[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]



 
  DEPARTMENTS OF TRANSPORTATION, AND HOUSING AND URBAN DEVELOPMENT, AND 
                RELATED AGENCIES APPROPRIATIONS FOR 2018

_______________________________________________________________________

                                 HEARINGS

                                 BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED FIFTEENTH CONGRESS

                              FIRST SESSION

                   _____________________________

              SUBCOMMITTEE ON THE DEPARTMENTS OF TRANSPORTATION, 
               AND HOUSING AND  URBAN DEVELOPMENT, AND RELATED AGENCIES

                   MARIO DIAZ-BALART, Florida, Chairman

  CHARLES W. DENT, Pennsylvania          DAVID E. PRICE, North Carolina
  DAVID P. JOYCE, Ohio                   MIKE QUIGLEY, Illinois
  JOHN ABNEY CULBERSON, Texas            KATHERINE CLARK, Massachusetts
  DAVID YOUNG, Iowa                      PETE AGUILAR, California
  DAVID G. VALADAO, California
  TOM GRAVES, Georgia

  

  NOTE: Under committee rules, Mr. Frelinghuysen, as chairman of the 
full committee, and Mrs. Lowey, as ranking minority member of the full 
committee, are authorized to sit as members of all subcommittees.

                       Doug Disrud, Cheryle Tucker,
          Carl Barrick, Jennifer Hollrah, and  Matthew Anderson
                            Subcommittee Staff

                   ______________________________

                                  PART 5

                                                                   Page
                                                                   
  Members' Day.................................................       1
                                                                      
  Oversight and Management.....................................     101
                                                                    
  Emerging Transportation Technologies........................      237
                                                                    
  Department of Housing and Urban Development ................      299
                                                                      
  Department of Transportation................................      415
                                                                    

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                         ___________________

                    U.S. GOVERNMENT PUBLISHING OFFICE
  
  26-790                    WASHINGTON : 2017



                      COMMITTEE ON APPROPRIATIONS

                                ----------                              
             RODNEY P. FRELINGHUYSEN, New Jersey, Chairman


  HAROLD ROGERS, Kentucky \1\                   NITA M. LOWEY, New York
  ROBERT B. ADERHOLT, Alabama                   MARCY KAPTUR, Ohio
  KAY GRANGER, Texas                            PETER J. VISCLOSKY, Indiana
  MICHAEL K. SIMPSON, Idaho                     JOSE E. SERRANO, New York
  JOHN ABNEY CULBERSON, Texas                   ROSA L. DeLAURO, Connecticut
  JOHN R. CARTER, Texas                         DAVID E. PRICE, North Carolina
  KEN CALVERT, California                       LUCILLE ROYBAL-ALLARD, California
  TOM COLE, Oklahoma                            SANFORD D. BISHOP, Jr., Georgia
  MARIO DIAZ-BALART, Florida                    BARBARA LEE, California
  CHARLES W. DENT, Pennsylvania                 BETTY McCOLLUM, Minnesota
  TOM GRAVES, Georgia                           TIM RYAN, Ohio
  KEVIN YODER, Kansas                           C. A. DUTCH RUPPERSBERGER, Maryland
  STEVE WOMACK, Arkansas                        DEBBIE WASSERMAN SCHULTZ, Florida
  JEFF FORTENBERRY, Nebraska                    HENRY CUELLAR, Texas
  THOMAS J. ROONEY, Florida                     CHELLIE PINGREE, Maine
  CHARLES J. FLEISCHMANN, Tennessee             MIKE QUIGLEY, Illinois
  JAIME HERRERA BEUTLER, Washington             DEREK KILMER, Washington
  DAVID P. JOYCE, Ohio                          MATT CARTWRIGHT, Pennsylvania
  DAVID G. VALADAO, California                  GRACE MENG, New York
  ANDY HARRIS, Maryland                         MARK POCAN, Wisconsin
  MARTHA ROBY, Alabama                          KATHERINE M. CLARK, Massachusetts
  MARK E. AMODEI, Nevada                        PETE AGUILAR, California
  CHRIS STEWART, Utah
  DAVID YOUNG, Iowa
  EVAN H. JENKINS, West Virginia
  STEVEN M. PALAZZO, Mississippi
  DAN NEWHOUSE, Washington
  JOHN R. MOOLENAAR, Michigan
  SCOTT TAYLOR, Virginia
  ----------
  \1\}Chairman Emeritus

  
                   Nancy Fox, Clerk and Staff Director

                                   (ii)
                                   


DEPARTMENTS OF TRANSPORTATION, HUD, AND RELATED AGENCIES APPROPRIATIONS 
                                FOR 2018

                              ----------                              

                                           Thursday, March 9, 2017.

                              MEMBERS' DAY

    Mr. Diaz-Balart. The subcommittee will come to order. Good 
morning and welcome to this year's first subcommittee hearing. 
Today we welcome our distinguished colleagues to testify on 
their priorities for the Departments of Transportation, and 
Housing and Urban Development for both fiscal years 2017 and 
2018.
    Now, under our full committee chairman, Mr. Frelinghuysen, 
we have brought back Member hearing days in order to give every 
Member the opportunity to express their priorities and concerns 
to this committee. We want every Member involved in the 
appropriations process. So I sincerely thank you for 
participating. Your views are crucial. They are important for 
us to begin this new appropriations season, and we look forward 
to hearing your testimony. It will help us put together a 
better bill.
    Mr. Chairman, I am glad that you are here. I know you are 
chairing your committee probably in the next few hours, Mr. 
Joyce has been recently named vice chairman of this 
subcommittee, and so we want to congratulate him.
    Now, with that, let me recognize the ranking member of this 
subcommittee, the gentleman from North Carolina, who I have 
enjoyed working with. And as ranking member, he has become an 
integral part of the team to make sure that we come up with a 
good bill, and that is obviously Mr. Price.
    You are recognized, Mr. Price.
    Mr. Price. Thank you, Mr. Chairman. I appreciate those 
words and want to reciprocate them. We have a good cooperative 
pattern of work established here, and I anticipate that we are 
going to have some challenges this year with some of the budget 
numbers we are hearing about, but we have to do our best, as 
always, on behalf of our institution and our power of the purse 
and the kind of priorities, a lot of which we are going the 
hear about today. We have got to do our very, very best to 
write an inclusive and robust bill.
    So I agree with you that it is a good way to start, to hear 
from our Members, and I commend Chairman Frelinghuysen for 
initiating this across all the subcommittees and look forward 
to today's testimony. Thank you.
    Mr. Diaz-Balart. Thank you, Mr. Price.
    And so we will begin with the gentlelady from American 
Samoa, Mrs. Radewagen. I will remind all of our colleagues who 
come in front of us that we have a very tight schedule. So we 
are going to have to stick to the 5-minute rule for testifying. 
Obviously, your written remarks will be included in the record. 
And so please do not forget to turn on your microphone, if you 
would.
    And, with that, ma'am, you are recognized. Thank you for 
being here.
                              ----------                              

                                           Thursday, March 9, 2017.

                                WITNESS

HON. AUMUA AMATA COLEMAN RADEWAGEN, A DELEGATE IN CONGRESS FROM THE 
    TERRITORY OF AMERICAN SAMOA
    Mrs. Radewagen. Thank you, Chairman Diaz-Balart and Ranking 
Member Price and members of the subcommittee. I very much 
appreciate the opportunity to speak to the subcommittee 
regarding some of the infrastructure needs in American Samoa. 
As you know, American Samoa lies in the middle of the Pacific 
Ocean south of the Equator. We the most remote U.S. Territory 
or State, and our infrastructure needs reflect that gulf of 
distance.
    Currently, any air traffic that flies into or out of 
American Samoa or even between the islands in my home district 
must do so under the air traffic authority of Independent Samoa 
due to the lack of an air traffic control tower in the 
territory. This includes the codel that was just there the week 
before last.
    A proposed solution that would also be budget-neutral would 
be to allow the money that FAA is requiring the American Samoa 
government to pay them, $15 million over the next 10 years, 
$2.5 million annually. It seems the 2014 FAA land-use audit 
report found that of approximately 865 acres of land approved 
by the FAA in 1973 for airport use, 325 acres had been removed 
from the airport and used for other government--local 
government--purposes.
    To rectify this issue, the ASG has agreed to pay FAA $2.5 
million a year for a 10-year period in exchange for FAA 
approval of a land-use change authorizing an interdepartmental 
change in jurisdiction for the 325 acres rather than a release 
for the disposal of airport property.
    My proposal would be to allow the FAA to repatriate these 
funds back to the ASG for the specific purpose of building an 
airport tower at Pago Pago International Airport, as well as 
other improvements to the airport that are desperately needed.
    American Samoa is also suffering from dangerous roads and 
other traffic infrastructure safety issues that must be 
addressed soon. Because our small islands, which are roughly 
the same size as Washington, D.C., are hit with extremely 
powerful hurricanes every year, the infrastructure is in 
constant need of repair. A lack of sufficient funding in the 
past has caused many of the much needed repairs to go undone.
    To rectify this issue and improve the safety of the roads 
in American Samoa and the other territories, I am requesting 
that the subcommittee please consider a significant increase to 
the territorial highways account authorized through the FAST 
Act. As it stands, there is no formula for which these funds 
are distributed and are left in the hands of administration 
officials. This policy has not benefitted American Samoa, and I 
also request there be a study of how the funds in this account 
might be more fairly spread out among the territories.
    While I have only begun to touch on the many infrastructure 
needs in my home district, I wanted to take this limited time 
to highlight some of the most significant, and I look forward 
to working with the subcommittee in any way that I can to make 
sure that the people of American Samoa are being afforded the 
same resources as their counterparts in the States and other 
territories.
    So thank you again, Chairman Diaz-Balart and Ranking Member 
Price, for your time and consideration of these requests. 
Should you have any questions, my staff is happy to work with 
your staff, my LD, and get you any information you may need. 
Thank you, and I yield back the balance of my time.
    [The information follows:]
    
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    Mr. Diaz-Balart. Let me thank the gentlewoman for again 
always being on top of the issues that are important to 
American Samoa, and I look forward to continuing to work with 
you. Thank you very much.
    Mrs. Radewagen. Thank you, Mr. Chairman.
    Mr. Diaz-Balart. Mr. Bridenstine, thank you for being here, 
sir. You have the floor.
                              ----------                              

                                           Thursday, March 9, 2017.

                                WITNESS

HON. JIM BRIDENSTINE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF 
    OKLAHOMA
    Mr. Bridenstine. It is my honor.
    Thank you, Chairman Diaz-Balart, Ranking Member Price, Mr. 
Culberson, and Mr. Valadao. It is an honor to be here. I wanted 
to bring up something regarding infrastructure that a lot of 
people don't think about. We think about infrastructure. We 
think about roads and bridges, highways. We think about 
hospitals and schools. One piece of infrastructure that I think 
a lot of people don't consider is launch.
    Space has transformed our way of life, the way we 
communicate, the way we navigate, the way we produce food, the 
way we produce energy, the way we provide security, do disaster 
relief, the way we do banking depends on GPS, for example. All 
of these capabilities require infrastructure, and as you look 
at how things are moving forward now, what used to be the 
domain of government, space, is now the domain of private 
operators and commercial operators, and when you think about 
things like remote sensing and imagery, the National Geospatial 
Intelligence Agency now uses a commercial space program in 
order to buy data from commercial providers for intelligence.
    When you think about communications, the Department of 
Defense, for its routine communications, uses about 80 percent 
commercial satellites, satellites that are launched to provide 
broadband from space, DIRECTV, the internet, are now being 
leased by the Department of Defense to provide communication 
capabilities for the warfighter.
    When you talk about all different sorts of activities 
happening in space, commercial providers are now carrying a 
heavy load. What we need to do within the FAA Office of 
Commercial Space Transportation is make sure they are 
adequately funded for all of the upcoming launches. Everything 
I just described is historical.
    When you think about the future, we are talking about 
hundreds, if not thousands, of satellites in low Earth orbit 
for remote sensing and imagery. When you think about 
communications, we are talking about actually many, many 
thousands of satellites. Boeing has a program. OneWeb has a 
program. SpaceX has a program. Each one of these low Earth 
orbit communication constellations constitutes multiple 
thousands of satellites in low Earth orbit. All are going to 
require launch, and these companies are contracting overseas.
    In fact, last week, an American company building imagery 
satellites for purposes that the Department of Defense will 
use, they launched 96 American satellites on a foreign rocket, 
an Indian rocket, to be precise. OneWeb has contracts worth 
billions of dollars with the Russians because we don't have the 
capability here in the United States to deliver what they need.
    So the Office of Commercial Space Transportation, which is 
within the FAA, in my estimation, needs to be fully and 
adequately funded just so that we can go forward with these new 
programs that are going to change the way we think about space. 
And, of course, where does that begin?
    The Office of Commercial Space Transportation within the 
FAA is the regulatory body. That is true. But they are also the 
body that is necessary to promote and facilitate commercial 
space industry. Right now, they are funded under a continuing 
resolution at a level that I believe is inadequate.
    Last year, I came to this committee, and I requested $19.8 
million, which doesn't seem like a big number, but that was 
what was in the President's budget request, and what the 
appropriations process came to was an amount less, and you guys 
delivered, and I thank you for that.
    The challenge is, operating under a continuing resolution, 
that $19.8 million never materialized. So I would ask this 
year, in order to take care of all of these needs that are 
transforming the way we think about space and assert the way it 
is transforming the human condition on Earth, I am requesting 
that the Office of Commercial Space Transportation within the 
FAA, sometimes called FAA AST, be funded to the tune of $23 
million. With that, I will be open to any questions.
    [The information follows:]
    
    
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    Mr. Diaz-Balart. Yes, Mr. Price.
    Mr. Price. Let me just ask--I thank the gentleman for his 
testimony. It is very convincing. Am I to conclude also that 
you will strongly back picking up the remaining 5 months of the 
current fiscal year so as to take advantage of the 
appropriations bill that would be included in an omnibus, as 
opposed to a yearlong CR?
    Mr. Bridenstine. I will tell you, I don't like doing CRs. I 
will also tell you that what we need to do is go through the 
appropriations process because, as I just described, the world 
has changed, and we need to make sure that what we are funding 
as a government reflects that change. I don't want to do a CR. 
If we do an omnibus and the priorities in there are 
appropriate, I am certainly willing to consider it.
    Mr. Price. You are giving us a very good example of why a 
serious appropriations bill with the detailed work that goes 
into it is preferable to automatic pilot.
    Mr. Bridenstine. Absolutely, yes, sir, and I fully 
appreciate you making that comment.
    Mr. Price. Thank you, Mr. Chairman.
    Mr. Diaz-Balart. Thank you, Mr. Price.
    And also, just for the gentleman, I will tell you: you have 
been very effective working with this subcommittee.
    Mr. Bridenstine. Thank you.
    Mr. Diaz-Balart. And we appreciate your involvement. We 
appreciate your hard work and look forward to continue doing 
so. And we agree with you: a CR a lot of folks don't understand 
how devastating a CR is in so many ways. But, again, I would be 
remiss if I didn't thank you for your hard work, particularly 
with your involvement with this subcommittee, and it is greatly 
appreciated.
    Mr. Bridenstine. Thank you for your support.
    Mr. Diaz-Balart. Thank you, sir.
    Mr. Culberson. Mr. Chairman?
    Mr. Diaz-Balart. Yes.
    Mr. Culberson. If I may, I also want to thank you, Jim, for 
your support for NASA for the space program and your 
understanding of the changing times in which we live. The 
commercial sector is going to be getting us into low Earth 
orbit. Like stepping out in front of the Rayburn Building and 
catching a cab, you will be able to catch a commercial ride 
into low Earth orbit.
    And you are exactly right: this agency needs to be--this 
portion of the FAA needs to be fully funded. And I really 
appreciate your support for getting our detailed appropriations 
bills on the floor, not only this one but the Commerce, 
Justice, Science bill as well that has NASA.
    Mr. Bridenstine. Would the gentleman yield for 15 seconds?
    Mr. Culberson. Yes, absolutely.
    Mr. Bridenstine. When you think about NASA, this agency is 
critical for NASA to accomplish its mission because NASA is 
using commercial to get back and forth to the International 
Space Station. This agency could make that problematic if it is 
not adequately funded.
    It is not just NASA, though. It is also the Department of 
Defense. It is the National Oceanic and Atmospheric 
Administration. This agency touches all of those and more, 
which is why it is so important.
    Mr. Culberson. I deeply appreciate your support for it, and 
I want to also wish Jim good luck. He has been--and I strongly 
support his application to become the new NASA Administrator. 
Jim would do a superb job with that position, and I want to 
strongly express my endorsement and support for your work, and 
I hope to see you become a new NASA Administrator and look 
forward to helping you----
    Mr. Bridenstine. Thank you.
    Mr. Culberson [continuing]. In that role. Thank you very 
much.
    Mr. Diaz-Balart. With Mr. Culberson's strong endorsement, I 
think the gentleman who was testifying in front of us has had a 
good day. Thank you. Thank you very up much.
    Mr. Bridenstine. Thank you.
    Mr. Diaz-Balart. Mr. Price, while we wait for some other 
folks to come and testify, why don't we just take a little 
break, and let's all stick around and see who wants to come and 
join us shortly. And, again, thank you all for being here. 
There is nothing more important than listening to our 
colleagues, and that is how we get a much better bill.
    So why don't we just take a few minutes' break, and we will 
gavel in as soon as our next witness approaches. Thank you.
     [Recess.]
    Mr. Diaz-Balart. Let me call the subcommittee to order once 
again. We are now joined by Mr. DeFazio, who, obviously, has a 
wealth of experience particular on infrastructure and 
transportation issues. And we thank you for being here and you 
are recognized, sir.
                              ----------                              

                                           Thursday, March 9, 2017.

                                WITNESS

HON. PETER A. DEFAZIO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF 
    OREGON
    Mr. DeFazio. Thank you, Mr. Chairman, and thank you for 
this committee's interest in transportation and related issues. 
The one, I think, really important point to make at the 
beginning, I mean, I will talk about the larger needs, but 
because we are under a continuing resolution we are realizing 
$1.5 billion less in transportation spending this year, below 
the FAST Act levels which were already pretty anemic given our 
needs.
    If we fully fund the FAST Act we will barely tread water. 
We will not significantly defray any of our accumulated balance 
of, you know, backlog for maintenance, repair, and replacement. 
So I would urge the committee to do all they can as we move 
through whatever continuing resolution or actual appropriations 
to get us fully up to the FAST Act levels. That would benefit 
the Nation as a whole.
    I would like also to share, I know there has been some 
members of this committee who have expressed skepticism, but I 
would like to share some of my concerns about the privatization 
of the air traffic organization, the ATC. First and foremost, 
when they started this discussion I said, well, you know, you 
have a constitutional issue, and they blew me off and said, no, 
there is no problem. And subsequent analysis showed, yes, 
indeed, there is a constitutional issue recently upheld by the 
Supreme Court, which is you cannot delegate regulatory or rate-
making or taxation authority to a private entity which affects 
competitiveness without government involvement.
    So I did not bring my flow chart, but I developed a 
flowchart of how this new streamlined organization after we cut 
the FAA in half and move ATO over there, leave safety 
certification, everything else over here subject to annual 
appropriations, sequestration, government shutdowns. Over here 
we will have the new private entity which is supposed to self-
fund somehow, we are not sure.
    And anything they propose, any route change, approach 
change, anything they approve, or certainly when they begin to 
want to assess fees against business aviation or general 
aviation or something else to pay for the system would have to 
then to go the Secretary's office, and the Secretary would then 
have an expanded office to review these proposals, you know, 
which seems to me not exactly a tremendous improvement. And if 
the Secretary disagrees, then they go to court. Great way to 
run a critical government function. So that's one major 
concern.
    I already mentioned the concern about us, you know, 
severing the agency in half. And, you know, there is a couple 
of other issues here. They are very critical and I have been 
critical over the years of procurement at the FAA, and some 
targeting reforms could benefit us there. Congress, in 1996, 
actually mandated procurement personnel reforms. Unfortunately, 
we did not exempt them from OMB and other political 
interference, and the reforms proposed by the administrator 
ended up being essentially the same system that we have.
    So, yes, we could benefit from reforms there, and we could 
certainly authorize the FAA administrator to do those things 
without OMB review and other review and get some needed 
reforms. But if you talk to Dr. Dillingham of the GAO, who has 
been very critical of their past acquisitions, he says now they 
are on a good track. They are implementing NextGen at a good 
pace. It is benefiting the industry tremendously with new fuel-
efficient approaches, and they are rolling them out quite 
quickly now. So really, the whole complaint is about problems 
in the past.
    Administrator Huerta has been doing a good job. And should 
we move over to a private corporation one can imagine the 
interruptions that might happen. In Canada, it was a very rocky 
8-year transition process. In England, actually, the government 
had to come back in and bail out the organization. Again, a 
rather rocky transition process.
    And another point which should be of concern is that in 
both Great Britain and in Canada, the only two privatized ATC 
operations in the world. All the other countries have gone to 
government corporations, which could work here, also. They had 
to pay for the assets. Under this plan we would give away tens 
of billions of dollars of assets to this new private 
corporation. Should the private corporation fail, as it did in 
England, and we wanted to take it back, we would have to pay 
for it.
    So not only are we going to give away assets taxpayers have 
paid for, should this new experiment fail we are going to have 
to buy back the assets that we already paid for that we gave 
away. You know? An absolute absurdity. You know, and then there 
is a number of other issues regarding the magnitude of our 
system in comparison to others.
    One other quick point. We are downstairs holding a hearing 
in Water about how we can deal with, you know, the backlog of 
maintenance in our ports which is causing lines of ships far, 
far out into the Pacific in L.A. and other parts of the 
country, raising the costs of imported goods. One way to deal 
with it is to actually spend the Harbor Maintenance Trust Fund 
tax collections on harbor maintenance.
    On a daily basis our 59 major harbors in the United States 
have 35 percent availability of authorized depths, 35 percent. 
We could deal with that if we merely appropriated every year 
the full amount of the tax that is collected. About $1.8 
billion a year is collected. We are spending, generally, half 
of that, and the rest of it goes into a theoretical account.
    So not only could we begin by just fully appropriating the 
tax that comes in to deal with our maintenance backlog, we 
could also, hopefully, access and spend down the $9 billion 
that is in a theoretical account. But anyway, they talked about 
that downstairs a little bit.
    But the other major focus downstairs is regulatory delays. 
Well, there is a new report. And I agree that there are 
sometimes over onerous regulations. But the principle cause of 
delays in projects, like the 140,000 bridges that need repair/
replacement of the Federal system, National Highway System, 
none of those are going to have to go through NEPA, or 
virtually none of them, if they are just replacements. But the 
money is not there. Plain and simple, the money is not there.
    A major study done by AECOM, an independent firm, ordered 
by Treasury, has just come out and they looked at 40 major 
pending projects. And of the 40, 39 are challenged by 
inadequate funding; out of 40, 19 by increased capital costs, 
20 by local opposition, and 9 by regulatory issues. So, you 
know, money is at the heart of many of our infrastructure needs 
and problems in this country.
    I know that you realize that on this committee and I 
recommend to you to do whatever you can to help increase needed 
funds. With that, I----
    [The statement of Mr. DeFazio follows:]
    
    
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    Mr. Diaz-Balart. Let me thank you, sir, for your very on-
point testimony. I would ask you, by the way, you talked about 
the flowchart, if you could bring it forward to the committee, 
we would love to submit that in the record.
    Mr. DeFazio. Sure.
    Mr. Diaz-Balart. I think without objection. So, Mr. Price.
    Mr. DeFazio. Mr. Chairman, if I could, the first time when 
we were holding one hearing on this in the last Congress and I 
put it up on the screens and the chairman looked at it and he 
said, I have never seen that before. I said, yeah, well, your 
staff could have developed it. We just followed the legislation 
and it looks like a Rube Goldberg, so I would be happy to 
provide it.
    Mr. Diaz-Balart. Thank you. Mr. Price.
    Mr. Price. Thank you. My colleague and I have been on this 
journey together since we were both elected some years ago, so 
I appreciate it.
    Mr. DeFazio. Do not say how many.
    Mr. Price. We will not say. So I appreciate your testimony 
on a number of fronts this morning, and actually, you are not 
the first member to testify this morning as to the harm we will 
suffer if we have a yearlong CR, if we cannot get off of this 
CR and into a regular appropriations, at least for the last 5 
months of the year. So I appreciate you underscoring that. It 
is not just dollars that are involved. It is also how those 
dollars are directed. But thank you for being here.
    Mr. DeFazio. Thank you.
    Mr. Diaz-Balart. Any further questions?
    Mr. DeFazio. Thank you, sir. Thank you very much.
    Mr. Price. Thank you, Mr. Chairman.
    Mr. Diaz-Balart. We will now proceed. The gentleman from 
Arizona, Mr. Gosar, you are recognized for 5 minutes, sir. And, 
again, thank you for being here, sir.
                              ----------                              

                                           Thursday, March 9, 2017.

                                WITNESS

HON. PAUL A. GOSAR, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF 
    ARIZONA
    Mr. Gosar. Thank you. I would like to first thank you, 
Chairman Diaz-Balart, Ranking Member Price, and the committee 
for their work on the appropriations process under their 
jurisdiction. I am Paul Gosar and I represent the 4th 
Congressional District of Arizona, and I appreciate the 
opportunity to provide testimony supporting the specific 
appropriation priorities for Arizona and the country as a 
whole.
    First, I would like to applaud the committee's leadership 
and fiscal prudence in previous years that saved taxpayers 
money and protected the civil liberties of our constituents by 
preventing funds from going to the wasteful National Roadside 
Survey. As such, I request once again that the following 
language be retained in the next fiscal year Transportation 
Housing and Urban Development and related agencies 
appropriation that, quote, ``None of the funds made available 
by this act may be used to obligate or award funds for the 
National Highway Traffic Safety Administration's National 
Roadside Survey,'' end of quote.
    Civil libertarians have raised legitimate concerns about 
the unconstitutionality of this program. Put simply, this 
survey looks like and acts like a police checkpoint and uses 
uniformed officers to pull cars over. Under the Fourth 
Amendment, the United States Supreme Court has ruled that a 
seizure occurs when a vehicle is stopped at a checkpoint. The 
question thus becomes whether such seizures are reasonable 
under the Fourth Amendment.
    More importantly, the courts have allowed police 
checkpoints only when there is compelling public safety 
justification, such as stopping and arresting drunk drivers. 
However, under the circumstances of this program there is no 
public safety jurisdiction. The surveys do nothing to make our 
communities safer because drivers who ultimately refuse to 
participate are free to drive away, even if the driver is 
impaired. This results in a wasteful program that is invasive 
in the least, and at worst is an abuse of power and the 
violation of our civil liberties.
    Let me be clear. I strongly support efforts which are 
proven to have actually contributed to the decrease in impaired 
driving since the 1970s, such as local law enforcement 
operations, effective State and municipal policings, curb 
abuse, and worthwhile education efforts from organizations like 
Mothers Against Drunk Driving, or MADD, and similar groups.
    I thank the committee for their previous support of the 
civil liberty language and ask that it be included again in the 
next appropriations bill.
    Another issue I would like to highlight for the committee's 
support is funding for congressionally designated high-priority 
corridors, or HPCs. These corridors are critical to the economy 
and security of the United States.
    Last Congress I was proud to work with a bipartisan group 
of members and stakeholders to pass legislation which expanded 
the designation of the future Interstate 11 to extend from 
Mexico all the way to Northern Nevada. This interstate 
comprises two high-priority corridors: the CANAMEX Corridor and 
the Intermountain West Corridor. Since 1991, HBCs have been 
identified, updated, and funded in various transportation and 
appropriation bills. Although funding has been authorized, 
Congress has not recently appropriated funds specifically to 
these high-priority corridors.
    The statutory definition of these corridors found in 1105 
of the Intermodal Surface Transportation Efficiency Act in 1991 
clearly identifies HPCs as appropriation projects of national 
importance and appropriate recipients of Federal funding. As 
this committee works to identify spending priorities that will 
address truly national, multistate transportation needs, I 
would encourage support of the high-priority corridors.
    Now, I understand the monumental task this committee faces 
each year to appropriate scarce taxpayer dollars to national 
priorities, and I appreciate their hard work. As you well know, 
the conversation cannot always be about finding more money. We 
must also look for ways to spend money more efficiently. In 
that regard, I look forward to working with this committee as 
well as other legislating and authorizing committees to 
institute reforms that will make our scarce transportation 
dollars go further.
    The high-priority corridors identified as a future 
interstate present an amazing opportunity to build truly 21st 
century infrastructure. Real policy reforms, such as 
streamlining NEPA process and simplifying Davis-Bacon 
preventing wage requirements, can reduce the costs of these 
projects by millions. These future interstates could serve as 
the pilot programs to test and demonstrate innovative policy 
reforms that save taxpayer money and better meet the 
infrastructure development we need to make American great 
again.
    I appreciate the opportunity to testify before you. I would 
like to thank all of the members for all that you do and the 
important work that goes forward from this committee. I yield 
back.
    [The statement of Mr. Gosar follows:]
    
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    Mr. Diaz-Balart. Mr. Gosar, thank you for your testimony, 
and we have been working for a long time on a lot of these 
issues. I appreciate you bringing up some very important 
issues, and I look forward to continue to working with you on 
those issues.
    Mr. Price.
    Mr. Price. Let me echo the chairman, say we appreciate your 
testimony and we will give it careful attention.
    Mr. Gosar. Thank you, Ranking Member.
    Mr. Diaz-Balart. Actually, before I recognize our next 
colleague I want to once again congratulate Mr. Joyce, who has 
been recently named as vice chairman of the subcommittee. Mr. 
Joyce, you are a heartbeat away from the chairmanship of this 
subcommittee. So I do not know why you keep giving me fatty 
goods all the time now and I am a little concerned about that. 
But, again, congratulations.
    Mr. Joyce. Thank you very much and I apologize for being 
late, but there was somebody who slightly resembled you, not as 
good-looking and not as well-dressed, named Diaz-Balart that I 
ran into on the way here who tied me up, so.
    Mr. Diaz-Balart. Obviously----
    Mr. Joyce. Lincoln something or other.
    Mr. Diaz-Balart [continuing]. Cannot be related to me. 
Cannot be related to me. Thank you.
    Now we will recognize the distinguished gentleman from 
California, Mr. Panetta. You are recognized. Thank you for your 
testimony.
                              ----------                              

                                           Thursday, March 9, 2017.

                                WITNESS

HON. JIMMY PANETTA, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF 
    CALIFORNIA
    Mr. Panetta. Thank you. I appreciate that, Chairman Diaz-
Balart, Ranking Member Price, other members, and 
congratulations Mr. Joyce as well. Thank you for this 
opportunity to speak here this morning.
    I would like to talk about the important programs that are 
very critical to my district's transportation infrastructure 
and its economy. I represent the Central Coast of California in 
the 20th Congressional District. And this winter, although we 
had been clamoring for it for quite a while, we got a lot of 
rain, a tremendous amount of rain, actually. And we were hit by 
a hard series of record-setting storms, storms that washed out 
major roads, highways. They isolate communities and they caused 
a tremendous amount of damage to individuals' homes and 
properties.
    And because of these storms the Pacific Coast Highway, in 
my biased opinion, one of the most beautiful stretches of road 
in the world, remains temporarily closed in many places. And 
near the southern part of that highway, the Town of Lucia, 
debris from landslides have covered lanes of traffic and closed 
an 8-mile section of that road. The boulders, as said on some 
of these slides, are so big, literally truck-sized boulders, 
have had to be removed by explosive ordnance. They are that 
big.
    In Big Sur, on the main route, Highway 1, there is a 
bridge, a 315-foot bridge, the Pfeiffer Canyon Bridge, that has 
suffered irreparable structural damage and has had to be taken 
down and replaced. Now, it is not that iconic Bixby Creek 
Bridge that you all see when you hear about Big Sur, but it is 
just as important of a venue, literally in the main part of Big 
Sur. And as you can see from this picture that I am holding up 
the slide occurred right here underneath this pillar, took out 
that pillar, caused the bridge to sink. No one can go on this 
bridge, you cannot walk over it, you cannot drive cars over it; 
it has got to be taken down and completely replaced.
    The residents who are in between this bridge and the slides 
are isolated. There are families who are separated, there are 
children who cannot go to school, and there are businesses who 
are absolutely shut down at this point because no one is 
driving on this highway. And just last week I took part in an 
airlift where pallets of food, supplies, and actually fuel were 
brought to these individuals, to these families, by helicopter.
    Repair crews are on the ground and they are trying to 
repair this all-American highway as quick as possible. However, 
with more rain in the forecast for the coming days many are 
concerned whether this work will have a lasting impact.
    To live in Big Sur you have to be tough, you have to be 
hardy; there is no doubt about it because they deal with these 
types of extreme weather situations. In 1982, parts of Highway 
1 were closed for 13 months after a massive mudslide buried 
more than a quarter-mile of road. In the wake of this event 400 
people lost their jobs and the tourist industry lost nearly $34 
million.
    Now, hopefully, history will not repeat itself this year 
when it comes to the amount of losses. But if not replaced 
quickly, that bridge that you just saw, the fact that it won't 
be replaced could devastate the economies of the communities of 
that Big Sur area. They rely on that influx of tourism during 
the spring and summer months. It is times like these when 
communities like mine look to the Federal Highway 
Administration's Emergency Relief Program for assistance.
    So I appreciate the $1 billion supplemental appropriation 
included in last year's continuing resolution and I encourage 
this committee to continue to provide the needed support for 
this critical program. Though we have not yet seen the 
President's budget proposal for fiscal year 2018, it is my hope 
that he demonstrates his commitment to improving our roads, 
bridges, airways, transit systems, and railroads through a 
strong Federal investment with the understanding of the 
importance of a strong Emergency Relief Program.
    Your subcommittee, Mr. Chairman, has the opportunity to 
make infrastructure investments that are desperately needed in 
districts all across the Nation so that we can ensure a modern 
transportation system that sustains economic growth.
    Thank you for the opportunity to advocate on behalf of 
these programs and thank you for the opportunity to be here to 
speak to you today.
    [The statement of Mr. Panetta follows:]
    
    
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    Mr. Diaz-Balart. And let me thank the gentleman for his 
testimony, and for being here. I know I can speak for everybody 
in the subcommittee when we tell you that we look forward to 
working with you.
    Mr. Joyce. I am sorry, sir, I might have missed it. For the 
bridge replacement, as I understood you, was there a cost 
estimate that you gave them?
    Mr. Panetta. They have not come up with that. So I cannot 
give you that now, but I can assure you that Caltrans, the 
California Transportation Authority, is working on that. I 
actually spoke with one of the heads of Caltrans, they said 
that they are obviously going to have to do an emergency 
replacement and that is going to take--what they are saying, 
which I was actually surprised, could be 6 months, which I 
think is pretty quick for that long a bridge, that big a 
bridge, in that area that is on such a dangerous cliff like 
that. But I think that that is, though, the time that he gave 
me. I will get back to you in regards to a number as to what it 
is going to cost.
    Mr. Joyce. Thank you.
    Mr. Diaz-Balart. And I want to thank the members of this 
subcommittee because they have been very, very sensitive to 
making sure that we have that money there. And so, again, we 
look forward to working with you. Thank you.
    Mr. Panetta. Thank you, sir.
    Mr. Diaz-Balart. Thank you.
    Mr. Aguilar. Mr. Chairman?
    Mr. Diaz-Balart. Yes, sir.
    Mr. Aguilar. It is a terrible place to live. Beautiful, you 
know. Very tough vistas as well. So if there is a, you know, a 
trip that needs to be seen, I am sure Mr. Panetta would host 
you, Mr. Chairman, to take a look at the seriousness of this 
issue.
    Mr. Diaz-Balart. Well, Mr. Aguilar, you are always willing 
to sacrifice greatly to help our colleague here.
    Mr. Aguilar. Yeah. As I shared privately I just want to be 
a team player, Mr. Chairman.
    Mr. Diaz-Balart. I am getting choked up. I am getting 
choked up and emotional. But thank you, thank you very much.
    Mr. Panetta. Open invitation.
    Mr. Diaz-Balart. Thank you, Mr. Panetta.
    Mr. Panetta. Thank you.
    Mr. Diaz-Balart. We will now recognize The Honorable Sheila 
Jackson Lee. And thank you for your testimony and we know you 
have a number of different issues that you want to talk about. 
We might be able to give you a little bit more than the 5 
minutes. If somebody else shows up, then I will have to cut you 
off, and if not, we might be able to give you a little more. So 
we will have to play that by ear, ma'am, but you are 
recognized.
                              ----------                              

                                           Thursday, March 9, 2017.

                                WITNESS

HON. SHEILA JACKSON LEE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF 
    TEXAS
    Ms. Jackson Lee. That may not be somewhat contentious, but 
I want to emphasize some points that I think are important. 
And, first of all, I want to thank this committee and thank the 
ranking member, thank the chairman. We admire and appreciate 
the bipartisan efforts of the Appropriations Committee as a 
whole, but, more importantly, Subcommittee on THUD, which I 
know you are very popular. And so I really appreciate there is 
a great need for both the protection and enhancement of our 
infrastructure.
    Let me quickly say I support $1.25 billion for 
transportation investment generating economic recovery. These 
are the TIDA Grants. TIDA Grants encourage cooperation between 
agencies and jurisdictions and often funds multimodal, 
multijurisdictional projects that are difficult to support 
through traditional transportation projects, and I think that 
is very important.
    I support $2.5 billion for New Starts Program. The New 
Starts Program provides funding for commuter rails, subway, 
light rail, ferries, and bus transit. And I want to make the 
point that Houston is a transit city, Harris County is a 
transit county. No one should suggest that the people of 
Houston do not advocate for transit. City government is a 
transit city government. Our metro is very responsive to the 
community, and we are eager to listen to members of Congress 
and community leaders on how best and how effective we can make 
this transit system. Harris County is a $4+ million metroplex 
area. The City of Houston is growing past a million and we need 
mass transit, and I would say that we need it now.
    So we support the Starts Program. We are one of the New 
Starts. We want to continue to finish our work. We just 
finished celebrating an overpass for the Harrisburg Bridge that 
will help that community make transit more effective. And we 
invite any of you to see how we are using the transit system. 
Certainly the Super Bowl evidenced how important our transit 
was and I think the NFL, if I might say, went away and said 
that we are one of the best cities in their scheme of cities 
for the Super Bowl and it was because of the transit system.
    I support $120 million for the Federal Transit Authority, 
provides grant funding to State, local, and tribal governments, 
public and private operators, and other recipients. And I 
support the funding request because access to transportation is 
a civil right, and that full funding for transit is imperative. 
It is very important for those citizens that rely upon it.
    I support the $2.3 billion for the Amtrak passenger rail. I 
think that is a vital part of that corridor.
    I support $3.1 billion for capital systems for high-speed 
rail corridors and inner-city passenger rail service. We are in 
the midst of a high-speed rail system in Texas. It is mostly 
privately funded. We are going through some of our challenges, 
but I know that it is an important element of our 
transportation.
    The airport, the major airport, Bush Intercontinental 
Airport, is in my congressional district. I support $3.4 
billion for an airport improvement program which provides 
grants to public agencies for planning and development of 
public use airports. We are growing. We are growing in our 
terminals, we are growing in the per passenger travel. And the 
improvements, we hope that we have been important fiscal agents 
of the Federal Government in using your money effectively and 
building on the national system of aviation.
    Now, I understand there is rumor that there may be a 14 
percent cut in public housing, $6 billion. I don't know whether 
to throw myself on the floor or the table or to show you to 
have mercy. And I know it all deals with your--I do not want to 
use the term ``allotment,'' but what you all have to work with. 
I am on the Budget Committee. We will be seeing that budget 
next week, and I hope to be bipartisan in my passion that that 
just cannot be.
    I support $3 billion for Community Development Block Grant. 
We have not seen fraud of any extensive form. This is down 
payment for homes, this is fixing roofs after hurricanes. And 
we are loaded, what we call blue tarps, with senior citizens in 
my district still from Hurricane Ike. They have never had their 
roofs fixed. We have a program in the city that we are trying 
to fix it, Mr. Chairman, and trying to use that money 
effectively.
    Parks and other forms of community development are 
lifelines to inner city and rural communities, which I support 
greatly, even though there is an Agricultural Rule Program that 
I have been involved in and support heavily. And so I hope that 
is not true.
    I support $120 million for housing for the elderly, and 
that is extreme in my community.
    I support $1.6 billion for the Home Investment Partnership 
Program, which is the largest combination for affordable 
housing. I worked with Habitat for Humanity. Our community 
helps build homes, but a lot of that is in partnership with 
Habitat for Humanity.
    I support $20 billion for the tenant-based rental 
assistance, $42 billion for fair housing.
    I support $500 million for HUD-VASH program that is for our 
veterans; $87.5 million for housing counseling; $155 million 
for childhood lead poisoning. Just to comment that there is 
lead poisoning going on today in many of our communities and we 
cannot be less active in that program because our children are 
still getting lead poisoning.
    Finally, I support $355 million for housing opportunities 
for persons with AIDS. One of the first programs that I 
utilized as a member of the Houston City Council, still today 
is for housing for people living with AIDS, affected by AIDS, 
and it is an effective program.
    So, Mr. Chairman, finally, you do great work. We want 
transit in Houston, Harris County; I want transit for the 
Nation. And, finally, I think that the HUD work for providing 
people access to housing is crucial and these are the programs 
that allow that to happen.
    [The statement of Ms. Jackson Lee follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]    
    
    
    
    Mr. Diaz-Balart. Let me first thank the gentlelady for your 
testimony.
    Ms. Jackson Lee. Thank you.
    Mr. Diaz-Balart. For your hard work. And by the way, you 
have done an extensive testimony, you have done it in record 
time. So again, thank you very much. Thank you. Thank the lady 
from Texas.
    Ms. Jackson Lee. Thank you.
    Mr. Diaz-Balart. We will now recognize The Honorable 
Congresswoman Plaskett. Thank you for being here. We look 
forward to your testimony.
                              ----------                              

                                           Thursday, March 9, 2017.

                                WITNESS

HON. STACEY E. PLASKETT, A REPRESENTATIVE IN CONGRESS FROM THE VIRGIN 
    ISLANDS
    Ms. Plaskett. Good morning, gentlemen. Thank you, Chairman 
Diaz-Balart, Ranking Member Price, for the opportunity to 
testify on appropriations for the Departments of Transportation 
and Housing and Urban Development over the next fiscal year. 
This legislation will serve as a statement of the commitment 
from the Federal Government to address some of our most 
pressing local needs in the Virgin Islands. In the United 
States territories, despite being home to nearly 4 million 
Americans, we are too often left out of important programs or 
underfunded compared to benefits available to Americans living 
in the mainland United States.
    For example, in the Virgin Islands, despite benefits we 
bring to the United States, including enormous tourism commerce 
from airline visits, cruise ships, and other vessels, Federal 
transportation funding to the Islands falls behind other 
jurisdictions even though the traffic strain on our 
infrastructure is often greater due to the high number of 
visitors year round. We have approximately 105,000 individuals, 
but have several million tourists that visit and strain our 
infrastructure every year. Territorial roads continue to be 
under stress from inadequate capacity. And in the Virgin 
Islands most of the Federal highways do not meet current 
standards. Because the territories are islands, most of the 
road construction is much more expensive than the mainland to 
accommodate due to supplier costs, costs of transportation. As 
a result of inadequate funds, crucial projects have been 
shelved, leaving only stopgap repairs to resolve maintenance 
issues, even on primary artery highways.
    I would like to emphasize that this negatively impacts 
everything, from commerce to disaster relief management, 
emergency response, law enforcement capacity, and my own shock-
absorbing bills that I have to pay for our vehicle on the road.
    Extreme weather during hurricane season annually 
demonstrates how fragile our infrastructure is and how much we 
depend on it. The territories are generally less well off than 
the States economically, partly due to lower per capita 
domestic product. And we pay higher prices for many basic 
necessities. We do not have local revenue means to provide for 
needed highway infrastructure without Federal assistance.
    Although the goal of bringing the territories into economic 
parity with the States has been a principle embraced by several 
acts of Congress over decades of partnership work, this has yet 
to be fulfilled in the area of transportation infrastructure. 
Each of the territories were acquired for specific strategic 
purposes and we continue to be of vibrant strategic value to 
the United States.
    Accordingly, I request full funding at or above current 
authorization levels for the territorial highway program over 
the next fiscal year. I also join others in calling for 
enhanced funding for TIGER Grants, preferably at or above the 
fiscal 2017 requested levels of $1.25 billion. TIGER Grants 
have been particularly important for our ports and 
transshipment projects in the Virgin Islands, which we believe 
will have adequate benefit to us in terms of growing our 
economies.
    I also welcome recent statements from leaders in Congress 
on both sides of the aisle for new supplemental transportation 
infrastructure programs and decisions by the President for this 
to be part of his agenda.
    If and when this committee will be working with the 
Authorizing Committee on any new transport expenditure program, 
it is imperative that the territories be fully incorporated in 
the package. New infrastructure projects in the Virgin Islands 
will create much-needed immediate jobs as well as help promote 
safety and security in an economy that is heavily based on 
tourism. There are numerous examples of needs that we have that 
are out of reach right now due to current levels of funding, 
but which could be covered with new or supplemental assistance.
    Again, I would point to our desire to really beef up our 
transshipment, our ports, which would grow our economy 
exponentially, provide jobs, and much-needed capital in the 
area. The U.S. Virgin Islands was purchased specifically 
because of our transshipment and our strategic location as the 
most easterly point in the United States.
    In addition, investment in airports and continued pressure 
on airlift is crucial to a place like the Virgin Islands. I 
urge that any discretionary program reforms expand eligibility 
in funding for the Airport Improvement Program, which has been 
very important for the necessary modernization of our airport 
on St. Thomas, Cyril King Airport.
    We also depend on well-funding maritime infrastructure. And 
I will be seeking fair inclusion of the Virgin Islands in the 
NHS and FTA Ferry Programs to assist in the purchase of much-
needed vessels to accommodate heightened transit demands along 
the route from St. Thomas to St. Croix. We at this point have 
to have duplicative services in every area, hospitals, our 
generators, everything because of the distance between the two 
major islands. Individuals cannot travel by airlift because of 
the cost, and so a ferry system would be really important to us 
to drive the cost down, stop some of the duplication, and 
really make our economy a much more vibrant one.
    I also strongly support the inclusion of school 
construction and broadband expansion programs in any new 
infrastructure package. Many of the people living in the Virgin 
Islands do not have ordinary access to the computer connected 
to the Internet and this continues to have a negative impact on 
educational opportunities, workforce development for a growing 
isolated island economy.
    Lastly, I would like to touch on housing-related programs, 
which service antipoverty tools for low-income people. Greater 
investment in home and CDBG Block Grants, Section 8 rental 
assistance, are critical for the availability of decent 
affordable housing in the Virgin Islands. These resources are 
especially important amid higher costs facing my constituents 
in communities across our country and I urge that they be 
strengthened through the next fiscal year.
    Thank you for the opportunity to present my testimony 
today.
    [The statement of Ms. Plaskett follows:]
    
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    Mr. Diaz-Balart. Let me thank our colleague for bringing up 
very important issues. And it is important. And this is a 
subcommittee that has always been very sensitive to making sure 
that our territories are not only not forgotten, but they are 
emphasized.
    Ms. Plaskett. Thank you. I appreciate that.
    Mr. Diaz-Balart. So thank you. And now I know that Mr. 
Aguilar, he does not feel comfortable voting for things unless 
he sees it personally, so he might have to--but we will have to 
work on the potential.
    Mr. Aguilar. You did not talk about Houston, though.
    Ms. Plaskett. Mr. Chairman, you know the end of the month 
is our 100th anniversary as being part of the United States. So 
all of you can come down for the celebrations on March 31 and 
get a view of it yourself, particularly you, Pete.
    Mr. Diaz-Balart. Thank you very much. We appreciate your 
testimony and we look forward to working with you.
    Why don't we then now take a short recess and let us 
reconvene at 11:25, if there is no objection. Without 
objection.
    [Recess]
    Mr. Diaz-Balart. Committee will come to order. Welcome, Mr. 
Cartwright.
    Mr. Cartwright. Thank you, Chairman.
    Mr. Diaz-Balart. Love to hear your positions. You have 5 
minutes.
                              ----------                              

                                           Thursday, March 9, 2017.

                                WITNESS

HON. MATTHEW CARTWRIGHT, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF 
    PENNSYLVANIA
    Mr. Cartwright. All right, and I want to thank all my 
fellow appropriators for having me here today. Today, I want to 
talk about three policy areas where I urge your subcommittee to 
give attention during the fiscal year 2018 appropriations 
process.
    First one is lead hazard control. I want to invite your 
attention to the persistent problem of lead in our communities 
and to advocate for full funding support for the Office of Lead 
Hazard Control and Healthy Homes in the Department of Housing 
and Urban Development. Citizens across the country are rightly 
concerned about the threat of lead to public health, and 
obviously that was something that was brought to the floor in 
Flint, Michigan. But in districts like mine, the threat of lead 
comes not just from the public drinking water systems, but also 
from old plumbing and paint in our houses.
    As you may know, in fiscal year 2014, the Centers for 
Disease Control and Prevention spent nearly $2 million as a 
part of a 3-year funding commitment to help some of the biggest 
cities in the country monitor lead exposure. The results were 
alarming. In Pennsylvania, nearly 10 percent of the more than 
140,000 kids tested had elevated levels of lead in their blood.
    The major cities in my district, Scranton and Wilkes-Barre, 
have a high percentage of homes built before the 1940s when the 
use of lead-used paint was highly prevalent. That is why I 
strongly support robust funding for HUD's lead prevention 
programs. The Office of Lead Hazard Control and Healthy Homes 
provides funds to State and local governments to develop cost-
effective ways to reduce lead-based paint hazards.
    In addition, the Office enforces HUD's lead-based paint 
regulations, it provides outreach and technical assistance, and 
conducts technical studies to help protect children and their 
families from health and safety hazards in the home. As the 
problem of lead in our homes and its impact on our health and 
our children's health persists, we need to continue this 
important work, and I do ask the subcommittee to provide full 
funding for that office's efforts.
    Secondly, rail. I urge the subcommittee to increase its 
support for our long-neglected national railway network. In 
many parts of the world, especially in Europe and in the 
emerging fast-growing economies of Asia, citizens enjoy 
advanced modern inner-city railway systems that improve their 
quality of life, drive business activity, and boost 
productivity. America has fallen behind the curve in this area.
    In Northeastern Pennsylvania, where I live and represent, 
for example, our cities would benefit tremendously from rail 
links that connect our region to New York and New Jersey. This 
would help bring companies and growth to our region, improve 
the lives of the thousands of people who make a grueling 
commute, particularly from southern Monroe County, 
Pennsylvania, to greater New York City every day by car and 
bus.
    In addition, investment in rail decreases road congestions, 
improved transportation safety, and curbs our emission of 
pollutants that contribute to climate change. And I know that 
Chairman Frelinghuysen has getting those cars off the road in 
northern New Jersey as one of his priorities.
    By laying new tracks and increasing connectivity for our 
workers, entrepreneurs, and visitors, we will send a powerful 
signal to the private sector that our rural regions and cities 
are places where businesses can thrive and have access to 
resources, talent, and new ideas. In short, restoring an 
efficient railway network will create jobs in the near term and 
make our economy more competitive in the long term.
    And finally, aviation.
    I want to begin by commending the subcommittee's work in 
the area of aviation over the last 8 years. This committee has 
provided more than 99 percent of the FAA's budget requests. 
Your support of the programs and activities of the FAA are a 
recognition that the United States operates the largest, most 
complex air traffic control system in the world.
    In that regard, I want to urge the subcommittee to continue 
its vigorous support for the FAA's effort to modernize our air 
traffic control system. Transitioning from ground-based radar 
navigation to satellite-based navigation is a complicated 
endeavor and through your support, the FAA has made noteworthy 
progress in its NextGen program from the installation of 
automatic dependent satellite broadcast ground stations to the 
advancements in data communications. Investments in NextGen 
will not only create a more efficient system, but will yield 
additional capacity and safety benefits.
    Finally, I want to urge the subcommittee to continue to 
support efforts to ensure that our pilots are adequately 
trained and rested, to ensure our Nation's excellent record of 
safety. In that regard, I hope you will resist any efforts to 
weaken or eliminate regulations that put the flying public at 
risk. Our Nation's ATC system is a public asset and your work 
is supported by the millions of passengers that pay into the 
Airport and Airway Trust Fund each and every time they fly. I 
do hope you will continue to make your effort to ensure that 
our ATC system remains under your careful oversight.
    I thank you for your time and I yield back, Mr. Chairman.
    [The statement of Mr. Cartwright follows:]
    
    
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    Mr. Diaz-Balart. Thank you, Mr. Cartwright. Your time has 
expired. Anyone have any questions? Thank you for your time 
here today.
    Moving along. Recognized now, Congresswoman Diaz Barragan.
                              ----------                              

                                           Thursday, March 9, 2017.

                                WITNESS

HON. NANETTE DIAZ BARRAGAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE 
    OF CALIFORNIA
    Ms. Barragan. Yes, thank you very much. Thank you, Mr. 
Chairman, the ranking member, and members of the Transportation 
and Housing and Urban Development Subcommittee. I want to thank 
you for an opportunity to allow me to speak to you today. I am 
one of the new members of Congress. I represent California's 
44th Congressional District. It includes the Port of Los 
Angeles and San Pedro, and then goes through areas like Compton 
and Watts, up into Southgate.
    Most notably, as I mentioned, is the Port of Los Angeles is 
in my district. It is North America's largest seaport. It 
touches every single congressional district in this country. I 
am proud to represent the thousands of workers that are 
directly and indirectly associated with the Port of Los 
Angeles. The San Pedro Bay ports, which includes both the L.A. 
port and the Long Beach port, accounts for one-quarter of the 
Nation's cargo and supports over 3 million jobs nationwide.
    My message today is simple. I urge you to invest in our 
Nation's freight transportation network, particularly on the 
multimodular transportation and on programs that provide 
comprehension solutions to combat homelessness.
    I want to start first with the freight transportation. With 
raising freight volumes, increasing population density, and 
growing international competition, we need to make sure to 
maintain and modernize and expand our infrastructure, including 
landslide freight connections that are necessary to move goods 
to and from our ports. A competitive grant program for freight 
and multimodular transportation, like fast-lane grants, will 
improve congestion, air quality, and helps goods get to where 
they need to go faster.
    In 2014, the FAST Act was enacted into law, making freight 
a national issue, and the first time that ports and freight 
were fully integrated into the surface transportation network. 
Now, the FAST Act also established dedicated freight programs, 
including discretionary grant programs known as FASTLANE, which 
authorized $4.5 billion over 5 years. The goals of the FASTLANE 
program are to increase the U.S. global economic 
competitiveness, reduce congestion and bottlenecks, increase 
efficiency and reliability of the highway network, and reduce 
the environmental impact of freight movement.
    In keeping with these goals, one particular program that is 
of national significance is something that was just funded in 
2017 for the--rather, an application for the fiscal year 2017 
program at the Port of Los Angeles. We submitted an application 
known as America's Global Freight Gateway Southern California 
Rail Project. This request represents only 29 percent of the 
project's total cost. This investment is needed to accommodate 
more cargo via on-dock rail at the largest port complex in the 
Western Hemisphere while reducing community impacts inland by 
grade, separating high-priority railroad crossings.
    Now, the two Port of Los Angeles project components 
currently accommodate approximately $6 million for--rather, 
sorry, they accommodate approximately 6 percent of all 
waterborne containers entering and exiting the United States.
    So I urge the subcommittee to fund FASTLANE grants at the 
authorized amounts of $900 million for fiscal year 2018, and 
$850 million for the fiscal year 2017. I also want to mention 
that Congress should consider raising or eliminating the $500 
million lifetime cap for multimodule projects, like highway 
connectors and on-dock rail, that are needed to move goods to 
and from our port.
    I will move on to homelessness. It is a issue that has just 
been exploding just throughout the country, more so in Los 
Angeles. And my district in Los Angeles County has the highest 
homeless population in the Nation with 47,000 homeless men, 
women, and children on any given night. It has reached epidemic 
proportions and I urge this body to support programs that will 
help break the silence, the cycle of homelessness.
    Just to highlight one of the programs is the Continuum of 
Care. It provides a comprehensive solution to homelessness 
epidemic which emphasizes housing first and provides supportive 
services. In Carson and Compton, both in my district, the L.A. 
County Continuum of Care has been crucial in preventing a 
return to homelessness by providing comprehensive solutions 
that previous efforts lacked. The funds can be used to provide 
transitional housing, rapid rehousing, permanent supportive 
housing, support services, and planning to improve program 
performance. It has been successful and I urge the subcommittee 
to support the $2.7 billion for homeless assistance grants for 
fiscal years 2018 and 2017, specifically, the Continuum of Care 
program at $2.4 billion for both fiscal years.
    To maintain housing affordability and prevent people from 
becoming homeless in the first place, we should support key 
programs that ensure access to affordable housing, such as the 
Community Block Development Grants. Since fiscal year 2010, 
CDBG has been cut nearly 25 percent, amounting to roughly $1 
billion annually. So just to get to the end here, I urge this 
committee to support things like HUD-VASH at a funding level of 
$75 million for both fiscal years 2018 and 2017. We do not have 
to accept homelessness. I think it is a solvable problem, and I 
thank this subcommittee for your time.
    [The statement of Ms. Barragan follows:]
    
    
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    Mr. Frelinghuysen. Thank you very much for your testimony 
here today. Appreciate it. Any questions? Hearing none, thank 
you.
    Now I have Congressman Johnson from the fine State of 
Louisiana.
                              ----------                              

                                            Thursday, March 9, 2017

                                WITNESS

HON. MIKE JOHNSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF 
    LOUISIANA
    Mr. Johnson. That is right, Mr. Chairman. Thank you and 
committee members. We will go from the other L.A. to the real 
L-A and that is Louisiana, right?
    I appreciate the opportunity to come before you today to 
consider funding priorities for the fiscal year 2018. I am 
grateful for your continued support of our Nation's 
infrastructure and transportation priorities.
    Given the importance of northwest Louisiana's unique 
national security footprint and mixed infrastructure needs, I 
am truly thankful for the opportunity to bring important and 
noteworthy projects to your attention. I am going to try to 
speak quickly so I can get it all in.
    Today I share my support for providing adequate formula 
funding for the FAST Act, and specifically grant opportunities 
in the FASTLANE program to aid the national needs we have heard 
here today. My district, Louisiana's Fourth Congressional, 
contains five of the nine Louisiana Department of 
Transportation State sectors, and that makes us the largest. 
Within that area, my district contains 3,403 bridges; a total 
of over 20,000 miles of local and interstate roadway. It is 
also home to four shallow draft port authorities with 485 miles 
of navigable waterways, 7 freight railroads, and 875 miles of 
railroad track. Every single one of these areas are in need of 
immediate attention.
    We are a poor State and I know there are many needs in your 
own districts, as well. Long-term statewide transportation 
plans have identified incredibly significant amounts in 
transportation needs right now. And we demonstrated that 
without adequate funding of about $1.86 billion to address 
these critical infrastructure projects, efforts aimed to 
improve safety needs will go unaddressed.
    Louisiana, despite maximizing and capturing available 
Federal dollars every year, sees a transportation budget that 
is only about 6- to $700 million annually, and it puts us 
drastically short of our critical needs.
    Just as many of the other members have here stated, my 
State is in desperate need of immediate action. To provide just 
a few examples of the critical issues in this district, since 
January alone, we have had nine bridges that have been forced 
to shut down. According to official reports in recent years, 
northwest Louisiana's economic health and our quality of life 
are at risk if these transportation and infrastructure funding 
challenges continue to go unanswered. Without the necessary 
funding, it will not be possible to reverse the damage done by 
previous year's failures to address these economic challenges.
    In the Fourth Congressional District of Louisiana alone, 
our statewide plan identifies at least 13 category A through D 
megaprojects.
    Given the realities of needing to maintain a fiscally 
balanced budget, we obviously accept that every infrastructure 
project cannot be met. But despite this fact, we have been 
presented with an opportunity to once again prioritize the most 
important and noteworthy projects. So in addition to advocating 
for adequate funding formula for the FAST Act, I would also ask 
that the committee support competitive grant opportunities and 
the FASTLANE program.
    I would like to provide some specific examples, very 
quickly, of the infrastructure and highway projects in my 
district that are critical for improving not only the local 
economy, but national security, as well.
    First, funding for the final portion of I-49. We have got 
3.6 miles of the proposed new highway that will intersect 
Shreveport, our largest city, in order to connect to I-49, at 
the I-20 interchange with I-49 North near the I-220 
interchange. This will add a seamless and helpful connection 
for a highway that extends all the way from Canada to New 
Orleans. This project will reduce travel time and travel 
distance for those remaining on I-49, and provide a more direct 
access to downtown Shreveport, as well as align needs for 
supporting current Air Force plans for our Air Force base at 
Barksdale.
    A second example is with the interstate project of I-69. It 
has been named by the U.S. DOTD as one of the six corridors of 
the future. And construction of I-69 is critically important to 
provide exponential resources to the port of Shreveport 
Bossier, Barksdale Air Force Base, and a much-needed loop 
around the urban area of Shreveport and Bossier City. In 
northwest Louisiana, the sections of independent utility 14, 
15, and 16 need to be completed in order for the project to 
continue.
    Third, we have a project that would greatly benefit from 
these programs, the interstate widening efforts for I-49 and I-
20 in the Fourth Congressional District. The I-20 corridor is 
congested with vehicle traffic at several points with 
conditions expected to worsen in the coming years. And grant 
opportunities have the potential to allow for further 
development of these interstates. They are critical for the 
economies of the local regions and States.
    Bossier Parish is one of the fastest growing areas of our 
State, and this rapid growth has caused severe traffic 
congestion, especially on Highway 3 and Highway 3105, Benton 
Road and Airline Drive. And that congestion threatens future 
development in the area. We have to act now. We need funding 
for that.
    Last but not least, I would like to mention the Barksdale 
Air Force Base gate project. Barksdale is a key national 
security asset located in Bossier Parish that does not have 
sufficient direct access to the interstate system. It is an 
issue which is a hindrance to national Air Force priority, and 
I met with our four-star general there about this 2 weeks ago.
    The State is advancing a project to fix this, supporting 
DOD's investment in our national security and in our State. The 
project will improve base security and connect the new public 
road extending from I-20 at the I-220 interchange to a new gate 
at Barksdale Air Force Base, moving the commercial vehicle 
inspection station away from aircraft approach. We think this 
is critical, especially for the future weapons storage and 
maintenance facility that will be there. And it has a 
preliminary cost estimate of 80- to $100 million. However, 
there is an immediate $11.8 million fiscal year 2019 MILCON 
request by the Air Force which has been briefed to the 
Secretary of Transportation and our State's governor.
    Like each of you, I have got dozens of projects that I 
could go on about. I realize that I am quickly running out of 
time, but in addition to these new capacity projects, costs to 
maintain the transportation system we already have continue to 
grow. Providing the needed resources to competitive grant 
opportunities in the FASTLANE program to address longstanding 
challenges will serve as an economic generator and help 
protections for Louisiana, Texas, Arkansas, and our surrounding 
areas. It is my understanding that many of these top priority 
infrastructure projects have been raised to the President, as 
well as to our governor.
    I know I am out of time and I want to thank you again for 
your hard work and your diligent efforts on all these things.
    [The statement of Mr. Johnson follows:]
    
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    Mr. Diaz-Balart. Let me thank you, Congressman Johnson, for 
your testimony. You obviously know we are always here to 
continue to work with you. This subcommittee is anxious and 
willing to work with you on issues that are important to you, 
and we want to thank you for your testimony. And remember also 
if there is anything else you would like to put on the record, 
you are more than welcome to do so. We look forward to working 
with you.
    Mr. Johnson. Thank you very much. Appreciate that very 
much.
    Mr. Diaz-Balart. Thank you, sir. I will now recognize 
Congressman Byrne from the great State of Alabama, somebody I 
have had the privilege of working with on a number of issues, 
so it is a privilege to have you here, sir. Thank you. You are 
recognized.
                              ----------                              

                                           Thursday, March 9, 2017.

                                WITNESS

HON. BRADLEY BYRNE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF 
    ALABAMA
    Mr. Byrne. Thank you, Mr. Chairman. I might say I am from 
the other L-A, lower Alabama.
    Mr. Diaz-Balart. I always thought that was part of Florida, 
by the way, lower Alabama.
    Mr. Byrne. It used to be at one time. We were the 
independent nation of West Florida for about 10 months in the 
1810s, and neither the British nor the Americans thought that 
was a good idea, so we are part of America now.
    Mr. Diaz-Balart. Well, it is a pleasure to have you here. 
Thank you, sir, and you are recognized.
    Mr. Byrne. Thank you very much. It is a pleasure for me to 
be here today. I want to applaud the efforts of this committee 
which have resulted in steady progress towards improving our 
Nation's infrastructure.
    I was proud to support the Fixing America's Surface 
Transportation, or FAST, Act back in 2015, and I support the 
financing necessary to ensure the bill's implementation.
    Despite our best efforts, there are many areas across the 
country that continue to have major transportation needs. For 
example, we continue to have a real transportation problem on 
I-10 along the Gulf Coast.
    In my hometown of Mobile, I consistently and repeatedly 
experience delays at the George Wallace Tunnel. Due to the 
tunnel's height and odd design, traffic accidents and incidents 
often occur. These result in people traveling around I-10 
sitting in traffic for hours, pushing toward 3- to 4-hour 
delays in the summer months as people are traveling to and from 
the beaches. Some of those are Florida beaches, Mr. Chairman.
    This portion of I-10 is incredibly important to our area as 
well, given its close proximity to the Port of Mobile and the 
need to ensure the safe and expedient flow of commerce to and 
from the port.
    Just as important, I-10 serves as an evacuation route 
during hurricane season, and I know I do not have to tell you 
the importance of that, Mr. Chairman. The current traffic 
situation could result in Americans being left in harm's way 
during a severe weather event.
    We have made important progress over the last few years 
working together with local, State, and Federal officials to 
move forward with a new I-10 bridge across the Mobile River. 
Former Secretary of Transportation Foxx came to Mobile to see 
the project, and he saw the need firsthand.
    So, I ask the committee to fully fund the various 
transportation programs in the FAST Act in order to allow 
projects like the I-10 bridge in Mobile to move forward. This 
project is a textbook definition of a nationally and regionally 
significant highway project.
    I am encouraged by President Trump's commitment to 
improving infrastructure. I completely agree with the 
President. However, we must be smart about how we make these 
future investments to rebuilding and boosting our Nation's 
infrastructure to ensure precious resources are not wasted on 
unnecessary or wasteful projects, which brings me to my other 
reason for sitting before you today.
    I want to urge the committee to avoid mistakes from the 
past, like funding for California high-speed rail. Looking back 
at 2009, the Obama administration spent $8 billion for 
transportation. One-quarter of that funding, $2 billion, went 
to California high-speed rail. This project was by no means 
``shovel ready.'' In fact, more than 8 years later, the land 
has not even been fully procured to complete the project. 
Today, California has not met any of the obligations to match 
the Federal funding. Even worse, almost another billion dollars 
was given to California in 2010, and the project remains 
embarrassingly behind schedule.
    The Los Angeles Times reported that the project ``will cost 
taxpayers 50 percent more than estimated, as much as $3.6 
billion more, and that is just for the first 118 miles through 
the Central Valley, which was supposed to be the easiest part 
of the route between Los Angeles and San Francisco.''
    This is the definition of a boondoggle, Mr. Chairman. We 
all heard about the ``Bridge to Nowhere.'' It is safe to call 
this the ``Train from Nowhere to Nowhere.''
    This is one of the largest wastes of taxpayer money ever. 
Given the many serious transportation needs around the country, 
it is a shame so much funding was wasted on California high-
speed rail.
    I hope the committee will use this disaster example of 
California high-speed rail to ensure funding is going, first 
and foremost, to nationally and regionally significant projects 
instead of boondoggles. We must make smart investments in our 
Nation's most serious infrastructure needs.
    Thank you very much for your time today. I appreciate the 
opportunity to share my thoughts.
    [The statement of Mr. Byrne follows:]
    
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    Mr. Diaz-Balart. Let me take this opportunity to thank you, 
sir. Again, you know, you have demonstrated always in my 
working with you that you are thorough, you are serious, and 
you do your homework. So, I just want to thank you, and just 
know that we appreciate your testimony and look forward to 
continuing to work with you, sir.
    Mr. Byrne. Thank you, Mr. Chairman. Good to be with you.
    Mr. Diaz-Balart. Thank you.
    Mr. Graves. Mr. Chairman?
    Mr. Diaz-Balart. Yes?
    Mr. Graves. If you are ever in California, I would love to 
take the opportunity to show you around on what they are doing 
out there in my part of the country. The Central Valley portion 
of it does touch my district, and it even comes to the point 
where we think it might even touch my own personal property. I 
would be happy to show you around and let you see from the 
perspective of those who are there what it is really like.
    During your testimony, I would say you were pretty accurate 
in your description.
    Mr. Byrne. Thank you.
    Mr. Diaz-Balart. Thank you. Seeing no further questions, we 
will now recognize the distinguished gentleman from New Jersey, 
Mr. Albio Sires, I think one of the hardest working members of 
Congress.
    Mr. Sires. Wow.
    Mr. Diaz-Balart. Absolutely. Congressman Sires, it is a 
privilege to have you here, sir, and you have the floor. Make 
sure your microphone is on.
    Mr. Sires. Is it on? Can you hear me?
    Mr. Diaz-Balart. Yes. Thank you, sir.
                              ----------                              

                                           Thursday, March 9, 2017.

                                WITNESS

HON. ALBIO SIRES, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW 
    JERSEY
    Mr. Sires. Well, thank you for affording me the time to 
express my support for two critical programs that will be 
included in the fiscal year 2018 appropriations bill, the 
Community Development Block Grant Program and the HOME 
Investment Partnerships Program of the Department of Housing 
and Urban Development.
    As a former mayor, I understand how critical these programs 
are to communities across the country, especially our low-
income communities. As you may know, President Gerald Ford 
signed this legislation creating the CDBG Program in 1974 to 
provide annual formula grants to local governments and States.
    Over 40 years later, the CDBG Program continues to provide 
funding for critical projects across our country that urban and 
rural communities would otherwise be unable to afford. These 
grants make investments in local and regional infrastructure, 
spur job creation, and fight poverty in communities that need 
it the most.
    Communities utilize this funding to rebuild streets, 
rehabilitate community centers, improve parks, and replace 
water mains that are badly in need of repair. These funds also 
support youth and homeless services, employment training, and 
projects to provide suitable living for the disabled.
    Importantly, these funds are flexible enough that local 
officials can direct them in areas that need them the most. The 
CDBG Program has been incredibly successful throughout its 40-
year history, and I know firsthand it has made a lasting 
impression on towns and cities across America.
    Like the CDBG Program, the HOME Program supports projects 
that would not otherwise be feasible. Using HOME funds, 
communities partner with local nonprofits to fund projects 
renovating and building or purchasing affordable housing for 
lower income Americans. These projects provide shelters for 
veterans, senior citizens, and the working poor.
    As our Nation's affordable housing infrastructure grows 
older, grants from the HOME Program become more and more 
critical to providing safe and affordable housing for those who 
need it most.
    On behalf of 1,000 cities in New Jersey's congressional 
districts and the thousands of people impacted by these 
programs, I urge you to support both the CDBG Program and the 
HOME Program as you continue your appropriations process. Thank 
you very much for the time given to me today.
    [The statement of Mr. Sires follows:]
    
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    Mr. Diaz-Balart. Let me just thank you, Congressman. Mr. 
Price.
    Mr. Price. Thank you, Mr. Chairman. I want to join you in 
thanking our colleague for short but persuasive testimony about 
the two programs that I believe it is fair to say on the HUD 
side of our budget have had historically the broadest 
bipartisan support, and certainly support in our communities 
across the country. So, thank you for underscoring that. We 
appreciate you being here today.
    Mr. Sires. Thank you.
    Mr. Diaz-Balart. Thank you, Congressman. Thank you for your 
testimony. We will now recognize, again, also from the State of 
New York----
    Mr. Espaillat It is hard to pronounce.
    Mr. Diaz-Balart. It should not be for me. If I can ask you 
first to make sure your microphone is on. It is Espaillat?
    Mr. Espaillat. Espaillat.
    Mr. Diaz-Balart. Okay. I will never get that wrong again. 
Thank you, sir, it is a privilege to have you here in front of 
our subcommittee.
                              ----------                              

                                           Thursday, March 9, 2017.

                                WITNESS

HON. ADRIANO ESPAILLAT, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF 
    NEW YORK
    Mr. Espaillat. Thank you, Chairman, Ranking Member Price. 
Let me just start by congratulating the chairman on the recent 
award he got at the dinner with his brother, Lincoln Diaz-
Balart, for the contributions of him and his family to public 
service. I was delighted to be there, where I found out the 
handsome level of funding that he will be impacting on for HUD. 
So, I hope to work very closely with him as we move forward.
    Mr. Diaz-Balart. With his introduction, I think he is doing 
really well. I think it was brilliant and on point.
    Mr. Espaillat. I hope to do better.
    Mr. Diaz-Balart. Right, Mr. Price?
    Mr. Price. Yes.
    Mr. Diaz-Balart. Thank you for your kind words, and again, 
you are recognized, and we thank you for being here.
    Mr. Espaillat. Thank you for allowing me to testify during 
today's subcommittee hearing to lay out my priorities as they 
relate to transportation, housing, and urban development.
    It is my hope that Congress will enact regular full-year 
fiscal year 2018 appropriations for HUD programs prior to the 
end of fiscal year 2017. It is my understanding that none of 
the fiscal year 2017 regular appropriation bills were enacted 
before the end of fiscal year 2016, and Congress instead 
approved two continuing resolutions to provide temporary 
funding. This provides funding through April 28, 2017, which is 
just around the corner.
    When it comes to housing, this kind of insecurity is hardly 
acceptable. Moreover, a recent news report has revealed that 
the administration is proposing cuts to operational funds by 
$600 million, so 13 percent of the budget, and these are 
serious cuts, and for big ticket repair items for public 
housing, cuts in the amount of $1.3 billion, or 32 percent. 
This is also a very serious level of cuts for public housing.
    Now, traditionally we think that infrastructure is just 
roads, bridges, and tunnels, but we as landlords, because 
public housing happens to be our housing--in fact, the 
President lives in public housing. The White House is public 
housing; we as members of Congress are the landlords, the 
owners of these housing units, and so is the President.
    We should own up to our responsibility to provide a safe, 
healthy, and sustainable life setting in these units, in over 
1.2 million units of public housing.
    I am submitting testimony because I am concerned with 
reports stating that domestic discretionary funding may suffer 
at great cost. This is particularly concerning, as it relates 
to already poor and struggling communities, like Washington 
Heights, Harlem, Inwood, the Bronx, and East Harlem.
    The Housing Choice Vouchers Program and the Section 8 
Rental Program are on the chopping blocks. My district has the 
most number of housing units in the City of New York and, 
therefore, the Nation, and has the second most residents in 
terms of population.
    Having been an organizer, I understand the effects of 
housing needs, the need to protect low-income renters from 
being displaced from their homes, and the importance and 
growing needs for increased funding for Section 8 housing. Now, 
the cuts that are being proposed also include cuts in Section 8 
Housing Vouchers for people like homeless veterans at the tune 
of $300 million, or from $300 million to potentially $19.3 
billion. So, this is very concerning.
    New York City Housing Preservation and Development, HPD, 
and the New York City Housing Authority, NYCHA, collectively 
administer over 123,000 vouchers that provide critical rental 
assistance to families across the city. These vouchers are a 
lifeline for more than 294,000 families in New York City. Since 
the 2009 sequestration, New York City families have lost nearly 
13,000 vouchers.
    New York City is home to the country's largest public 
housing authority, and its impact is monumental for low-income 
and working families in a high-cost city. Public housing is a 
valuable asset for more than 400,000 New Yorkers. That is 
bigger than many cities throughout the United States. This is 
an asset that needs to be fully funded to prevent the loss of 
even more public housing units in our Nation.
    Public housing operations and capital have been underfunded 
for many, many years, putting long-term viability of the units 
at risk, and resulting in health impacts for residents, 
including asthma, respiratory illnesses, which are a major 
public health concern for public housing residents throughout 
the Nation.
    New York City has a 5-year backlog of capital needs, 
nearing $17 billion. This is the largest unmet need in the 
Nation, and a significant portion of HUD's total capital 
backlog assessed at $26 billion in 2010.
    An increase in funding will be invested in capital repairs 
which could tackle the public housing needs and health 
concerns. Many of the public housing units in our country are 
in disarray, and with an added $600 million, units could 
address more remediation, including roof repairs, brick 
repairs, piping, asbestos removal, and other issues that lead 
to increases in health concerns for low-income residents.
    My time is about to expire, Mr. Chairman, but I do want to 
stress the importance of having funding channeled to public 
housing. In my opinion, infrastructure should include our 
public housing network, and we should provide adequate funding 
for families to have a safe and healthy environment in which 
they live. We as landlords have that responsibility.
    Thank you so much.
    [The statement of Mr. Espaillat follows:]
    
    
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    Mr. Diaz-Balart. Let me just thank you for your testimony, 
and please do know that this committee is looking forward to 
working with you. You obviously represent a part of the country 
that is very dynamic. So, just know that we look forward to 
working very, very closely with you in the coming months.
    Mr. Espaillat. Thank you so much. I look forward to that 
opportunity.
    Mr. Diaz-Balart. Mr. Price.
    Mr. Price. Let me reiterate we are happy to have you as 
part of the Congress. I welcome you and thank you for your 
testimony today. We will pay very close attention to it.
    Mr. Espaillat. Thank you so much.
    Mr. Diaz-Balart. Thank you, sir. We will now recognize Mr. 
Visclosky, who has been patiently waiting back there, if he is 
ready. Then we will have Mr. Suozzi right after that, if he is 
ready as well.
    Again, sir, thank you for being here, and thank you for 
sharing your testimony.
                              ----------                              

                                           Thursday, March 9, 2017.

                                WITNESS

HON. PETER J. VISCLOSKY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF 
    INDIANA
    Mr. Visclosky. Mr. Chairman, Mr. Price, and members of the 
committee, I appreciate the opportunity to testify before you 
today. I feel like I have come home. My mentor in another 
century was chairman of this great subcommittee, so it is good 
to be back.
    I am here today to emphasize my support and ask for your 
support for the Federal Transit Administration's Capital 
Investment Grant Program and the New Starts, and Core Capacity 
Grants Program. All of you understand the importance of transit 
and its economic and beneficial impact throughout the United 
States. I want to give you a real world example in northwest 
Indiana.
    Lake County, Indiana, which is the most populous county I 
represent, is on Lake Michigan and it is contiguous to the City 
of Chicago. Lake County, Illinois, is on Lake Michigan and it 
is contiguous to the City of Chicago. Since 1970, the 
population of Lake County, Indiana, which I represent, has 
declined by 10 percent. The fact is, the population for Lake 
County, Illinois, has grown by 83 percent. The median household 
income in Lake County, Indiana, in the similar period of time 
has declined by 12.5 percent. The median household income in 
Lake County, Illinois, has increased by 17.7 percent.
    I would propose to you one of the fundamental differences 
is that on the Illinois side of the State line between our two 
great States there are over 470 miles of mass transit line, 
many of which go to Lake County, Illinois. On the Indiana side, 
it is as though someone built a great wall. There are 38 miles 
of mass transit in Indiana going to Michigan City. The line 
then extends to South Bend. We have been working for a 
generation to connect ourselves to the economy of Chicago, 
which is larger than the economy of Sweden, to not only access 
that economy, but to draw down its benefits to northwest 
Indiana.
    Over the past several years, we have had 16 of the 20 
communities in Lake County make a long-term, 30-year commitment 
to meet and match Federal funding. I would point out that in 
his capacity as governor, Vice President Pence in 2015 signed 
State legislation for a long-term, 30-year commitment to meet 
that Federal program. This year in his budget, Governor Holcomb 
in the State of Indiana has included money to meet those 
Federal grant programs. We will apply in August.
    But all of this effort for a generation will be for naught 
if that capital investment grant program is not adequately 
funded. Currently in 2016, the appropriation was $2.17 billion, 
which was sustained due to the enactment of the continuing 
resolution. I would point out in this committee's markup for 
the House you included $2.5 billion, obviously understanding 
the value of this program.
    It is not limited to the coast, it is not limited to 
northwest Indiana. You have projects in places like El Paso, 
Texas; Albuquerque, New Mexico; and Milwaukee, Wisconsin. I 
would strongly urge you, when we talk about infrastructure in 
this Congress and we talk about investing in the economy, to 
ensure that we preserve these programs, not just for the 
congressional district I represent, but recognizing that, since 
2012, requests for these types of capital construction have 
increased from 37 to 63. Because communities throughout our 
great Nation understand the importance economically for good-
paying job growth that this Federal investment of our taxes 
represent. And again, I appreciate the opportunity to be before 
you today.
    [The statement of Mr. Visclosky follows:]
    
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    Mr. Diaz-Balart. Well, let me thank you, sir, and obviously 
you are somebody who understands the appropriations process as 
well if not better than anybody in this building and this 
facility. So obviously we look forward to working with you. Mr. 
Price, any comments or questions?
    Mr. Price. I want to thank our colleague and friend for 
being here and for taking note of the attention this committee 
paid in the current cycle to New Starts, and the importance of 
getting closer to that number, hopefully, with a 5-month 
omnibus bill for the remainder of 2017. In the meantime, you 
have given a very convincing rationale rooted in your own 
district's experience for the importance of this going forward, 
so we appreciate that.
    Mr. Visclosky. Appreciate your efforts very much. Thank you 
so much.
    Mr. Diaz-Balart. Thank you, sir. Now we will recognize Mr. 
Suozzi. And again, thank you for being here on time and, again, 
we look forward to working with you. The floor is yours, sir.
                              ----------                              

                                           Thursday, March 9, 2017.

                                WITNESS

HON. THOMAS R. SUOZZI, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF 
    NEW YORK
    Mr. Suozzi. Thank you, Mr. Chairman, and thank you, Ranking 
Member Price, and the other members that are here today for the 
subcommittee. I want to thank you for the opportunity and the 
time to discuss my request for funding the health impacts of 
airplane noise at some of our busiest airports throughout the 
country.
    Recently, I was elected as co-chair of the Quiet Skies 
Caucus along with Congresswoman Eleanor Holmes Norton, and we 
are fortunate to have Congressmen Quigley and Lynch serve as 
co-vice chairs of the caucus. All of us, along with dozens of 
other members from both sides of the aisle, have constituents 
who are deeply impacted by unacceptable levels of airplane and 
aircraft noise.
    I am a new member of this distinguished body, but while 
exploring a run for this office, aircraft noise was one of the 
first issues I heard about from voters. At a town hall I had 
held last June, a constituent rose to ask about what I would do 
and could as a member of Congress to reduce aircraft noise over 
her home and in that neighborhood. In fact, she was interrupted 
twice during the conversation in less than 2 minutes by 
aircraft passing overhead. The noise was so loud, she had to 
pause and wait for planes to pass before she could continue 
asking her question.
    I represent New York's Third Congressional District. The 
district stretches from northeastern Queens along Long Island's 
north shore through Nassau County and Suffolk County. My 
constituents have two of the world's busiest and biggest 
airport, LaGuardia airport and John F. Kennedy International 
Airport, that lie just beyond the district's boundaries. 
Although both airports are outside the district, both rely on 
flight paths that traverse numerous neighborhoods in and around 
my district. This is not a discrete problem affecting a limited 
number of people, but a major issue impacting people across the 
country.
    Many of us rely on Reagan National Airport to return home 
each week. Congresswoman Holmes Norton's district's 
constituents, who call Washington, D.C., home, are impacted by 
travelers like ourselves, who come from our districts to engage 
in the people's business or visit our Nation's capital. Mr. 
Quigley's constituents live near O'Hare International Airport, 
one of the world's busiest airports, and suffer greatly under 
the volume of flights that land and depart every day. And Mr. 
Lynch's constituents in and around Boston's Logan Airport also 
suffer from unacceptable noise levels along with constituents 
of dozens of other members who are part of the Quiet Skies 
Caucus.
    This is not a partisan issue. Mr. Coffman of Colorado is a 
member of the Quiet Skies Caucus and works with us on behalf of 
his constituents to alleviate and reduce unacceptable noise 
levels.
    Our friends in the Senate also believe this is an important 
issue. Senators McCain and Flake of Arizona have championed 
this cause and have taken the lead in the Senate to help 
mitigate noise from aircraft in Arizona and across the country. 
I have tried to make the case that unacceptable noise levels is 
a bipartisan national issue of significance worthy of 
congressional attention.
    Today my primary goal is to impart the significance of the 
issue to you and my colleagues. One of the key takeaways was a 
realization from a town hall meeting I had that there is an 
ongoing failure to understand the seriousness of this issue. In 
other words, we still need to persuade the Federal Aviation 
Administration and others that this is not a subjective 
complaint of a bunch of cranks, but an objective problem 
harming human health.
    In order to legitimize concerns, I believe we need to 
federally fund health studies conducted by the leading 
universities of our country to demonstrate that this issue 
objectively raises health concerns. I have followed up with 
members of the Quiet Skies Caucus and found they agree with 
this conclusion and even relayed their own constituents' 
frustrations that their complaints are often dismissed without 
due consideration. We believe these health studies which will 
objectively determine the impact on individuals and their 
families' health will demonstrate the need for all stakeholders 
to address the issue.
    In addition to health studies, and while they are 
conducted, I believe other steps should be taken in the 
interim. Many districts are experiencing unacceptable noise 
levels as a result of the NextGen route changes. While the FAA 
says the noise is within the acceptable 65 day/night level, 
that standard was developed more than a decade ago. I believe 
that the FAA needs to conduct an expedited review of the 65 DNL 
standard and incorporate actual noise sampling, not just rely 
on the modeling and simulation. Therefore, I ask the Committee 
to include report language urging the FAA to expedite DNL 
review and to provide the Committee with a report no later than 
60 days after enactment of the act describing a pilot program 
for conducting actual noise sampling as part of the DNL review.
    On its face, this issue may appear to be one of mere 
annoyance, but I can assure you that it is not a trivial issue. 
The members and Senators I have mentioned above, and many more, 
can echo and expand upon the thoughts and points I have raised 
today. Our constituents raise legitimate concerns because they 
are subjected to unacceptable noise levels at a volume and 
frequency that have dramatically impacted their quality of life 
and their health. My hope is that the subcommittee will join 
with us to assist from across the country by raising the 
profile of this issue and working with us towards results and 
getting things done for the American people.
    Thank you so much for your time. I cannot imagine what is 
like for you to listen to everybody's different requests that 
come in here, but I am very grateful for the opportunity to be 
here.
    [The statement of Mr. Suozzi follows:]
    
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    Mr. Diaz-Balart. Well, let me first thank the gentleman. 
And I will tell you, obviously, on this subcommittee we have 
Mr. Quigley, who never lets us forget the issue that you have 
just brought up, and just know that we look forward to working 
with you.
    Mr. Suozzi. Thank you so much.
    Mr. Diaz-Balart. Thank you, sir. Mr. Price.
    Mr. Price. Let me reiterate that receptivity. We have a 
history on this committee of trying our best to deal with what 
are often difficult situations, so we appreciate your 
testimony.
    Mr. Suozzi. Thank you, Mr. Price. Thank you.
    Mr. Diaz-Balart. Thank you, sir. We are not going to 
recognize, by the way, members of the subcommittee. Mr. Lawson 
will be our last colleague testifying in front of us today.
    While he gets ready, let me just tell you that Mr. Lawson 
is a freshman, but he has been involved in Florida politics. He 
and I served in the Florida legislature and so it is, frankly, 
a real personal--just it is wonderful to recognize him here now 
as a colleague as we were for many years in the Florida 
legislature and now in the United States Congress. So on a 
personal level, it is great to see you here, sir, and obviously 
as chairman let me recognize you for your testimony.
                              ----------                              

                                           Thursday, March 9, 2017.

                                WITNESS

HON. AL LAWSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA
    Mr. Lawson. Thank you, Mr. Chairman, and it is a real 
privilege for me to be here with you and I am real honored to 
be able to represent the Fifth Congressional District in 
Florida. I need to say that it runs all the way to 
Jacksonville, you know, from Gaston County to Jacksonville, to 
make sure to include it.
    There are a number of critical programs that I would like 
to discuss given the importance of our district. First, I would 
like to see full funding for the Capital Investment Grants 
Investment Program. These projects not only generate economic 
development, but also help to reduce energy consumption. I know 
the subcommittee has been very supportive of these programs and 
your work should be applauded for providing over $408 million 
in fiscal year 2017, the THUD bill more funding than the Senate 
bill.
    I would like to highlight one project for my district that 
is currently in the small start pipeline for funding. The 
Jacksonville Transportation Authority had begun implementing a 
57-mile bus rapid transit, the BRT, network system called the 
First Coast Flyer. It is made up of five district lines, two of 
which are already operating. The fiscal year 2017 bill, there 
is currently $14.9 million pending for the First Coast Flyer 
East corridor and for fiscal year 2018 budget, $37.9 million 
for the Southwest corridor. I would like to see both projects 
funded.
    The BRT is an important investment in Jacksonville public 
transportation system. It has provided us with a variety of 
options to develop safe, reliable, premium service in a cost-
effective manner. I would like to see the subcommittee continue 
to provide funding for the TIGER Grants program and bus 
facilities.
    Finally, I recently had the opportunity to visit Eureka 
Gardens Apartments, a privately owned, subsidized apartment 
community in Jacksonville. Like most Americans, the residents 
of Eureka Gardens want a clean, affordable, and safe place to 
raise their families and to call home.
    The conditions I saw really kind of broke my heart. Sadly, 
under the previous management company, Eureka Garden has fallen 
into a horrible state of disrepair where residents have to 
combat black mold, infestation, gas leaks, the loss of heat and 
hot water, no air-conditioning, and persistent crime problems 
which is very prevalent. It is my firm belief that the people 
who pay rent, regardless of their income, neighborhood, or 
whether they live in privately owned or public housing, have 
the right to expect and get routine maintenance, and that no 
one should be forced to live in conditions that threaten health 
or safety.
    It is my hope that as the committee begins to put together 
the 2018 budget that it would consider adding additional 
funding for oversight, renovation, and modernization of older 
public and private housing units. Not only that it was brought 
to my attention, it was also brought to the attention of 
Senator Rubio, who had the opportunity to visit that area.
    It is my hope that a separate line of funding could be made 
available for small, medium, and large communities. I would 
also ask that the committee consider providing low-income loans 
to owners of subsidized housing until--units to make necessary 
repairs to their facility.
    I want to thank you all for this opportunity to share with 
the subcommittee my thoughts on funding and thank you again for 
ongoing support of these programs. I really cannot say enough 
about the chairman's commitment that he had in the State of 
Florida. I had the opportunity to work with him and it is truly 
an honor to be reunited with the chairman here, and I am sure 
that he remembers all of the good things that we did in the 
State of Florida, even though he was, in my opinion, the 
southern part of Florida, and we always thought they were 
separated from America. We were up there around Georgia and 
Alabama, but it was a big difference.
    So we were still able to work together and I am so honored 
to have the opportunity for the first time, to meet many of you 
all, and to realize that I have got 13 seconds, I want to thank 
you all for this great opportunity.
    [The statement of Mr. Lawson follows:]
    
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    Mr. Diaz-Balart. Well, let me just again, for those of you, 
Mr. Price and others, as he said, he and I worked together, we 
conspired together on a lot of difficult issues. And just be 
forewarned, he will not let us forget the issues that are 
important to him.
    So thank you, sir, and, again, an honor. And you are right, 
for me, it is a personal moment of personal satisfaction to be 
able to be reunited with you, sir. Mr. Price.
    Mr. Price. Mr. Lawson, we are very happy to have you here. 
We can benefit, I think, from your years of experience and your 
political savvy as well as your attention to the needs of your 
part of Florida. So we look forward to working with you.
    Mr. Lawson. Thank you so much, I look forward to it.
    Mr. Diaz-Balart. Let me now just thank each and every 
member of the subcommittee, also those members who came to 
testify on their THUD priorities today. We appreciate the 
opportunity to hear their testimony and we are pleased to share 
this process with all of us. As I said earlier, everyone's 
written testimony will be included in the record.
    And again, lastly, as a reminder, the member database to 
submit your appropriations requests for fiscal year 2014 bill 
is open and the deadline to submit THUD requests is April 4. So 
please be sure to submit your request by the deadline, again, 
so we may include them in the fiscal year 2018 process. And, 
Mr. Price, any closing remarks?
    Mr. Price. No, thank you, Mr. Chairman.
    Mr. Diaz-Balart. Members, any closing remarks? Great.
    Well, again, our next hearing is next Thursday, March 16, 
where we will hear from the Inspector General at the Department 
of Transportation and of HUD.
    And with that, this hearing is adjourned. Thank you.

                                          Thursday, March 16, 2017.

   OVERSIGHT HEARING--DEPARTMENT OF TRANSPORTATION AND DEPARTMENT OF 
                     HOUSING AND URBAN DEVELOPMENT

                               WITNESSES

CALVIN L. SCOVEL III, INSPECTOR GENERAL, DEPARTMENT OF TRANSPORTATION
DAVID A. MONTOYA, INSPECTOR GENERAL, DEPARTMENT OF HOUSING AND URBAN 
    DEVELOPMENT
    Chairman Diaz-Balart. I am going to call the meeting to 
order. But before we start, I do want to announce that, 
obviously, since we have two inspectors general today, I just 
want to announce that there is another inspector general here, 
and that is my personal inspector general, and that is my wife, 
Tia, who is here along with my son, Cristian. They do not get 
the opportunity to come up to Washington a lot, so it is great 
to have them here today.
    With that, today, we welcome Inspectors General, The 
Honorable Calvin Scovel from the Department of Transportation, 
and The Honorable David Montoya from the Department of Housing 
and Urban Development. So the oversight work, gentlemen, that 
you do for our committee, and for our country, frankly, is 
vital. Please know that we cherish what you do. You ensure that 
tax dollars are being well-spent and that those dollars are 
stretched as far as possible, whether it is for our Nation's 
transportation or housing needs. We rely on your good work, on 
your judgment, on your dedication to find waste and fraud and 
abuse in agencies, and, obviously, that is something that you 
do not tolerate and we do not tolerate. So when we have 
concerns regarding the management and effectiveness within both 
departments, you know that we look to you for much-needed 
oversight and guidance, and the guidance that you provide 
through, again, your various audits and the investigations that 
you all do. So you help us get there, you help us get these 
agencies back on track as much as humanly possible and ensure 
that they are working as efficiently and as effectively as 
possible. We look forward to your testimony.
    With that, let me recognize the Ranking Member of this 
committee, a person who we work very closely together, the 
gentleman from the great State of North Carolina, Mr. Price, 
for any opening remarks that he might have. You are recognized, 
sir.
    Mr. Price. Thank you, Mr. Chairman. I join you in welcoming 
Mr. Scovel and Mr. Montoya here today. I will keep this 
statement relatively brief, because we will need to get to the 
questions, but I want to just underscore a few concerns.
    The oversight hearing is an important opportunity for us to 
examine the key management challenges facing the Departments of 
Transportation and HUD. Many of these issues are not new. For 
example, HUD has struggled to modernize its IT infrastructure, 
facing ongoing challenges associated with human capital 
management, and over the years, failed to establish 
sufficiently strong internal controls over how it obligates and 
controls funds.
    Meanwhile, the DOT Inspector General has highlighted 
ongoing challenges associated with the safe integration of new 
transportation technology, namely, unmanned drones and 
autonomous vehicles, as well as the department's management of 
certain high-risk contracts. I look forward to exploring these 
topics in more detail this morning.
    I am also concerned with the Trump administration's 
painfully slow pace when it comes to the appointments of deputy 
and assistant secretaries and other high-ranking officials. You 
simply cannot run a complex department without a strong 
leadership team in place beneath the Secretary.
    Compounding the problem is the recently announced Federal 
hiring freeze imposed by the Trump administration, which, I 
believe, could threaten core government functions if it is left 
in place. The GAO has noted that across-the-board hiring 
freezes are almost always counterproductive.
    Finally, the Trump administration to-date has shown a 
blatant disregard for addressing possible conflicts of 
interest, starting with, but limited to, the man at the top. 
Oversight is a key function of Congress, but it is especially 
integral to the work of the Appropriations Committee. 
Independent inspectors general enable this subcommittee to 
conduct effective oversight, make informed funding decisions to 
ensure our limited Federal dollars are spent wisely, and that 
most certainly includes exploring conflicts of interest. I will 
address that in our question period.
    So I look forward to learning more about how HUD and DOT 
are meeting their management challenges and where they stand to 
improve. Thank you, both, for being here today. Thank you, Mr. 
Chairman.
    Chairman Diaz-Balart. Thank you very much, Mr. Price. 
Today, we will begin with the Department of Transportation's 
Inspector General, Mr. Scovel. Your full written testimony, 
sir, will be included in the record, and we look forward to 
listening to your testimony. You are recognized for five 
minutes.
    Mr. Scovel. Chairman Diaz-Balart, Ranking Member Price, 
members of the subcommittee, thank you for inviting me to 
testify today on the Department of Transportation's (DOT) top 
management challenges. Every year, DOT invests more than $70 
billion to operate and modernize our transportation 
infrastructure. My office supports these efforts through audits 
and criminal investigations that identify and help protect 
against fraud, waste, and abuse of taxpayer dollars. I greatly 
appreciate the subcommittee's support and continued focus on 
the important work of government oversight performed by offices 
like mine and that of Inspector General Montoya.
    My testimony today focuses on three critical challenge 
areas that we have identified for DOT for 2017: safety, 
stewardship, and completion of mandates and recommendations. As 
Secretary Chao has noted, safety remains at the forefront of 
DOT's mission. The United States continues to have one of the 
safest transportation systems in the world. However, new 
technologies and industries bring new challenges.
    For example, FAA recently issued a rule to help safely 
integrate small unmanned aircraft systems, known as UAS, into 
our airspace. However, the number of UAS sightings by pilots 
and others continues to go up, over 1,400 this past year, as 
compared to just over 200 in 2014. Many of these occurred at 
altitudes where other aircraft operate. Maintaining safety will 
require a strong risk-based oversight system by FAA and 
coordination with other agencies.
    Similarly, the emerging technology of driverless cars poses 
new safety challenges for DOT and NHTSA. Several companies are 
already developing, testing, and selling various iterations, 
and the number is expected to grow quickly. DOT and 
policymakers must clearly define the tools and standards 
necessary to oversee and regulate this industry and the 
technology underlying it.
    At the same time, NHTSA must continue to improve its 
processes for investigating vehicle safety defects. Most 
recently, a Takata air bag defect resulted in 11 fatalities and 
180 injuries. Due in part to our investigative work, automobile 
makers recalled tens of millions of vehicles, and Takata 
Corporation was sentenced last month to pay $1 billion in 
criminal penalties. NHTSA is making progress towards addressing 
our recommendations to collect and analyze more comprehensive 
vehicle safety data, but must continue to improve internal 
controls within its Office of Defects Investigations.
    With regard to stewardship, we have identified areas where 
DOT can improve how it manages and oversees the billions of 
dollars invested each year in our transportation 
infrastructure, from highways and bridges to air traffic 
control.
    For example, FAA faces ongoing challenges to deliver six 
programs that are essential to implement NextGen and modernize 
our outdated air traffic control systems. Expenditures since 
2003 for these six programs now total over $5.7 billion, and 
their completion has been pushed to well beyond 2020. As a 
watch item, many requirements remain undefined, and FAA has yet 
to fully quantify how these programs will achieve expected 
benefits for the aviation industry.
    Protecting our infrastructure also requires addressing 
increasingly sophisticated cybersecurity threats. However, DOT 
has not effectively implemented programs to actively monitor 
and mitigate security breaches immediately, during, or after an 
attack. Recent trends in mobile, cloud, and workplace 
technology also present new challenges to monitoring and 
securing DOT's network.
    Finally, as it carries out its mission, DOT must develop 
strategies to efficiently carry out mandated and recommended 
improvements. These include provisions in the 2015 FAST Act, to 
improve investments in highway and transit projects, as well as 
key aviation safety mandates from the 2016 FAA Extension Act. 
Those mandates include, for example, requiring better records 
on a pilot's training and background. DOT has also faced delays 
in addressing recommendations to improve pipeline and hazardous 
material safety from both our office and NTSB.
    In conclusion, my office will continue to assist DOT and 
Congress as we work to meet these and other challenges, 
including helping the department leverage its resources to 
promote safety and efficiency and prevent fraud in any 
forthcoming infrastructure investment plans.
    Mr. Chairman, that concludes my prepared statement. I am 
happy to answer any questions you or other subcommittee members 
may have.
    [The information follows:]
    
    
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    Chairman Diaz-Balart. Thank you very much, sir. We will now 
recognize HUD's Inspector General, Mr. Montoya. Mr. Montoya, 
your full testimony also will be included in the record, and 
so, again, you are now recognized for five minutes, and thank 
you for being here, sir.
    Mr. Montoya. Thank you, sir. Chairman Diaz-Balart and 
Ranking Member Price and members of the subcommittee, thank you 
for the opportunity to discuss the Department of Housing and 
Urban Development's top management and performance challenges 
for fiscal year 2017 and beyond and the oversight my office 
conducts.
    Just this past year my office's contribution realized 
financial benefits to the government of nearly $8.5 billion, 
which represents a leading return on investment of $67 for 
every dollar spent on our work. We have a talented staff, and 
together through the years we have developed a culture of 
focusing on stewardship, accountability, and impactful 
oversight work. I want to share how proud I am of our team at 
HUD OIG and I am proud to serve them as their Inspector 
General.
    HUD's key management and performance challenges are so 
interrelated and interconnected that our reviews indicate one 
impacts another to such a degree that in many cases HUD will 
not be able to remedy one without first correcting another. 
This becomes a taxing challenge to determine which needs to 
come first or whether several need to be accomplished 
simultaneously.
    Achieving HUD's mission continues to be an ambitious 
challenge for its limited staff, given its diverse programs, 
the thousands of entities carrying them out, and the millions 
of citizens who receive benefits from them. HUD's most 
significant challenge is reflected in it struggle to establish 
and implement effective and required financial management 
governance.
    In our fiscal years 2016 and 2015 (restated) financial 
statement audit report we expressed a disclaimer of opinion due 
to HUD's inability to deliver principal financial statements in 
a timely manner and other unresolved audit matters. This marks 
3 years in a row now that HUD has been unable to receive a 
clean opinion.
    The absence of having key financial staff with appropriate 
skills, background, and knowledge to oversee the preparation of 
Federal financial statements was best illustrated when we found 
several instances where rounding was performed to the nearest 
billion and hundred billion while OMB requires the highest 
level of rounding only to the nearest million.
    The result was that HUD had to withdraw it published agency 
financial report in December of 2016 in order to correct 
material errors. The Office of the Chief Financial Officer did 
not inform my office of changes it made after it submitted 
final financial statements for our review, and left the 
impression that certain sections of its published financial 
statements had been audited by my office when they had not 
been.
    HUD and the Office of Chief Financial Officer had failed to 
design and implement an adequate system of internal controls 
over financial reporting necessary to mitigate the challenges 
and risks in its complex financial reporting process, which 
will continue to contribute to the persistence of disclaimers 
in the Department's annual financial statements for the 
foreseeable future.
    These challenges and risks were exacerbated by the 
Department's New Core project that was to have transitioned 
HUD's legacy general ledger application to an enterprise 
resource management application housed in a Federal shared 
service provider. Our audits have determined that HUD's 
transition to a shared service provider did not improve the 
handling of its financial management transactions.
    A year after the transition, HUD had inaccurate data 
resulting from the conversions and continued to execute 97 
percent of its programmatic transactions using legacy 
applications. HUD also continues to face challenges and funding 
constraints in addressing outdated information technology 
systems, its ability to integrate updated application systems, 
and replace the legacy systems.
    The use of aging systems has resulted in poor performance 
and high operation and maintenance costs, and have also 
inhibited HUD's ability to produce reliable, useful, and timely 
financial information. They also leave the Department's 
financial systems and information at increased risk of 
unauthorized access and modification.
    Ginnie Mae also continues to face challenges in its 
financial management accountability, managing counterparty 
risk, and monitoring nonbank issuers, which has grown by 
approximately 62 percent since 2010, and now represent a 
majority of issuances annually. By the end of fiscal year 2016, 
Ginnie Mae had made guarantees on loans with the remaining 
principal balance of approximately $1.7 trillion.
    In conclusion, HUD will continue to face challenges until 
it puts controls and adequate resources in place to address 
them. We remain committed, though, to working collaboratively 
with HUD and strive to provide best practices and reasonable 
recommendations that support HUD's mission and 
responsibilities.
    We also are strongly committed to working with the 
Department and the Congress to ensure that these important 
programs operate efficiently and effectively and as intended 
for the benefit of the American taxpayers now and into the 
future.
    Mr. Chairman, this concludes my testimony and I would be 
pleased to answer any questions you or the committee may have. 
Thank you.
    [The information follows:]
    
    
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    Chairman Diaz-Balart. Thank you very much, sir. We, 
obviously, have many issues to talk about and I know that a lot 
of members have questions.
    Members, we will proceed in the standard 5-minute rounds, 
alternating sides, recognizing members in order of seniority as 
they were seated at the beginning of the hearing. We will try 
to move quickly so everyone can get their questions in.
    Be mindful of your time. Obviously, the 5 minutes includes 
not only your questions, but also the answer time. And I will, 
by the way, adhere to that as well. So I will be mindful of 
that as well.
    Let me start, Inspector Montoya, with you. For several 
years now, and you mentioned it right now in your testimony, 
that your office has been--well, frankly, has had to express 
disclaimers on HUD's consolidated financial statements. Every 
Federal agency should be able to produce financial statements 
that meet audit standards, but this is, obviously, especially 
important for a financial institution like HUD.
    As simply as you can, if you can please provide the 
committee with an update on the state of financial grievances 
and governance, the governance issue at HUD, if you would?
    Mr. Montoya. I will do my best to keep it under an hour and 
a half.
    Chairman Diaz-Balart. And simple, right?
    Mr. Montoya. And simple. I will do my best.
    Chairman Diaz-Balart. Of course.
    Mr. Montoya. Thank you, Mr. Chairman. I think I would sort 
of roll this all up into one quick phrase and that is a failure 
of leadership at all levels. Having said that, this is a good 
example of the interdependencies and interrelationships of the 
many programs that HUD faces.
    Let us start with human capital. They do not have the 
appropriate skills, knowledge, and expertise to prepare Federal 
financial statements. That is different from budget process. 
You couple that human capital concern that HUD has had for a 
number of years, and you overlay that onto the dependency on IT 
systems that, in many cases, were never designed to handle 
financial management processes, they are aging, and you end up 
with a confluence of the problems that you see, right, lack of 
internal controls and then lack of systems that can provide the 
relevant information that they need. That is the shortest 
answer I can give you.
    With regards to the failure of leadership, I do not think 
for several administrations now there has been a real look at 
prioritizing the type of skill sets and the personnel they need 
to get to address these many issues, not only in the financial 
management internal controls area, but also in their IT, 
security, and infrastructure.
    Chairman Diaz-Balart. Let me try to see if I can get you to 
specifically, if you can, comment on HUD's use of internal 
controls regarding its financial statements.
    Mr. Montoya. Well, the problem with the Department is it is 
heavily siloed. So most of the financial accounting processes 
are not centered into the Chief Information Officer. They are 
basically left to the various programs, and in many cases these 
programs do not understand general accounting principles, if 
you will.
    And so often they are putting systems into place that do 
not comport with Federal financial management. And so when you 
go to roll the systems up for the financial statements, we see 
a number of areas where there are mistakes, if you will.
    Chairman Diaz-Balart. You know, that is, obviously, 
extremely disappointing and it is not the first time that we 
have heard this kind of thing. It is a persistent problem at 
HUD. Now, I think most of us would agree that what makes it 
more difficult, actually more alarming, is that HUD has been 
without a Chief Financial Officer (CFO) for more than 18 
months. So, you know, I do not know how an agency can deal with 
all these issues without having a qualified CFO.
    And so can you briefly discuss what is happening there, and 
also what gaps do you think HUD needs to fill to tackle some of 
these problems that you have mentioned?
    Mr. Montoya. Yes, sir. They have, in fact, have been 
without a CFO for quite some time. I would say that out of 
their nine senior accounting positions only two of them, at 
best, have an accounting background, let us say a certified 
public accounting type of certification. A lot of them are 
budget-related type backgrounds. But, again, that is different 
from Federal financial management. And so that is problem 
number one and goes back to my earlier statement that they do 
not understand the intricacies of the systems they oversee.
    The best example is this idea that somebody could approve 
to round to the nearest billion and hundred billion when all 
that is allowed is a million.
    Chairman Diaz-Balart. Yeah, that is insane.
    Mr. Montoya. So you understand how the numbers get crazy.
    Chairman Diaz-Balart. That is insane.
    Mr. Montoya. Yes, sir.
    Chairman Diaz-Balart. And I am trying to be kind.
    Mr. Montoya. I would not disagree with you, sir. And that 
goes, again, to the lack of experience and knowledge that you 
need in a CFO's office to prepare the statements.
    I will give you an example, if you will bear with me for a 
second here. So the assistant chief financial officer for 
accounting has an MBA in finance, but that does not necessarily 
relate to the accounting principles that individual needs to 
know. So I think that would be my biggest concern is, again, 
the failure of leadership to get these positions filled and get 
them filled with the appropriate skilled staff.
    Chairman Diaz-Balart. In the 14 seconds that I have, the 
fact that they have not prioritized filling the CFO position, 
to me, does it take 18 months usually?
    Mr. Montoya. I would not think so, sir. But apparently it 
has here.
    Chairman Diaz-Balart. Thank you, sir.
    Mr. Price, you are recognized, sir.
    Mr. Price. Thank you. I would like to ask both of you to 
address conflicts of interest and how your offices deal with 
them, what your responsibility is, and a couple of more 
detailed aspects of that. Of course, this is especially a 
challenge as we start a new administration, hundreds of new 
personnel come into the departments to fill important 
positions. These individuals bring experience from outside 
government.
    With that comes, of course, the risk of conflicts of 
interest. Such conflicts become a focus of Senate confirmation 
hearings, so Cabinet-level nominees. But the scrutiny, of 
course, has to go beyond that and that is where, I assume, your 
offices come in.
    So what role do the inspector general offices play in 
investigating conflicts of interest, assessing the 
effectiveness of the Department's existing processes to deal 
with conflicts of interest? How are these concerns brought to 
your attention, typically? What responsibility do you have to 
deal with them? Are you free to initiate inquiries before a 
complaint is registered? And then how do you handle potential 
conflicts of interest after a senior officer is confirmed? Do 
you proactively review ethics filings? You see where I am 
going? I would appreciate your elaborating as much of this as 
time permits.
    Mr. Scovel. Thank you, Mr. Price. Let me take a stab at it 
from the perspective of the Department of Transportation. Our 
Office of Inspector General (OIG) takes its responsibility to 
investigate allegations of conflict of interest most seriously, 
and over the years we have done so with some notable successful 
investigations and prosecutions.
    We receive allegations from many different sources, 
oftentimes through our Hotline, oftentimes through information 
that is presented by other Federal employees, frankly, to our 
field officers, our field investigative offices. And in some 
instances our field offices are colocated with other Department 
offices, and so staff get to know staff and generates that kind 
of understanding and trust so that we will come by interest 
might exist.
    Through our investigative resources we will pursue as 
quickly and as thoroughly as possible any allegation of a 
conflict that rises potentially to the level of a crime. We are 
under obligation as well, as an OIG, to inform the FBI in every 
case where public corruption--and that is one of the 
acknowledged and longstanding focuses of interest on the part 
of the FBI--where any allegation of public corruption might be 
involved. And together we will investigate these cases.
    I have referred to a couple of notable examples, one dating 
back some years now, but it involved the Deputy Administrator 
at the Federal Railroad Administration (FRA), and allegations 
that she had improper business relationships with other 
associates in the industry, business and personal 
relationships.
    Much more recently than that we investigated and arrested 
and secured a conviction, with the assistance of the U.S. 
Attorney's Office in the District of New Jersey, of the number-
two Federal Highways official for the State of New Jersey. He 
was alleged to have engaged in conduct that amounted to a 
conflict of business interest between what he was supposed to 
be doing for the Department and the government and what he was 
doing on the side as well.
    We also review with the Department, and the Department has 
a standing obligation, the Department's agency ethics officials 
have a standing obligation, to refer to us any matters that 
they have questions about. And occasionally we will get 
information through those sources, too.
    So, to sum it up, sir, we take it most seriously. We have a 
proven track record. We will continue to keep our eyes open, 
and, in fact, we have a couple of inquiries open at the moment 
that I am not at liberty to discuss in a setting like this. But 
I hope I can reassure you that we do understand that to be one 
of our prime responsibilities.
    Mr. Price. Thank you. Mr. Montoya?
    Mr. Montoya. Yes, Mr. Price. We, like Inspector General 
Scovel, do take the matters seriously. We have a proven track 
record as well at looking at conflicts of interest. On several 
occasions we have found that they are unfounded and we move on. 
Several cases we have found issues.
    One in particular had to do with the deputy secretary some 
years ago on a lobbying issue. I believe in that case he was 
ill-served by the Office of Ethics for the Department. And I 
think that within the Office of Ethics in the Department I 
would not have any confidence in them, sir. They have proven 
time and time again that they do not have, I guess, the ability 
to speak truth to power, if you will, and to make the tough 
calls when necessary.
    As an example, they referred a matter to us of an ex-
employee who may be lobbying, if you will, back into the 
Department, having business with the Department that they 
should otherwise not have. When we go back to them with our 
findings and the results, because they are the ones that have 
to make the determination as to whether there has been an 
ethics violation, they do not want to make that determination 
and that troubles me that they will not want to make the 
determination.
    We had another example having to do with the interpersonal 
act, hiring appointments, where an individual from the 
regulated community was brought into the Department in a high-
level position, and the Office of Ethics was nowhere to be 
found when it came to not only this individual's financial 
disclosure reports, but talking to the Secretary and the Deputy 
Secretary about what this person should or could do while they 
were in the Department.
    Now, in fairness to them, I think any Office of Ethics 
within a department or agency should have some degree of 
organizational independence. It is that organizational 
independence, maybe not so much like an IG, but certainly some 
independence that would keep them from having concerns of fear 
of reprisal and conflicts themselves with the folks that they 
have to serve.
    I think in our case, they do not ask the relevant 
questions. They do not dig deep. They take at face value what 
the individual says and they leave it at that.
    Chairman Diaz-Balart. If I may?
    Mr. Montoya. Yes, sir?
    Chairman Diaz-Balart. Because our time has run out. But, 
Mr. Price, I think you have touched on a very important issue 
that we need to further look into. Thank you.
    Mr. Price. Yes. We will pick it up later. Thank you very 
much.
    Mr. Montoya. Absolutely. Thank you, sir.
    Mr. Price. Absolutely.
    Chairman Diaz-Balart. Mr. Young, you are recognized, sir.
    Mr. Young. Thank you, Mr. Chairman, Ranking Member Price, 
and my colleagues. Good morning. Gentleman, thanks for coming 
today.
    Mr. Montoya, thanks for your testimony. And the issue of 
the financial statements, the auditing, the lack of 
understanding key information that should be there, the human 
capital issue, I appreciate the chairman's attention to this 
and I know my other colleagues on both sides want to try to get 
to the bottom of this and fix this because it is a very 
frustrating situation.
    In your testimony you shared since 1991 the OIG has 
reported a lack of a integrated financial management system. 
How long have they been using the same integrated financial 
management system? And how does that dovetail with the computer 
systems as well? So you have a process and then you have, I 
guess, a product. Do they match up? Just talk a little bit 
about that.
    Mr. Montoya. So a lot of their IT systems are 15 to 30 
years old.
    Mr. Young. Okay. Wow.
    Mr. Montoya. Many of them were not designed to handle 
Federal financial management processes. That is the first 
troubling part.
    The other issue, I would say, and I have a great example 
here--well, let me talk about the fact that these problems, not 
all the IT issues, but the human capital and the financial 
management processes, are problems that are going to take years 
to correct, sustained leadership not only from Congress, but 
the administration, a commitment to really correct these 
problems. And absent any kind of a budget shortfall or cut, 
these are still things that are going to be resonating and 
still issues that they are going to have to deal with.
    Probably one of the best examples I can give you is just 
the lack of systems to handle some of these financial 
management processes. It is within the Office of Public and 
Indian Housing there is a lack of an automated process to 
complete the reconciliations required to monitor the public 
housing authorities and to ensure Federal cash, mind you, that 
is not maintained in excess of the immediate need. These 
reconciliations are prepared manually on unprotected 
spreadsheets. So for over 2,200 public housing authorities 
receiving $17 billion annually, they manage this on an Excel 
spreadsheet.
    So you can see that when we talk about implementing IT 
systems that can handle these types of accounting issues, it 
becomes very critical.
    Mr. Young. I want to get to a few of your recommendations. 
Would you recommend having an integrated technology system that 
was up to date, but as well when it comes to the human capital 
issue and the Office of the CFO, ensuring that the people 
coming in there--like you said, I think there was only 2 of the 
10 maybe had accounting backgrounds. Is that what you said?
    Mr. Montoya. Yes, sir.
    Mr. Young. Okay. What can Congress do to help you with 
that? To help ensure that those who are coming into those 
positions have the appropriate backgrounds. I mean, do we go as 
far as not just recommending, but mandating that those within 
that office have an accounting degree? I mean, how far do we 
go? Because we have to make this work. This is not about 
attacking HUD. This is about ensuring the taxpayer dollars are 
spent wisely and the programs are effective.
    Mr. Montoya. Yes, sir. Thank you. Well, to be clear, I 
think in some of these high-level positions, high-leadership 
positions, you do not necessarily have to have the accounting 
degree, but you should surround yourself with people that have 
the requisite skills. You should be willing to listen to them 
and to provide you advice and counsel.
    In the area of let us talk about Ginnie Mae, the General 
National Mortgage Association or the Government National 
Mortgage Association. They are handling a $1.7 trillion 
portfolio. By the end of the year that will be about $2 
trillion. They do not have the infrastructure, again the IT 
systems or the personnel, to handle the security processes they 
have to handle in the markets that they have to deal with every 
single day. I think in their particular case, I think Congress 
and the administration need to think about a different pay 
scale, quite frankly, not one consistent with Fannie Mae, for 
example, where the CEO makes $1 million a year, but maybe 
something on the order of what the Federal Housing Finance 
Agency or CFPB or the SEC and some of these other governmental 
agencies make in order that the salaries are high enough to 
entice the right type of personnel. Often Ginnie Mae loses good 
candidates to higher paying banks and financial institutions, 
so it is very difficult for them to compete. So that is on the 
one hand.
    On the other hand, with regard to these systems, HUD 
continues to be so heavily siloed that even within the IT 
environment and the financial environment, each program office 
could do its own thing from an accounting standpoint and an IT 
standpoint that does not relate to another office's accounting 
and IT functions, so the two do not talk. And that was one of 
the biggest problems in the New Core program that they tried to 
implement. These systems do not talk because the data is not 
the same, the systems are not the same. And so I do not know 
that New Core would have ever worked quite frankly.
    Mr. Young. This is frustrating and I imagine it frustrates 
you, too, but you are helping us get to the bottom of the human 
capital needs. The systems are not integrating together. They 
are very old as well as maybe the structure. You talked about 
all the silos, but I would like to have further conversations 
with you on this. Mr. Chairman, I yield back.
    Chairman Diaz-Balart. Thank you, sir. Mr. Aguilar.
    Mr. Aguilar. Thank you, Mr. Chairman, Mr. Ranking Member. 
Thank you, gentlemen, both for being here. Picking up on what 
my colleague was just talking about, I mean, Mr. Montoya, some 
of the key words you mentioned is something anyone who has been 
in a public financing realm never wants to hear, which is lack 
of internal controls, something that is deeply troubling. 
Specifically to follow up on what Mr. Young was saying, HUD has 
on two different occasions taken steps to implement new systems 
and it has not worked. Additionally, outsourcing data entry and 
financial management activities have raised oversight concerns 
from your office.
    Can you talk a little bit about the centralization of these 
procedures versus outsourcing some of those activities, and 
what the effect of budget reductions could do on our ability to 
deliver accurate financials in the future?
    Mr. Montoya. Yes, sir, Mr. Aguilar. Thank you for the 
question. With regard to internal controls, it boils down to 
the lack of policies and procedures. Now, they are getting 
better at updating their policies and procedures. These are 
accounting policies and procedures. And, yes, it has to be 
centralized in the chief financial officer position and that 
should flow then to the rest of the programs. So that is the 
biggest problem when you talk about internal controls.
    With regard to the collaboration between all these 
programs, there is difficulty there in sort of talking to each 
other before they created a separate financial management 
structure, for example, or even their IT structures. And, yes, 
it is frustrating that for years these things have been going 
on, and I will say that some of the stuff is not new. On the 
order of 23 years ago, GAO had testimony on these very same 
issues and yet we are here 23 years later talking about the 
very same things: the IT systems, the ageing systems, and some 
of the financial systems.
    That is troubling for me as an IG and that is why I make 
the statement that I think it is a failure of leadership at all 
levels, and even at the IG level, that maybe as IGs, my 
predecessors and I, have not been forceful enough and outspoken 
enough to say do we need to wait 23 more years? You have two 
financial institutions sitting with this Department, the 
Federal Housing Administration and Ginnie Mae. Together their 
portfolio is about $3 trillion. If one of those has a major 
breakdown, if you will, that is going to affect the national 
economy. And these two organizations are really not 
prioritized.
    When you talk about human capital, for example, hiring a 
CFO for Ginnie Mae is not any more important than hiring a 
typist. The president of Ginnie Mae and I had a pretty good 
relationship. We talked often. He would tell me stories where 
he wanted to pull his hair out because when he would send up a 
request to hire a chief financial officer, it took a back seat 
to whatever was in front of him in the queue: a typist, a 
general staff person. There is no prioritization to put 
everything aside and let us get the CFO hired first. After that 
person is hired, we will hire whatever else we need. That is 
the kind of stuff that is most frustrating to me, and that is a 
leadership issue. That is a basic, fundamental governance and 
management issue.
    Mr. Aguilar. With fewer resources will that get better or 
will that get worse, with fewer resources, centralization 
versus in-house work? I mean, how is that going to look?
    Mr. Montoya. You know, I do not know that it is going to 
get--I do not think the budget really has anything to do with 
it, quite frankly, sir, because whether you have everything you 
could possibly want or not, if you do not prioritize the staff, 
the systems, the processes that you need first, it does not 
really matter how much money you have, and I think they have 
shown that. They have not had this kind of a severe budget cut, 
whatever is anticipated, for years and yet they have chosen not 
to prioritize it.
    So will they prioritize it with a budget cut? I am hopeful 
because with any kind of budget cut, you really have to 
prioritize and do what is important first.
    Mr. Aguilar. Appreciate it. Mr. Scovel, I will try to get 
this out quickly to give you a little bit of time. In your 
testimony you indicated that more needs to be done to ensure 
that high-risk contracts are managed well and you also indicate 
that many of the issues with contract management could be 
avoided if the contracts were properly specified and properly 
scoped. How is DOT working to improve those specifications and 
limiting the use of high-risk contract vehicles in the future 
and what can we do to make this acquisition piece a little 
better?
    Mr. Scovel. Thank you, sir. It is a concern of ours. We 
have identified a number of issues across the Department, 
including even at the Department level. We focused a lot of our 
efforts, however, on the Federal Aviation Administration (FAA) 
and its contract practices, and we have gotten into all of that 
through our work when we are called on to review the NextGen 
Air Traffic Control Modernization Program.
    High-risk contracts, cost-reimbursable contracts, of 
course, leave the door open to a contractor billing the 
Department, excessively perhaps, for costs. We have found 
instances where the Department did not sufficiently check on a 
contractor's cost-accounting systems to ensure that the costs 
that were actually advanced by the contractor to the Department 
for reimbursement were backed up within that contractor's 
accounting system.
    With regard to sole-source contracts, particularly on the 
FAA side, those have been a consistent concern of ours. FAA 
tends to acquire a lot of proprietary technology through sole-
source contracts. That means it is locked in in future 
contracting cycles to a particular contractor. Oftentimes those 
contracts are let without conducting the sufficient market 
research and the independent government cost estimate that is 
required in order to properly let a sole-source contract.
    Mr. Aguilar. I appreciate it, Mr. Scovel. My time is up.
    Mr. Scovel. Thanks.
    Mr. Aguilar. And it is my first real hearing and I do not 
want the chairman to get upset with me.
    Mr. Scovel. I understand.
    Mr. Aguilar. So I will cut you off there and we will 
restart this.
    Mr. Scovel. Thanks. Thanks very much for your question.
    Mr. Aguilar. Thank you.
    Chairman Diaz-Balart. Thank you again, Mr. Aguilar. Mr. 
Joyce, you are recognized, sir.
    Mr. Joyce. Thank you, Mr. Chairman. I just want to follow 
up on a couple of the questions here and have you put on your 
hat of a private citizen who has all this intel as to what has 
been taking place. How do you fix those problems? You said 
money is not necessarily the issue. How do you get to the 
bottom of this and cure these issues?
    Mr. Montoya. I think just getting the right people in the 
right seats and looking at the right things.
    Mr. Joyce. That is easy to be said, but, I mean, we need to 
get down to it--we cannot continue to do the same thing year 
after year. You said you have been following through now on 30 
years of this and have the same issue. This is ridiculous.
    Mr. Montoya. So I think like many organizations, HUD in 
particular does very well at looking outward, managing its 
programs outward. They do not do a very good job at looking 
inward. And if they do not get to that soon, they might not be 
able to do their job looking outward.
    I will give you an example again where the IT systems and 
financial management accounting sort of interplay. HUD relies 
heavily on IT to deliver and manage its services throughout its 
own organization and externally.
    Mr. Joyce. One question. Are these old legacy systems that 
continue to be patched that we have invested a lot of money in, 
so, therefore, we think we should keep them versus something 
that is obviously better? I mean, you and I probably grew up 
when they had a plastic phone that you would dial and now we 
have these. Is the agency keeping up with the technology?
    Mr. Montoya. They are not. In fact, many of their systems 
cannot even be patched. Some of their systems do not even have 
application support. And the example I was going to give you 
was the Tenant Rental Assistance Certification System, TRACS as 
it is known. It satisfies the Multifamily Housing Program. It 
accounts for 78 percent of HUD's housing subsidies, about $10 
billion annually.
    And I want to quote something the Department, the staff 
folks, told us when we were doing this review, and I am going 
to quote: ``TRACS has no vendor support agreement. Therefore, 
when the old system catastrophically fails, there is no means 
to manage Housing's rental assistance programs and/or pay 
subsidy payments of approximately $9.8 billion annually.'' My 
point to that is when this thing fails--and it is not a matter 
of if, it is a matter of when--there is no manual way to get 
$10 billion out to the general public who need these funds. 
That is the kind of critical point or mass that we are at.
    And so to your question, no, some of these cannot even be 
patched anymore and some of them do not even have vendors that 
keep up with them, quite frankly.
    Mr. Joyce. Which is something that you brought up as well, 
the fact that some of these things are being allowed without 
any vetting of the people who are getting these contracts. So 
these are age-old contracts that continue to stay in place, yet 
they cannot keep up with the system that they are allegedly 
trying to maintain?
    Mr. Montoya. Yes, sir. I was just passed a note, 87 percent 
are past their end-of-life system. These systems, 87 percent of 
them, are past end of life. And that is the other problem 
within the Department. Yes, we are heavily reliant on 
contractors. The problem is that the Department has divested 
itself of its own internal expertise, background and 
experience, that we do not even have staff that can properly 
manage these contracts. So we do not have staff that can manage 
an IT contract from the standpoint that if an IT contractor 
says you need $1 billion over here, that we would know to say 
yes, no, or that is not $1 billion. It should be $1 million. 
And that is another concern that we keep seeing.
    And I am driving the point home with these systems because, 
again, the Department has--I think we tend to forget--has two 
financial institutions in it, and these institutions are 
reliant on the same systems that the rest of HUD is.
    Mr. Joyce. I am outraged that we would be in a position 
where you do not have an IT department that can make a judgment 
on whether or not these systems that are being implemented are 
worthwhile or even cost-effective, and there is no way to get 
to the bottom of that? I am a former prosecutor, so I am sort 
of a brass tacks guy. I want to get down to how do we fix the 
problem?
    Mr. Montoya. You know, so the CIO's position at the 
Department is a politically appointed position. The gentleman 
who was there, I have to give him credit. I think he was really 
advanced the ball, but he left. He was there 2 years and he 
leaves. So you are absent the CFO. You are absent, I think, is 
the Chief Security Officer. We are also absent the Chief 
Architect for these systems. So, again, much like in the 
financial arena and the IT arena, we are absent key staff. The 
only one that is a political appointee is the CIO, Chief 
Information Officer. The rest are careerists. So, again, even 
there we lack very critical positions being filled.
    So, again, with the lack of leadership--now look, do not 
get me wrong. The Department is made up of really hardworking, 
dedicated staff. I want to make sure we are clear about that; 
99.9 percent of them, like any environment, are hardworking, 
dedicated, and they are committed to an honorable mission. The 
problem is they are not given the tools, the resources, to do 
it well and to do it efficiently and eventually not even 
effectively when these systems break down.
    Mr. Joyce. The crazy part is that we are spending money but 
not giving them the tools that they need so they can operate in 
a 2017-2018 setting.
    I realize I have gone beyond my time, Mr. Chairman, and I 
will yield back. I guess I do not have any time to yield back.
    Chairman Diaz-Balart. Thank you. Ms. Clark, you are 
recognized.
    Ms. Clark. Thank you, Mr. Chairman, Mr. Ranking Member, and 
thank you to our witnesses for being here today. As part of the 
accountability, the Whistleblower Program is an important piece 
of that. Mr. Scovel, I missed that from your status update, but 
I did see, Mr. Montoya, that there has been training going on. 
Could you both update me on where that is? Are there challenges 
that you see? And do they have sufficient resources to carry 
out the mission?
    Mr. Scovel. Let me start, Ms. Clark. Thanks very much for 
the question. I appreciate your interest in this important 
topic. Whistleblowers and other insider reports are key areas 
for us to be able to explore in order to effectively protect 
the Department's programs and the taxpayer dollar.
    In our Office of Inspector General we have an individual 
whom we call our whistleblower protection ombudsman. He has 
been in charge of our whistleblower protection and the training 
within our office for a number of years now. We have a training 
effort to educate all of our OIG staff, so that should they 
come in contact with individuals who express an interest in 
perhaps revealing information and could be characterized as 
whistleblowers, that all of our staff know the procedures to 
refer them to the proper person.
    Our whistleblower ombudsman has handled several dozen cases 
during the time that he has been with us and since he has been 
appointed. Seventeen of those cases have been referred to the 
Office of Special Counsel, which has primary jurisdiction to 
investigate and resolve whistleblower complaints raised by 
Federal employees. Within our office we have got six open 
investigations currently, one involving a Federal employee, 
another five involving Federal contractors, and we have primary 
responsibility for those.
    We have closed four, and let me give you a taste of how 
those have been resolved over the last couple of years. One 
individual took our report of investigation and deemed it 
worthy of pursuit in District Court in the District of 
Columbia; another was denied at the Department level. One, we 
have determined we had no jurisdiction because the 
whistleblower allegation was lodged under the Recovery Act, and 
it turned out there were no Recovery Act dollars implicated in 
this particular contractor employee's case.
    One we substantiated; it was a whistleblower matter that 
was submitted by an employee of WMATA, the Washington 
Metropolitan Area Transit Authority. He was alleging contract 
improprieties within the agency and he entered into settlement 
negotiations and, in fact, resolved the case and received a 
settlement from WMATA based on that.
    Ms. Clark. Do you see any challenges specifically to this 
program?
    Mr. Scovel. We do, most certainly. The whistleblower 
protection ombudsman is a specific designation that we are 
required to have only through November, I believe, of this 
year. We would consider it an important designation to maintain 
by law. We are prepared to do it, notwithstanding a 
requirement. So, we will continue it in our office because we 
deem it that important.
    However, we find that we are strapped for resources. We 
have one attorney investigator who not only doubles as our 
whistleblower ombudsman, but also as an investigator for some, 
if not most, of the matters alleged in these whistleblower 
communications.
    So, should we have more resources? Of course we could do 
more. In the meantime, I am reasonably satisfied that we are 
doing all we can with what we have got.
    Ms. Clark. Great. Thank you. Mr. Montoya, I wanted to talk 
to you in my remaining time, about some of what you highlighted 
in your report of September 30th about prosecuting civil fraud. 
Specifically with financial institutions there is quite a list: 
Wells Fargo, 1.2 billion; Freedom Mortgage, 133 million; seven 
major cases.
    It does not look like it is the first time that you have 
gone after some of these bad actors. How many financial 
institutions have been debarred from participating in HUD 
programs since 2008?
    Mr. Montoya. Thank you for your question, Ms. Clark. I do 
not believe any have been debarred from doing business with the 
Department or FHA.
    Ms. Clark. And is there a reason why? Is that part of your 
calculus with disbarment, is repeated violations?
    Mr. Montoya. Well, it certainly could be, that is actually 
up to the Department to make a determination as to whether that 
would happen; highly unlikely. You know, many of these failures 
are, if you will, lack of appropriately ensuring that folks 
could actually pay for these loans occurred years and years 
ago, and I think a lot of that conduct has really changed over 
the last 5 years.
    So, could that have happened 5 years ago? Maybe. I think it 
would be highly unusual to debar a bank or an institution that 
could otherwise, you know, provide mortgages to low- to 
moderate-income families. I think, in fairness to the 
Department, we work jointly with them, with the Department, my 
office and the Department of Justice, to address these issues. 
I think the Department took it seriously. But again, yeah, it 
would be a question for the Department, whether they actually 
ever considered debarment.
    Ms. Clark. Thank you, Mr. Chairman.
    Chairman Diaz-Balart. Thank you. Before I recognize Mr. 
Valadao, let me announce I am going to have to be in a markup 
on budget on the Health Care Act. So, I am going to ask the 
vice chairman if he could take over.
    And with that, I recognize the distinguished gentleman from 
California, Mr. Valadao.
    Mr. Valadao. Thank you, Mr. Chair. Mr. Montoya, I 
understand your office published an audit back in July 2015, 
which concluded that over-income tenants blatantly abused the 
public housing system. It has been reported that thousands of 
people across the country receiving HUD benefits despite 
earning incomes greater than the eligibility threshold. The 
audit report also indicated with more than 300,000 qualified 
families that are stuck on waiting lists.
    For example, I am aware of cases in my own district in 
which families making over $100,000 were receiving public 
assistance from HUD. Audits like these provide HUD the 
opportunity to reevaluate policies and initiatives, make 
improvements to take sufficient steps to reduce abuse such as 
over-income families in public housing.
    Can you please describe steps HUD has taken to negate 
flagrant abuse by tenants who make more than the low-income 
threshold?
    Mr. Montoya. Yes, sir. Thank you, Mr. Valadao, for the 
question. Well, yeah, so the subject our work took on, not only 
a lot of public interest, but obviously a lot of congressional 
interest, and legislation was passed unanimously about a year 
ago. It was called the Housing Opportunity Through 
Modernization Act, and it requires public housing authorities 
to evict over-income families after 2 consecutive years of 
exceeding applicable income limitations. The key will be the 
oversight that HUD provides to that process and whether public 
housing authorities are actually doing it.
    It is unfortunate, but the Department really does not have 
the resources to provide that level of oversight. We, at some 
point, will probably come in some several years later to do a 
follow-up audit or evaluation to see if we find any extreme 
outliers. But really it is going to fall to the Department to 
provide that oversight.
    Mr. Valadao. So, my next question then is to Mr. Scovel. In 
2015, Congress passed the FAST Act, the largest transportation 
package in more than a decade. With the FAST Act it was 
reported that the inspector general submit an assessment to the 
Department of Transportation on the impact of delays, and the 
pick up and delivery of goods by motor carriers and drivers. To 
my knowledge the report has not been submitted to the 
Department of Transportation.
    Do you know when the Department will have the ``Delays in 
Goods Movement Report'' completed to submit to the 
Transportation Committee? And do you mind providing this 
Committee with an estimated timeframe for the completion?
    Mr. Scovel. Yes, sir. In fact, I may be able to answer all 
aspects of your question right now. The Department, as 
required, did complete its study--I am sorry, you were 
referring to a study on freight delays?
    Mr. Valadao. Yes.
    Mr. Scovel. Yes. I am sorry. I mistook your question for 
one regarding hours of service for motor carriers. I do not 
have a timeframe for you on the freight delay study. I 
understand that we will be auditing it, and we will be happy to 
follow up with more information to you and your staff when we 
have that available.
    Mr. Valadao. Okay. And then on the hours of service, you 
were going to say?
    Mr. Scovel. Yes. I was going to say that in the 
Appropriations Act, the Department's imposition of suspended 
hours of service for motor carrier drivers, the Department was 
required to conduct a study, and then, in the meantime, suspend 
the imposition of those aspects of the rules, often called the 
restart provisions of the rule.
    That study was completed. My office was required under the 
Appropriations Act to certify, in effect, the methodology that 
was used in the study. We did that. We completed that review 
and communicated to both the Congress and the Secretary on 
March 2nd that the study had met all requirements.
    The Secretary, I believe, has already submitted her report 
to the Congress. If not, then it should happen any day, because 
that matter had been in her office the last we were informed. 
Thanks.
    Mr. Valadao. Thank you. I yield back.
    Mr. Joyce. Thank you very much, Mr. Valadao. There is no 
time to yield back, but that is fine; just kidding. Starting, I 
hate to be rude, but I guess I'll start this round and then we 
will continue to go through the questions.
    Inspector Montoya, first, both of you gentlemen, I notice 
your lovely green ties, so thank you for keeping it in honor of 
St. Patrick's Day; my birthday, too.
    As you know Ginnie Mae has had problems with tracking and 
hiring staff that have the right skill sets to perform mission-
critical jobs. What are the effects of not having employees 
with the necessary skills in Ginnie Mae's financial accounting 
management and overall management capacity?
    Mr. Montoya. Well, sir, I think the first problem you see 
is disclaimers of audit opinions, and so that is the first 
part.
    The second part is that, you know, with these nonbanks that 
they are starting to see a huge influx of, there is really no 
oversight body to them. Maybe the Consumer Financial Protection 
Bureau, but there is not an oversight body like you would have 
like if it was a bank.
    These nonbanks are not capitalized as a bank would be, and 
so it is going to be incumbent upon Ginnie Mae to do that 
oversight. If they do not have the appropriate accounting 
skills, financial-type background, it is going to be even more 
difficult for them to do the proper oversight of these 
nonbanks. And so those are two areas where I think it could be 
very detrimental to Ginnie Mae.
    Mr. Joyce. Following up on that, is it a significant issue 
that individuals with the necessary skill sets are extremely 
well paid in the private sector, so it becomes nearly 
impossible for Ginnie Mae to compete. What would make the 
agency more competitive?
    Mr. Montoya. Well, as I stated earlier, sir, I think what 
would make it more competitive is that the Department, the 
administration, and Congress get together to consider a 
different pay structure for at least Ginnie Mae. And by that I 
am not even advocating for all of Ginnie Mae employees, and 
they have got about 140, but there is a small cadre that you 
could probably look at that are paid a higher salary.
    And again, consistent with other Federal agencies, like the 
Federal Finance Housing Agency, CFPB, even makes a higher 
salary. So, consistent with that, it gives you a little bit 
more latitude, if you will, to attract folks.
    Mr. Joyce. With a portfolio of 1.7 trillion in outstanding 
principal balance, Ginnie Mae is a big and important financial 
institution, needless to say. What are the potential 
consequences if they do not get their financial house in order?
    Mr. Montoya. Well, we saw it in the case of TBW when they 
had to take over these portfolios when these organizations, you 
know, tank, in essence. They do not have the infrastructure to 
handle that. So if you get a lot of these issuers that cannot 
do what they need to, well, Ginnie Mae is guaranteed that there 
is--you know, through the good faith and credit of the U.S., 
you know, that these payments are going to be made. That means 
they have got to take it on, they have got to service, they 
have got to operate these things. They do not have that 
infrastructure. Without that you have major problems.
    And they do have contractors, they use a lot of 
contractors. In fact, most of the work is done by contractors. 
But therein lies, still, the problem with the lack of actual 
onboard expertise. They do not have the proper skills to 
oversee the contractors who are overseeing all these things 
that need to be overseen.
    Mr. Joyce. Yes. I would like to recognize Ranking Member 
Price.
    Mr. Price. Thank you. I actually want to continue this line 
of questioning, but first I want to return briefly to the 
previous discussion of conflicts of interests and ethics. I am 
impressed with the testimony both of you gave as to the 
authority and responsibility you have to pursue conflicts of 
interest at all levels. Especially caught my attention, Mr. 
Montoya, with your comments about the disabilities of the 
Ethics Office within HUD. You are responsible for overseeing 
that office for making those critiques public inside and 
outside the agency. You have the ability to be proactive and I 
take it you have the ability and the responsibility to do a 
post-confirmation review of the ethics filings of senior 
officials. All of those things true?
    Mr. Montoya. No, we do not do a post review of the filings 
of the ethics official per se.
    Mr. Price. What would it take to trigger such oversight?
    Mr. Montoya. Well, we have an allegation of a conflict of 
interest.
    Mr. Price. An allegation from some credible source of a 
conflict of interest?
    Mr. Montoya. Right. So, for example, in the matter where 
they hired somebody through an IPA that really should not have 
been there, at that point, we asked for this information. The 
irony there is they had not made or produced it.
    Mr. Price. All right, fine. Let me turn to this line of 
questioning having to do with financial management. Mr. 
Montoya, you cited over two decades of challenges in this 
regard and you provided a rather generic explanation, failure 
of leadership. It seems to me if you have got two decades of 
failures of leadership, you might look beyond that. And 
actually, the more you talk, the more I think you have, in 
fact, looked beyond that, that that generic explanation may not 
be your entire explanation because you are citing the ability 
to attract and compensate and motivate first-rate personnel.
    This Ginnie Mae case seems like a case in point. So if 
administration after administration, if decade after decade you 
are observing a failure of leadership, it looks like you 
certainly want to scratch beneath that generic explanation and 
see if there are systemic or system problems that make 
leadership difficult or impossible as you define it.
    So that takes me to the Ginnie Mae case. And you have just 
talked about what I take to be an overreliance, certainly a 
heavy reliance, on third-party contractors to perform key 
functions, the inability inside the agency to oversee those 
contracts. You have cited the pay structure that makes it hard 
to attract the right kinds of employees and to have them 
exercise authority effectively.
    It is hard to imagine that a budget like we have seen in 
the last 24 hours or a hiring freeze makes any of this easier. 
You say it is not budgetary, but surely budget and personnel 
cuts of a drastic sort do not help. I do not understand your 
statement that this is not, in any way, budgetary. So you see 
where I am coming from in terms of wishing you to elaborate. 
Give us a little fuller, more satisfying explanation.
    And then, Mr. Scovel, if we have time, I would like for you 
to--I assume DOT does not have problems of this magnitude. I 
would like to have your attempting to compare here what maybe 
is going right or at least differently in that agency. But, Mr. 
Montoya.
    Mr. Montoya. At some point, somebody has got to make these 
decisions that you are going to find the right people to put 
them in the right place, in the right seat. You are going to 
look at those things that are a priority to the Department, and 
that is what I am getting at. Yes, we have done a lot of 
behind-the-scenes reviews, audits, investigations. We relate 
that to the Department through our recommendations for best 
practices. I will give you the best example I have.
    In the first 3 years I was at the Department, we had maybe 
six or seven disagreements with the Department senior 
leadership. Eventually, we were able to figure those out and 
come to some resolution. So these things never went to the 
Deputy Secretary for a decision, i.e., where she is playing--
you know, having to make a decision between us as the IG and 
the assistant secretary for the program.
    In the last 2 years, with the prior administration, 
particularly the Deputy Secretary, those skyrocketed to 16 
disagreements. And in those occasions, really what it related 
to was an atmosphere that was created that was to not listen to 
the IG, they do not have anything to provide, and many of these 
recommendations went to these core management and performance 
challenges that I am talking to. So when you have leadership 
who fails to see that these recommendations are going to 
hopefully help them and yet they discount them out of turn, 
that is troubling to me.
    As I have often said, as IGs, we are not there to make 
those Departments look bad. We are part of those Departments. 
It is our job to help them succeed. It is our job to help them 
reach their mission assignments and their responsibilities, not 
the opposite. And there was a culture created for the last 2 
years that was to not trust the IG. Slow them down as much as 
you can. I had to, on several occasions, I had to threaten to 
come to Congress with 7-day letters because there was a failure 
of cooperation, failure to give us the documentation we needed 
to do our audits, our investigations. If it had not been for 
the Secretary and his team to come in to say to the Deputy 
Secretary, no, you will give them that information, we would 
not have done it. We would have had to come to Congress.
    So listen, I want to credit publicly Secretary Castro for 
honoring his commitment when he signed a joint letter with me 
that his staff would cooperate with our office. But if not for 
him, the Deputy Secretary would have allowed these things to 
basically go by the wayside. That is what I mean by a failure 
of leadership.
    Mr. Price. My time has expired. We will return to this. 
Thank you for elaborating that.
    The question remains, though, given stellar leadership or 
outstanding leadership, what kind of measures, what kind of 
policies are required here? And, of course, we need to get to 
that as well. That is where I think this Ginnie Mae case is 
troubling and, at least for me and I think many others, raises 
questions about the wisdom of such across-the-board measures as 
hiring freezes. And certainly, the kind of budget cuts we are 
looking at here, that pertains, by the way, to your own offices 
and the kind of ability you are going to have to perform your 
functions as well, of course, as Ginnie Mae and other offices 
who have these severe management challenges. So we will return 
to this. Thank you.
    Mr. Montoya. Thank you, sir.
    Mr. Joyce. Thank you, Ranking Member Price. And I think I 
speak on behalf of this whole committee that if you feel 
compelled that you need our help at any time, come before this 
committee. With that, I recognize Member Young.
    Mr. Young. Thank you, sir. Mr. Scovel, I want to talk about 
unmanned aerial aircraft systems, what we call drones commonly. 
You released a report in December 2016, finding that the FAA 
has not established a comprehensive oversight framework for the 
use of drones overseeing the UAS industry. Can you share some 
of the key recommendations from this report and what, if any, 
steps are being done to implement those findings?
    Mr. Scovel. Yes, thank you, sir. Key area, it is one of--
probably the top one in terms of emerging technologies that 
keeps me awake at night; a significant safety threat, as anyone 
who flies can appreciate.
    FAA is working, in my view, deliberately in an effort to 
integrate Unmanned Aircraft Systems (UAS) into the national 
airspace. A key part of that will need to be developing this 
comprehensive oversight framework that we mentioned in our 
report. And by way of oversight framework we would start first 
with consolidated data, relevant data, that right now is spread 
between three different offices within FAA. It is not 
integrated, it is not analyzed comprehensively; it is spread 
between different silos within FAA to the detriment, we think, 
of the Agency's ability to understand the threat to safety 
posed by UAS and also to deal with it.
    Mr. Young. Are they moving on that recommendation about 
consolidating their data, do you know?
    Mr. Scovel. They have agreed, but they are holding off. 
They have a target action date and they are working to 
complete, I understand. However, I think that within the minds 
of many there is a question mark related to what will happen 
should air traffic control be separated from FAA proper.
    Right now, responsibility for UAS integration is spread 
between the Air Traffic Organization, ATO--the safety 
organization that is separate from but also within FAA, of 
course--and then there is a UAS Integration Office. All three 
of those entities are responsible for collecting some data, but 
it is not all integrated. Some of those entities may remain 
within FAA should air traffic control be separated.
    Mr. Young. Do you know if in your findings, 
recommendations, and within the folks at FAA looking at this, 
if they are taking into account proprietary information by 
private citizens? Particularly in agriculture, we have a lot of 
farmers and producers who use drones, UASs, for many reasons, 
and I am just wondering regarding that proprietary information 
and privacy if that is being addressed.
    Mr. Scovel. Yes, FAA does not have a primary responsibility 
for privacy, that is, you know, in the classic sense of a drone 
hovering over your backyard or whatever the nature of the 
perceived intrusion might be. However, FAA has agreed with the 
National Telecommunications and Information Administration that 
has, by designation of President Obama at the time, primary 
responsibility to develop a Government-wide framework regarding 
privacy concerns--to address privacy concerns.
    The role that FAA has taken on for itself has been that of 
education. So when applicants register their UAS with FAA, they 
receive a packet regarding privacy and the best practices 
there.
    The other aspect that you mentioned, sir, specifically with 
regard, say, to precision agriculture and other specific uses, 
FAA--and I do want to give them good credit for this--FAA has 
undertaken stakeholder communication and collaboration most 
diligently, and it has a Drone Advisory Committee, for 
instance, that is helping the Agency understand better how to 
integrate beyond--what is called in the industry and the 
Agency--beyond line-of-sight operations, which would include 
many agricultural applications as well. That is a key area that 
both industry and the Agency realize they need to focus on. 
There need to be some technological improvements in order to 
facilitate that.
    Mr. Young. Well, that is encouraging.
    Mr. Scovel. But they are keyed onto it.
    Mr. Young. That is encouraging because it is always good, I 
think, when you take into account who this affects and the 
opinions and needs, wants, comments of the stakeholders.
    My time is about up, Mr. Chairman, but will there be a 
third round?
    Mr. Joyce. Yes, sir.
    Mr. Young. Thank you.
    Mr. Joyce. Thank you, Mr. Young. The Chair recognizes Ms. 
Clark.
    Ms. Clark. Thank you, Mr. Chairman. I want to follow up on 
a point from our ranking member. And as we are looking at 
conflicts of interest, as we are looking at personnel issues, I 
think, Mr. Montoya, your testimony was that 43 percent of HUD 
career permanent employees will be eligible to retire by 2019. 
What is the impact of a blanket hiring freeze?
    Mr. Montoya. Well, there certainly will be an impact with a 
blanket hiring freeze because it goes back to my concerns that 
they then are very limited in who they can hire and, of course, 
it slows the process down in hiring some of these key roles and 
positions they need to fill. With regards to the retirements, 
the troubling part there is much of the expertise that the 
Department currently holds will leave with it. And that goes 
again to what limited staff we do have to provide the contract 
oversight, if you will, and the financial management governance 
side and the IT side will be gone and so we will even have less 
internal. So from the standpoint of making sure the Department 
has it right with the limited hires they will get, assuming 
they get any, they have got to make the right hires and they 
have got to prioritize those hirings.
    Ms. Clark. I also want to go back to our discussion about 
disbarment. And in your testimony you raised that HUD is often 
hesitant to take strong enforcement actions against lenders 
because it has a competing mandate to continue FHA's role in 
restoring the housing market. Do you believe this is part of 
why we have not seen financial institutions with multiple 
violations being disbarred? And if so, what kind of 
recommendations do you have around this tension between the 
mission of HUD?
    Mr. Montoya. So that is probably a question best for HUD. 
Whether that is their reasoning, it certainly could be. With 
regards to the tension, you know----
    Ms. Clark. But that was your testimony, right, you do 
believe that?
    Mr. Montoya. Oh, yes, I do.
    Ms. Clark. Yeah.
    Mr. Montoya. I do believe that. But with regards to why 
they do not disbar, I think part of that is, you know you do 
not--and in fairness, they do not really want to lock down the 
economy. They do not want to lock down the ability for people 
to get homes. You just want----
    Ms. Clark. But even if we took disbarment away, if we are 
just looking at repeated violations and pursuing those----
    Mr. Montoya. Right.
    Ms. Clark [continuing]. Do you think that would be--is 
there a way to address this tension that might ease that 
problem?
    Mr. Montoya. So they do have an MRB, a board that is 
supposed to look at these actors who continuously do these 
things. And at that level, they can impose financial penalties, 
they can disbar at that level. And so they do have a mechanism 
outside of a civil case, for example, the DOJ, to take strong 
enforcement. Often it is very weak.
    We did some work on that, on the MRB, the Mortgagee Review 
Board, about 10 or 12 years ago. I have asked my staff to do 
another review. But even back then, we saw very weak penalties 
were doled out even for some of the most egregious things; very 
low penalties, if any. Usually they will walk away with a slap 
on the hand. And, again, I think that goes to they are really 
reticent to try to do the carrot and the stick. You know, they 
are there as regulator, encouragers, you know, open up the 
market.
    Ms. Clark. Yeah.
    Mr. Montoya. But they also have that role of overseer to 
say, well, look, yes, we want you to open up the market, we 
want you to provide, you know, loans for housing, but we do not 
want you to defraud us in the process. So there has got to be 
that balance and, unfortunately, they lack a lot of that stick 
side. Right? They leave it to me in a lot of ways to do that.
    Ms. Clark. All right, thank you. I want to get a quick 
question in for Mr. Scovel about the Merchant Marine Academy 
and the sexual harassment and assault. You said in your 
testimony they had completed 29 of the 44 action items 
suggested in the 2014-15 action plan. Can you give me an 
update?
    Mr. Scovel. Still working on the remaining items, Ms. 
Clark. As we informed the committee, and we have also worked 
with the Department and the Maritime Administration (MARAD) and 
the Academy on these, the 42 action items were those that had 
been identified by the Academy itself as a result of its last 
full-fledged survey of students. The Academy had made good 
progress on those, and we reported to this committee back in 
August that they had completed 29 in our view. They claimed 
credit for having completed a few more. We pointed out that, in 
our view and reasonably, their count could not be accurate, and 
they ended up fully agreeing with us.
    I think they are completely focused on those areas that 
demand the most attention and that is, to use Inspector General 
Montoya's terms, proper leadership at the top, continued 
engagement at that level, incident reporting. The last survey 
from the 2014/2015 time period indicated a completely 
unrealistic number of reported incidents compared to those 
students who, in an anonymous survey, had reported instances of 
sexual harassment themselves. That and coordination with the 
industry on the Sea Year program where cadets from the Academy 
are especially vulnerable when they take their many months at 
sea with the shipping industry. Working with the industry on 
that and also preparing cadets for that Sea Year experience, 
the school realizes that those are the key elements that will 
bring them to success. Important area, of course, especially 
this week in light of testimony from the Marine Corps over on 
the Hill, so, you know, the services themselves are wrestling 
with it.
    Just yesterday I saw a media report that the other service 
academies, too, had reported an increase in reports of sexual 
harassment as well. So the Merchant Marine Academy knows that 
it has still a lot of work to do, but I am confident that they 
are focused in the right directions.
    Ms. Clark. Thank you. Thank you, Mr. Chairman.
    Mr. Joyce. Ms. Clark. Mr. Aguilar.
    Mr. Aguilar. Thank you, Mr. Chairman. Nice tie. Happy 
birthday, again.
    Mr. Scovel, your testimony notes that more than $6 billion 
was spent in contracts annually for fiscal years 2015/2016. 
Specifically, you note that cost-reimbursable contracts may be 
considered high risk because contractors are paid whether work 
is completed or not. We have also heard examples where the 
product delivered by a vendor may have included services not 
designed within the contract or needed by the Department of 
Transportation. This may result in additional costs to the 
overall completion of the project.
    So my question is, does the DOT have a mapping tool that 
tracks in real time the progress infrastructure projects are 
making toward completing the work required within the Federal 
grant process--Federal contract process? And if not, are there 
standards in place to collect information that could be used to 
aggregate this tool utilized by the agency? I believe that 
mapping tools that organize and display the progress of these 
infrastructure projects across the country can support the 
agency's efforts better and help them manage assets and 
investments.
    Mr. Scovel. Absolutely, and I would entirely agree. I think 
you are right, those are critical tools in order to ensure 
success for the Department's mission.
    I would distinguish between those aspects of the 
Department's funds that are allocated to grants and the 
individual operating administrations, especially the Federal 
Transit Administration (FTA) and Federal Highways. While they 
do track or map their grants within their divisions, in the 
case of Federal Highways that would be 52, so each State is its 
own--has its own division and office under Federal Highways, 
plus the District and Puerto Rico. I would need to get back to 
you to see how far Federal Highways' headquarters is on 
integrating and comprehensively analyzing, across the Nation, 
how all of those particular grants might map out. But I do know 
that division-by-division they are tracked and followed through 
that tool.
    The Federal Transit Administration is organized by region. 
They do attempt to do the same thing. We have worked in the 
past with the Federal Transit Administration at the 
headquarters level to try to identify best practices between 
its regions on how they can track and monitor and assess the 
progress of their grants. And FTA has made pretty good progress 
in that area.
    Mr. Aguilar. So you can work with them on best practices, 
but it is really left up to each office as to how they 
administer?
    Mr. Scovel. Most certainly, but that has been a consistent 
theme with us when we have audited both FTA and Federal 
Highways. And that would be greater oversight at the 
headquarters level of what the division offices are doing 
within Federal Highways; what the regional offices are doing 
within Federal Transit to ensure greater consistency and better 
understanding at the headquarters and the Secretary level, and 
at the congressional level, of what those two operating 
administrations are doing.
    The $6 billion figure, sir, that we cited in our written 
testimony has to do with contracts that are let by the 
Department as opposed to grants. And it is that cost-
reimbursable aspect that we highlighted by way of finding some 
particular audit that we completed as posing a particular 
danger, a special danger to the Department. And the Department 
has agreed with our recommendations on that and is making some 
progress in executing on those.
    Mr. Aguilar. I appreciate it. Mr. Montoya, by statute, FHA 
is required to maintain a capital ratio of 2 percent or more in 
the reserve fund. In fiscal years 2015 and 2016, the capital 
ratio was 2.07 and 2.32. It is projected that the fund will 
continue to be above the threshold limit. President Obama 
issued guidance to lower the FHA premiums, partly because the 
FHA Reserve Fund achieved the capital ratio that surpassed its 
legally required threshold 2 years in a row.
    On January 20th, President Trump suspended the guidance and 
eliminated the opportunity for homeowners to take advantage of 
the lower FHA premiums. Does the OIG have any data to 
demonstrate that increasing FHA premiums is necessary to 
maintain the 2 percent capital ratio threshold in the FHA 
Reserve Fund?
    Mr. Montoya. Well, we do not have any data, per se. I think 
what we have looked at with regards to the actuarial report is 
they seem to be on track, assuming nothing goes wrong in the 
mortgage market, to continue to add to that MMI Fund. You know, 
our concern is that the Department does not make decisions that 
could negatively impact it. We have an ongoing body of work 
that we were in major disagreement with the Department having 
to do with down payment assistance and the fact that mortgages 
are being given to low- to moderate-income families with very 
high interest rates. And if those homeowners cannot eventually 
afford those higher interest rates, if we have a downturn in 
the market, you could have defaults. So it is really incumbent 
upon FHA itself to make the right decisions on risk versus 
reward, and we understand they have got to do that.
    In this particular case, our disagreement is that we think 
they are in violation of the Housing Act in allowing these sort 
of what we call borrower-funded down payments to occur and so 
sometimes FHA can be its own worst enemy. But what we know now 
with regards to our review of the actuarial is that they are 
above the threshold and they seem to be on track to continue to 
add to that.
    Mr. Aguilar. Appreciate it. Thank you, Mr. Chairman.
    Mr. Joyce. Thank you, Mr. Aguilar. And here we are at the 
end of the second round and we recognize Mr. Dent.
    Mr. Dent. Thank you, Mr. Chairman. Good morning.
    Mr. Scovel, I would like to ask you just a question on MAP-
21. On March 6th, your office issued an audit report on DOT's 
progress in implementing initiatives under MAP-21, which are 
designed to accelerate project delivery. While the report 
detailed certain initiatives that had a low level of State 
participation, during your office's examination of this issue, 
were there any programs that you found that had a high level of 
State participation?
    And two, if Congress is going to be considering a 
transportation infrastructure package at some point in the near 
future, it would be helpful to understand what programs may be 
working to expedite project timelines so that Congress can, you 
know, best direct its efforts and ensure that any resources 
provided for infrastructure have a real and immediate impact. I 
think that is one of the frustrations we have all seen with 
infrastructure, that we are not in the 1930s and the 1950s 
anymore. When we said we were going to go build a road, we used 
to go out and build it, and now we spend a hell of a lot of 
time and money on preconstruction activities and we do not have 
a whole lot of stimulative effect because there is not much 
shovel-ready. So have at it.
    Mr. Scovel. Okay, thanks, sir. Yes, we did recently 
release--very recently release--our audit report to fulfill our 
obligation in the act to audit the progress or the successes 
under Subtitle C of MAP-21. This had to do specifically with a 
thought that shifting responsibility from Federal Highways 
especially to the States--should they decide to take it for 
environmental reviews--might, in fact, speed things up. While I 
think to most laymen it would make sense, for many of us, we 
see the requirement for an environmental review to be a 
significant showstopper.
    In fact, I was rather surprised that our audit report did 
not substantiate my supposition. And that is because, 
generally, the States declined to accept the invitation, if you 
will call it that, to take from Federal Highways the 
responsibility to conduct these environmental reviews for a 
number of reasons. Primarily, there was no financial incentive 
for them. Many States are resource- and budget-strapped at this 
point. Some States identified to us--when we questioned why 
not, you know, you might be able to get your projects underway 
sooner--they said, well, our lawyers are telling us that we 
will be required to waive sovereign immunity, which we are 
loath to do because we know that in many of these instances, we 
are going to get sued.
    So one State especially stood out as an example of being 
willing to take that step, and that was the State of Texas. And 
they indicated to us that they were willing and the legislature 
was willing to waive sovereign immunity, and it required an act 
of the legislature, of course. And furthermore, they considered 
their budget picture and resource-staffing picture to be 
sufficient to allow them to take it on. They did. They achieved 
some successes in moving some projects a little bit quicker 
than others, developing some innovative approaches on other 
projects, but the other States that we questioned did more 
detail. Oregon, Georgia, Pennsylvania was one, they tended to 
hang back, so we would characterize it very much a mixed bag.
    I do not know that there is any particular silver bullet, 
frankly, to make a huge progress in accelerating projects. The 
changing nature from project to project, State to State, and 
what resources the States are able to develop make it difficult 
to say that there is any universal method to achieving 
accelerated project delivery that would be the hope for all of 
us.
    Mr. Dent. Well, thank you. And I would like to turn to Mr. 
Montoya. On January 20th, your office issued a report that 
found HUD program participants may be receiving multiple 
subsidies through both multifamily housing programs and Public 
and Indian Housing programs. And according to these findings, 
you provided recommendations for HUD to address these issues. 
These recommendations required public housing agencies to 
better utilize the Enterprise Income Verification system, which 
contains resident information. Given the constrained fiscal 
climate in which we are operating, it is imperative that all 
appropriated funds are put to qualified and proper uses.
    Could you tell us if, one, if HUD has begun to implement 
the recommendations in your report to prevent future waste? And 
two, if your office believes there are any other areas where 
HUD could prevent duplicative awards by utilizing information 
or verification systems that are readily available to them? And 
my time is almost up.
    Mr. Montoya. Yes, Mr. Dent. Thank you for the question. I 
would have to get back to you on whether they have actually 
implemented or are working on the recommendations. I think 
other areas where there is duplication of benefits is the 
Disaster Program, and that is really not only within the 
Department, but as it relates to SBA and FEMA money. We are 
doing a body of work in that arena to see where there might be 
duplications of benefits and maybe where there could be some 
legislation that could help correct that.
    Mr. Dent. Thank you. I see my time has expired.
    Mr. Joyce. Thank you, Mr. Dent. We will start on the third 
round of questions and continue on as long as the committee 
people have questions to ask. I will start off myself.
    Mr. Scovel, one of the things that has troubled me is the 
local metropolitan transit system, WMATA. Incidents this year 
included a track fire, a derailment, a flooded station, and 
one-day emergency shutdown of the entire system. These 
incidents have unveiled a massive extent of disarray to WMATA's 
infrastructure and repair process.
    Additionally, it was announced that nearly half of the 
Track Inspection Department is under review, discipline, 
suspension, or at risk of being fired after investigation into 
the July 29th derailment at East Falls Church suggested it was 
a widely accepted practice within the department to complete 
reports for inspections that had not been performed.
    In light of these developments, I am curious what 
recommendations your office has, if any, to WMATA that would 
help ensure the safety of the riders, the cost-effective use of 
taxpayers' dollars in repair efforts, and that these projects 
are completed in a timely and efficient manner?
    Mr. Scovel. Thanks, sir. This is a significant question for 
all of us in the Washington area and has broader implications 
for transit agencies across the country, of course. Our office 
has not undertaken any specific review of WMATA proper. WMATA 
has its own Office of Inspector General and for that reason and 
others, we have not looked at WMATA. I can say that GAO, 
however, was asked by Congress to look at WMATA's specific 
implementation of its current SafeTrack effort and recently 
reported out and recommended to WMATA that it engage in far 
better project management practices than it had undertaken when 
it first initiated the SafeTrack surge.
    As I understand it, WMATA's reply was, yes, but we felt we 
were under the gun for significant safety challenges and we 
wanted to get started; realizing that, of course, we had not 
completed every mark on the checklist by way of project 
management expertise, but we will get to it.
    Where our office, where DOT OIG has focused our efforts has 
been on FTA's oversight of transit agencies, and specifically 
with regard to WMATA, the process by which FTA decided to 
exercise its recently granted safety oversight authority that 
came to that Agency from 2012 legislation. We issued an audit 
report immediately upon enactment and suggested to FTA that it 
may wish to consider a number of best practices that we had 
gleaned from regular audits of other safety oversight agencies. 
FTA had embarked on that, had been making pretty good progress 
in our estimation. However, then it had to pull the trigger and 
assume direct safety oversight of WMATA itself.
    We initiated another audit and have completed that one that 
reported that FTA, in exercising that safety oversight 
authority, had a number of challenges. One had to do with 
staffing. Did it have the right expertise and the right number 
of staff to enable it to do that?
    The other was, what kind of data was it collecting? It is 
not going to be able to focus its efforts without the right 
data.
    The final one was oftentimes, as in the case of WMATA, FTA 
will be pulled into a direct oversight role, but it has to have 
a way to pull out. It needs to have an exit strategy too, which 
it had not been able to do sufficiently at the time we 
conducted our audit with regard to WMATA itself.
    So that is the area where our office has been working with 
FTA and indirectly with WMATA on its current woes.
    Mr. Joyce. Well, it would appear it is a tetra-headed 
monster, if you will. All the different agencies that are 
involved, but no one really claiming oversight----
    Mr. Scovel. Mm-hmm.
    Mr. Joyce [continuing]. Or taking it--and that there are 
too many people on the Metro rail every single day with 
potential for disaster. Do you believe in its current structure 
WMATA is internally equipped to efficiently manage and execute 
the necessary repairs?
    Mr. Scovel. Clearly, room for improvement, and I would cite 
the GAO report in that, particularly with regard to SafeTrack. 
This is the most significant rehabilitation effort that this 
transit agency has ever undertaken. GAO found some noteworthy 
areas where the planning and execution could be far better 
achieved. It is up now to the board of directors and to the 
chief executive officer to put those into play. We can see--and 
I ride Metro myself, every single day. We can see how it is 
working out and not working out over the course of SafeTrack. 
Clearly, WMATA has a ways to go.
    Mr. Joyce. Well, I hope you continue to ride in a safe 
fashion.
    Mr. Scovel. Thanks.
    Mr. Joyce. Thank you. Moving now to Ranking Member Price.
    Mr. Price. Thank you, Mr. Chairman. Mr. Scovel, I belatedly 
have consulted your resume here, and note the bachelor's degree 
from UNC-Chapel Hill and the law degree from Duke University. 
As a former Marine, I assume you have a more courageous answer 
to this question than I do as to who you root for in ACC 
tournaments.
    Mr. Scovel. Oh, absolutely, and I appreciate the question, 
sir. And thank you for your able representation of the Triangle 
Area. It is going to be Carolina all the way.
    Mr. Price. That is a more courageous answer, yes.
    Mr. Dent. Villanova.
    Mr. Scovel. I love Duke. When they are not playing 
Carolina, Duke is my team, but when they are going head to 
head, it is Carolina, so.
    Mr. Price. Very good. Well, as opposed to ducking, that is 
a good answer. And, of course, when they are not playing each 
other, it is a very easy answer.
    Well, I do want to turn to you because we perhaps have a 
point of comparison here in terms of DOT's financial 
management, things that might have occurred to you in terms 
especially of the factors that go into better performance.
    I also want to turn to the question of these new challenges 
and the budget implications of them. Autonomous vehicles, 
unmanned aircraft going to need to communicate with other users 
in the national airspace and on our roads and highways. And as 
you have said repeatedly here this morning, this is a daunting 
task. It requires new skills, new tools for the Department to 
safely integrate these technologies into the transportation 
network. It will likely require additional resources and skill 
sets at DOT and, for that matter, in your own office to carry 
out and oversee these efforts.
    So, that is my question. If you have reflections on 
financial management generally, but then, in particular, when 
we are talking about hiring freezes, the budget cuts of the 
magnitude we are looking at here, how on Earth are we going to 
get on top of this new challenge?
    Mr. Scovel. Thanks, Mr. Price. Yes, just listening to 
General Montoya relate his woes at the Department of Housing 
and Urban Development, I count myself lucky to be at the 
Department of Transportation in terms of its financial 
management. And I say that even remembering that within 2 weeks 
after my taking office as Inspector General in 2006, my office 
issued a qualified opinion to the Department, the only time, 
certainly within my tenure as Inspector General, that we saw 
the necessity to do that. And the reason at the time had to do 
with how FAA was accounting for its capital, if you will, its 
plants and equipment, and how it was accounting for 
depreciation and all of that.
    FAA is a big enough part of the Department that it rose to 
be a material deficiency. And our contract accountants at the 
time, KPMG, told us that they would be required to issue a 
qualified opinion and, of course, we did.
    I will give the Department and FAA great credit for 
immediately, upon that problem, setting about correcting it, 
and within the following year, had it nailed. And while it has 
been a watch item for us and our contract auditors in the years 
since, it has not risen to the point again where it threatened 
the integrity of the financial operation.
    We have had other problems that have arisen. I would have 
to cite Federal Highways. They had a significant problem with 
regard to unobligated balances for specific projects. The 
Department created a working group and immediately set upon 
that when we informed them early on that this was a potential 
problem.
    We have also had more recent questions with regard to how 
FTA has been cooperating with our contract auditors, and the 
Department has taken the stick to FTA on that. So, I am very 
much encouraged by it.
    With regard to an overall budget picture for the 
Department, I will leave it to the Secretary and her team to 
figure out how to do that with some of the emerging 
technologies that you cited, UAS, autonomous vehicles--a key 
for the agencies now trying to work through that problem. What 
will become even more significant going ahead will be 
engagement with stakeholders, keeping in mind, of course, the 
danger, if you will, or the specter of takeover of the 
regulator. But I think between us and the Secretary and the 
Congress, of course, we will be able to guard sufficiently 
against that.
    In my own office, I do have concerns about our budget. The 
hiring freeze is one thing for the next number of months, but a 
much longer concern and more immediate problem will be the 
hiring or the budget picture for our office.
    I respect General Montoya's 60-to-1 return on investment. 
In the last year, we had a 54-to-1 return on investment, 
meaning for every single appropriated dollar that our office 
received, we were able to return to the Government and the 
taxpayer $54.
    Together, I think we stand very near the top, certainly 
within the top five or six among all OIGs in Government.
    Seventy-five percent of my budget, sir, is allocated to 
personnel salary and expenses, because that is how we 
accomplish our mission. We have no programs. We have no 
hardware. We have no grants. We have no loans. We deliver 
reports of investigation to prosecutors so that they can try to 
nail the bad guys. We deliver audit reports to you and to the 
Secretary, so that together we can figure out how to improve 
efficiency, economy, and effectiveness for the Department's 
programs.
    I need people to do that, and most of my budget dollars go 
to pay them. If I cannot do that, then my ability to keep you 
and the Secretary fully and currently informed, and that is my 
mission by way of the IG Act, my ability to accomplish that 
mission will be threatened.
    I used the phrase earlier, sir, that elements in the 
Department do all they can with what we have. We are at the top 
of that list in terms of our OIG. I do not tell our people that 
we are going to do more with less, because that is a sure-fire 
method to drive people into the ground, but what I do tell them 
every day, I expect them to come to work and do all we can with 
what we have got.
    It will be up to the Congress and the administration to 
determine what our sum might be, but I want to assure this 
committee that you will have our 100-percent effort every day. 
Thanks.
    Mr. Price. Thank you. Thank you, Mr. Chairman.
    Mr. Joyce. Thank you. Mr. Young?
    Mr. Young. Mr. Montoya, the Mutual Mortgage Interest--
Insurance Fund, I'm sorry, Insurance Fund, there is an issue 
out there regarding the implication of this fund. The Property 
Accessed Clean Energy, or PACE loans as they call them, they 
are attached to the property rather than the borrower, have 
high interest rates, and are repaid by an assessment.
    So, there are concerns that allowing HUD to insure 
mortgages on properties with PACE loans because this puts them 
in a second lien position, and thereby increases the risk for 
the MMI Fund and taxpayers.
    As you know, the Federal Housing Finance Agency prohibits 
Fannie Mae and Freddie Mac from insuring properties with PACE 
loans. So, there are concerns that the PACE loan problems echo 
the subprime mortgage issue that we had years ago. 
Creditworthiness does not matter, some say. No down payment is 
required. Contractors function as loan brokers. Often 
homeowners may not know what they are getting into. I am sure 
that all of us do not want to go back to the 2008 crisis, and 
avoid another $1.7 billion bailout.
    So, would you agree that allowing FHA funds to take a 
second lien position creates a greater risk to the MMI Fund and 
to taxpayers? And just talk about the implications of this 
policy and what you found. I would like your insights.
    Mr. Montoya. Yes, sir. Thank you for the question, Mr. 
Young. It goes to the point I made earlier that sometimes FHA 
is its own worst enemy, and we would agree. Putting the FHA 
mortgage in a second lien position to these PACE loans could 
very well be detrimental to the MMI Fund if homeowners default. 
And you are absolutely correct. Often, these homeowners do not 
understand the obligations of these loans, that these are 
assessments, they are not part of a loan, the traditional loan. 
And, in fact, we are not even sure that these PACE loans or 
these homeowners are actually going to benefit from any energy 
measures, and so that increases, obviously, the liability.
    It is a concern for me that back in 2015, we thought FHA 
was on pace to maybe not sort of back this idea. Something 
changed within the year, and they decided to go ahead and put 
out guidance that said they would insure these types of loans, 
with certain caveats that people needed to know that the loan 
should not be put in a second position, but they do not really 
have that say so because that is a State issue as to lien 
position on loans.
    So, we are troubled by it. We are appreciative that you 
brought this to our attention, to my attention. I actually did 
not realize this, but my audit staff has a proposed audit on 
these PACE loans, so I would commit to you that when we get 
done with that body of work and even maybe before that, we 
would love to give you an oral briefing, and certainly give you 
the report when it is done.
    Mr. Young. When do you anticipate that that audit may be 
done? We do not want to rush it, but just maybe a timeline.
    Mr. Montoya. Well, sure. So it was an audit proposal in 
this year's audit planning stage. So I obviously jumped into 
the fray and said that is going to be one of them, so it will 
be starting, hopefully, some time in the next several months.
    And so certainly, what we want to determine is the adequate 
controls that might mitigate the risks associated with insuring 
these loans, sir.
    Mr. Young. Thank you for that, appreciate that.
    Mr. Montoya. Thank you, sir.
    Mr. Young. I yield back, Mr. Chairman.
    Mr. Joyce. Thank you, Mr. Young. Mr. Aguilar?
    Mr. Aguilar. Thank you. Mr. Montoya, picking up a little 
bit on that, and maybe go back and forth between the MMI Fund 
and also, as you mentioned, some of the down payment assistance 
programs that present problems to your office.
    Just thinking about it from the perspective of underserved 
communities, in 2015, the top four home lenders scaled back on 
FHA lending in 2015, prioritizing conventional loans, while 39 
percent of all mortgages issued were government insured, 63 
percent of Latinos took out government-insured mortgage loans. 
So this is something that affects the community that I 
represent. Down payment assistance is crucial for families who 
would like to buy a home.
    In your office report on the FHA-insured loans published 
recommendations that HUD consider a position allowing some 
borrower-financed down payment assistance programs to also 
participate in the FHA program.
    So I guess my question is how do we ensure that proposed 
reforms do not create barriers to homeownership that 
disproportionately affect the Latino community?
    Mr. Montoya. Yes, sir. Thank you for the question, and it 
is a valid question. What we are sort of mandated to do and 
what we want to ensure we do is that the home borrower, the 
loan borrower, the homeowner, goes into these loans fully aware 
of what they are getting into, and that has been the problem 
all along is they are not fully informed of what these loans 
really mean, what this down--now, just to be clear, we do not 
have a problem or disagree with down payment assistance 
programs, generally speaking.
    We have a contention and a concern over a particular 
program where these premiums are raised often without the 
borrower knowing, so that when they get into the loan, they are 
going to have a higher premium interest rate on the loan. So 
that is the troubling part of this.
    Certainly, with regards to homeowners going into these 
loans fully informed, fully aware, fully understanding that 
they can or cannot pay for it, that should not close any 
community from accessing the loans. Our main purpose here is to 
ensure these borrowers are fully informed and aware of what it 
really means and what those numbers are going to really look 
like when they get into these loans.
    Mr. Aguilar. Can that be done through added disclosures? Or 
how can we further the goal of informing consumers so they know 
what they are getting into?
    Mr. Montoya. Absolutely, sir, added disclosure, and that 
was one of our recommendations. We had several recommendations 
on the down payment assistance audits that we did. And part of 
that is they have to fully disclose that, and you have to 
disclose that very overtly. You have to get a certification 
that you did disclose it.
    The Department does not even track these types of loans, 
which is even more troubling. They do not track them 
separately. So there is no real history on whether these things 
track well or not, you know, the higher premium interest rate 
of these loans as compared to general down payment assistance.
    These down payment assistance loans were initially designed 
to receive a grant or money to get people into the homes, 
right? With no expectation that the money would be paid back. 
Well, these higher interest loans are designed so that the 
money is paid back, and it is paid back on the back of the 
borrower. That is what the borrower does not understand. This 
is not, you know, a grant that is going to get you into a home 
and help you. They are going to pay for it themselves.
    So absolutely it goes to disclosing and to ensuring that 
occurs. And so that has been the biggest point of contention on 
this particular down payment assistance program.
    Mr. Aguilar. Right, okay. But your office is not expressing 
disagreement that offering the increasing affordability and 
access to these programs is a worthy goal. The question is how 
do we get there? What disclosures do we offer in order to 
protect consumers, and how do we ensure the program is legal 
moving forward as well?
    Mr. Montoya. Absolutely. It is a worthy goal and, as I said 
earlier, the mission of the Department is an honorable mission. 
What we want to ensure is that these individuals who are 
receiving these loans are fully aware and they are not taken 
advantage of.
    In the case of the PACE loan that we were just talking 
about, these contractors are pushing these loans, right? So it 
becomes this idea that you are not really protecting the 
consumer, and it really becomes sort of predatory lending, 
right?
    And so that is what our focus is, is to ensure that that 
sort of thing does not happen to these individuals, these 
families.
    Mr. Aguilar. I appreciate it. And, Mr. Scovel, I just 
wanted to let you know that I am sure I cannot speak for Mr. 
Montoya, but I am sure if you really felt some sympathy for his 
position, there are plenty of vacant positions at HUD, CFO as 
we have heard and others. So feel free to jump in with two 
hands and help out.
    Mr. Scovel. Ah, great.
    Mr. Aguilar. Thank you, Mr. Chairman. I yield back.
    Mr. Joyce. Thank you, sir. Okay, I'm going to--any more 
questions? Well, I have got on here of local interest. Mr. 
Montoya, if you would not mind, the point-in-time count, are 
you familiar with that?
    Mr. Montoya. Generally familiar with it, yes, sir.
    Mr. Joyce. Okay. As you know, it requires communities 
receiving funds through the homeless assistance grants to 
conduct annual PIT counts, of people experiencing homelessness.
    The counts are to occur 1 day during the last week of 
January. The data collected on this day is then often used a 
model for total homelessness in a given area, and this has been 
problematic for communities that I represent, specifically 
Ashtabula County, Ohio. Located in the most northeast corner of 
the State, the county represents both rural and urban areas, 
and its proximity to Lake Erie leads to some of the most 
extreme weather patterns in the country, especially this week.
    Local homelessness assistance program directors have 
expressed concern that the PIT data collection method for which 
they must abide is problematic in obtaining an accurate count 
of homelessness in this region. For one, homeless individuals 
in rural areas take shelter in hard-to-locate and spread-out 
locations, making it difficult to pinpoint and register 
individuals in the timeframe given.
    Additionally, it is a safe bet at this time of year you are 
going to see some extreme weather, during which many homeless 
individuals take shelter in local businesses, such as 
laundromats, fast food restaurants, making it even harder to 
account for a large population of the vulnerable.
    Has your office evaluated any ways by which the assistance 
programs can collect more accurate data? And if so, what are 
your recommendations for doing so?
    Mr. Montoya. Thank you for your question, Mr. Joyce. We 
have not done any body of work on this particular program. I 
would be interested, and I have asked my staff to look into it, 
as to whether the systems that HUD uses to collect this data is 
something we could do analysis on to figure out where these 
accounts are occurring.
    Recognizing they do do this one night every year, and every 
other year I think they go to those populations who are not in 
shelters in very specific areas. I think it would be difficult 
in all cases to sort of make sure you are not missing anybody. 
But we have not done any body of work. I certainly would be 
interested into looking into that a little bit deeper for you 
to see what we might be able to ask with regards to how 
complete this program really counts.
    Mr. Joyce. Well, thank you very much. Mr. Price?
    Mr. Price. Thank you, Mr. Chairman. I, in this final round, 
would like to turn to an issue that is extremely important and 
needs to be addressed. And I hope that in the time remaining 
you can at least give a cursory update on your progress. Both 
departments, of course, have critical and sensitive 
information, technology systems, air traffic control, 
processing of federally insured mortgages, and on and on. And 
cyber attacks are a very real and a serious threat in all these 
areas.
    Every day outdated legacy information systems perform these 
critical tasks and yet pose unique information security 
challenges. And they are often fragile. They often lack the 
resiliency of their modern counterparts. So, just to take HUD 
alone, you note, Mr. Montoya, that the fiscal 2016 IT funding 
decreased 16.3 percent from the previous year, and then 
decreased another 16 percent in 2017. So, constrained resources 
is a euphemism, I think, for how these agencies are operating 
in this area. And then looking ahead, maybe even more 
constraints.
    So, could you give us an update on what work remains to be 
done in improving the security and resiliency of legacy IT 
systems in each of your departments? Give us an idea of whether 
or not this can be achieved within existing resources.
    Mr. Montoya. Yes, Mr. Price. So, with ours, just to give 
you a sense, I think there is over 400 HUD IT products that are 
running on unsupported platforms. So, again, that goes to the 
critical need for that.
    To the extent that any budget cut will certainly have an 
impact on how quickly they can get to these security concerns 
and issues, but really for them, it is not even a matter of 
patching and security awareness, it is about creating new IT 
systems that can take over where these aging systems will 
eventually just--will stop. So, that is naturally the more 
critical aspect.
    So, even with any budget cut, I think it is going to have 
to be a real focus on the priorities, what has to come first 
and what should come first. And I think that would be my 
simplest answer, that even when it comes to our Department, at 
some point security patches really are not going to work on 
these things. So, it is beyond patching these things. It is 
really about moving them on to new systems.
    Mr. Scovel. Thank you, sir. For DOT, I would say somewhat 
much the same thing. There needs to be, certainly, 
prioritization of replacement for those key of the 460 or so IT 
systems that the Department of Transportation relies on. With 
regards specifically to your point about cyber attacks and 
vulnerabilities, of course we do the required FISMA audit every 
single year.
    We have highlighted across all the domains of cybersecurity 
areas where the Department needs to make progress. With regard 
to continuous monitoring, for instance, last year we found that 
with regard to one of the Department's major networks, the 
monitoring tool had detected 110,000 weaknesses at the time, 
yet the Operating Administrations that rely on that network had 
not been informed where those weaknesses were, so that they 
could undertake remediation at that level.
    With regard to incident handling and reporting, we found 
similar shortcomings. The committee may remember that in 2014 
there was a fire caused by a contract employee in the En Route 
Air Traffic Control Center near Chicago. The center had to be 
shut down for several weeks. The aviation industry reported 
losses of upward of $350 million as a result. Yet that 
significant incident had not been reported. Everyone knew about 
it because it was in the news, but it had not been reported 
officially to the Department, because the Department views FAA 
as separate and apart in its incident-reporting requirements. 
Neither FAA nor the Department had reported it to the 
Department of Homeland Security, to the U.S. Computer Emergency 
Readiness Team. Glaring, glaring deficiency.
    With regard to contingency planning, this is mentioned 
specifically in our longer statement. Of the Department's 460 
systems or so, we determined last year that 86 percent had not 
experienced recent or comprehensive contingency testing of its 
recovery plans should the inevitable cyber attack occur.
    So, those would be three areas where the Department clearly 
needs to prioritize its efforts. Longer range, ultimate fixes, 
like at HUD, may rely on upgrading, as financial resources 
permit, updating the networks themselves. But clearly in the 
meantime, there is much work to be done.
    Mr. Price. Thank you. Thank you, Mr. Chairman.
    Mr. Joyce. Thank you, Mr. Price, Mr. Young. Well, I just 
want to thank both of you gentlemen, along with your staff, for 
all the answers and your participation here today. The 
committee staff will be in contact with the budget officers 
regarding questions for the record. I know I have a number of 
questions to submit, and I would imagine other members of the 
subcommittee do as well. And if you would work with the OMB to 
return the information for the record to the committee within 
30 days from Friday, we will be able to publish a transcript of 
today's hearing.
    Mr. Price, any final comments?
    Mr. Price. No, it was a very useful hearing. Thank you both 
for being here.
    Mr. Joyce. Yes, thank you both. As a former prosecutor, I 
appreciate exactly what you are doing. And keep up the great 
work.
    Mr. Montoya. Thank you, Chairman.
    Mr. Joyce. With that, this hearing is adjourned.
    Mr. Montoya. Thank you, sir.
    
    
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                                            Thursday, May 18, 2017.

                  EMERGING TRANSPORTATION TECHNOLOGIES

                               WITNESSES

NIDHI KALRA, PH.D., SENIOR INFORMATION SCIENTIST FOR THE RAND 
    CORPORATION
PROFESSOR MYKEL KOCHENDERFER, STANFORD UNIVERSITY DEPARTMENT OF 
    AERONAUTICS AND ASTRONAUTICS
DAVID STRICKLAND, COUNSEL AND SPOKESPERSON FOR THE SELF-DRIVING 
    COALITION FOR SAFER STREETS
BRIAN WYNNE, PRESIDENT AND CEO OF THE ASSOCIATION OF UNMANNED VEHICLE 
    SYSTEMS INTERNATIONAL
    Mr. Diaz-Balart. Good morning. Let us call the subcommittee 
to order. Today we are here to discuss how new technologies are 
changing our transportation system, not to mention our entire 
world. We are going to focus our time today on two specific 
technologies: on Unmanned Aerial Vehicles, or what is commonly 
known as UAVs, and Automated Vehicles, also known as AVs, which 
those, in essence, are self-driving cars and trucks.
    I do not have to tell anybody that these are interesting 
and exciting times when it comes to technology that will make, 
whether its freight or travel, far more efficient and 
convenient; we hope, we think. It will clearly change the way 
we live and the way we work and, frankly, it is hard to imagine 
what we may be looking at in 10 years, not to mention 20 or 30 
years from now.
    Even more exciting is the potential for a much safer and a 
much more reliable and potentially more efficient 
transportation system. Last year there were over 40,000 deaths 
from auto accidents and 90 percent of those were due to human 
error. By removing this human factor, the automated vehicles 
could theoretically one day save tens of thousands of lives 
every single year, and it is difficult to imagine what an 
incredible achievement that would be for our country and for 
mankind.
    On the unmanned vehicle aircraft side, I should say it 
appears that the future is, frankly, already here. The promise 
of drone and that technology is already beginning to transform 
our day-to-day lives. Together we need to figure out, to 
support innovation, how do we make sure that we continue to be 
on the forefront of innovation in our skies while also 
maintaining a world-class safety record? And I know all of us 
are proud of having the safest airspace on the planet.
    To realize those benefits of these new technologies we must 
strike a balance between obviously the promotion of innovation, 
of private innovation, and also of protecting the public 
interest and the safety of the public so these potentially 
disruptive technologies offer a world of new possibilities. 
But, the safety of the American people obviously has to always 
come first, and that is the balance that we have to deal with.
    All levels of government are going to play a role in 
safeguarding the public as these technologies come to market, 
and there is no doubt that agencies funded by this subcommittee 
will play a very active role in research and regulation of both 
UAVs and AVs. And in addition, to try to understand how these 
technologies will change the marketplace, the transportation 
networks, et cetera, we must also understand what is the 
appropriate role for government, and for the different 
agencies.
    So to help explore all of that, we are here today. I want 
to thank the members of the panel, this wonderful panel that I 
am, frankly, really, really, really, really looking forward to 
hearing from.
    But with that, let me recognize Mr. Price, the ranking 
member of the committee, and thank you, Mr. Price. You are 
recognized.
    Mr. Price. Thank you, Mr. Chairman. I join you in welcoming 
this distinguished panel of witnesses here today and look 
forward to receiving their testimony. This hearing is an 
important opportunity for us as appropriators to examine the 
emerging technologies in the transportation sector, 
particularly unmanned aerial systems and automated vehicles.
    In many respects these technologies have already arrived, 
as the chairman stressed. Drones are being used to help farmers 
inspect crops; utility companies check their power lines in 
remote or hard-to-reach areas. Car manufacturers have already 
rolled out semiautonomous systems designed to help drivers 
detect and avoid crashes before they occur. I actually have one 
on my own vehicle, a remarkable cruise control system which 
does it for me when a car slows down in front.
    As these technologies mature they have the potential to 
provide enormous benefits to our transportation network and to 
society at large by enhancing efficiency and safety. But before 
this technology becomes ubiquitous, technologies from industry, 
academia, and government will need to grapple with a lot of 
issues, policy, regulatory, operational concerns.
    For example, as unmanned aerial system begin flying over 
population centers how do we ensure the safety of those on the 
ground as well as other aviation users in the airspace? How can 
we quickly identify drones when they fly into restricted or 
sensitive areas?
    As more and more cars on our roadways have semiautonomous 
driving features, how do we account for human behavior which 
both experience and research tell us can be far from rationale? 
Automated systems already generate immense amounts of sensitive 
user data. When these technologies proliferate in our 
transportation network, how can we use that data to improve our 
underlying technology while respecting privacy and keeping data 
safe from those who would abuse it?
    As appropriators we especially want to make sure that the 
Department of Transportation and its various component agencies 
not only have the resources they need to facilitate innovation 
and fulfill their critical safety oversight responsibilities, 
but that they are using these resources most effectively and 
with a full knowledge of the emerging technologies they are 
dealing with.
    I believe this hearing will provide an excellent platform 
to discuss these issues and inform our subcommittee's work as 
we assemble our bill for the coming fiscal year. So, Mr. 
Chairman, I appreciate your calling this hearing and look 
forward to the testimony. Thank you.
    Mr. Diaz-Balart. Thank you, sir. Let me introduce our 
distinguished panel. Professor Kochenderfer from Stanford 
University, the Department of Aeronautics and Astronautics, 
that is correct? Thank you, sir.
    Mr. Brian Wynne, president and CEO of the Association of 
Unmanned Vehicle Systems International. Thank you, sir.
    Nidhi Kalra, Ph.D. and senior information scientist for the 
RAND Corporation.
    And also then Mr. David Strickman, counsel and spokesperson 
for the Self-Driving Coalition for Safer Streets.
    I want to again, as I said before, thank each and every one 
of you for joining us this morning and we all really, really 
look forward to hearing from you. So with that, we will today 
begin with Professor Kochenderfer.
    Professor, your full written testimony will be included in 
the record and, with that, we look forward to hearing your 5 
minutes.
    Mr. Kochenderfer. Thank you. Good morning, Chairman Diaz-
Balart, Ranking Member Price, and members of the subcommittee. 
Thank you for the opportunity to discuss the integration of 
unmanned aircraft systems, or UAS, also commonly called drones, 
into the airspace.
    I am a professor in the Department of Aeronautics and 
Astronautics at Stanford University and a third-generation 
pilot. I am speaking solely for myself.
    For research over 10 years, it has involved statistical 
estimation of risk and development of technology for enhancing 
aviation safety and the safety of other transportation 
technologies. While at MIT Lincoln Laboratory, I developed a 
collection of airspace models directly funded by the FAA, DHS, 
and the Air Force. These models have been since used to 
estimate collision risk for manned and unmanned aircraft by 
government, academic, and commercial organizations around the 
world.
    My work has also led in part to the technology underlying 
the FAA's next-generation Airborne Collision Avoidance System 
X, called ACAS X; the FAA is developing and flight testing a 
version of for unmanned aircraft. My students at Stanford 
University have been supporting this effort and the effort of 
NASA to build a UAS traffic management system, or UTM.
    I will begin by outlining the motivation for building a 
system for enabling the safe and efficient operation of drones. 
This new wave of unmanned aircraft technology has the potential 
to save lives and create jobs, as mentioned by Mr. Price.
    Drones are able to assist in the inspection of 
infrastructure, search-and-rescue operations, agricultural 
surveillance allowing famers to increase yields, more 
effectively use water resources, and reduce crop damage. In the 
medical space drones can enable the swift transport of organs 
for transplants and the delivery of medicine.
    The transformative nature of unmanned aircraft technology 
on the benefits they bring to society are difficult to deny. 
However, there are significant worries about the reckless use 
of drones and the risks they pose to other air traffic 
participants as well as people and property on the ground. 
There are also concerns about the violation of privacy given 
that many drones are equipped with cameras and landowner rights 
to the airspace immediately above their property. These are all 
valid concerns, but I will focus my opening remarks on the 
challenges associated with the airspace integration.
    The airspace in the United States is the safest and most 
complex in the world. The FAA is charged with the 
responsibility for ensuring that this impeccable safety 
standard is maintained even with the proliferation of new 
airspace users, platforms, and applications.
    The UTM appears to be the best way forward for integrating 
these new users, allowing for the flexible use of the airspace 
while preserving the ability of the FAA to regulate the traffic 
as needed to preserve safety. The UTM is an air traffic 
management ecosystem for uncontrolled airspace. NASA has led 
the effort in developing the concept and prototype in the 
system with broad participation from industry, government and 
academia along with coordination with the FAA and the FAA test 
sites.
    The development of the UTM has aimed to identify the 
relevant services, responsibilities, information architecture, 
data exchange protocols, and so forth. The vision that has 
emerged from these research activities over the past few years 
is that the FAA maintains regulatory and operational authority 
for airspace and traffic operations.
    The UTM would be used by the FAA to issue directives, 
impose constraints, and modify air space confirmations. But air 
traffic controllers are not required to actively control drones 
in controlled airspace. The FAA maintained situational 
awareness through the UTM. The FAA manages the Flight 
Information Management System, or FIMS, which interacts with 
various UAS service suppliers.
    A private entity can apply to become a USS, a UAS service 
supplier, and the various service suppliers coordinate with 
each other to--oh, thank you--coordinate with each other to 
provide service such as real-time position information and 
notification to drone operations and operators. The concept is 
that participation in UTM may allow, with FAA concurrence, 
exceptions from the current part 107 requirements.
    I would like to conclude by saying that there is an 
opportunity for the United States to be a leader in the 
development of the UTM and ushering in the next generation of 
aviation bringing with it the benefits I mentioned earlier. 
Thank you for this opportunity and I am happy to be a resource 
to this subcommittee.
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    Mr. Diaz-Balart. Thank you very much, Professor. We now 
recognize Mr. Wynne for your opening testimony. And as I said 
before, your written testimony will also be included in the 
record. You are recognized, sir, for 5 minutes, and thank you 
for being here.
    Mr. Wynne. Thank you, Chairman Diaz-Balart, Ranking Member 
Price. I really appreciate the opportunity to be here this 
morning to testify at this hearing, speaking on behalf of the 
Association for Unmanned Vehicle Systems International, the 
world's largest nonprofit organization dedicated exclusively to 
the advancement of unmanned systems and robotics, UAS, and the 
resources needed to fully integrate UAS safely and efficiently 
into the national airspace system.
    As you know, UAS are regulated by the Federal Aviation 
Administration, which has taken several positive steps in the 
past few years. I hope to take a few minutes today to tell you 
about where the unmanned systems aircraft industry is going and 
how an appropriately funded FAA is necessary to help the 
industry reach new heights and create enormous economic value 
for the country.
    The FAA implemented the small UAS rule also known as part 
107 last August. It was the result of years of collaboration 
between industry and government that established a flexible, 
risk-based approach to regulating UAS. These regulations have 
been in effect for more than 8 months and there is strong 
evidence the commercial UAS market is poised for a significant 
growth.
    As of this month, there are more than 820,000 UAS 
registrations with the FAA, the vast majority of which are 
hobbyists. Of those about 62,000 platforms have been registered 
for commercial use. The FAA expects more than 400,000 UAS could 
be flying for commercial purposes over the next 5 years, a more 
than sixfold increase from today.
    An economic analysis by AUVSI projects the expansion of UAS 
technology will create more than 100,000 high-paying jobs and 
generate more than 82 billion to the economy in the first 
decade following full integration into the national airspace. 
These figures will likely go higher under the right conditions.
    In addition to part 107. an FAA extension measure was 
signed into law last year which would advance UAS research, 
expand commercial operations, and enhance the safety of the 
national airspace for all aviation systems manned and unmanned. 
While this extension measure will provide some short-term 
stability through September 2017, it is critical that Congress 
pass a long-term bill this year. A vital prerequisite for 
advancing UAS is an adequately funded FAA that can meet the 
employment and staffing needs required of the future as well as 
provide the necessary resources to update and automate the 
FAA's infrastructure to support this new technology.
    To safely manage the hundreds of thousands of UAS 
anticipated to operate in American skies, the FAA needs first 
and foremost to automate its UAS processes. Automation will 
also be important beyond part 107 for more complex operations. 
Many of its important management tools and processes which 
facilitate safer and more seamless UAS operations currently 
operate by manual data input or processing.
    If the UAS wants to remain a global leader in UAS 
innovation manual processes and out-of-date technology will not 
suffice. The FAA also needs additional employees who are 
dedicated to future UAS rulemakings to move us beyond part 107 
and allow for more complex operations. More resources to 
advance UAS regulations will help enhance the safety and 
security of the annual airspace.
    We recognize that the recent budget agreement that this 
Congress passed and President Trump signed into law made some 
additional investments in the FAA. I would like to personally 
thank this committee's leadership for providing resources to 
expedite UAS innovation. It is definitely a step in the right 
direction.
    I want to hasten to add that industry is not relying on the 
FAA and government alone to advance UAS. Industry is currently 
shouldering much of the R&D costs, finding solutions to make 
UAS fly higher and farther more safely and efficiently. 
Industry has also been a close partner with government in 
advancing a UAS traffic management system known as UTM and in 
developing standards for remotely identifying operators and 
owners of UAS.
    The UAS industry is primed for incredible growth thanks to 
industry representatives and government regulators nurturing 
innovation. Vital to these efforts, however, is an FAA that is 
appropriately funded and empowered to engage meaningfully in 
the process alongside industry stakeholders.
    Thank you again for the opportunity this morning. I will 
look forward to answering the committee's questions.
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    Mr. Diaz-Balart. Thank you, Mr. Wynne. We now recognize Ms. 
Kalra. Again, your opening statements and your full testimony 
will be submitted into the record. And you are recognized. 
Thank you so much.
    Ms. Kalra. Chairman Diaz-Balart, Ranking Member Price, and 
distinguished members of the subcommittee, thank you for the 
opportunity to testify today on important emerging 
opportunities and risks created by autonomous vehicles.
    Now, in the interest of full disclosure, I want to let you 
know my spouse is the co-founder of a Silicon Valley startup 
working on autonomous vehicles, though his work has no bearing 
on my testimony or vice versa.
    Now, today, first I would like to talk about safety, and 
then I will briefly talk about mobility. Now, as you know, 
traffic crashes pose a public health crisis in the United 
States, and autonomous vehicles have the potential to mitigate 
this crisis, and as a society we want them to become as safe as 
possible, as quickly as possible. But they probably will not 
eliminate all crashes and may introduce new safety risks, 
particularly in the near term.
    So, please let me describe several challenges that stand in 
the way of managing the safety risks and realizing the safety 
potential, and then I will propose some solutions.
    The first challenge is that there is not yet a practical 
way to prove that autonomous vehicles are safe prior to 
allowing them on the roads for consumer use.
    Second, there is no consensus about how safe autonomous 
vehicles should actually be before they are allowed on the 
road. This means we neither know what test autonomous vehicles 
should have to take nor what would constitute a passing grade.
    Now, resolving these questions is urgent, because real-
world driving experience is actually crucial for improving 
autonomous vehicle safety, but this presents a third problem, 
while in the real-world setting presents risk to early adopters 
and to other road users.
    It is a lot like allowing a teenager driver on the road. 
They may not be good drivers yet, but they need experience to 
become good drivers. Until then, they pose risks to themselves 
and to others which we try to limit with learner's permit 
restrictions. And we might need some policies for autonomous 
vehicles in their teenage years.
    And there is a clear and essential role for sound 
policymaking, and I will make three recommendations.
    First, I recommend that we rapidly develop methods of 
testing autonomous vehicle safety.
    Second, I recommend that that these methods be used to 
shape a flexible, adaptive, regulatory framework that defines 
what safety thresholds must be met in order to put autonomous 
vehicles on the road.
    A lower threshold of safety might be okay for demonstration 
projects designed to improve autonomous vehicle performance in 
controlled environments, but a higher threshold of safety would 
be warranted for widespread consumer use in uncontrolled 
environments.
    Such new approach could, for example, be built into the 
changes that are being considered to exemptions to the Federal 
Motor Vehicle Safety Standards. Some autonomous vehicle 
developers are seeking a potential increase from today's 2,500 
vehicles per year to 100,000 vehicles per year. But this is 
risky given the difficulty of assessing autonomous vehicles 
safety prior to widespread deployment.
    Now, a two-phased approach might help. For example, 
initially allowing a small number of exemptions, and then after 
safety is demonstrated increasing the cap on exemptions, could 
be a viable path to deploying innovative vehicle designs while 
also managing risks.
    Now, such a framework would likely fall under NHTSA's 
jurisdiction, but NHTSA and Federal policymakers should work 
with industry, State and local policymakers, and the public. 
NHTSA has already released Federal policies for autonomous 
vehicles, but these do not specify testing methods or 
performance requirements, or yet develop such a framework. 
There also are not yet requirements, but industry guidelines 
for technology development and use.
    And a regulatory framework like the one I describe will 
take time, so in the interim I thirdly suggest that pilot 
studies and data-sharing can help manage risks while 
encouraging technology development.
    And before I conclude, I would like to briefly talk about 
mobility. Autonomous vehicles could improve mobility for 
millions of Americans who are elderly, young, have disabilities 
or live in poverty. But policies may be needed to make 
autonomous vehicles affordable, available, and accessible to 
these groups. Policymakers can incentivize developers to reach 
these markets faster than they might otherwise or integrate 
them into public transit.
    Policymakers may need to help developers make them 
accessible, for example, by complying with ADA Guidelines and 
building payment systems for these technologies.
    And while the cost of shared autonomous vehicles is 
expected to be low, policymakers could extend transit and peer-
transit reduced fares to these technologies.
    To conclude, we cannot forecast the impact that autonomous 
vehicles will have on transportation safety and mobility in the 
decades to come, but we can shape that trajectory with well 
thought-out policies.
    Thank you very much. I look forward to your questions.
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    Mr. Diaz-Balart. Thank you, Ms. Kalra. I am sorry I got 
that wrong. We now recognize Mr. Strickland. And again, your 
statement, your entire testimony, will be submitted for the 
record. We look forward to your testimony as well. Thank you, 
sir.
    Mr. Strickland. Thank you. Mr. Chairman, Ranking Member, 
and members of this august committee, I thank you for the 
subcommittee's interest in exploring the tremendous potential 
benefits provided by fully automated vehicles. I am a partner 
at Venable LLP, and testifying here today as counsel to the 
Self-Driving Coalition for Safer Streets.
    Additionally, I served as NHTSA administrator from 2010 to 
2014, when the agency issued its first testing guidance in 
2013. The Coalition, whose members are the Ford Motor Company, 
Waymo, Lyft, Uber, and Volvo Cars, is focused on enabling the 
development and the deployment of level 4 and level 5 self-
driving cars.
    Despite these companies' different backgrounds, they came 
together because of their commitment to bring the tremendous 
safety benefits of self-driving to consumers in the safest and 
the swiftest manner possible.
    The Coalition believes fully autonomous vehicles have a 
great potential to make our road safer and more accessible. In 
2015, 35,092 people died in motor vehicle crashes. The early 
estimates from NHTSA in the first half of 2016 suggest a 10.4 
percent increase in roadway fatalities compared to the same 
period last year.
    Since an estimated 94 percent of all crashes are the result 
of human error, such as drunk driving, reckless driving, 
distracted driving, all your variance, fully autonomous 
vehicles may reduce these crashes because they remove human 
error from the driving process.
    In addition, self-driving vehicles hold the promise to 
enhanced mobility for the disabled and the elderly, reduce 
congestion, and improve productivity. As you are aware, in 2016 
NHTSA released voluntary guidance regarding the testing and 
deployment of autonomous vehicles.
    The Coalition supports NHTSA's effort to construct a 
voluntary framework that would promote the expeditious and safe 
introduction of self-driving vehicles as a means of improving 
safety and mobility.
    Today, I want to discuss three areas where we believe that 
the Congress can play a key role in promoting the safe and 
expeditious deployment. The Coalition first wishes that the 
FMVSS, or the Federal Motor Vehicle Safety Standards, be 
updated and modernized.
    We feel that the development of an updated FMVSS to which, 
according to the automated vehicle policy, manufacturers could 
certify HAVs that do not have controls to permit operation by a 
human driver, i.e., no steering wheels, pedals, et cetera, the 
potential safety benefits of such vehicles would vastly reduce 
crashes caused by human drivers are enormous.
    Second, we will ask that NHTSA be granted the authority to 
expand testing and deployment. The Coalition supports NHTSA's 
proposal in the policy to extend its statutory exemption 
authority. Limitations that currently exist under law are 
insufficient to achieve efficient and thorough testing.
    Current authority permits NHTSA to exempt not more than 
2,500 vehicles per year for a 2-year period on the basis of 
equivalent safety. There are other lesser flexibilities in the 
code, but none of them are sufficient to the task. To increase 
the exemption cap in a significant manner, the Coalition 
supports eliminating or raising the exemption cap to a level 
that will help facilitate meaningful commercial deployment of 
HAVs.
    To achieve this, the Coalition supports the NHTSA's 
proposal to be provided new authority to ``grant incrementally 
increasing exemptions of the same manufacturer, progressively 
relaxing the numerical limits on annual production volume and 
exemption duration over time, or even eliminating those limits 
altogether while following incremental one-step-at-a-time 
approach with a preference for the latter.''
    To be clear, the Coalition believes expanded exemptions 
should be conditioned on a demonstration to NHTSA of equivalent 
safety for the FMVSS for which an exemption or exemptions are 
sought. We strongly believe that the Congress should act to 
provide this authority to the agency immediately to fully 
enable the potential lifesaving innovations of level 4 and 
level 5.
    Third, and finally, to promote uniformity at the State and 
local levels. In the FAVP, NHTSA encourages States to focus on 
traditional areas of jurisdiction, such as licensing, traffic 
enforcement, and setting insurance requirements. However, we 
are concerned that the FAVP still provides a leeway for States 
to fill in gaps and build their own regulatory framework for 
automated vehicles.
    Recent and ongoing legislative activity in the States 
across the country has demonstrated the importance and the 
urgency of this concern. We encourage the Congress and NHTSA to 
signal to State and local authorities against rushing into 
legislating simply because the subject matter is new and novel.
    With that, I conclude my remarks, and I am open to any 
questions that the panel may have. Thank you so much, Mr. 
Chairman.
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    Mr. Diaz-Balart. Thank you very much for your testimony. We 
are going to begin with the rounds as usual. Remember, as 
always, leave time for not only your questions, but the answers 
within that 5 minutes.
    Let me start with a question to you, Professor. So you have 
worked with NASA, EFA, and UTM.
    Mr. Kochenderfer. Yes, sir.
    Mr. Diaz-Balart. And so what are your observations 
regarding the relationship between the two in developing the 
UAS Traffic Management System? And we have heard a lot about 
that. So what is that relationship like?
    Mr. Kochenderfer. Yes. So, fortunately, NASA Ames is just 
down the street from Stanford, and so I have been able to 
participate in many of the meetings between NASA and FAA as 
well as industry. NASA in particular has been very successful 
in engaging industry in participation, and many of them have 
brought their own resources and investment to build up this UTM 
prototype.
    Both NASA and the FAA have worked together to put together 
some research transition teams, and that they have put together 
a Joint Management Plan. I think it is a very good relationship 
because the FAA in this context is the regulator and NASA is 
serving the role as a research organization and facilitating 
the connection with industry.
    And I would say that so far this has been very successful, 
but we do need to makes sure that the FAA is fully equipped to 
act upon the recommendations and so forth that have emerged 
during the development of the system.
    Mr. Diaz-Balart. Professor, is there a timeframe for the 
actual deployment of the UTM system, and have NASA and FAA 
established milestones and goals?
    Mr. Kochenderfer. Yes, they have. I actually reviewed the 
report last night. They do have milestones. And it is important 
to understand that this is a very complex engineering problem. 
And in order to really address it, you need to take these baby 
steps and validate every step along the way. And so they have 
set appropriate milestones and so forth that will bring us 
closer to the goal of flexible airspace access.
    Mr. Diaz-Balart. Thank you. Mr. Wynne, I would love to hear 
your comments on how the UTM effort is using public-private 
partnerships. How is that working? Is it working?
    Mr. Wynne. I think it is. The concept of operations that 
the professor laid out in his testimony I think are extremely 
important; the FAA obviously needs to continue its role in 
managing the airspace. I think increasingly what we are 
developing, and industry is bringing to the table, is the 
ability to potentially offer services that offload that from 
the government and make it more widely available, and, more 
importantly, do so very, very quickly and interoperable with 
the existing air traffic control system.
    Mr. Diaz-Balart. How can the FAA and industry, for example, 
cooperate or collaborate on research activities?
    Because the issue is, you know, they need to be flexible 
enough, to respond to issue changes and challenges. And so how 
do you see that happening?
    Mr. Wynne. Well, I think that a massive change inside of 
the FAA is--they have embraced this technology, recognizing 
that we are working on technologies that will scale much faster 
in unmanned systems, but will also benefit manned systems. So 
that is a very, very important step forward in mentality. And 
they also understand that the technology is advancing very 
quickly. So it is very difficult without the help of industry 
to understand how to leverage this, but I think that is 
happening. It is happening from Michael Huerta, the 
administrator, on down.
    Mr. Diaz-Balart. Great. Mr. Price, I have some time left, 
but my questions are a little bit longer than that, so I will 
go to you now.
    Mr. Price. All right. Thank you, Mr. Chairman. Well, let me 
turn to our AV group and pose some questions that your 
testimony raises, especially yours, Mr. Strickland, but happy 
to have either of you chime in.
    You have referred to the NITSA Initiative here and the kind 
of guidance that has been offered for about a year now, I 
think, since that was issued. There have been about 50 bills, I 
understand, however, introduced in over 12 States affecting 
autonomous vehicles. Most of them were introduced before the 
NITSA guidelines were published. And I have imperfect 
information, incomplete information as to how much has actually 
been enacted in the State level, much less what kind of range 
of proposals, how wise they are, how consistent they are, what 
those look like.
    I wonder, Mr. Strickland, if you maybe for the record could 
furnish any inventory you or anyone else has of this, but here 
I would appreciate either of you characterizing these 
rudimentary regulatory efforts at the State level. Presumably, 
what we do not need is a patchwork of legislation that makes it 
impossible for these technologies to thrive for that matter, 
for there to be a consistency State to State that achieves the 
basic objectives of safety and efficiency.
    So could you say more about this and the kind of guidance 
you believe is necessary beyond what NITSA has done, 
particularly, of course, the Federal role?
    Mr. Strickland. Mr. Price, your assessment of what is going 
on in the States is correct. We have seen activity; over, you 
know, over 50 bills in a number of States and they address a 
variety of number of issues, some of them that are well within 
the purview of what the States regulate, such as rules of the 
road issues, registration, financial responsibility. Those are 
all the appropriate State roles. The concerns are that the 
States may step in and become a non-Federal motor vehicle 
safety regulator. And that is incredibly problematic in terms 
of the motor vehicle manufacturing market consistency and the 
regulatory patchwork.
    For us, some of the--all the legislation from our 
perspective we do not think is entirely necessary for there to 
be safe deployment and testing of these vehicles. However, 
there are some issues that need to be taken care of at the 
State level. We would encourage the Congress and NITSA to 
really try to fill that space. Unfortunately, NITSA does not 
have a rule which they can then have the opportunity to preempt 
any inconsistent Federal motor vehicle safety standard or 
standard out in the States. So it really is going to be 
incumbent to really use the bully pulpit to really show Federal 
leadership to encourage the States to really focus on those 
areas which are very necessary in order for us to have safe 
deployment.
    Ms. Kalra. Now, if I may add, you know, since those policy 
guidelines were laid out, you know, States do not actually want 
to pass technical regulations. They recognize that this is not 
something they necessarily know how to do well, it is not going 
to help the industry. So they were trying to, I think, fill in 
a gap. But since the indications are out that NITSA is rapidly 
working on this, I think we are going to see less of that.
    Now, to be clear, we already have a patchwork of different, 
you know, insurance rules and rules of the road. So the 
question is, can we not add to that particularly with a 
technical design? And I think we are seeing States back away 
from particularly those aspects of regulation now that NITSA is 
showing a lot of activity here.
    Mr. Price. So both of you are saying that NITSA is on 
track?
    Mr. Strickland. Yes. I would say NITSA at this point in 
trying to fulfill its leadership role is very much on track, 
recognizing the limitations of its being able to fill the space 
with a rule. It just does not have the time to do that and the 
market is moving so quickly that it is using all of its tools 
necessary to fill that leadership role, but it does have 
limitations.
    Ms. Kalra. I do not know if NITSA is on track. I do not 
underestimate the difficulty of the task that NITSA has, but I 
do think that there are areas that need serious attention, 
again related to how will we know how safe autonomous vehicles 
are and how safe should they be.
    Mr. Price. Thank you. Thank you, Mr. Chairman.
    Mr. Diaz-Balart. Thank you, sir. Mr. Valadao.
    Mr. Valadao. Thank you, Chairman. I appreciate all of you 
taking some time to be here today.
    In addition to unmanned aircraft systems or drones simply 
being a hobby for many Americans, drones have various business 
applications in a variety of industries, including agriculture, 
which is obviously important to me and my district. 
Accordingly, Congress provided more than $20 million over the 
requested amount in fiscal year 2017 to further support and 
accelerate the safe integration of drones into national air 
space, including funds to support continued development of 
unmanned traffic management system.
    Mr. Wynne, why do you think the unmanned traffic management 
system implementation is so important to the long-term success 
of the United States drone industry, and in particular, how 
will it ensure safety, security, and most importantly for a lot 
of us, privacy?
    Mr. Wynne. Yes, that is an excellent question, Congressman. 
I think that UTM first and foremost needs to be viewed on sort 
of an evolutionary basis, that NASA talks in terms of build, 
build 1, build 2, build 3, et cetera. And some of the 
technologies that are needed to fully implement that system are 
being developed as we go. So we are speccing those out. 
Ultimately what UTM envisions is the ability to do the most 
complex operations in urban areas, in congested airspace. There 
is a lot airspace out there that is not being efficiently 
utilized, and I think it offers tremendous opportunities for us 
to deliver the massive number and increasing number of packages 
under 5 pounds, just as an example, taking a very complex 
application and moving it forward. And that would take cars off 
the road, that would take trucks off the road, that would, you 
know, help us alleviate some of the congestion problems we have 
just as one of the externalities that are associated with this.
    All of these questions of what data is being utilized on 
the back end of that are being developed as we speak. I think 
the UTM system would allow us, for example, to segregate 
certain airspace that drones would naturally just go around. 
That will be extremely important from both a privacy and a 
security perspective, as well as safety.
    Mr. Valadao. So reading even just this morning about a 
prison in the U.K., this sky fence that is being built, I mean, 
how much is something like this going to play a role into--I do 
not know if you guys read this story. I mean, it is something I 
guess happens quite a bit where they are always trying to find 
ways to smuggle in drugs, cell phones, and things. There are 
some examples in the U.K. where they are using drones to drop 
them in over the fence lines, and the first place I guess in 
the world where they are actually installing a sky fence. It 
should be operational soon. And does something like that play a 
role in the future of this, especially from the privacy 
perspective? And how affordable can something like this 
possibly be if you are trying to protect, let us say, your home 
or your business from people coming and invading your privacy? 
Or even the prison system, where there--I represent a lot of 
prisons, too. I mean, is this something that they are looking 
into as well?
    Mr. Wynne. Absolutely. The community that I have the good 
fortune to represent includes tracking, identification, counter 
solutions as well. Our foundations are fundamentally in the 
military and we have been expanding that into the commercial 
sector and into the civil sector. So the concepts that you were 
describing, obviously this will not be successful unless we do 
all of this flying safely and responsibly. The kinds of things 
that you are describing are already against the law. So 
anything that we can do to help individuals or organizations 
keep their property safe will obviously be brought to bear as 
well.
    Mr. Valadao. All right. And one more question. Dr. Kalra, 
am I saying that right?
    Ms. Kalra. Good enough.
    Mr. Valadao. Thanks. In your testimony you made the point 
that autonomous vehicles could pose a new and serious crash 
risk, for example, cyber attacks. Last fall the Department of 
Transportation released guidelines for the development of self-
driving cars and made cybersecurity part of the 15 point 
assessment for autonomous vehicles.
    In your opinion, what role should government regulators 
play in keeping self-driving cars from hackers and what more 
could manufacturers be doing to secure vehicles against such 
threats?
    Ms. Kalra. You know, I mean, the issue of cybersecurity in 
autonomous vehicles really cannot be understated because these 
are large cyber-physical systems that if hacked could cause 
serious harm to people and property. The challenge, I think, 
and the challenge for the role of government is--I mean, part 
of is to create the right incentives, but the incentives are 
already there, so I think it is largely a question of best 
practices being followed in the industry. I mean, you know, 
cybersecurity cannot be sort of shrink-wrapped on top. You 
cannot make a car and then be like, oh, let us, you know, tape 
it up so no one can get in. It really has to be baked into the 
very design of the vehicle because the vehicle is not made by 
one manufacturer, it is made by many, many manufacturers. And 
so the industry may need to rethink cybersecurity as a supply 
chain issue as our vehicles become more connected rather than 
icing on the cake.
    Mr. Valadao. All right. Well, my time is up. Thank you.
    Mr. Diaz-Balart. Thank you, sir. Ms. Clark, you have a 
question?
    Ms. Clark. Thank you, Mr. Chairman and Ranking Member 
Price, and thank you to the panelists for being here. It is 
really a breathtaking technology and the changes that we are 
talking about that comes with many challenges. I cannot even 
picture AVs in Massachusetts. And we do a lot of things well, 
driving is not one of them, and the challenges you are going to 
have with our rotaries and our drives.
    But I wanted to talk to you about a challenge that I see 
coming with automated driverless cars. And I was looking at 
Census Bureau occupational data. Almost 3 percent of all 
working Americans are employed as drivers of some sort, truck 
drivers, cab drivers, bus drivers. And, in fact, truck driver 
is the most common job in 29 of our States. In total, 4.4 
million Americans age 16 and over earn their living driving a 
vehicle. So just for a comparison, that is more than 36 times 
the 121,000 jobs the coal industry has lost since 1985 when 
that industry's employment peaked.
    So, Mr. Strickland, do you have a sense of how many of 
those 4.4 million jobs will be replaced by autonomous vehicles 
and what role does the industry have in helping transition 
Americans to different employment, and what steps are being 
taken?
    Mr. Strickland. Well, Ms. Clark, it is an excellent 
observation about the potential of disruption. And I do not 
need to tell you about the, you know, transitions in history 
which have changed employment prospects. This is nothing new 
for us. But what we can do is think about this prospectively 
and work in partnership with not only the private sector, but 
with the government, and sort of think about how we prepare the 
possibility of this transition and not knowing the exact scale 
of it. I think that is still to be determined.
    One thing I just want to note, especially on the commercial 
truck driving side of the question, right now we are looking at 
about a shortfall of 50,000 drivers. They are constantly 
looking and constantly advertising. And one of the issues in 
the truck driving industry is that younger people are not 
interested in the profession and the current constituents that 
are in these professions are getting older. So in some ways 
this is a situation where, frankly, some levels of automation 
will probably help the industry maintain its productivity.
    Second, probably in delivery, I mean, in the commercial 
driving industries, because it is not just a federally 
regulated concern, it is both State regulations, there is 
operator regulations from the Federal Motor Carrier Safety 
Administration, there is Hazmat with EPA, and all these other 
issues. Just to be blunt, you may not actually be able to have 
a fully unmanned truck driving universe just because of the 
risks with heavy-duty, over-the-road trucking. So that may be a 
situation where automation may assist, but may not necessarily 
fully replace.
    In the livery situation, however, to be determined on how 
it may impact. You may see in taxis in highly urban areas 
possibly have the diversity of unmanned transportation being 
available, but I think that is incumbent upon us as an industry 
and, frankly, the government, State and local, and Federal, to 
be able to work and think through these transitions so that we 
are prepared for that eventuality.
    Ms. Clark. So you said that the scale is sort of hard to 
know, but do you think that the timing--I have seen estimates 
that the timing really is 5 to 10 years when we are going to 
see big impacts. Does that timing sound right to you?
    Mr. Strickland. I would say, Ms. Clark, that I do not think 
necessarily in terms of a wide-scale deployment that will 
actually cause displacement. I do not see that between a 5 to 
10-year period. I think what you will probably be seeing is 
smaller deployments in more discreet areas. And this is just me 
speaking individually, not necessarily for the Coalition. Lots 
of our members have sort of different business plans. But I 
think when you are talking about rotating the fleet or rotating 
livery vehicles of that massive scale, it will take a long time 
to have a full replacement that is necessarily, say, a one-to-
one replacement for taxis and black cars for self-driving. So I 
think you will probably see some aspects of it in smaller 
pieces, but it will be a much longer time before you probably 
see the type of job impacts that some people are estimating.
    But I do not necessarily think that may be the case.
    Ms. Clark. Ms. Kalra, I wondered--I only have a few seconds 
left--if you have anything briefly to add on this?
    Ms. Kalra. Yes. I would add that what is often not talked 
about in the job prospects is that adding access to 
transportation, to physical mobility, is often an incredible 
driver of economic mobility, and I think that should not be 
underestimated. The questions policymakers ask, on the one 
hand, while we are going to lose some jobs, how do we make sure 
that this technology is used so that people can actually get to 
better training, better education, jobs that they otherwise 
would not be able to get into so that we can create benefit, 
economic and job benefit to the same people that might be 
losing their jobs?
    Ms. Clark. Thank you.
    Mr. Diaz-Balart. Mr. Graves.
    Mr. Graves. Thank you, Mr. Chairman. Appreciate the 
panelists being here. This is a great discussion. And I think 
we can all in this room really appreciate the benefits here of 
the mobility and safety and technology and excitement of the 
advances that we are discussing.
    I have basically two questions, but the first one is I am 
curious because I believe this technology, from an autonomous 
vehicle perspective, is driven mainly as a result of safety, 
safer roads. And I have not really heard any--and I came in a 
little bit late--any statistics that might indicate what the 
incident statistics might be, autonomous versus nonautonomous, 
and where is that going as an industry.
    We hear a lot about flaws here and there, but I think we 
can all admit that sometimes we are distracted drivers in many 
cases. But what are some statistics that we are seeing? And I 
do not quite know who to direct the question towards, but if 
you could help us with that, incident statistics.
    Mr. Strickland. Certainly. I am happy to start off and hand 
it over to Nidhi.
    As the Federal safety regulator for 4 years, the human 
tragedy that I had to deal with on an everyday basis is just 
astounding. And nobody really thinks about it because it is one 
our top 10 killers of our youngest people. It has been that way 
for a very long period of time.
    I am the chairman of Mothers Against Drunk Driving. Drunk 
driving crashes kill one-third of all traffic fatalities 
combined. Distraction, the numbers are not as good. About 3,500 
people die because of distracted driving. And the numbers go up 
because of speed, because of all these issues we are talking 
about. If you eliminate human error, which 94 percent of all 
crashes have that element in it, you are going to make a huge 
improvement to safety.
    In terms of actually having a study of what a self-driving 
vehicle does and compare it to a regular driver, we do not have 
hard numbers as to, you know, the actual reductions because 
that is ultimately going to be a road-user data question. But I 
think from what we see from the technology of the vehicles 
being able to maintain the driving task, we are sure that we 
are going to be able to directly drive down human error 
significantly and ultimately we will be able to know those 
numbers as we get more testing on-road and we see more limited 
deployments.
    But the bottom line, sir, is that what we see and the 2 
years of increases that we have seen in traffic fatalities is 
that our successes in eliminating bad driving behavior through 
the behavioral programs, you know, Click It or Ticket or all 
the drunk driving programs, they have gotten us to a point, but 
we are going to need this next technological evolution for us 
to really drive these numbers down to where we are seeing that 
maybe some time in the future, 30, 40, 50, 60 years from now, 
people are going to be wondering why we lost so many people to 
traffic crashes in the first place.
    Ms. Kalra. I, too, am optimistic about the safety benefits, 
perhaps not quite as optimistic, though. Let me say two things.
    One is I caution about the use of the 94 percent statistic 
on human errors because often that is looking at the last line 
of defense before a crash occurs, and there are many things 
that lead to a crash. So, I absolutely agree that, you know, 
drunk driving, these kinds of obvious human errors, autonomous 
vehicles will never make those mistakes.
    We have to ask ourselves what new mistakes would they make? 
Basically, the fact that humans kind of stink at driving does 
not mean that a machine necessarily will be better. So, I 
caution about inferring that we are going to get rid of 94 
percent of crashes.
    The second part is about statistics. The challenge is that 
although we have so many tragedies, so many fatalities on our 
roadways, we also drive an enormous amount. Americans drive 3 
trillion miles a year, and that translates to, I am going to 
loosely approximate, 1 fatality per 100 million miles driven.
    What that means is, for example, say you had a 20 percent 
improvement in your fatality rate with autonomous vehicles, so 
they only have 0.8 fatalities per 100 million miles. To prove 
that with statistical confidence would require driving 5 
billion miles, which is like going to Neptune and back and back 
again. That is way too many miles to drive with a test fleet 
where you have trained drivers behind the wheel. It is not 
going to happen. It would take hundreds of years.
    The thing is, once we get people on the road that is going 
to be easy because Americans drive 8 billion miles every single 
day. So, that is the conundrum: how do we determine the safety 
of the vehicles before we let our friends and our families in 
them? And I do not have an answer to that, and I think that is 
an urgent question.
    Mr. Graves. Thank you. I have just a few seconds, but from 
what I hear the purpose of this clearly should be safety. And 
what I hear is that even where technology is today, there is an 
indication that it is possible that autonomous vehicles can 
provide additional safety measures and prevent incident. We 
just do not know quite what the number might be.
    What I would be interested in in the future, Mr. Chairman, 
is how do insurance companies factor all of this in, and would 
my rates go down if I had an autonomous vehicle versus my own 
personal driving? And that might indicate where the safety 
measures are. Thank you, Mr. Chairman.
    Mr. Diaz-Balart. Mr. Aguilar.
    Mr. Aguilar. Thank you, Mr. Chairman. Thank you, Mr. 
Ranking Member.
    Dr. Kalra, if we could continue down this safety path 
discussion with you and Mr. Strickland for a moment. You just 
said from a recommendation standpoint we just do not know 
enough yet. So, when will we know enough from a deployment 
perspective of whether a fleet of, let us just say autonomous 
ride-share vehicles, you know, when they will be safe enough to 
be deployed? And what recommendations from a policy perspective 
do you think we should consider?
    Ms. Kalra. I think the reality is we will not know before 
the public starts--I think given the state of methods we have 
for testing, we may not know with the certainty we would like 
how safe these technologies are. We do not have a crash-test 
dummy or fuel economy testing standards. We do not have the 
analogy for this space.
    What that means to me is that we would want to deploy the 
technology in ways that manage the risk even if we cannot 
quantify it. So, deploying it in favorable conditions, in well-
designed environments with an informed public, informed 
participants, and doing our very best to make sure that there 
are things being done in the vehicle and outside the vehicle 
that address these risks.
    For example, having vehicles that drive at lower speeds or 
only in certain conditions where everyone is required to buckle 
up inside; they have the highest internal and external safety 
technologies. I think these are methods of managing the risk 
until we better understand what it is.
    Mr. Aguilar. Mr. Strickland, if we can pick up on this, and 
let me add a component to it. I think from the folks that you 
represent they are going to be a little bit more potentially 
vertically integrated, right? So, they are going to be some of 
the manufacturers as well that can control more things. So, 
when we talk about the cyber risks that Mr. Valadao brought up, 
which are very real, it is a little easier when you are 
vertically integrated if they are designing, they are building, 
they are doing all this, they are not buying something else and 
then putting autonomous technology into it; they are developing 
it themselves and then building it from scratch.
    So, can you talk about the safety component from that lens 
of kind of vertical integration, as well as when we know a 
fleet could be ready?
    Mr. Strickland. Certainly, sir. Safety by design, 
especially in cybersecurity, and, frankly, all of the vehicle 
systems is a must. You can never think about safety after the 
fact because, as Ms. Kalra made note, it is an unsuccessful 
pathway. And if you are thinking about vehicle automation 
specifically or just cars in general, being a Six Sigma 
engineering prospect, making sure that you are 99.999 percent 
sure that the vehicle or the component is going to operate 
within its tolerances as it is designed is essential.
    The ease in terms of whether you have a company that is 
better integrated to do that or not is, frankly, to be blunt, 
not the important issue. The issue is to create the signal for 
all players on the marketplace that you have to comport and 
have safety by design. Now, there are going to be some 
combination of companies that can do that better because of its 
organization, but that should not be the driver of how you do 
it.
    But to circle back to when we are going to know when the 
cars are going to be safe enough to be used within some scales, 
I think a number of issues that Ms. Kalra brought up are very 
important. But I also want to contrast to the fact of how we 
think about design and test new systems on vehicles today, 
things like adaptive cruise control, I think the Ranking Member 
says he has on his vehicle, or Crash Imminent Braking systems 
or Electronic Stability Control. There was no special construct 
or limited environment for any of these technologies as they 
were deployed, and they were very, very important.
    Now, what you had was two things. You had manufacturers and 
component designers that, frankly, looked at their own 
particular risks in terms of deploying new technologies for 
possible commercial deployment, which is a huge limiter on how 
much risks are being taken. That is number one. Number two, you 
have NHTSA, which uses its defect authority, which is whether 
or not something on the vehicle poses an unreasonable risk to 
safety.
    The combination of these two things have allowed for us to 
have numerous vehicle innovations without there having to be 
any new Federal motor vehicle safety standard established 
beforehand. I do not think that we need to think about self-
driving vehicles. There are some different variances because we 
are talking about full control of the vehicle.
    But we should not stray away from the native way that we 
have done this for, frankly, over 50 years in vehicle design. 
And I think that it has proven to be very successful and that 
we have gotten these things that are life-saving on the road. 
For example, Electronic Stability Control was invented by 
Mercedes in 1990. That technology now deployed throughout the 
fleet and mandated in 2012 saves tens of thousands of lives a 
year. That is what we are so concerned about. If we slow this 
technology down, we lose the opportunity to save lives.
    Mr. Aguilar. Thank you. Thank you, Mr. Chairman.
    Mr. Diaz-Balart. Mr. Dent.
    Mr. Dent. Thank you, Mr. Chairman, and thanks for putting 
on this hearing.
    Dr. Kalra, a small business in my district, Royal Truck and 
Equipment, has developed the world's first autonomous truck-
mounted attenuator, or ATMA. You see them on the backs of 
trucks, if an errant vehicle crashes into it, so not to hurt 
the construction workers. You see them in the work zones, they 
are placed in the construction zone to absorb the impact of 
that errant vehicle.
    Currently, these vehicles must have a driver who is 
understandably placed in a dangerous situation. By developing 
an autonomous version of this vehicle the driver can be taken 
out of harm's way. The technology is being tested in London. It 
will be tested next month for use in Colorado by their DOT.
    Given the dangerous environment that these TMA truck 
drivers operate in, it seems to me that making such operations 
autonomous could help save lives while still performing the 
important tasks that those trucks carry out for construction 
crews. Would you agree with that? And if so, what do you see 
are the biggest impediments toward further exploring and 
implementing such technologies?
    You have seen them on the backs of trucks, you have seen 
them on highways, they make them in my district. But they want 
to have an autonomous vehicle because the guy who is driving 
that truck obviously is there to take the impact of the errant 
vehicle. It seems like this technology might make sense. But 
you see them on the roads.
    Ms. Kalra. I hope you will forgive me, but I am simply not 
familiar enough with either the problem or the solution that is 
being proposed to have an informed opinion. So, anyone else.
    Mr. Dent. Okay. Maybe Mr. Strickland or somebody who is 
familiar with it.
    Mr. Strickland. I am familiar with it, but just basically 
as an adjunct to improve crash protection on commercial heavy-
duty trucks. I think the bottom line being for the entire 
heavy-duty and medium-duty fleet any technology that, frankly, 
helps reduce this driver error issue, number one, but also, 
frankly, makes it more protective for others when you are in 
the eventuality of a crash is always a good thing.
    And, you know, there are a number of technologies that are, 
frankly, being put on the trucks now, such as Electronic 
Stability Control for heavy-duty systems, things of that 
nature. So, yes, I am familiar with it and, yes, it would be an 
improvement.
    Mr. Dent. I have been seeing these demonstrations. I see 
them on the highways and I thought, well, this would be great. 
You put a driver in one of those trucks, and to take the 
impact, well, that would be a great use for a driverless 
vehicle. So, okay. Well, thanks. Maybe we will follow up with 
you on that.
    Professor Kochenderfer, I am supportive of the UAS Traffic 
Management, UTM, work being carried out by NASA and the FAA, 
and I would like to see how those initiatives move forward in a 
manner that allows for the safe, efficient integration of the 
UAS as soon as possible. The recently enacted fiscal year 2017 
Appropriations bill provided additional funds for NASA's UTM 
efforts to help ensure the safe integration of UAS into the 
national airspace system.
    Looking at our current work on fiscal year 2018, do you 
feel that a continued emphasis on promoting UTM will help to 
fulfill the goals of establishing a system that safely manages 
diverse UAS operations in the airspace in both suburban and 
urban areas in a timely manner?
    Mr. Kochenderfer. Yes, it is definitely helpful. As you 
know, there are a number of challenges that need to be 
addressed in the near term, and those dollars will be extremely 
helpful in addressing things like communication and data 
challenges. It will be important in hiring the right people 
with the right areas of expertise. It will help in terms of 
transitioning the UTM to a deployable system.
    I think another priority is continuing with these pilot 
programs. As I mentioned before, this needs to be an 
incremental process, and this will be another important area of 
research over the next few years.
    Mr. Dent. If I could follow up, I understand there are many 
individuals, both in the government and the general public, who 
would view UAS more as a threat to public safety than as an 
innovative technology to generate positive change.
    What are some of the most effective initiatives that the 
UAS industry has undertaken to help alleviate some of those 
concerns, and how can Congress help to facilitate further 
collaboration and cooperation between the FAA, NASA, and UAS 
industry and other Federal agencies, like DHS and FBI?
    Mr. Wynne. Actually, in those conversations, very 
immediately we have a meeting on Monday to discuss this as well 
with many of the key law enforcement agencies.
    I think a simple example, sir, is right now, most of the 
drones are flying somewhat anonymously, as it were. We need 
remote identification technologies, and our organization put 
out a call for papers on that on behalf of the FAA, and we got 
almost 50 papers back from some very sophisticated 
organizations inside of 2 weeks.
    This technology needed to be developed. It is in the 
concept of operations for UTM. We just moved it up very, very 
quickly, and are working on that, and we are doing that with 
DHS, with members of the Department of Defense, et cetera, and 
with the Department of Justice.
    Again, industry collaboration while we are bringing the 
solutions to the table.
    Mr. Dent. Thank you.
    Mr. Diaz-Balart. Mr. Joyce.
    Mr. Joyce. Thank you, Mr. Chairman. Thank you all for being 
here today. Mr. Strickland, I would like to ask you, since you 
have some expertise in NHTSA, being familiar with the research 
centers the agency utilizes, including the Transportation 
Research Center in Ohio, what role have these sites played in 
helping develop HAV technologies, and how can Congress assist 
these centers to expedite the deployment of HAVs onto our 
roadways?
    Mr. Strickland. Well, you gave me a moment to brag about my 
old staff. They really are some of the best and brightest in 
the world in terms of automotive research and especially in the 
safety space.
    The TRC in East Liberty, Ohio, is a fantastic facility, but 
I believe they would be helpful in deployment if they had more 
resources to address a number of these issues, specifically 
their ability for simulation training--simulation testing, I 
should say.
    I think also their work in battery research would be very 
essential because there seems to be a strong nexus with having 
automated vehicles have a high level of electrification, but it 
is not necessarily individually set. You could have a regular 
internal combustion engine and the car would also be an AV.
    I think an important aspect of resources is, frankly, of 
all the not sexy things, is the Counsel's Office. They are a 
fantastic group of lawyers, but, frankly, thinking about the 
evaluation of exceptions, a number of these other issues that 
are going to be coming to the office making decisions about 
testing, they need more resources there to help expedite these 
requests across a variety of things, but specifically for 
automated vehicles. Being able to get these decisions out 
quicker would help get thoughtful decisions being made and get 
these vehicles deployed quicker.
    Mr. Joyce. You may not be aware, but the State of Ohio has 
also recently put money into that center.
    Mr. Strickland. I know very well.
    Mr. Joyce. Since the time you left. We would like to 
continue to see some of the testing done there, and any 
expertise you could lend to that would be quite helpful.
    Mr. Strickland. Mr. Joyce, I would be happy to help in any 
way I can.
    Mr. Joyce. Great. Thank you very much. Nothing further, Mr. 
Chairman.
    Mr. Diaz-Balart. Mr. Joyce never misses an opportunity to 
push for Ohio. Mr. Young.
    Mr. Young. Thank you, Mr. Chairman. This issue goes out to 
anybody who wants to try to dive into it. I have asked my 
colleagues to think about this as well. As we are talking about 
within Congress, infrastructure and making some serious 
investments in our infrastructure, roads and bridges, should we 
be looking at roads and bridges in traditional transportation 
systems in a new way when we are looking at unmanned and 
autonomous vehicles?
    If we are entering that new age and new dawn of mobility in 
traveling and delivery, what considerations or applications 
should we take into account when we are making those serious 
investments to ensure that this new age of transportation is 
fluid, it fits, it is functional, it is safe?
    Does it run parallel with sensor towers, some kind of grid 
relay system, new materials in the roadways, or what I believe 
to be traditional roadways, some kind of positioning system?
    What should we be looking into as we go forward with this 
infrastructure bill? What considerations would you be wanting 
to see possibly included as we dip our toe into this new world 
here?
    Mr. Strickland. Mr. Young, I am just going to make a 
general statement about vehicle safety, which would include 
AVs. Better infrastructure helps everyone. Better road design 
helps everyone.
    For automated vehicles, once again, I am going to go into 
the realm of unsexy and talk about more resources for Counsel's 
Office at NITSA, the real fantastic unsexy for road work, 
better line paint. That would be a huge, huge deal for 
automated vehicles.
    The bottom line being the manufacturers are building a 
vehicle for the road environment today. They are not building 
vehicles anticipating needed road improvements in the future. 
Frankly, the most rudimentary improvements to road safety and 
road building would, frankly, benefit not only AVs, but it 
would benefit all drivers.
    The one thing I would suggest, it is not necessary, but 
thinking for road efficiency in the future, better 
communication between the road and vehicles in the future has 
shown huge benefits, and in this work that was done by the 
Department of Transportation and my old agency.
    It would be beneficial, not necessarily for automated 
vehicles, but I think making those investments and having the 
infrastructure communicate to vehicles and being able to 
collect data for a better understanding of congestion and how 
to mitigate it, I think benefits us all.
    Mr. Young. That is the point I kind of wanted to dive into, 
having the infrastructure communicate to vehicles, and what is 
needed to do that. I do not know.
    Mr. Strickland. Mr. Young, I am happy to get back to you on 
that. There are a number of things that could be done, all the 
way to right now the National Highway Traffic Safety 
Administration has a pending proposed rule for having DSRC, 
dedicated short-range communications, chipsets being placed in 
every vehicle, so that vehicles can communicate with each other 
transmitting safety messages. Somebody has run a light, you 
should slow down, all these other types of things, ultimately 
tying the infrastructure being able to communicate with 
vehicles so you can let road users know of changes for 
congestion, being warned about hazards, being able to pre-plan 
or even providing a benefit.
    You are driving home late at night and there is no oncoming 
traffic, and you are sitting at a red light and nobody is 
coming. You could actually have the vehicle being communicated 
to by the road saying, well, since there is nobody coming, we 
are going to automatically change the degree so you can keep 
moving.
    There are a variety of things that the Department is 
working on, and I could circle back on some of the things that 
we know internally, but certainly connect you to the folks at 
NITSA as well that can give you a longer explanation than that.
    Mr. Young. Thank you.
    Ms. Kalra. If I could add just briefly, I completely agree 
with David that basic stuff, lane stripes, better signage, 
these things will improve safety for absolutely everyone.
    I think it is too soon to begin investing in vehicle-to-
infrastructure communication on a large scale because if it is 
going to take, let us say, 10 years for there to be widespread 
vehicle-to-infrastructure communication, in 10 years, so much 
happens in the communication industry, if we think back 10 
years ago, we were on like 2Gs or something. Even now there is 
a debate about whether DSRC is correct or 5G or something else.
    It may be, in my view, premature for the public sector to 
make massive investments in vehicle to infrastructure 
communication, but to monitor and know this may be something 
that is needed in the future, I think, would be the right move 
at this time.
    Mr. Young. Thank you very much, Mr. Chairman.
    Mr. Diaz-Balart. Thank you. Mr. Wynne, a couple of things. 
I can envision, and that is why today has been so interesting, 
we are potentially looking at a different world, and not in 50 
years, but in relatively short order.
    Does the FAA have the right level of engagement with the 
industry to ensure that this is a public-private partnership, 
for example? Is the organizational structure appropriate at the 
FAA for the task of integrating UASs?
    Mr. Wynne. I think so. They have been evolving very, very 
quickly. As you know, the UAS Integration Office only became a 
line of business at the end of last year, I think. They have 
been building that process, and now they are getting properly 
funded.
    It is difficult, even the question Mr. Young asked about, 
how do you future proof? UTM, in some respects, is a future 
infrastructure that we are building, but we are building it a 
piece at a time, as it were, very rapidly. We are reiterating 
very, very rapidly.
    There is a vision now for how do we do that, and I would 
say if the FAA was not able to keep up with that, we would be 
in a lot of trouble. And for a while, I think that was the 
case, but I think they have now gotten caught up, and now they 
are trying to get ready for that future.
    Just to add an interesting part between these two, the 
automated vehicles on the ground and the automated vehicles in 
the sky, as it were, we have Uber Elevate, which had a meeting 
3 weeks ago in Dallas, where they had some of the stalwarts of 
both the electric vehicle community as well as the aviation 
community coming together to develop this ``Jetsons'' vision, 
as it were, of people being able to dial up a device on their 
phone that they would be able to get into and fly from one 
place to another. As a 25-year pilot, that got my attention.
    That, I think, is going to continue to push this envelope, 
but there again, good representatives from the FAA, Wes Ryan 
from the Small Airplane Directorate was there, they are paying 
attention. They are looking for how do we support this into the 
future?
    Mr. Diaz-Balart. Mr. Wynne, again, we tend to think of the 
FAA as air traffic, big airplanes, small airplanes, going from 
one airport to another. We are now potentially looking at 
something totally different. We are looking at, in essence, 
airspace, not only being in the corridors we are used to, but, 
frankly, over urban areas and over rural areas.
    Do you think the FAA is the right setup to deal with all 
that?
    Mr. Wynne. Well, again, it is difficult to future proof. 
What I have seen from the FAA, Mr. Chairman, is not only are 
they bringing some of the highest, the best talent into the 
Unmanned Office, but I think they are reaching into every 
element of every department, every office of the FAA, and it is 
a very, very large organization, as you know, with many 
different tasks and many different responsibilities. So I think 
there has been a serious effort from the top down to develop 
collaboration with industry and to communicate throughout the 
organization and pull resources and quality thinking from all 
elements of the agency. By no means have we figured it all out 
yet.
    Mr. Diaz-Balart. The concept, for example, of segregating, 
one of the main aspects, this is now totally different and 
separate from the FAA. Separate from parts of the FAA, just 
from what I have heard today, it would seem to me that would be 
kind of just the opposite of what we want to hear.
    I keep hearing you all talk about integration and 
communication as opposed to just the opposite. Am I wrong 
there?
    Mr. Wynne. It is an excellent point. I view it as we have 
been working on the air side, we have been working for 
accommodations in the airspace. Eventually, that will start to 
become integration into the airspace, and then ultimately the 
evolutionary part is, is that interoperable with the ATC?
    Air traffic controllers are not standing still either. They 
are in the process of moving forward with NextGen. How do those 
things move in parallel? These are very, very active 
discussions right now between the industry and the regulators.
    Mr. Diaz-Balart. Thank you. Mr. Price?
    Mr. Price. We will just continue in this vein because we 
are dealing with a mind-bending reality here. I do not know how 
far along we are toward the day when human-piloted flights are 
a minority of air traffic, but we are surely going to get 
there. Is that correct? And that would seem to have profound 
implications for how we do air traffic control, the kind of 
areas we are covering with what kind of technology, what kind 
of techniques, and also the human factors involved here, major 
adaptation, retraining required for pilots, controllers.
    So, let me just bring it back to the previous line of 
discussion with the account--the rather optimistic account, I 
would say both of you were giving--about the UTM development 
thus far. I think, Professor, you talked about the baby steps 
that have been taken, but you described it, basically, an 
incremental process that you felt was on track. Can you say 
more about that and about--this cannot be incremental forever. 
There will be points at which we are doing what, certainly, 
would now look like radical changes in the way we manage air 
traffic, airspace, the kind of personnel we deploy, with what 
kinds of training, and, for that matter, the implications for 
pilots as well, the human beings who are now operating in the 
airspace.
    So, I am basically just giving an opportunity to talk 
further about this UTM process. Any kind of counsel you have as 
we go forward as to what that should look like?
    Mr. Kochenderfer. Yes. So, actually, in preparation for 
this hearing, I spoke with a number of members of industry--
from FAA, from NASA--and one of the themes that emerged in 
these discussions is that the FAA will, just due to scalability 
issues, mean to delegate some of their authority for 
certification. You also see this inherent in NASA's prototype 
and vision of UTM with these UAS service suppliers, which would 
be run by industry members, but, of course, with oversight and 
so forth by FAA.
    Mr. Price. All right. That does elaborate. It is not 
terribly conclusive in terms of the specifics we might be 
looking for as we oversee this process and evaluate it.
    Mr. Wynne, you have anything to add?
    Mr. Wynne. Well, I would start with where we are. Where we 
are today is the FAA has provided us with rules that allow us 
to fly with very little risk in the airspace that already 
improve safety on the ground; that improve our ability, 
actually, to look at bridges and do bridge inspections when we 
get around to addressing the infrastructure challenges that are 
before us. And there have been some great examples of using a 
drone to survey a bridge and decide we do not need to spend $20 
million on rebuilding that bridge, we just need to handle these 
particular parts of the roadway that are deficient for a much 
less amount of money.
    I say nothing of the people who no longer have to hang from 
harnesses doing that bridge inspection and other kinds of 
vertical infrastructure where, essentially, we are providing 
people with tools that allow them to do things more safely. To 
get to more complex operations, we need to work collaboratively 
with NASA, with the FAA, and build these things in such a way 
that in stark contrast to the carnage on the ground, we have 
extremely high safety rates in the air and we need to maintain 
those. Clearly, we want to use unmanned systems and automated 
technologies to improve the safety record on the ground as 
well; and, I think, the part that is fascinating to me is that, 
ultimately, some of these technologies, like near-field 
collision technologies or collision avoidance technologies, 
will scale across these domains. So, there is a lot of learning 
that will be gained from efforts on both sides of this 
equation.
    Mr. Price. Thank you. My time has expired. Let me just 
flag, though, for future reference, a related question that if 
you have thoughts you might supply to the committee, and that 
has to do with the implications of all of this for the NextGen 
program. We know that it is integrated; we know that it is 
implicated. As you well know, the NextGen program is under 
intense scrutiny from both the appropriators and authorizers up 
here, so this, for me, and I think for other members, is a 
relevant issue. Is this being adequately addressed amid the 
myriad of other issues that are on the table?
    Mr. Diaz-Balart. Mr. Dent.
    Mr. Dent. Thank you, Mr. Chairman. I just have one question 
for Mr. Wynne. As this hearing has demonstrated, the committee 
holds a great deal of interest in supporting efforts that will 
allow the United States to gain and maintain a lead in the 
research, development, and the eventual integration of UAS. 
This sentiment is shared by a number of our colleagues on the 
authorizing side in the Transportation and Infrastructure and 
also on the Science, Space, and Technology Committees. In light 
of such broad congressional support for these efforts, do you 
feel that UAS issues in the FAA's UAS integration office are 
receiving sufficient attention and support from within the FAA?
    Mr. Wynne. I do. I do, sir, and I appreciate the question. 
And, yes, there has been phenomenal support here on Capitol 
Hill, and we are grateful for that and I think with good 
reason. I think the challenge, of course, is the FAA has an 
extremely important job to do. This is adding to their burden 
as well. And as you point out, we need to stay along, in 
addition to just addressing the potential safety issues if we 
do not regulate properly--and industry and government are 
working to make sure that we get those regulations done 
properly--we will miss a trick or two as an economy if we do 
not take advantage of this technology. So, I think, it is worth 
leaning in, and I appreciate, again, the leadership of this 
committee in investing in this particular technology and all 
unmanned system technologies.
    Mr. Dent. Thank you.
    Mr. Diaz-Balart. Ms. Clark.
    Ms. Clark. Thank you, Mr. Chairman. Mr. Wynne, this drone 
technology really has the potential to revolutionize the way we 
move goods, maybe even in our ``Jetson''-like fashion move 
people someday. But since coming to Congress, I have worked a 
lot on technologies and their unintended consequences: the 
cellphone app that allows an abuser to secretly track their 
victim; the Twitter game that allowed people to own social 
media profiles of people that then became a target of 
harassment; the webcam that can be appropriated remotely by 
someone else. None of these technologies was invented for 
nefarious purposes and yet that is what the result was. And I 
loved the imagery that you used, that you cannot think about 
privacy and law enforcement afterwards and sort of shrink-wrap 
it around a product.
    So, I am hoping you can share with me what the industry is 
looking at as far as taking steps to address and work with law 
enforcement in the development of this technology before its 
widespread adoption. And, specifically, do you see a need to be 
developed to identify the operator of a drone that is used for 
criminal purpose? Are you thinking about putting those sorts of 
protections in?
    Mr. Wynne. Indeed. I think you have put your finger on an 
extremely important thing. For me, personally, over the last, I 
think, 8 months, this has been one of my top priorities. Law 
enforcement, public safety officials, generally, really wants 
to benefit from this technology. They see tremendous benefits 
from this technology to do things as simple as an accident 
investigation on a busy highway or fire fighters, or search and 
rescue, et cetera.
    So, the law enforcement community is a great partner for 
the industry, and we are working with them very, very closely 
to figure out what are the standards that need to be done, and 
how do we help them do their jobs, not just with the 
technology, but in enforcing the laws that might be violated 
with the technology.
    Ms. Clark. Right.
    Mr. Wynne. And let us be clear, most of the laws pertain to 
this technology whether it is specific to this technology or 
not. So, all laws pertaining to privacy also pertain to drones. 
You cannot use a drone any more than you can use a telescope 
to, you know, to spy on someone. So, I think that is really 
important.
    A specific example, tomorrow I will be up working with the 
folks that are in charge of law enforcement or safety at the 
Tappan Zee Bridge project in New York. They are using drones to 
build that, to do that multibillion dollar construction 
project. Very, very important that they be able to do that for 
safety reasons and for efficiency. But they need to be able 
to--the law enforcement need to know that those are authorized 
drones.
    Ms. Clark. Right.
    Mr. Wynne. So, I am not a fan anymore of no-drone zones 
because we use drones in many different places. But I am a big 
fan, increasingly, of authorized drones only. And so, that begs 
the question that you are raising, how do we remotely identify 
the people that are flying that? I leaned in on the 
registration process. I personally supported that with former 
Secretary Foxx when he gave the administrator of the FAA the 
task to get that done inside of about 2 months before Christmas 
of 2016, and we did it. The FAA did it with the collaboration 
of industry. Now we need to take the next step of how do we 
remotely identify--and, once again, industry is leaning in here 
to provide those technologies.
    Ms. Clark. That is great. I wondered, specifically, we have 
Federal law right now that criminalizes video voyeurism only 
within special jurisdictions in the United States where State 
laws do not apply: national parks, Federal government 
buildings. Do you believe we should extend similar 
technologically-neutral criminal statutes to the rest of the 
United States in anticipation of more widespread drones?
    Mr. Wynne. I am not familiar with that, ma'am, so, I would 
not be able to take a position on that, but I would be happy to 
provide an answer for the record.
    Ms. Clark. Thank you. Thank you, Mr. Chairman.
    Mr. Diaz-Balart. Mr. Young.
    Mr. Young. Thank you, Mr. Chairman. Public transit--and we 
have been kind of talking a lot in our minds thinking about 
personal use of these autonomous vehicles in deliveries--you 
know, commercial applications--but public transportation, are 
you engaging at all with any transit authorities? I know that 
Des Moines, which is in my district, the regional transit 
authority is really excited about trying to get engaged on this 
to do some kind of pilot project and is working with the 
Department of Transportation on this. How do you see this 
fitting into the public transportation?
    Mr. Strickland. Oh, Mr. Young, once again, I have an 
interesting intersection in my career.
    Mr. Young. Do tell, David.
    Mr. Strickland. I know. I am one of the Federal voting 
members for WABATA. So, in addition to--so I think about this 
personally a lot, but, frankly, I think that the self-driving 
industry, in addition to thinking about the way that self-
driving can help support the disabled and the elderly, which is 
a hugely underserved community which relies upon public 
transit, it is the opportunity for automated vehicles, and a 
variety of types, too, frankly, to be an extension of public 
transit and help support it. So, I think, as for having last-
mile solutions as being part of it, being able to have the 36 
million people that are disabled, and the 20 million of them 
that are of working age, being able to have solutions that are 
more tailored in order to be able to get to public transit 
pipelines.
    So, yes, I think there are a lot of folks that are thinking 
about this individually, and I know that I have had a number of 
conversations through APTA and others about how we better work 
together. But I think you are right. I think, once again, as I 
think that both of us stated earlier, this is the opportunity 
to think ahead so that we build a system that is thoughtfully 
integrated so that we can have automated driving help support 
public transit and increase those efficiencies.
    Mr. Young. And do you view this in the context, and 
differently, I would imagine, in between rural transportation 
needs and urban transportation needs as well? Because I have a 
very rural district in some areas, and there are some unique 
transportation needs that are needed there in public transit.
    Mr. Strickland. That is absolutely right. I think that is a 
reason why thinking about, again, last-mile issues. I think, 
especially in rural communities, that is a big issue, making 
public transportation more efficient. One of the keys to it is 
because the configuration of rural communities, it is really 
tough to be able to get those efficiencies of scale. Automation 
could help build those efficiencies because you can have last-
mile solutions to get to the main trunks for bus lines, and et 
cetera.
    So, I think you are absolutely right, Mr. Young, in 
thinking about this prospectively that this is not just simply 
an urban solution. I think that automation could be supportive 
of public transportation in a variety of aspects in our 
communities across the country and I think it is a real 
opportunity for all of us.
    Mr. Young. Mm-hmm, and then you just mentioned on your own, 
and I was going to touch on this, that the opportunities that 
this can bring for our folks with disabilities and who are kind 
of homebound sometimes and not able to get out to where they 
need to be sometimes. Are you taking into account working with 
the disability community to make sure that there is access, and 
that there is safety, you know, and confidence in that system, 
too, to allow them to participate in this as well?
    Mr. Strickland. Mr. Young, actually we have a number of 
partners in our coalition that represent folks that are 
disabled. But, more specifically, and Ms. Kara mentioned this 
earlier, is that--you know, one of the things when you think 
about economic opportunity, the one thing that automated 
vehicles, self-driving could do is those 20 million folks that 
are disabled that have the capability to work, but may not have 
the possibility to do so because of their transportation 
choices, one of the great things that we can look at is having 
those people being involved in the economy, being able to work 
because we have solutions for them.
    So, the short answer is, yes, we are working very hard with 
those communities and thinking about making sure vehicles that 
are being designed in the beginning to support people that are 
disabled, not thinking about retrofitting vehicles that are 
already in assistance, which is very expensive for those 
communities, which I know that you are aware of.
    Mr. Young. Well, thank you for engaging with them because 
there is a lot of opportunity there in the folks with 
disabilities, and then just making sure that there is 
confidence with that community and those people because, you 
know, something new like this, you know, you think about 
vulnerabilities in these systems, and anything that you can do 
to just really keep that pipeline open in communication, and 
alleviate and bring confidence to that system for them, it will 
be awesome. Thank you.
    Mr. Diaz-Balart. Thank you, Mr. Young.
    Mr. Young. Thank you, Mr. Chair.
    Mr. Diaz-Balart. Those 20 seconds that you have, if I may 
take them.
    Mr. Young. Take them, 18, 17.
    Mr. Diaz-Balart. You know, some of these projects that we 
fund are 20 years out; massive transit projects. Are we 
funding, in essence, the equivalent of the horse and buggy as 
opposed to is there a possibility that some of what you all are 
looking at could replace those large systems?
    Mr. Strickland. I do not think you are talking about horse 
and buggy. I think you are thinking about spoke and wheel. I 
think that, frankly, public transportation is still necessary 
in a centerpiece, but I think what you really think about in 
terms of automation is how we can make those transit systems 
more efficient and thinking about, as I said to Mr. Young, how 
do we have an efficient usage of last-mile solutions? And I 
think that is where automation comes in.
    Mr. Aguilar. Mr. Chairman, do you need any more time? Okay. 
For Mr. Wynne and Mr. Kochenderfer, Mr. Wynne first, you talked 
about the registry. We know the importance of training and 
educational play in the UAS system. The educational component 
requires for the registry only an acknowledgment of bullets of 
safety guidance. I understand that there are six UAS test sites 
throughout the United States meant to collect data to help 
inform decisions on how to integrate the systems. What role do 
these test sites provide in developing educational programming 
for operators? Additionally, is industry playing a role in the 
development of training for the UAS operators and, if so, how? 
Are there ways that we can work better with FAA and the 
industry to help on the training and education side?
    Mr. Wynne. Yeah, that is a very big topic right now. AUVSI 
recently launched a Remote Pilots Council since the advent of 
part 107, we now have certificated operators under part 107 and 
we have just finished I call it a whistle stop tour, where we 
had nine meetings around the country gathering those folks 
together in a room with the FAA in many instances. Actually, in 
all instances, we had an FAA representative talking about what 
they saw as the needs from a training perspective to make 
certain that remote pilots maintain the highest levels of 
airmanship and standards of operations.
    So we are in the process of figuring out what that is going 
to require and backing up to how do we at least get an 
alignment on that, because I think that is one more thing that 
industry can do that we do not necessarily need to burden the 
FAA with today. As far as everyone else that is flying out 
there, the people that are not necessarily commercial 
operators, which requires a part 107 certificate, hobbyists as 
it were, AUVSI has been pressing forward with the Academy of 
Model Aeronautics and the FAA and a hundred now plus supporters 
with our Know Before You Fly campaign, which is information 
that is increasingly right in the boxes for a device. So if you 
walk into an electronics store and walk out with a drone to 
fly, and we love people doing that, you know, people love 
things that fly. They have the information at the ready hand to 
know, you know, how to get the information, the latest app, et 
cetera, to know am I flying in the right place, am I flying 
responsibly.
    Mr. Kochenderfer. Yes, so I would have to applaud the 
efforts of AUVSI and AMA and FAA on the Know Before You Fly 
program and the success in the registration. So you mentioned 
that they only had to demonstrate knowledge in a limited area. 
But keeping that test simple for the hobbyists, I think, was 
critical in the success of the registration. So the required 
registration started February 2016 and then by June 495,000 
registered. And if you increase the burden of that training, I 
think that would decrease the registration. But, of course, you 
do, for the commercial operators under 107, they do need to 
take a much more comprehensive FAA exam. And I feel that is 
appropriate.
    Mr. Aguilar. And the test sites discussion, are we doing 
enough?
    Mr. Wynne. Yes, the test sites I think are extremely 
important and one that I am aware of, for example, one of the 
largest broadcasting organizations in the country, Sinclair, 
does all of the training of their pilots to capture news at one 
of the test sites. So that is an easy, that is one of many 
examples of how the test sites are being used. Probably more 
appropriately, the test sites are set up to do more advanced 
things and collect data on flying beyond visual line of sight 
and such, things that we are trying to prove out with more 
complex operations with additional risks.
    Mr. Aguilar. Thanks, I will yield back, Mr. Chairman, give 
you some more time.
    Mr. Diaz-Balart. Thank you. I think we can do one more 
round, if that is all right and you all are willing. Thank you. 
Obviously, we have a lot of interest in this committee. Ms. 
Kalra, and kind of what I was asking before is, this 
subcommittee allocates funds for projects that not only take 
years to build, but are supposed to be there for decades and 
decades. And so, looking ahead, how disruptive potentially is 
the AV technology going to be? When should the transportation 
planners start factoring in this disruption or this addition, 
whatever you want to call it, for these large-scale, expensive, 
long-term projects?
    Ms. Kalra. You know, it would not be an overstatement to 
say that it will be as disruptive as the automobile was for the 
horse and buggy. But similarly, it is also as uncertain. I do 
not think anyone who is riding around in their buggy could say, 
oh, the car is coming, here is what it is going to look like in 
50 years. So it is extremely important for transportation 
planners to think now about the changes that are coming. But 
that is extremely difficult to do because there is deep 
uncertainty about what those changes will mean. And so I think 
attention needs to be paid to identify investments, investments 
that are vulnerable to making no sense in a particular future 
or that cannot be repurposed, readapted, you know, the designs 
are fixed.
     Mr. Diaz-Balart. Well, for example, let us look at 
something like hard rail, you know, rail?
    Ms. Kalra. Yes.
    Mr. Diaz-Balart. Which is exceedingly expensive, it is 
inflexible, you know. Is that something that we should now be 
looking at? Are there different alternatives? Should it be an 
alternative that can later be transferred over to, unmanned 
vehicles, I mean that kind of thing?
    Ms. Kalra. Rail has, you know, but rail also has enormous 
advantages. And so the question needs to become is a particular 
project vulnerable to changes, and I do not think there can be 
wholesale dismissal, I think this is important. But certainly 
to say okay, we are going to, even if we think of light rail, 
we are going to build an extension from point A to point B, to 
think does that make sense in the future that may have people 
with better last-mile connectivity, it may become even more 
important actually in a world where there is last-mile 
connectivity. So the question I do not see as being asked 
enough because it is a difficult question to answer, but I 
think it needs to be asked now.
    Mr. Diaz-Balart. Yes, sir?
    Mr. Strickland. Mr. Chairman, I will say the one thing that 
I think is a certainty is that we will always be capacity 
constrained on the ground. You cannot build your way out of a 
congestion problem. The more roads you build, the more capacity 
you build, the more people use it. So ultimately transit and 
rail are always going to be important components of, frankly, 
our transportation system. I think that Ms. Kalra made a 
fantastic point is really sort of looking at the individualized 
project level about whether or not that particular investment 
in this specific macro point works. But I do think that in 
general, the specific continued investment in transit, frankly, 
it future proofs us for a number of things, not only 
congestion, but who knows what the cost of fuel is going to be 
in the future, and all those other types of things which we, 
frankly, face every single day.
    And I think automation has a real opportunity, if done 
right to help public transit. But I do not think that this is 
an offset to transit or an offset to rail. We just have to be 
much smarter about where we invest it and how.
    Mr. Diaz-Balart. Let me talk a little about how it has been 
on the forefront of helping consumers make decisions right, 
better, and whether it is things like seatbelts. So, I do not 
know who wants to deal with this or what we should be doing to 
make sure that drivers understand what their cars either do, 
and the technology that is already here and that is already 
coming and, more importantly, maybe what they do not do. And 
are there opportunities for NHTSA to educate consumers through 
traditional awareness campaigns or product reviews? Anybody 
looked at that and thought about that?
    Mr. Strickland. I have thought about this for a long time, 
and when I was administrator and even post my service. The 
issue of consumer education is not only a governmental 
function. Frankly, it has to be fully participatory of 
everybody in the industry, especially when you are talking 
about those that are at points of sale, the folks that are 
selling you the car. Right now, I will just be blunt because I 
purchased a new car recently. Most dealerships do a very poor 
job in describing active safety technologies that are on the 
road today because they do not understand them. It is not 
something that is visible, too, because it is usually--it 
intervenes when you are about to have a crash, so nobody really 
sees it. There are some manufacturers that work very hard and 
try to get their dealerships trained up.
    I think the New Car Assessment Program has been a wild 
success in incentivizing manufacturers to raise the bar of 
safety, which ultimately they go and try to sell and educate 
the consumers. I think thinking about a more robust effort as 
part of the new car assessment in the future to help teach 
people about if you have an automated vehicle, what it can and 
cannot do. But I think it is incumbent upon, frankly, the 
private sector and those at points of sale, and then continuing 
efforts to make sure people truly understand what environments 
this vehicle can and cannot operate in.
    Ms. Kalra. I completely agree, but I will.
    Mr. Diaz-Balart. My time is up.
    Ms. Kalra. Oh, I am sorry.
    Mr. Diaz-Balart. But it is good to be chairman. Go ahead. 
No, please, please proceed.
    Ms. Kalra. I think that is absolutely right and the one 
thing we want to avoid is using engineering terminology to 
communicate to the public. And we have adaptive cruise control, 
smart cruise, there is a million ways, and consumers are 
confused. And I think that is a role for NHTSA to play.
    Mr. Diaz-Balart. Mr. Price, thank you.
    Mr. Price. Well, these last exchanges have opened up a 
really important set of questions, I think, having to do with 
congestion and capacity. And I would think this is an important 
consideration in both areas. I would like to have our UAS folks 
comment on this. But I first want to go to the more obvious 
questions maybe about transit and about the implications of 
what you are saying.
    We have had, I would say it is fair to say this morning, we 
have had a rather expansive view of the possibilities of both 
of these technologies and it will improve our lives. And as far 
as the need for some kind of regulatory regime is concerned, it 
has been overwhelmingly focused on safety. That is appropriate. 
But I would think that the collective good questions apply in 
this area as they do in all areas, and that there are questions 
about how much of a good thing we can deal with and what is the 
capacity, what are the tradeoffs in terms of congestion and how 
do we deal with that. And I am especially impressed by what you 
say, Mr. Strickland, about transit.
    You know, one can imagine roads just as clogged with 
autonomous vehicles as they are clogged with ordinary vehicles, 
and the solution of simply putting on more lanes would be 
equally probably counterproductive. So one can readily 
appreciate the need for mass transit for all sorts of reasons.
    But I think what you are saying is really exciting as well, 
though, because that last-mile problem is really a problem, 
connecting the shut in, the people in rural areas, the people 
with special needs, collecting those folks to transit is a huge 
issue. And then you think about the future of Park and Ride, 
and we would not need huge tracks of land in valuable areas 
devoted to Park and Ride, maybe remote parking becomes much 
more feasible. I think there are lots of implications. So I 
think we really need to think this through, and I appreciate 
any further comments you have about this, about that set of 
issues, congestion and capacity, and how we can anticipate and 
deal with this.
    Mr. Strickland. I will touch on it very quickly, Ranking 
Member, is that the ability to have automated vehicles to be a 
mixture in the fleet really does give us a number of models on 
opportunities. As you said, car share, ride share, where you 
have a resource, which is an owned car, which sits 90, 95 
percent of the day, is only utilized for a small percent of the 
day to actually have increased utilization of vehicles so that 
you would need fewer of them, could be an implication which 
happens in the future and helps address congestion.
    And the other issue which I think you touched upon greatly 
is how do you re-reclaim living space, green space, from the 
roadway? And I think that thinking about capacity issues and 
self-driving could impact of how cities are thinking about it. 
The city of Beverly Hills in California is very aggressive 
right now in thinking about its future, about possibly having 
Beverly Hills being an AV city, where they can reclaim the 
parking and turn it into retail, they can turn that into 
housing, they could turn it, they can free green space and more 
pedestrian space.
    So I think that is very much, I think, the larger, broader 
thinking, but it does take long-reach thinkers as well.
    Ms. Kalra. I would add that I think for parts of our 
transit, which we normally think of like large buses, fixed 
routes, there is an opportunity to reimagine that, because many 
of the goals of transit include it is public, it is 
sustainable, it reduces congestion, it reduces air pollution, 
it is equitable. Some of these goals can be achieved in 
portions of our current transit system more efficiently with 
autonomous vehicles that are better sized and more convenient 
on demand, so that instead of just, well, do we have private 
vehicles connecting us to main transit hubs, we reimagine how 
we can meet the goals of transit more efficiently and with 
greater effectiveness.
    But the other side of it, any time the cost of driving goes 
down, people drive more. There is a latent demand. And so I 
think these cost reductions that we hope to see need to be 
offset by policies like congestion pricing that send the right 
market signals, that internalize the externalities that we 
currently largely ignore in our transportation system.
    Mr. Price. Mr. Chairman, can we ask our aviation guests to 
chime in briefly?
    Mr. Wynne. If I might, yes, thank you, Mr. Price. I think, 
we think of Washington airspace, for example, as very 
congested. It is complicated airspace for a whole bunch of 
reasons, security being among them. But, you know, all large 
metropolitan areas generally are--the airspace is dominated by 
airports, we have many here. But that airspace is almost empty 
at night for noise abatement reasons alone; that airspace is 
available at night.
    I go back to my milkman analogy years and years ago. The 
milkman would come in the dead of night and bring you your 
milk. There are a lot of opportunities for us to use what we 
normally think of as very congested, complex airspace at night 
to do deliveries that are currently being done in the middle of 
the day. And that is a good example of how capacity, this world 
of the way we think about congestion and capacity, can change 
very radically with this technology.
    Mr. Kochenderfer. And just to add to that, our national 
airspace is a national resource and it is important that it be 
used efficiently. On the drone side, you can imagine a 
contention for some areas of the airspace, especially as we 
begin to have drone operations in urban environments where 
maybe both Google and Amazon want to deliver to the same areas, 
and resolving those kinds of conflicts is something that UTM is 
poised to do.
    Mr. Young. Thank you, Mr. Chairman and Ranking Member, a 
privilege to be with you today. This is a very exciting issue 
and we have had a good two or three of these kind of issues 
hearings. And so you are obviously experts on your issue, and 
obviously, you probably are looking around the world at what 
other countries are up to and are we on par. When we are 
looking at the world right now, and the United States, are we 
on par with the other countries, are we ahead of them, are we 
behind them? And is our testing and operating this framework 
ready to launch compared to other countries? And then as well, 
where are we in terms of the public acceptance of the reality 
that this is coming and to get ready for it?
    And please, each one of you, I would like hear where you 
think we are in regards to our peers around the world.
    Mr. Kochenderfer. So maybe I can start. So, Stanford is 
pretty much adjacent to Google, so we see the Waymo vehicles on 
our streets all the time.
    In terms of drones, for a long time, many of the drone 
startups and companies would do their testing in other 
countries with more flexible airspace regulations. But I think 
we are starting to catch up and we have the potential to be a 
leader in this area.
    Mr. Wynne. I agree. I think part 107 was an enormous step 
forward and many of our colleagues internationally are paying 
attention to that; UTM, which we have been discussing today. 
ICAO has just announced an initiative on--that is the 
International Civil Aviation Organization in Montreal. Again, 
they are inviting NASA and the FAA to come, because a number of 
the member States of ICAO do not want to have to try and figure 
this out for themselves, and as an industry, we are very much 
in favor of harmonization around the world.
    So I think we are in very, very good shape. I think we 
could easily lose that lead quickly. The advantage that we 
always have in America, of course, is that we have the largest 
market and many of the technologies are going to be pulled 
through here by the huge numbers of vertical sectors that are 
going to use this technology. So I think we have that advantage 
if we can keep up from a regulatory standpoint.
    Mr. Young. So when you say lose the lead, it is because of 
the regulatory standards that we have not met yet or are not 
out there for us to meet?
    Mr. Wynne. That is the potential that we worry about.
    Mr. Young. Okay. Please.
    Ms. Kalra. You know, I think from a technological 
standpoint, I would argue that we are ahead and I think we have 
the intellectual and investment powerhouse, you know, whether 
it is in Silicon Valley or Detroit or really in many parts of 
our country. I will leave it to David to speak about what the 
deployment is happening abroad. But in terms of public 
acceptance, people are becoming--particularly if you diversify 
by age, the public is very interested in this technology and 
particularly younger people. They do not want to drive. They 
are looking forward to this technology. Many of them do not 
know how to drive. I think particularly if the benefits of this 
technology in terms of safety and convenience are truly 
realized, I do not really see this as being a problem in the 
same way that we do not need regulations to encourage people 
to, like, buy an iPhone or buy another gadget that makes their 
lives better or more fun. I think this could be one of those 
technologies where we do not need to encourage the public to 
adopt it too much.
    Mr. Young. Thank you.
    Mr. Strickland. I absolutely concur in terms of our 
technological capacity. I think that as a country, I think that 
we are very much in the lead because of the diversity of 
manufacturers and Silicon Valley companies. But I literally 
just got back from Korea yesterday, and I will say that I think 
both our AUV folks captured it. We have a technological 
advantage, but we have regulatory uncertainty which, frankly, 
certain countries do not have, like the People's Republic of 
China. If they want something to happen, it just happens. And 
we do not have that flexibility here.
    And so my biggest concern is that we may lose our 
advantages in terms of development and capacity and technology 
to, frankly, a country that could just simply just put a rubber 
stamp and then it is free open season for any manufacturer that 
wants to deploy. I think that that has probably always been our 
concern. Consumer acceptance, I think, talking back to the 
chairman's question about what can be done to help consumer 
acceptance, people are very interested in technology, but I do 
think there are questions because people have concerns about 
automation, and they have a greater sense of their own ability 
to drive. I am a great driver, everybody else stinks. And that 
is a problem and I think ultimately for us to be able to 
encourage people to use and try the technology is going to be a 
long reach effort, it is going to take lots of effort to make 
sure that we get this done right.
    Mr. Young. Thank you for educating us and thank you for 
helping us navigate our way to this new world. And so, Mr. 
Chairman and Ranking Member, thank you very much for the 
opportunity.
    Mr. Diaz-Balart. Thank you. Mr. Young closed it out 
marvelously well. Thank you all very much, it has been 
exceedingly interesting. Thank you very much.

                                            Thursday, June 8, 2017.

              DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

                                WITNESS

HON. BEN CARSON, SECRETARY, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
    Mr. Diaz-Balart. We will now call the subcommittee to 
order. Good morning, everyone. Today we welcome Secretary Ben 
Carson from the Department of Housing and Urban Development to 
discuss the fiscal year 2018 budget request.
    Mr. Secretary, I know that I do not have to tell you that 
you have one of the most difficult and important jobs in 
Washington. You have said several times that HUD can and should 
provide a ladder of opportunity to those hardworking families 
that can obtain social and economic upward mobility and pursue 
the American dream. HUD's mission is to create strong, 
sustainable, inclusive communities and, frankly, quality, 
affordable homes for folks. Achieving this mission is an 
ambitious challenge.
    HUD has many diverse programs, thousands of entities that 
carry out the programs, and millions of citizens who have 
received benefits and who, in many cases, depend on HUD. And 
frankly, HUD is a very large financial institution as well. 
Ginnie Mae and the Federal Housing Administration together hold 
a portfolio of $3 trillion. And safeguarding the financial 
health of these institutions is essential for, frankly, our 
national economic health.
    HUD is requesting a total of 40.7 billion and new budgetary 
resources in fiscal year 2018 which is 15 percent below 2017. 
The budget request proposes to eliminate a number of programs 
that are important to our mayors, and I am sure you have heard 
and will hear from them as well, cities, towns, and, for 
example, community development block grant programs, the HOME 
Investment Partnership programs, in particular are some of 
those. So I am sure, Mr. Secretary, that we are going to have a 
robust conversation and discussion about these programs and 
many other things. And again this is a long process that I look 
forward to, all of us look forward to working with you on.
    In addition, the budget includes cost-saving proposals and 
reforms across its rental assistance programs. Now, however, 
most of those reforms are outside this committee's jurisdiction 
and must be addressed first by the authorizing committee. Some 
of the reforms are to provide public housing authorities 
benefits such as flexibilities and regulatory relief from 
administrative burdens. The budget would also set a mandatory 
minimum rent and increase tenant rent contributions, and it 
would suspend rent increases for private-owned units.
    Mr. Secretary, your budget states that these policies would 
result in additional resources that would allow more homes to 
be available to more households. You know, Mr. Secretary, 
because you were recently in the district that I am privileged 
to represent, that I represent low-income and urban areas, and 
I support the spirit of HUD's mission and the desire to operate 
more efficiently obviously and to do more. My mayors, my city 
council, my community leaders, and constituents, all rely on 
HUD programs and this is why it is so important that we work 
together to explore the implications of any reforms and cost-
saving proposals in our communities. It is not the intent to 
impose additional undue burdens onto our most at-risk 
populations or to reduce our affordable housing stocks or its 
conditions. That said, I agree that it is critical that HUD be 
a good steward of its resources as nearly all of what HUD 
oversees helps the most vulnerable in our society.
    So yet I continue to receive reports that HUD has 
tremendous difficulty with basic management. The number of and 
seriousness of those negative inspector general reports is 
astonishing, and I know that you share that concern. Poor 
financial controls, possible Antideficiency Act violations, lax 
program oversight, major risks to IT systems, gaps in 
cybersecurity, the list goes on and on. These core management 
challenges have plagued HUD now for 24 years, a quarter of a 
century.
    The HUD IG has indicated that the problem boils down to 
lack of leadership or management attention issues and, 
unfortunately, those are challenges, Mr. Secretary, that you 
are inheriting. And so we are grateful that you have decided to 
take on this very difficult task. So, Mr. Secretary, I ask you 
to take a fresh look at these core issues and prioritize them. 
I know you are interested in doing that. I want to work with 
you, with the administration, to make HUD the high-quality, 
high-functioning organization, you know, that it has to be to 
oversee these crucially important programs.
    Mr. Secretary, you know, you have come from humble 
beginnings and are exceedingly sensitive to people who are 
experiencing poverty and hardship. Together, we have to work 
together to strive to make HUD programs more effective, more 
efficient for the American people. I look forward to working 
with you, sir, as we make the hard choices, and they are hard 
choices, necessary to meet our Nation's housing and economic 
development needs, all while obviously being accountable to the 
taxpayer.
    Before we get to your opening statement, Mr. Secretary, I 
want to recognize the ranking member of this subcommittee. The 
gentleman from North Carolina and I have developed a great 
relationship.
    So with that, Mr. Price, you are recognized for your 
opening statement.
    Mr. Price. Thank you, Mr. Chairman. I, too, look forward to 
working with you as we navigate this challenging budget cycle. 
And I want to join you in welcoming our Secretary of Housing 
and Urban Development, Dr. Ben Carson. Welcome, sir, to our 
subcommittee.
    Nearly all of HUD's affordable housing and community 
development programs are at this moment underfunded and have 
been underfunded compared to demonstrated need. I think we have 
to honestly acknowledge that at the outset. These are programs 
that serve some of the most vulnerable people in our country: 
the elderly, the disabled, children, veterans, single parents 
trying to make ends meet.
    It is not an exaggeration to say that America, the most 
prosperous nation in the world, is in the midst of an 
affordable housing crisis. More and more families are 
struggling to pay rent; meanwhile, only one of four people 
eligible for Federal rental assistance can actually receive it 
because of funding constraints. We should not be comfortable 
with this reality. In fact, it should force us to ask tough 
questions about our values and priorities.
    Unfortunately, the Department's fiscal 2018 budget request 
before us today would make these daunting problems even worse. 
The request includes $36.3 billion in funding offset by 9\1/2\ 
billion in receipts. The total budget authority provided in the 
request would be lower than last year's level by about $7\1/2\ 
billion, 17 percent.
    Since more than three-quarters of HUD's budget is devoted 
towards simply maintaining current resident and housing cuts of 
this magnitude will disproportionately affect a community 
development and other targeted housing programs, for example, 
community development. Let's look at that, a flexible source of 
funding of hundreds of urban and rural communities to help meet 
the needs of low- and moderate-income people, a program that is 
remarkable for its bipartisan support over many years. That 
program is proposed for complete elimination. The home program, 
complete elimination. That is the largest Federal block grant 
to State and local governments designed exclusively to produce 
affordable housing for low-income families.
    My colleagues and I have heard from hundreds of local 
elected officials and housing practitioners that these programs 
play a critical role. They are the most flexible programs in 
your portfolio. They play a critical role in helping address 
affordable housing shortages and other pressing community 
needs.
    Mr. Secretary, in your Senate confirmation you spoke about 
addressing housing instability and poverty in what you called a 
comprehensive manner. And that would include providing greater 
access to healthcare, economic opportunity, so that there is a 
kind of comprehensive approach with people in need. And I think 
it is fair to say that we widely share those goals, but I, for 
the life of me, cannot find in this budget any evidence of 
taking that vision seriously.
    It is especially troubling that your budget would eliminate 
the Choice Neighborhoods Initiative. This program helps 
transform aging public housing developments into vibrant, 
mixed-income communities, and it does leverage non-Federal 
funding to promote small businesses, to bring other services 
into the community. It is the very epitome of a comprehensive 
approach, the best example in your portfolio, yet you are 
proposing to totally eliminate it, totally eliminate choice 
neighborhoods.
    Even the Self-Help Home Ownership Opportunity Program, 
SHOP, and Section 4 capacity-building would be zeroed out. SHOP 
is used by Habitat for Humanity, other nonprofits to help 
create affordable housing. It has a huge multiplier effect in 
the kind of funding and the kind of support it brings forward. 
They use the sweat equity model in Habitat. But any Habitat 
local or national leader will tell you that SHOP is essential, 
essential seed money for what they are doing; same for Section 
4, which expands their capabilities and their technical 
expertise.
    Finally the National Housing Trust Fund, that does not even 
constitute discretionary budget authority, yet you are 
proposing that it be eliminated. This is a real head scratcher 
because these are mandatory funds, they are derived from 
contributions by Fannie Mae and Freddie Mac. The Housing Trust 
Fund has only recently been tapped by the States, but it is 
already being used to finance the development and rehab of 
affordable housing for low-income people. Why would we want to 
see that go away?
    These sweeping program eliminations, I must say, fail to 
demonstrate the surgical precision, if I may say so, that we 
might expect from you. They are the equivalent of taking a meat 
axe to the HUD budget, which has already faced steep reductions 
in recent years. This budget request says that State and local 
governments should pick up the slack, but how? How? It is 
incomprehensible, it is unacceptable.
    And there are many reductions as opposed to outright 
eliminations. There are many, many damaging reductions in this 
budget. I will not go into them in detail except just to note 
that tenant-based Section 8 is cut by 5 percent. We are talking 
here about 265,000 people nationwide back out onto the streets, 
public housing cut across the boards, massive cuts: housing 
opportunities for people with AIDS, 7 percent cut; homeless 
assistance grants, 6 percent cut; housing counseling, 15 
percent. The list goes on. Without sustained increases in 
funding commensurate with need, people will lose housing and 
they will lose the supporting services that they rely upon.
    I would also want to register my concerns with the 
Department's so-called rent reforms, which would essentially 
shift HUD programs' costs onto residents, raising minimum 
rents, eliminating utility allowance reimbursements, ending 
higher payments for new enhanced vouchers. These could have 
serious repercussions for people who rely on housing 
assistance. If changes are needed here that is best left to the 
authorizing committees, they should not be loaded onto a budget 
proposal.
    And why on Earth roll out these reforms first in places 
like project-based rental assistance? The 202 housing program, 
rental housing program for the elderly, 811 program for the 
disabled. Why on Earth start there? These are programs that 
serve vulnerable, elderly, and disabled individuals. It just 
sounds counterintuitive at best and just terribly mistaken at 
worst.
    As I said at the beginning the current state of housing in 
America should force us to ask tough questions. Unfortunately, 
looking at this budget proposal raises many unsettling 
questions. Does this administration care about the most 
vulnerable among us? And have you been appointed, do you find 
yourself in this position only to preside over the demise of 
HUD? I think that is not too severe a question to pose.
    Before I close I want to remind my colleagues that although 
in the beginning of June we still have no budget resolution, no 
top line spending number, no subcommittee allocations, and the 
debt limit is rapidly approaching.
    So without another bipartisan budget deal, we will also be 
forced to cope with the devastating return of sequestration 
and, of course, the numbers proposed in the Trump budget are 
below sequestration for HUD and for other critical agencies. In 
the past years we know this has been a recipe for disaster. It 
is simply a formula for not being able to appropriate and 
having a crisis at the end of the fiscal year. We do not need, 
our country does not need this kind of breakdown this year. We 
should anticipate this. We should do a budget deal. We should 
have a more comprehensive approach that will let us write our 
appropriations bills on budget and on time.
    Mr. Secretary, I look forward to hearing your testimony 
today. We have some really important questions to explore. We 
have got to work together to ensure that vital housing and 
community development programs are adequately funded and 
continue to rest the crying needs that we see in our 
communities.
    I thank you, Mr. Chairman.
    Mr. Diaz-Balart. Thank you, Mr. Price. Now it is a deep 
honor for me to be able to recognize the leader of this 
committee, the chairman of the full committee, the gentleman 
from New Jersey, Chairman Frelinghuysen.
    Mr. Frelinghuysen. Well, thank you, Chairman Diaz-Balart, 
and Mr. Price and Ms. Lowey and I, we all welcome you here to 
the appropriations process. Today's hearing is an important 
part of the oversight duties of the committee now that we have 
formally received the administration's budget request, yours in 
particular, this committee will undergo, given a thorough 
analysis. Today's hearing is part of the process we follow to 
determine the best use of taxpayers' dollars after all the 
power of the purse lies in this building. It is the 
constitutional duty of Congress to make these types of spending 
decisions.
    As the chairman said, HUD provides critical resources to 
some of our most vulnerable populations in our country in need 
of housing, including seniors, homeless veterans, and those 
with disabilities and those with very limited incomes. I am 
sure you would agree, Mr. Secretary, it is completely 
unacceptable that even one veteran in our country should be 
reduced to homelessness as they struggle with post-traumatic 
stress syndrome or drug and alcohol abuse or a lot of other 
things.
    In my neck of the woods we have an incredible facility at 
the Lyons VA Hospital in northern New Jersey which provides 62 
affordable housing units to homeless and at-risk vets. Of these 
62 units, 50 are supported by HUD-VASH vouchers, so we need to 
take a look at that, make sure that we make the right decisions 
on their behalf.
    Throughout my time in Congress, I have been a strong 
advocate for those with disabilities. As has been said by 
others on the panel here, your budget proposal calls for 
cutting housing for persons with disabilities, the Section 811 
program, by 18 percent. I think we are all curious to 
understand how the Department plans to serve those families 
given such a cut. And like others I am concerned about the 
proposed cut of a billion dollars to Section 8 tenant-based 
rental assistance and would like to know how the Department 
plans to honor all existing vouchers with such a sharp 
reduction.
    And lastly, I join with my colleagues in being concerned 
about, and we are all concerned about, waste, fraud, and abuse, 
but the fate of the community development block grants. These 
have had, I think you know well, bipartisan support for 
decades. In fact, they were created under President Nixon's 
administration to give power back to the people to make 
decisions locally to focus on community needs. So I share with 
my colleagues my concern about a lot of the programs you are 
reducing and I look forward to hearing your answers. And may I 
say I will be working very closely with the chairman and the 
ranking member to make sure we get a budget across the finish 
line for all of our departments that meets the needs of the 
American people.
    Thank you, Mr. Chairman.
    Mr. Diaz-Balart. Thank you, Mr. Chairman. It is also a 
privilege to be able to now recognize the ranking member of the 
full committee, the gentlewoman from New York, Mrs. Lowey.
    Mrs. Lowey. Thank you, Mr. Chairman. And I would like to 
thank Chairman Diaz-Balart and Ranking Member Price for holding 
this hearing, and, Secretary Carson, thank you so much for 
joining us.
    Simply put, Mr. Secretary, your budget is inadequate at 
best and unconscionable at worst. It would eliminate community 
development block grants which Congress funded at more than $3 
billion in the recently passed bipartisan fiscal year 2017 
Omnibus, the HOME Investment Partnerships, which leverages 
Federal funding to build affordable housing and receive 
bipartisan support for a $950 million investment.
    Your budget would also cause great suffering and harm, 
including cutting housing opportunities for persons with AIDS 
by $26 million; increase homelessness by slashing homeless 
assistance grants by $130 million and rental assistance by 
$64.9 million; decrease lead hazardous control, a program that 
I have been working on for a very long time, but the need is 
still clear to most everyone. It keeps our children safe from 
lead-based paint and other hazards in their home. That was a 
cut of $15 million.
    Secretary Carson, there is no justification for this 
drastic approach. And given your public statements, I have 
really serious doubts about your grasp of the difficulties that 
millions of Americans face and the resources available to give 
people a hand up. I say that because when I worked in the State 
with Mario Cuomo a long time ago, I ran the anti-poverty 
program and most people want a hand up. They do not want a hand 
out. So cutting these programs is just unconscionable.
    You have suggested that the government has made things too 
comfortable for people living in public housing and that 
poverty is merely ``a state of mind.'' In fact, I visit all our 
public housing and one of the major problems we have, people 
are there too long because there is not enough affordable 
housing so in many instances we cannot move people out of 
public housing into affordable housing, not enough resources to 
do that either.
    Perhaps you have not really studied the people your 
Department is assisting to realize that this budget would 
result in millions of Americans, many of whom are senior 
citizens, veterans, children, people with disabilities, and the 
working poor, living in homeless shelters or on the streets. 
These cuts, Mr. Secretary, do not exist in a vacuum and would 
end up costing taxpayers even more than if we invest now in the 
very types of assistance you propose to severely cut or 
entirely eliminate.
    Housing must play a big role in strengthening and growing 
the middle class, empowering hardworking Americans, providing 
economic opportunity for all Americans, providing economic 
opportunity for all Americans.
    And I just want to say, Mr. Secretary, I know you just 
assumed these responsibilities, I really look forward to a 
productive discussion. I hope we can have it today and I hope 
we will continue the discussion, because we are people, 
Democrats, Republicans, and on Appropriations we really try to 
work together.
    So, I hope you will be listening to our concerns, which 
come really from the bottom of our hearts and based on the 
experience many of us have had in our communities, and I do 
hope that working together, we can make some changes.
    Thank you and thank you, Mr. Chairman.
    Mr. Diaz-Balart. Thank you, Mrs. Lowey.
    Mr. Secretary, your full testimony will be included in the 
record. We look forward now to hearing from you, and so, sir, 
you are recognized for 5 minutes.
    Secretary Carson. I am delighted to hear the passion and 
the compassion from all the speakers, because that means that 
it will be much easier to work with you. Thank you for inviting 
me to discuss the Department of Housing and Human Development 
proposed budget for fiscal year 2018.
    The first Secretary of HUD, Robert C. Weaver, said that we 
must look for human solutions, not just policies and programs. 
I want our efforts to assist those in need, but also to support 
a path to self-sufficiency. At the same time, we are keenly 
focused on efficiency throughout the agency with a mindset of 
doing more with less.
    Of course we continue our mission. The budget reflects the 
President's commitment to support HUD's critical functions, 
such as to provide rental assistance to low-income and 
vulnerable households; to promote decent, safe, and affordable 
housing for Americans, and to have access to home ownership; 
and to help work-eligible families achieve independence, 
freedom from regulations and bureaucracy, and the ability to 
govern themselves.
    The President's 2018 budget also continues to provide 
rental assistance for 4.6 million households, while recognizing 
a greater role for State and local governments and the private 
sector to address community and economic needs.
    We also support borrowers through the FHA on their path to 
home ownership. This is very important for first-time home 
buyers and those on limited incomes. But again, it is a part of 
the path forward to wealth creation through investments, 
equity, and responsibility.
    For 2018, the budget proposes a set of policies in its core 
rental assistance programs to reduce cost. At the same time, we 
continue to assist current residents, encourage work, and 
promote self-sufficiency. The budget also seeks to provide 
administrative flexibilities and to streamline the complex and 
administratively burdensome calculation of income and rent.
    I am particularly interested in creating healthy homes. 
Now, as a physician I can tell you any amount of lead in our 
children is too much. The budget promotes healthy and lead-safe 
homes by providing $130 million for the mitigation of lead-
based paint and other hazards in low-income homes, especially 
those in which children reside. We also fund enforcement 
education and research activities to further support this goal, 
all of which contributes to lower health care costs and 
increased productivity.
    Turning to community development and the homeless 
population, this is where our humanity must be evident and our 
commitment steadfast. Our programs must reach out and so must 
our hearts. We must be compassionate, yet wise. HUD's homeless 
assistant grants serve vulnerable individuals and families who 
are homeless or at risk of becoming homeless through a wide 
variety of service and housing interventions, including 
homelessness prevention, emergency shelter, rapid rehousing, 
transitional housing, and permanent supportive housing.
    These programs are the vehicles used by HUD to promote 
evidence-based approaches leading to more effective use of 
resources. The budget would provide $2.25 billion for homeless 
assistance grants and supports the renewal of over 240,000 
beds.
    HUD will continue to work closely with our State, local, 
and nonprofit partners who are close to this issue to help 
continue to find efficiencies and to work to end homelessness. 
We continue to make progress in eliminating chronic 
homelessness.
    The American housing market must remain stable, secure, and 
safe, FHA mortgage insurance programs, along with the mortgage-
backed security guarantee Ginnie Mae, will continue as a path 
for responsible home buyers to have access to credit so they 
can build wealth through ownership.
    The budget includes 400 billion in loan guarantee authority 
for FHA mortgage, insurance programs, and 500 billion in 
authority for Ginnie Mae's secondary market guarantees. These 
programs would generate approximately $9.5 billion in receipts 
in 2018.
    In summary, the President's budget is fiscally responsible 
and meets the requirements of my Department. It reflects 
commitment to fiscal responsibility while supporting critical 
functions. It also administers programs to help low-income and 
vulnerable households. It helps work-eligible families achieve 
self-sufficiency and supports a path for borrowers to upward 
mobility.
    Thank you for your time today, and I look forward to 
answering your questions, and most importantly working with 
this committee to find appropriate solutions.
    [The information follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]    
    
   
    Mr. Diaz-Balart. Thank you very much, Mr. Secretary. Mr. 
Secretary, as I mentioned before, and as you mentioned, your 
budget represents a 15 percent reduction from fiscal year 2017, 
the enacted level, and it bases that funding level in part on 
rental reforms that depend on changes to statute, which, by the 
way, as I mentioned before, that is outside the subcommittee's 
jurisdiction. So it is going to depend on the authorizers 
working with you and buying in on these issues.
    So just what is your plan to engage with the appropriate 
committees of jurisdiction? If you have any idea of timelines 
for these reforms to receive full consideration and being 
implemented.
    And because here is my concern, and let us assume for 
argument's sake that if some of those things are not done, you 
know, would that require modification of your budget, or what 
alternatives then would you be willing to look at? To just kind 
of throw that in your direction.
    Secretary Carson. All right. Well, thank you, Mr. Chairman. 
And thank you for the incredible work that you have been doing 
in your district. I have had a chance to visit there with you, 
and really appreciate that.
    The authorizers have, in fact, requested that we meet with 
them, and we are extremely happy to do that and making 
arrangements to do so. You know, this is very much a 
collaborative process, and, you know, in the multitude of 
counselors is safety.

                   COMMUNITY DEVELOPMENT BLOCK GRANT

    Mr. Diaz-Balart. Let me go now to the Community Development 
Block Grant issue, and also the HOME issue. We are obviously 
hearing great concerns from local leaders on the proposed 
elimination of CDBG and HOME programs. Is the administration 
contemplating ways to address the loss of that reduction of 
community or loss of community development in affordable 
housing funding?
    For example, will there be a potential housing and 
community development funding portion in the infrastructure 
proposal? You know, this subcommittee deals with both 
infrastructure and housing. So, you know, how would you respond 
to that, and what do you think the administration is looking 
at?
    Secretary Carson. Well, certainly we have been advocating 
for housing to be included in the infrastructure bill, and 
things do seem to be moving in that direction. But obviously I 
cannot comment on that because it has not been formulated yet. 
You know, the community development block grant program, in its 
original intent, was really to provide flexibility to State and 
local governments to be able to use Federal fundings in the way 
that they saw most appropriate for the community development in 
their particular area. And that was a good mission; 
particularly worked well with the mission of HUD to provide 
safe and affordable housing with a particular focus on those 
individuals of low income.
    Over the course of time there has been significant mission 
creep, and only about 20 percent of CDBG dollars are used for 
housing. It does not mean that the other things are not good 
things, but, you know, about 15 percent is used for State and 
local administrative purposes.
    And we have to say within the budgetary constraints that we 
have what is critical. We have to prioritize very much like a 
family, who discovers that there are 12 major problems with 
their house that they only have enough money to fix six of 
them. How are they going to prioritize? You know, it is really 
hard to say to the other six, well, you are going to have to 
wait.
    But the fact of the matter is, the main purpose here is to 
be able to provide safe and appropriate shelter for millions 
and millions of American households and, therefore, that goes 
to the top of our priority list. And again, that does not mean 
that other things are not important, but it is critical that we 
be able to do that.
    It is also important to recognize that there is over $8 
billion in the CDBG pipeline, 3 billion of which was 
appropriated for the 2017 cycle. We are looking at ways to make 
sure that that money will be used in the most efficient and 
effective way, as we are with all the pipeline monies for the 
different programs.
    Mr. Diaz-Balart. Mr. Secretary, I try to lead by example. 
My time is up. So now I will recognize Mr. Price.

                               OVERSIGHT

    Mr. Price. Mr. Secretary, there have been reports, I am 
sure you are aware, that the White House has ordered agencies, 
including yours, to ignore Democratic oversight requests. Now, 
the administration seems to be saying that Democratic oversight 
has no legitimacy, that oversight is only the prerogative of 
the majority party. That seems to be the position. And if so, 
it is a new level of partisanship that is unprecedented, 
totally unacceptable, and can only worsen our gridlock.
    So, I want to ask you some questions about this, so the way 
it affects you. What is the policy of your Department with 
respect to responses to congressional inquiries? More 
specifically, do you have policy or do you have guidance that 
would prohibit or delay responses to ranking members of 
congressional committees or subcommittees with jurisdiction?
    Thirdly, is there a policy or guidance that would prohibit 
or delay responses to Democratic members of Congress?
    And finally, if such policies or guidance are in place to 
prohibit or delay responses to ranking members or to all 
Democratic members, was such a policy developed in consultation 
with the White House or the Office of Management and Budget?
    Secretary Carson. Thank you, Mr. Ranking Member, and 
particularly for your extreme concern about your constituents. 
As far as transparency is concerned with the operations at HUD, 
as far as I am concerned, that is high priority, and has 
nothing to do with the person's political party. I would be 
extremely opposed to withholding information based on party. 
And, you know, one of the reasons that I accepted this position 
is because I was horrified by the level of partisanship that 
exists in our country.
    You know, a house divided against itself cannot stand. And 
the problems that the poor in our country face are not partisan 
issues, and I am delighted that many have expressed the desire 
to work together, and I will certainly be doing that and will 
not be withholding any information.
    Mr. Price. Thank you. I am glad to hear you say that. I was 
glad to hear your colleague, Secretary John Kelly, make a 
similar declaration yesterday. I want to ask you to be a bit 
more specific, though.
    Of course we appreciate the offer of cooperation. We are 
talking here, though, about inquiries, requests, that sometimes 
take a very specific form and that require extensive follow up, 
that require a timely response. Are you saying that when those 
responses come from the minority side, as well as the majority 
side, that you would give them equal priority? In other words, 
you would not honor what the administration seems to be saying 
about the oversight being only a majority prerogative?
    Secretary Carson. Yes. I hope that is a misinterpretation 
of what the administration is saying, but I can tell you at 
HUD, we will treat all inquiries equally.
    Mr. Price. Have you had any directives to the contrary?
    Secretary Carson. I have not had any such directives.
    Mr. Price. All right. I will take you at your word. And we 
appreciate that commitment. Thank you, Mr. Chairman.
    Mr. Diaz-Balart. Thank you, sir. Mr. Chairman.
    Mr. Frelinghuysen. Thank you, Mr. Chairman. I suspect I am 
the only one on the panel that actually has ever met Secretary 
Weaver. He was a friend of my late father's and I ran into him 
on several occasions. And he often said, I would be happy to 
come up to your congressional district to be helpful or stay 
away from your congressional district if it would not be 
helpful. But he was a good man, and he was committed to the 
same endeavor you are here.

                              SECTION 811

    I would like to--and I am concerned about the fate of 
people with disabilities in your budget proposal. Certainly, 
Section 811, I am particularly concerned about Section 8. Those 
who are nonelderly oftentimes in the Section 8 program, older 
Americans, I won't say crowd out those with disabilities, 
developmental disabilities, mental disabilities. I want to make 
sure, and may I just say for the record, you may not know it, 
but in that nonelderly area, there is actually something called 
housing vouchers, and I have an amount of pride in making sure 
that people with a variety of disabilities continue to get the 
services they need and the housing they need.
    Would you talk more about your commitment, your 
Department's commitment, to those with a variety of 
disabilities? There is a broad spectrum, but certainly the 
optics of cutting a billion dollars here and the 18 percent out 
of Section 811, those are not very good optics.
    Secretary Carson. Well, thank you. Thank you for 
particularly your concern about the disabled. As you know, I 
spent 36 years in medicine, most of that as a neurosurgeon and 
most of that as a pediatric neurosurgeon, and had to deal with 
a lot of disability and----
    Mr. Frelinghuysen. That is exactly why I am--knowing of 
your background, it is important for you to----
    Secretary Carson. So, obviously I am going to fight for 
that group of people. I am going to fight for everybody, but 
with particular interest. What we have discovered, and 
particularly in the whole rental reform package, is that we are 
able to find a lot of inefficiencies and improve the way that 
services are rendered. And in continual care for permanent 
supportive housing we are getting basically 14.8 percent more 
households per dollar spent on that program, just through 
examining what was going on with waste and inefficiencies. That 
is being applied to virtually all of the programs.
    And again, for those families or those individuals who have 
particular hardships, we have waivers available for them, so 
any changes to the program that adversely affect them in a way 
that would impact upon their ability to maintain our goal of 
safe housing and secure housing, we have waivers.
    Mr. Frelinghuysen. Well, respectfully, and I know my time 
is limited, individuals with disabilities, families with 
disabilities, I am sure we are all focused on inefficiencies, 
but in many of their cases, the potential for sharp reductions 
would put those families and individuals in a very bad 
position.
    I hope that as we move towards a completion of this bill, 
that you will, hopefully, be working with both the ranking 
member and the chairman to address the needs of this very 
diverse and important community.
    Secretary Carson. We will not allow that community to be 
adversely affected.
    Mr. Diaz-Balart. Mrs. Lowey.
    Mrs. Lowey. Thank you, Mr. Chairman. Mr. Secretary, while 
thousands in Flint were tragically exposed to lead through 
drinking water, historically paint has been the most prevalent 
source of lead exposure, and much of the success we have had in 
reducing the exposure to lead has come from a partnership 
between HUD, the EPA, and the CDC, each providing expertise and 
resources. In the fiscal year 2017 Omnibus, Congress provided 
an increase to $145 million, and just a month later we received 
your proposal to cut that bipartisan investment by $15 million.

                                  LEAD

    Your own budget estimates that similar lead hazard control 
programs have a return on investment of at least 17-to-1 at a 
value of over $30 billion. Given the tremendous needs, why do 
you propose this cut? And at the current levels, how many grant 
applications are turned away due to the lack of funding?
    Secretary Carson. Okay. Thank you for your concern about 
lead. That is something that, obviously, I am very concerned 
about having worked for 36 years in Baltimore and seeing the 
effects of that lead exposure. It is approximately 310,000 
children per year are adversely affected, and those are the 
ones that we know about.
    You know, we have altered the considerations for lead 
action to make them consistence with the CDC at 5 micrograms 
per deciliter, helping to establish a national standard for the 
first time.
    In terms of the funding, based on the previous two cycles 
we suggested a $20 million increase, so from $110 million up to 
$130 million. At that time we did not know that you would 
recommend $145 million, which we will happily accept, but we 
did not have the ability to do that at the time of the budget. 
So that does not reflect disconcert. It reflects just the 
opposite and we feel very strongly about that.

                                  SHOP

    Mrs. Lowey. Well, that is good news. Thank you very, very 
much and I look forward to working with you on that.
    In the couple of minutes I have left I wanted to talk about 
the SHOP program, which awards grants to national and regional 
nonprofits to purchase home sites and develop or improve 
housing for those with low incomes.
    It is a really good program because I have visited them. 
The home owners are required to put in sweat equity towards the 
construction or rehabilitation of their homes, and in fiscal 
year 2017 Congress funded SHOP at $10 million. We have heard 
from advocacy groups who would like to see the program funded 
at $15 million, not eliminated.
    Mr. Secretary, you have spoken about the importance of home 
ownership to our country and our economy, so why should we 
eliminate a program that increases home ownership among the 
low-income and first-time home buyers?
    And I also want to say SHOP grantees have raised a 
significant amount of private leverage, bringing in more than 
$2 billion of investment into communities. So when you take 
away the Federal dollars, you take away that ability to 
leverage and create these investments. I am hoping that we can 
work together on this program as well.
    Secretary Carson. Well, I would be delighted to work with 
you on the whole concept of home ownership. It is so critical 
and it is the principle mechanism whereby family wealth is 
generated in this country.
    Again, we have to work within the constraints of what we 
have, but I am always happy to work with you on that.
    Mrs. Lowey. Well, I thank you so much. I will even give you 
back 45 seconds. Working with you on these programs would 
really be a privilege, so I thank you----
    Secretary Carson. Thank you.
    Mrs. Lowey [continuing]. Very much for your commitment. 
Thank you.
    Mr. Diaz-Balart. Mr. Dent, you are recognized.
    Mr. Dent. Thank you, Mr. Chairman, and good morning. Mr. 
Secretary, thank you for your service to our country.
    Secretary Carson. Thank you.

                             CDBG AND HOME

    Mr. Dent. Just a few things. As others have already 
mentioned here on this panel, the President's budget does call 
for eliminating both the CDBG program and the HOME program, 
among others. In the communities that I represent I have seen 
the importance of affordable housing developments and other 
programs that have been made possible for leveraging both the 
CDBG and HOME funds.
    Just earlier this week, on Monday actually, before I came 
down I attended the grand opening of an affordable senior 
living center in Allentown, Pennsylvania, my home town, that 
made use of home funds and Federal housing vouchers to bring in 
private capital to finance this particular project. As 
demonstrated by the project, Federal funds can serve as a real 
catalyst and leverage private investment for development.
    Its justification for eliminating funding for CDBG and HOME 
programs the administration stated, in part, that it recognized 
that State and local governments are better positioned to 
address overall economic development needs, and that evolving 
affordable housing activities to State and local governments 
would be a more appropriate solution to addressing these 
challenges.
    While certainly I agree that the State and local 
stakeholders should have the most control possible over their 
needs and decision making, eliminating these Federal funds 
would seriously eliminate their ability to bring capital, to 
bring in private and State and local government investment for 
these important projects. So these funds will be eliminated.
    How does the administration expect that the States and 
localities would be able to attract the needed private 
investment for affordable housing and other projects? And while 
the budget states that State and local governments should be 
the ones to address these challenges, it does not provide any 
sort assistance relief or other mechanism to replace the 
programs taken away.
    Secretary Carson. Thank you, sir. I would draw your 
attention to RAD.

                                  RAD

    Mr. Dent. To what? I am sorry.
    Secretary Carson. RAD, Rental Assistance Demonstration--
    Mr. Dent. Yes.
    Secretary Carson. Here is a program that does a tremendous 
amount of leveraging of public dollars at a national average of 
about 19-to-1, and is able to rehabilitate many of these 
multifamily public housing situations, convert others. And 
those are the kind of things that we are very much behind.
    And, again, I do not want to give people the impression 
that I do not like the things that have been done before. I 
think that the effort that people have put into these and some 
of the benefits are very laudable.
    But we are working within a different framework here, and I 
know it has been talked about for years and years, fiscal 
responsibility. We have to get on track, but compassion, I 
think, also involves thinking about future generations and what 
we are doing to them if we just continue to think about what is 
going on in the here and now.
    So I am very happy to work with people on ways that we can 
use the funding that we do have. But it is absolutely essential 
that we do not allow the most vulnerable people in our society 
to be discarded and thrown out on the streets as we look at all 
the other programs.
    Mr. Dent. I would agree, Secretary. I just want to convey 
to you the concerns that I have heard from the leaders in 
cities like Allentown, Bethlehem, and Lebanon, Pennsylvania, 
Republican and Democrat, that these two programs in particular 
have real value to them.

                                  HCAP

    Another issue, too, that I am very concerned about is the 
Housing Counseling Assistance Program, and that provides 
housing counseling services to home owners and tenants, both 
pre and post purchasing, and can help struggling home owners 
prevent foreclosure and assist them in avoiding difficulties in 
the first place.
    In the case of pre-purchase counseling, these services are 
able to teach a person to fish, so to speak, instead of only 
providing a single instance of monetary assistance. And the 
services have had a demonstrable, positive impact for those who 
participated.
    In the wake of the national housing and foreclosure crisis, 
Congress created the National Foreclosure Mitigation Counseling 
Program in 2007, to provide counseling to struggling home 
owners. Many entities that made use of these housing counseling 
funds also then received funding from the NFMC.
    And as the country has obviously recovered quite a bit from 
the housing crisis, the NFMC has been phased out. Bottom line 
is I was encouraged to see that they finally had requested 
level funding with the Further Continuing Appropriations Act of 
2017 for the Housing Counseling Assistance Program. Could you 
please elaborate a little bit on the administration's decision 
to support funding for this particular program?
    And finally, do you think it may be prudent to increase 
funding for this program in light of the NFMC's winding down, 
so that buyers are prepared for the responsibilities of home 
ownership and divert a future crisis?
    Mr. Diaz-Balart. Mr. Secretary and Mr. Dent, I fear that we 
are going to have to get to that question later. I apologize to 
Mr. Dent.
    Mr. Dent. Well, I will ask it in the second round.
    Secretary Carson. I had a dynamite answer for it.
    Mr. Diaz-Balart. There you go.
    Mr. Dent. I am here for the second round. Yield back.
    Mr. Diaz-Balart. Thank you, Mr. Dent. Mr. Quigley.
    Mr. Quigley. Thank you, Mr. Chairman. Thank you, Mr. 
Secretary. Speaking as someone well-acquainted with the medical 
issues, Doctor, I appreciate you being here.

                                 HOPWA

    The HOPWA program, Housing Opportunities for Persons with 
HIV/AIDS, is facing a 7 percent cut. Your reaction to that just 
given the understanding of what the program means for Americans 
living with HIV.
    In Chicago, about 23,000 people were living with HIV in 
2015. The viral suppression rate for others, that means the 
viral load is so low that the person cannot transmit HIV, was 
48 percent in Chicagoans. That is about 18 percent higher than 
the national average. We have worked hard to achieve this rate.
    It is interesting, a sample of persons who lived in HOPWA 
housing in Chicago, 66 percent were virally suppressed. That is 
much higher as well. You seem to be today merging passion, 
compassion, and efficiencies. The HOPWA program seems to be 
doing all those as well. Your reaction given that to the 
proposed cut?
    Secretary Carson. Sure. First of all, I am, along with you, 
happy to see the tremendous progress that has been made in the 
treatment of HIV/AIDS. And many people are able to lead 
completely normal lives now, so things are changing for the 
better in that sense.
    I had an opportunity on my listening tour to visit a HOPWA 
facility. It was beautiful. The people there were 
extraordinarily happy. And one of the things that impressed me 
the most was the executors who were telling me that at first 
there was a lot of opposition, and now they have reached a 
point where they almost have to turn away people in the 
community who are trying to help. And that facility was built 
through public-private partnerships.
    Those are the kinds of things that represent sort of the 
new model. The old model was the government came in with a 
whole bunch of money and said build this facility for people 
with AIDS, build this facility for low-income people in this 
area, et cetera. The new model is the government sees a program 
and then facilitates public-private partnerships by creating 
win-win situations. And I think that is going to provide much 
better footing for allowing people to develop to their full 
potential, so that we do not actually need so much aid for 
people. But we have to lay the foundation to do that.
    Mr. Quigley. Well, according to your own agency there are 
about 390,000 people eligible for HOPWA through this program 
that can currently only service about 60,000 households, and a 
7 percent cut only makes that worse.
    Secretary Carson. And the same can be said about affordable 
housing in general. We have three to four times as many people 
in need of it as we are able to provide. But if we continue 
along the same kinds of ways that we have been doing it for the 
last several years, we are treading water.
    Mr. Quigley. Well, you mentioned----
    Secretary Carson. We need to do something that----
    Mr. Quigley. Respectfully----
    Secretary Carson [continuing]. Will expand.
    Mr. Quigley. Respectfully, though, you talked about 
priorities being those most vulnerable. Every study I have seen 
indicates that one of the most important factors in suppressing 
the viral load of HIV-positive Americans is stable housing, as 
you would imagine, for a variety of reasons.
    So, to your earlier point, this seems to be working against 
helping those most vulnerable, most exposed from a passion, 
compassion point of view, but clearly from a dollars point of 
view. Because people who are HIV-positive go off their 
medication, they are going to be an extraordinary cost as well 
given that their treatment is upset and they are going to get 
sick.
    Secretary Carson. I do not----
    Mr. Quigley. And they are going to potentially make others 
sick.
    Secretary Carson. I do not disagree with you. But, again, 
the pie is only so big. We need to make the pie bigger. If we 
can make the pie bigger, we can make more slices.
    Mr. Quigley. Well, now we are talking the same thing, 
making the pie bigger. Thank you.
    Secretary Carson. Okay.
    Mr. Diaz-Balart. Thank you, sir. Mr. Vice Chairman, Mr. 
Joyce, you are recognized.
    Mr. Joyce. Thank you, Mr. Chairman, and Mr. Secretary, 
pleasure to see you today. Thank you for being here. As you are 
well aware, many of our districts still see the effects of the 
housing crisis, and they are still struggling to cope with the 
aftermath a decade later.

                              FORECLOSURES

    A particular concern in my district is home foreclosures 
and, subsequently, vacant properties that have caused blight 
throughout once thriving communities. Cities end up owning a 
large percentage of these properties and, therefore, have the 
responsibility of maintaining or demolishing them, but this has 
proven overly burdensome, so these abandoned properties often 
remain vacant and in a dilapidated state. Consequently, they 
are devaluing nearby homes and serving as sanctuaries for 
criminal activity.
    Does your Department have any plans to complement the 
initiative taken by the Department of Treasury through the 
Hardest Hit Fund, refurbish these communities? And secondly, do 
you have any recommendations as to how the fund can operate 
more effectively and efficiently?
    Secretary Carson. Well, I am glad you brought that up. 
Thank you. Yes, we are working hand-in-hand with Treasury and 
with several of the departments, quite frankly. The blight 
issue is severe because a lot of those houses are used for 
criminal activity, and they promote disease as well. So the 
long-term cost of them is quite significant.
    And we are looking for ways to better use all the dollars 
and to more rampantly authorize the demolition of these kinds 
of facilities. There has been previously a lot of red tape 
involved in getting that done, and we are trying to reduce that 
very significantly so we can quickly move to take care of that 
program.
    Mr. Joyce. I would like to help you to that extent, but the 
other part, obviously, is when these abandoned homes become 
city property, they have to be boarded up. Boarding up is a 
telltale sign to a criminal that here is a place that you can 
continue to do your criminal activity, whatever that may be.
    There is a clear boarding requirement in lieu of plywood 
for vacant and abandoned properties that have been expanding 
across the Nation through Fannie Mae, Freddie Mac, and the VA. 
They have begun reimbursing for the full cost of clear boarding 
given its cost efficiency and its long-term benefits.
    Has your Department done any recent assessments on the 
benefits of clear boarding technology in preserving vacant and 
abandoned homes?
    Secretary Carson. I believe that is something that is being 
looked at, but I have not been given a full appraisal on that 
yet. We will look into that.
    Mr. Joyce. Please. It is something that as you go through 
these neighborhoods you would have no idea which----
    Secretary Carson. It makes sense.
    Mr. Joyce [continuing]. One is a residence. Yes. Thank you.
    Secondly, I will move on quickly since I see I have a 
little bit of time remaining here, as you know, earlier this 
spring our subcommittee had the pleasure of meeting with 
Inspector General Montoya.
    Secretary Carson. Yes.
    Mr. Joyce. His testimony is insightful and I appreciate the 
work that both of you are doing to ensure the efficient and 
proper use of our taxpayer dollars.

                             HUMAN CAPITAL

    I would like the opportunity to follow up on an issue that 
he raised during the hearing that is an ongoing concern to me, 
and that is HUD's human capital. A 2015 survey by HUD stated 
that fewer than half of HUD employees felt their training needs 
have been addressed. A July 2016 GAO report further echoed 
those findings.
    Can you please elaborate on the initiatives HUD is 
currently carrying out to better equip its employees, and has 
the Department implemented a new strategy for its hiring 
authority to better target qualified candidates for employment?
    Secretary Carson. Yes. Our Department of Human Capital is 
in the process of being beefed up, so to speak, as are several 
of our departments. Many of the findings that Inspector General 
Montoya found, there were 11 material weaknesses, very, very 
legitimate. I have looked at it, I have talked to him about 
him, and we are going to address all of them, but want to 
really do it in a more holistic manner rather than just 
pinpoint things at a time. So we have hired a COO because you 
need an operator. That is one of the things that I have 
discovered in my many years in the corporate world, and we are 
going to be nominating a CFO and a CIO.
    And we will be able to really merge our effort to solve 
each of those 11 material weaknesses.
    Mr. Joyce. Well, I wish you Godspeed to that end. Thank 
you, Mr. Chairman. I have no further questions at this time.
    Mr. Diaz-Balart. Thank you, sir. Congresswoman Clark, you 
are recognized.
    Ms. Clark. Thank you, Mr. Chairman, and thank you, Mr. 
Secretary, for being with us today. I was struck by some things 
in your testimony. One was your statement that we must be 
compassionate, but wise, and also that as you are looking to 
reduce costs, you would assist current residents, encourage 
work, and promote self-sufficiency.

                            HOUSING VOUCHERS

    So I am hoping you can help me put together those goals 
with a quarter of a million Section 8 vouchers that would be 
lost under this budget proposal. I am sure you are aware the 
vast majority of rental assistance in this country goes to 
households that are composed of children, elderly, and the 
disabled.
    Secretary Carson. Yes.
    Ms. Clark. And by ``vast majority'' I mean in 
Massachusetts, that is 90 percent of the households that 
receive Federal rental assistance. In the chairman's home State 
of Florida, that is 91 percent. In the ranking member's home 
State of North Carolina that is 92 percent. So a vulnerable 
population makes up, overwhelmingly, closing in on 100 percent 
of the assistance recipients.
    And I want to tell you about a constituent in my district. 
She is 76 years old. She has a gross income from Social 
Security of $18,025 a year. She receives a $5,000 deduction for 
her medical expenses, which means under the current formula 
using adjusted income she pays $188 per month in rent.
    Under your reforms she would pay $450 a month. That is an 
increase of over $3,100 a year or 17 percent of her entire 
gross income. Never mind the vouchers that we are just going to 
lose, that every housing group, whether at home or nationally, 
has said there is absolutely no way attrition can make up for 
that.
    So, how does this square? I have been thinking, like, how 
does this square with your statements about being compassionate 
and wise and taking care of our current residents and self-
sufficiency?
    And when you say the pie needs to be bigger, I guess my 
question to you, is it ultimately you are being held to 
constraints by this administration, that you are forced to make 
these sort of draconian and heartless cuts that are so 
damaging?
    Secretary Carson. Well, it is a back-and-forth process to 
try to reach a compromise on where things should be. Obviously, 
you know, my goal is to use with the great efficiency anything 
that we have. As far as the specific example of the woman you 
gave, there are cutoffs in terms of the formula that is used so 
that people do not experience what you said she is going to 
experience.
    If that, in fact, is happening, there is a problem, and we 
also have hardship exemptions, particularly for the elderly and 
for the disabled.
    Ms. Clark. I am curious about that statement with the 
hardship waivers because as these programs already do not have 
sufficient funding, they are serving the very lowest income 
people in our country. So the idea of a hardship waiver around 
that seems to beg the point, I just do not see the efficiency 
that we are gaining in this when we are cutting off a quarter 
of a million vouchers that are such a lifeline for such a 
vulnerable population.
    Secretary Carson. Okay.
    Ms. Clark. And if we are looking at that like building that 
path, as you said, to self-sufficiency, but then we are taking 
away the community development block grants, the Choice 
Program, the SHOP program, in fact, every incentive that helps 
create robust, public-private partnerships. Where are those 
incentives in this budget?
    Secretary Carson. Well, I do understand what you are saying 
and do recognize that we have carefully looked at who would be 
impacted to make sure that we did not displace any of those 
most vulnerable people.
    Ms. Clark. How are you going to choose who losses their 
voucher?
    Secretary Carson. People who already have vouchers and who 
are already sheltered--when you talk about 250,000 people 
losing, you are talking about people who are on a waiting list. 
You are not talking about people who are already being 
sheltered. That is a different population.
    Ms. Clark. Well, that is not my understanding from my 
housing communities, but I see my time has expired.
    Mr. Diaz-Balart. Thank you, very much. Mr. Culberson, you 
are recognized, sir.
    Mr. Culberson. Thank you, Mr. Chairman. Mr. Secretary, 
thank you for your service to the country. I admire you 
immensely and the work that you have done throughout your life.
    Mr. Price, our ranking member, pointed out quite correctly 
that we need to have a more comprehensive approach to 
appropriations when we look at the Federal budget, and I wanted 
to give you an opportunity to talk about that bigger picture 
and the more comprehensive approach because as many of the 
folks in this panel have been talking about their concern about 
recommended reductions in different programs that do a great 
deal to help people that are most in need. And obviously, we 
have to have a safety net for people that are the most fragile 
and in need.

                          BALANCING THE BUDGET

    But in order to do so, I wanted to give you an opportunity 
to talk about the urgency of balancing the Federal budget and 
the bigger problem, and that is that 70 cents out of every 
Federal dollar that comes in, every one of our taxpayers' very 
precious, scarce, and hard-earned tax dollars, 70 cents 
immediately goes out the door to the automatic pilot mandatory 
spending programs: Social Security, Medicare, Medicaid, the 
Affordable Care Act, veterans benefits, principal on the debt 
and interest on the debt, which leaves the annual operating 
expenses of the Federal Government under the jurisdiction of 
appropriations 30 cents on the dollar. Yet 15 of that 30 cents 
goes to the Defense Department, which has been so badly 
underfunded that half of the Marine Corps planes--excuse me, 
half of the Navy planes cannot fly for lack of spare parts. 
Seventy percent of our young men and women in the Marine Corps, 
the airplanes, 70 percent of their planes cannot fly because of 
a lack of spare parts.
    We face great threats around the world. We are going to 
need to dramatically increase defense spending. So we are left 
with the 15 cents on the dollar to try to spread around all the 
other vital functions of the Federal Government.
    Now, you were very eloquent during the presidential 
campaign in talking about the urgency of balancing the Federal 
budget. Would you talk to us a little bit about the need for 
members of Congress to be honest with our constituents and tell 
them how urgent it is that we rescue Medicare and Social 
Security for insolvency, and the amount of money that will free 
up while ensuring that Americans that paid into those programs 
received the benefits that they have paid for.
    Secretary Carson. Well, thank you. I cannot tell you how 
refreshing it is to know that somebody actually cares about 
this. I mean $20 trillion in national debt, just back it back 
to $18 trillion, if you tried to pay that off at a rate of $10 
million a day, 365 days a year, it would take over 5,000 years. 
And this is what we are putting on the backs of our citizens. 
Every one of those thousands of babies that are born today will 
come with a debt of $60,000 on their head. This does not go 
away. So we have to work within that reality.
    Almost every society had an opportunity to do this. You go 
back to 17th century Spain, 18th century France, 19th century 
Great Britain, ancient Egypt, ancient Rome. Every one of them 
knew that there was a problem. They did nothing about it and 
they collapsed. Are we going to face the same thing or are we 
going to be smart enough to learn from their examples?
    And again, I want to emphasize the programs that we are 
talking about, the things that have been done, they are 
wonderful things. And if we had the funding, we should do them 
all; we should do them, take care of everybody. It would be a 
wonderful thing. But we cannot. Therefore, we have to do the 
most responsible things that we can do and we have to try to 
lay the groundwork for, you know, economic growth and to be 
able to take care of people. If we destroy these programs 
because we are fiscally irresponsible, we won't be able to take 
care of anybody.
    Mr. Culberson. Absolutely. And is it possible, logically, 
to even begin to balance the budget by only looking at 15 cents 
on every Federal dollar?
    Secretary Carson. I do not think so.
    Mr. Culberson. Impossible. So I really welcome the help of 
my Democratic colleagues. I know my Republican colleagues are 
committed to paying off that national debt, which is a terrible 
thing to pass on to our children and grandchildren.
    Secretary Carson. But we can still do it if we start now.
    Mr. Culberson. But we can still do it. If we start right 
now, people who are 45 years of age or younger, Social Security 
will not be there for them. If you are 54 years of age or 
younger, Mr. Secretary, the Medicare hospital fund can only pay 
50 cents on the dollar. These are hard realities that we in 
Congress, the Republican majority--this is why I believe Donald 
Trump was elected, because people are sick and tired of the 
debt, of the deficit, of the inaction, the refusal of the 
Congress and the President to deal with reality. The country 
expects us to get her done and balance the budget and 
accomplish these things so that you have the money that you 
need to take care of the most vulnerable and fragile in our 
society. Would you agree?
    Secretary Carson. I would agree and I thank you for your 
willingness to talk about it. I think a lot of people, of your 
colleagues, actually understand this, but it is not a popular 
thing to say.
    Mr. Diaz-Balart. Thank you, Mr. Culberson. Mr. Young.
    Mr. Young. Thank you, Mr. Chairman. Secretary Carson, thank 
you for being here today.
    Secretary Carson. Thank you.
    Mr. Young. I am just going to have a conversation with you. 
There are a lot of challenges that you are going to be facing 
with this Department and you have probably already realized a 
lot of that.
    Secretary Carson. Yes.
    Mr. Young. Why did you accept this job?
    Secretary Carson. Well, you know, I spent my entire 
professional career trying to give children a second chance, 
only to see many of them go back into an environment that was 
not healthy. And this is an opportunity to try to do everything 
I can to improve that environment for them, so it is a 
continuation of my work.
    Mr. Young. Do you have just a handful of real goals that 
you want to accomplish with this Department? To leave it not 
necessarily as a legacy with your name on it, but we are 
talking about the people that are impacted within the programs 
of this Department. What kind of goals do you have for them?

                             HUMAN CAPITAL

    Secretary Carson. Well, the real goals for me are to 
recognize that our people, all of them, are human capital. And 
when it comes to our Nation and the future, we have to compete 
with China and India, nations that have three to four times as 
many people as we do, which means if we do not develop our 
people, we will not be able to compete into the future. So, I 
want to see us take a much more holistic look at the problems 
that we have rather than pinpointing things and having our 
little special groups. We need to take a holistic view of 
America and what we must do in order to stay strong into the 
future.
    Mr. Young. And speaking of America, I urge you to spend as 
much time as possible outside of the district, being on the 
ground in our neighborhoods, in our communities, not just in 
urban areas, but as well in some of our very rural areas. I 
represent a district that is very rural and very urban at the 
same time. I represent Des Moines and then 16 very rural 
counties, parts of those. And so with the challenges, though, 
that you have, there are two things I think could be a hurdle. 
But if you hire the right people and have the right 
accountability, I am hoping that you can get to where you want 
to get.
    And you talked about hiring a Chief Information Officer and 
a Chief Financial Officer. We have had some hearings in this 
committee when we have had the Inspector General before us and 
talking about the real challenges with the different networks, 
technology networks and systems that you have at HUD.
    Secretary Carson. Yes.
    Mr. Young. And if some of them went now, there would not be 
anybody who was trained to replace some of the parts, or that 
software would not even be available today, and also really 
getting a grasp on the financial management of the Department 
as well. I hope you really challenge your employees to make 
those goals, just so that the Department can run better, and 
also you have got to have accountability for the taxpayer.
    Secretary Carson. Yes.
    Mr. Young. Make sure that the hardworking folks in America, 
the taxpayer dollars they send out here, they are used in a 
good manner.
    Secretary Carson. That is a huge goal, basically, to run it 
like a business. And, you know, I have spent 18 years on 
Kellogg's board and 16 years on Costco's board as well as 
started a national nonprofit and I have had, despite what the 
media will tell you, a great deal of experience in business and 
how to do things. And I have already seen enormous savings that 
can be realized by doing things in a rational way.
    Mr. Young. Well, I want you to know that many of us here on 
the committee, we want to work with you for the benefit of the 
American people and to help those who are struggling to get 
that opportunity to just reach that higher ladder of self-worth 
and economic worth as well, and to be able to give back to this 
great country some day. Thank you.
    Mr. Diaz-Balart. Thank you, sir. Mr. Valadao.
    Mr. Valadao. Thank you, Chairman. Thank you, Secretary, for 
your time today and your testimony.

                              REGULATIONS

    In your testimony, you highlighted that HUD is weighed down 
by too much bureaucracy and unnecessary regulations. This is 
evident in my district where a public housing agency was 
awarded a grant of over $3 million last December. Six months 
have passed since the announcement of this award and the agency 
is still yet to see those funds. How are you proposing to 
reduce regulation and bureaucracy in order to ensure your 
Department is able to appropriately and efficiently direct 
these funds to the individuals who are desperately in need?
    Secretary Carson. Thank you so much for that question. That 
has been a pet peeve of mine for a long time, bureaucracy. And, 
you know, I define bureaucracy as people who care more about 
the rules than the goals. But we have appointed a task force, 
as has been asked for by the President in Executive Order 
13777, and we are looking at every single regulation. And also, 
we have open comment period and during my national tour, which 
will be continuing, listening particularly to our local HUD 
employees and to the people who administer the programs, 
finding out from them what are the things that keep you from 
being able to move efficiently and effectively, and dealing 
with those directly.

                         COMMUNITY PROGRAM CUTS

    Mr. Valadao. All right. And then in my district, my 
district has many small communities with a very limited tax 
base. These communities depend on Federal community development 
funding for housing, infrastructure, community facilities. For 
example, in unincorporated areas, like Del Rey, Earlimart, 
Richgrove, and Lamont, all within my district there in 
California, developers of affordable rental housing utilize a 
combination of funding sources in addition to the private 
equity they raise through the low-income tax credit, especially 
in small towns or rural areas. Very often, these include key 
HUD funding programs like HOME and Community Development Block 
Grant. And I know you touched on it a little bit earlier with 
the chairman's questions, but I did not really hear a 
substitute. So I would like to know what your substitute--or 
what do you propose to keep these projects viable for low and 
very low-income wage earners?
    Secretary Carson. Okay. Well, first of all, keep in mind 
that many of those projects that have been set in motion 
through some of those grants will be continuing. The CDBG 
funding is not really meant to take care of the debt service. 
It is more like collateral. And the effect of those projects 
will extend, in many cases, for decades and will generate funds 
which can then be used for the debt service.
    But in terms of the public-private partnerships, the use of 
things like the low-income tax credits, you know, we are 
working with the Treasury Department and across multiple silos 
to make sure that no matter how we end up we will have programs 
that encourage the public-private partnerships because there is 
so much more money in the private sector than there is the 
government, particularly considering the conversation that we 
just had about national debt.

                           RURAL COMMUNITIES

    Mr. Valadao. I guess I have got time for just one more. HUD 
is tasked with supporting housing needs across America in 
urban, suburban, and rural communities alike. However, the 
previous administration and Federal policymakers and Congress 
often overlooked the needs of rural America, including the 
rural communities like my district and many of those 
represented up here. How much of HUD's funding goes toward 
supporting housing needs specifically in rural communities and 
how can HUD programs be improved to make the most of those 
funds and ensure consistent practical support is provided to 
rural communities?
    Secretary Carson. Well, obviously, we are very concerned 
about the rural communities and of working with the Agriculture 
Department. We have combined programs to deal with housing 
needs in the rural communities.
    But the other thing about rural communities I think is 
incredibly important is the use of internet. In many cases, it 
is nonexistent. I have went into a lot of places when I was 
campaigning, I was absolutely shocked about the communication. 
And of course, that makes a big difference for the 
opportunities that are available for those young people. And 
now that we have reached the point in our society where a lot 
of work can be done from home, it makes it even more important.
    So, yes, we are paying attention to that, very much so.
    Mr. Valadao. Well, I appreciate that and I appreciate you 
bringing up the internet, too. So, thank you, Chairman, my time 
is up.

                               PACE LOANS

    Mr. Diaz-Balart. Thank you, sir. Mr. Secretary, last summer 
HUD began allowing FHA to ensure mortgages on properties with 
what is known as PACE loans, property assessed clean energy 
loans, on them, which potentially puts them in a second lien 
position. The second lien position potentially increases the 
risk for the MMI funds and taxpayers. Now, the MMI fund was 
forced to draw $1.7 billion from Treasury 4 years ago to cover 
the projected losses on loans that are guarantees, and it 
reached its statutory research level just 2 years ago. The 
Federal Housing Finance Agency prohibits Fannie Mae and Freddie 
Mac from insuring properties with PACE loans. Do you believe, 
Mr. Secretary, that a second lien position actually could 
create a greater risk to the MMI fund and to taxpayers?
    Secretary Carson. Well, I think it is a potential problem 
and one that I had a number of conversations with some of your 
colleagues in Congress and one which we are looking at very 
carefully. A lot of the people who get involved in those PACE 
loans do not really understand them. They do not understand 
what they are getting involved with. And at the very least, 
there has to be mandatory counseling before someone gets into 
something like that, but it does create real problems.
    Mr. Diaz-Balart. So you are going to be looking; I am 
assuming and I am hoping, that you are going to be 
reevaluating.
    Secretary Carson. Absolutely.
    Mr. Diaz-Balart. Reevaluating the policy?
    Secretary Carson. Absolutely.
    Mr. Diaz-Balart. And I do not know if you have had a chance 
to see there is a bill, the PACE Act, Protecting Americans from 
Credit Exploitation.
    Secretary Carson. Yes.
    Mr. Diaz-Balart. All right. So you are looking at that as 
well?
    Secretary Carson. Yes.
    Mr. Diaz-Balart. Great, I am glad to hear that, Mr. 
Secretary. Let me change the subject.

                         VOUCHER FLEXIBILITIES

    Over 7\1/2\ million Americans depend on either public 
housing or private vouchers to afford a place to live, and I am 
speaking quickly. I always speak quickly, and I am doing it 
quicker now because I have got a lot of questions. And 
obviously, helping these people remain in stable housing is one 
of HUD's fundamental commitments, and so I appreciate you 
taking a hard look at these programs, Mr. Secretary.
    We obviously have to do everything that we can to address 
unnecessary costs. You have spoken about that. The budget 
requests a broad authority, a broad authority to provide 
waivers and other flexibilities to the PHAs, public housing 
authorities, to cut costs. Can you provide some specifics on 
what some of these flexibilities might mean and how much 
potentially they could save?
    Secretary Carson. Well, you know, the PHAs right now have 
their hands tied when it comes to operating funds versus 
capital funds. If they just had the ability to shift money from 
one to the other as needed, it would take care of a lot of the 
problems that they have, that one thing.
    Mr. Diaz-Balart. And I know that you have visited a lot of 
locals and so I am assuming that you have gotten some feedback, 
potentially some good feedback, right, as to some of the things 
that they need to be helpful?
    Secretary Carson. It has been actually quite wonderful to 
sit not only with the HUD employees, and most HUD employees are 
outside of Washington, D.C., by the way, but also to talk with 
the tenants, the beneficiaries. And one of the things that has 
been very enlightening is that those communities that have 
tenant associations tend to do much better, tend to work much 
better with the people who manage, and tend to have a much 
higher quality of life. So we are encouraging the establishment 
of those in all of the units.

                             NEGATIVE RENTS

    Mr. Diaz-Balart. Thank you, Mr. Secretary. I do not have a 
lot of time, so I had a question which I am going to have to 
kind of reword. The issue of what is known as negative rent 
payments, which, you know, some people say that it is, well, it 
is, you know, you are paying people to live in public housing, 
but I would tell you that obviously I believe that certain 
costs like electricity, et cetera, I know that those are real 
costs. Your budget makes some proposals and I just look forward 
to working with you because I believe we should probably not be 
treating folks whose utilities are not paid in HUD programs 
differently than those that are because obviously those are 
real costs. And I just had some questions, but I just wanted to 
throw that your way as an issue of concern and something that I 
look forward to continue to working with you.
    Secretary Carson. It is a big issue of concern for a lot of 
the tenants, also, and people who are on the waiting list and 
who are looking for some equity and some fairness. So I look 
forward to working with you to make sure that we do things in a 
fair and equitable way.
    Mr. Diaz-Balart. Thank you, Mr. Secretary. One of the 
reasons I get such great cooperation from the members of the 
subcommittee to keeping on time because I try to do the same 
thing. So anyways, Mr. Price.

                       PUBLIC/PRIVATE PARTNERSHIP

    Mr. Price. All right. Thank you, Mr. Chairman. Mr. 
Secretary, you have referred to your listening tour, glad to 
see you doing that, going around the country to communities and 
HUD field offices. I know you went to your native Detroit, you 
went to Jacksonville, Miami, Columbus, Ohio, other places. You 
have said some things along the way and I want to know about 
how they relate to this budget proposal. You said you want a 
housing policy that delivers more bang for the buck, partly by 
encouraging, leveraging more State and local support as well as 
private sector investment. You also have spoken often of 
partnerships, one of the best tools we have to revitalize the 
communities, public-private partnerships, partnerships among 
levels of government. And I am going to say that is music to 
our ears in the Research Triangle area of North Carolina. That 
has been our stock in trade.
    I am not sure the notion of partnership, though, and of 
leveraging is brought out by this budget. And so I do want to 
ask you, on your tour did anybody suggest that it was a good 
idea to totally eliminate the seed money? Did anybody suggest 
it was a good idea to totally eliminate community development 
block grants, for example, or did anybody suggest that we 
should get rid of the HOME program or did anyone suggest we 
should get rid of the SHOP program? You know, it is one thing 
to have Federal seed money, it is one thing to make sure 
Federal money leverages other monies. But how does that work if 
the Federal money is totally eliminated?
    Secretary Carson. Well, the Federal----
    Mr. Price. And let me just zero in a little bit more on 
SHOP because it has been mentioned here this morning. One 
example of the kind of partnership that presumably you are 
talking about is the kind of work we do with Habitat for 
Humanity. The first time, I am sure you do not remember this, 
the first time I met you was in Raleigh, North Carolina, at a 
meeting involving Habitat for Humanity. There are three pillars 
for Habitat, three sources of the partnership that the Federal 
Government has with Habitat: CDBG, which often does the 
infrastructure for these communities; SHOP; and the section for 
capacity building. Every one of those programs is eliminated in 
this budget. So did anyone suggest that? Did anyone suggest 
that that is the way to an effective kind of catalytic role for 
the Federal Government?
    Secretary Carson. What has been suggested in all of these 
places that I go is that we do everything that we can to 
facilitate the public-private partnerships and working across 
silos with other departments, including Treasury. We are 
looking for ways to do that. I very much believe in Habitat for 
Humanity. I very much believe in self-sufficiency. But there 
are ways to do that and we are going to be working on those 
ways.
    Mr. Price. Well, the Habitat folks that I am talking to are 
just baffled by this because you know what else this budget 
does is eliminate AmeriCorps. Who do you think organizes those 
Saturday morning builds that bring all these volunteers in and 
makes sure that goes in an orderly way? AmeriCorps, national 
service. I just do not get it. I certainly get the idea of 
partnership and seed money. I mean, that is really the best way 
to spend Federal funds, not just total Federal financing of 
these efforts. But when you totally remove the core funding, 
that just seems like a formula for making these things go away.
    Secretary Carson. Well, do keep in mind that there is 
billions of dollars in the pipeline already in these programs 
as we work on ways to effectively and efficiently utilize the 
money and with the principle in mind that public-private 
partnerships are the way to go. So that is all on the plate for 
things that we are proceeding to do
    Mr. Price. Well, presumably, that means future budgets 
would not be as destructive in this respect.
    I just have a minute left here, but, you know, you have 
talked about hard choices, you have talked about the kind of 
things we want to give more emphasis to, knowing we cannot do 
everything. But I, for the life of me, do not see what is 
strengthened in this budget. One thing I thought we might see 
would be, for example, bringing back the kinds of partnerships 
we used to have with religious communities.

                              SECTION 202

    My district is peppered with 202 housing for the elderly: 
St. Joseph's AME in Durham, First Baptist in Chapel Hill, 
Cosmopolitan Baptist in Raleigh. These are congregations that 
took on the formation of, you know, an NGO and worked with HUD 
to build rental housing for the elderly, and those are 
wonderful communities. Is that the sort of thing you might want 
to bring back? I mean, what are we strengthening in this?
    Secretary Carson. Well, you know, there are probably a lot 
of things you do not see in the budget that do not necessarily 
reflect what we are going to be doing.
    Mr. Price. That is why I am asking you.
    Secretary Carson. You know, for instance----
    Mr. Diaz-Balart. Mr. Secretary, I apologize, but I am going 
to have to cut both of you off.
    Secretary Carson. Okay.
    Mr. Diaz-Balart. But we will, hopefully, get back to that. 
Mr. Valadao?

                         MANAGEMENT CHALLENGES

    Mr. Valadao. Mr. Secretary, the Inspector General states 
that your key management and performance challenges are so 
interconnected that it is difficult to remedy one without first 
correcting the other. One significant challenge is to establish 
and implement effective and required financial management 
governance. HUD has not had a clean opinion on its financial 
statements in 3 years, and HUD has not had a CFO for 2 years 
running. Financial leadership starts at the top. Where are you 
in the process of filling the CFO position you mentioned 
earlier and can you give us a timetable of when you expect to 
have a CFO?
    Secretary Carson. Yes. Obviously addressing these issues, 
as I said before, holistically, is important and you have to 
have a CFO in order to do that because many of the material 
weaknesses dealt with financial weaknesses. We have been doing 
a diligent search looking for people who are highly qualified. 
We have a number of them and we are just in the process right 
now of paring that list down and presenting it to Congress.

                        HUD FINANCIAL STATEMENTS

    Mr. Valadao. The IG has noted that HUD's key financial 
staff do not have the appropriate skills or background to 
oversee the financial statements. The most significant example 
was rounding to the nearest billion or hundred billion in the 
fiscal year 2016 financial statements. What is your plan to 
address the lack of financial knowledge at HUD and not only 
ensure that you are hiring people with the right skill sets?
    Secretary Carson. We have already addressed that issue. We 
are already staffing up with the people who have the requisite 
knowledge to deal with that. That has been a big concern of 
mine from the first week I was there.

                            HOUSING SERVICES

    Mr. Valadao. All right. And then there are nonprofits in my 
district that provide a variety of home ownership services to 
low- and moderate-income home buyers, including housing 
counseling and education for purchase and resale of HUD homes, 
providing essential secondary financing to enable families to 
purchase their first home in a sustainable fashion. These 
nonprofits provide a valuable service by building stable home 
owners who have become an important part of the infrastructure 
in their communities. Routinely these nonprofits complain about 
the onerous nature of the HUD certification process to provide 
such services, creating bureaucratic and sometimes invasive 
oversight that adds cost and complication to the organizations 
who should actually be treated as trusted partners. What will 
you do to streamline such processes?
    Secretary Carson. We have recently undertaken a 
comprehensive program to review that very issue and are making 
very significant and rapid progress on that. There is 2,100, 
you know, such organizations around the country. We are looking 
at that and moving rapidly.
    Mr. Valadao. All right, thank you. Chairman, I yield back.
    Mr. Diaz-Balart. Thank you. Mr. Quigley, you are 
recognized, sir.
    Mr. Quigley. Thanks again. Thanks again, Mr. Secretary. 
Let's talk about something that does not cost any money.
    Secretary Carson. All right.

                                 LGBTQ

    Mr. Quigley. Complying with existing law of rules and 
regulations. When Senator Brown asked you a question during the 
confirmation process, she asked if you believed that HUD 
currently provides, and I will quote, ``extra rights to the 
LGBTQ people,'' I am quoting, ``that need to be withdrawn.'' I 
believe your answer was that you did not. But either in the 
last couple weeks or months, the Department has purged at least 
six documents that involved training to emergency shelters and 
other housing that keep particularly sensitive teenagers, 
transgender teenagers, from getting kicked out on the street, 
how to comply with these things. The timing seems odd and why 
would they be removed without being replaced with substantially 
the same, if you felt they needed to be better or something, 
materials?
    Secretary Carson. Well, you may be referring to the survey 
that was pulled back dealing with LGBT youth homelessness.
    Mr. Quigley. No, I am sure this is just training materials 
given to these facilities so that the staff at the emergency 
shelters and the housing facilities can make sure that they are 
not discriminating against LGBTQ and particularly transgender 
youth.
    Secretary Carson. We have a policy of making sure that no 
one is discriminated against and are looking at all of our 
policies across the board for everybody when it comes to 
discrimination.
    Mr. Quigley. Well, not everybody is discriminated against. 
There are particular groups that have been discriminated 
against more than others obviously and that is why you have the 
training materials. That is why you have these materials 
available so that these shelters can comply with the rules. So 
why would you remove anything if your goal is not to 
discriminate against anyone?
    Secretary Carson. The only reason that we would remove 
anything is so that we can look at it and determine whether its 
effective in turn. And some of the things, we have discovered, 
were not effective and were not providing good data. We want to 
make all of our decisions based on evidence, not on ideology.
    Mr. Quigley. I go back to my original point, though. If 
these shelters, if these facilities need to know how to comply, 
just removing the existing instructions does not help. I mean, 
at the best of circumstance, when would you tell me that they 
would--are they going to be replaced and are they going to be 
designed to protect LGBTQ?
    Secretary Carson. All the policies will be designed to 
protect LGBQ and everybody else.
    Mr. Quigley. Why would you remove these and not replace 
them at the same time or at least wait until you have got a 
suitable replacement, if indeed there is a suitable 
replacement?
    Secretary Carson. As I have said, if anything has been 
removed, it is being removed in order to be looked at and 
improved.
    Mr. Quigley. And what would your timeline be to be 
replaced?
    Secretary Carson. Well, I need a specific----
    Mr. Quigley. On those six materials that were purged from 
the website?
    Secretary Carson. As soon as possible.
    Mr. Quigley. Well, I guess the bigger picture here no one 
has really gotten into it, your discussion, and I guess maybe 
this is germane, of poverty, and I am sure your words were 
different, being a state of mind. Let me just ask if your sense 
of poverty being a state of mind applies to particular groups 
or excludes particular groups given that about 14.5 million 
Americans live in poverty that are under the age of 18 and 
about 10 percent, 4.2 million, are over the age of 65. And 
clearly those were all groups that live in CHA housing. Would 
those be included in those where poverty is a state of mind?
    Secretary Carson. Well, I appreciate you asking that 
question. Because, first of all, I said partly, so it is a 
part----
    Mr. Quigley. Well, I will let you----
    Secretary Carson [continuing]. Of the state of mind.
    Mr. Quigley [continuing]. Draw the parameters.
    Secretary Carson. And secondly, recognize that the human 
brain is extraordinarily complex and it is programmed 
throughout the course of a person's life, and that programming 
determines how a person faces things. For instance, if you are 
a minor league baseball player, you come up for the first time 
at bat and you see Nolan Ryan, you say, oh, no, Nolan Ryan. He 
has got a 100 mile an hour fastball and I am probably never 
even going to see the ball. You are probably going to approach 
it differently than another minor leaguer who comes up and says 
Nolan Ryan, he is an old man, I am going to knock the cover off 
this ball.
    So the way that one approaches things makes a very big 
difference, and I think everybody knows that. Some people 
always, you know, take advantage of a situation to distort the 
meaning, but the fact of the matter is America is a very 
special place. And I know there was a New York Times article 
last week that said, you know, it is just the other way around 
in terms of the mindset and that America is the most difficult 
place for anybody to rise. And if that were the case, why would 
so many people be risking life and limb to get here? We have 
something very special. We need to preserve it. And the can-do 
attitude is a big part of what made America a great Nation.
    Mr. Diaz-Balart. On that note, Mr. Quigley, I hate to 
interrupt you, but I think we should have time for another 
quick round. And so, Mr. Dent.

                           HOUSING COUNSELING

    Mr. Dent. Yes, thank you, Mr. Chairman, and the Secretary. 
You did not get a chance to give me your blockbuster answer 
that you said you were going to give me on housing counseling, 
on the question that I had posed to you earlier. You know, we 
were talking about how, you know, housing counseling assistance 
was important and that obviously there is still a demonstrated 
need for services, particularly for people before they buy 
homes. But you were going to give me an answer, as I had 
mentioned, level funding, you know, for the housing counseling 
assistance program and feel free to answer.
    Secretary Carson. Well, I think I have already answered it 
with one of your colleagues, but we have placed an enormous 
amount of emphasis on this, recognizing that, you know, there 
used to be a time when people in this country actually knew 
about housing. Everybody when I was a kid growing up knew that 
you do not pay more than two and a half times your annual 
income for a house. That kind of information has been lost and 
that makes counseling ever more important at this time. So we 
have concentrated a great deal of effort on all of those 
housing counseling centers, all 2,100 of them, to try to bring 
consistency and to educate the people who are actually doing 
the counseling.
    But also, we are looking at the use of the internet to 
create tutorials for people because it has to be done at 
different levels. People operate at so many different levels in 
this country and the average American operates at about the 8th 
to 9th grade level. But a lot of the material is not at that 
level so we need to have it at various levels so that people 
can use it at their own pace, in addition to taking advantage 
of the housing counselors.
    Mr. Dent. Well, thank you. I have seen some real value to 
the housing counseling programs in my community. I saw it 
during the financial crisis and I have seen it since, so I just 
wanted to put a plug in for that.

                              VASH PROGRAM

    And I am just going to return to another issue that 
Chairman Frelinghuysen had discussed as it related to the VASH 
program, the HUD Veterans Supportive Housing program. My staff 
tells me that these programs have been very effective in 
reducing homelessness among veterans. In fact, in my community 
we have the Street Medicine Program, which you might actually 
find interesting, run by one of the hospitals, where we 
actually go out on the streets with medical professionals and, 
you know, sit on the streets down by the railroad tracks, along 
the river, you know, where people are living. A really 
impressive program and it is not just treating veterans, but 
all sorts of folks.
    Secretary Carson. Sure. No, I have seen it.
    Mr. Dent. And, well, I invite you to come up to our 
community in Allentown, it is really impressive.
    Secretary Carson. Can I do neurosurgery on the street?
    Mr. Dent. Well, I would never try to tell you where you can 
and cannot do surgery, Doctor. But just so my main question is 
the budget request seeks additional support, as you know, for 
the HUD-VASH program. If HUD awards all of the potential new 
vouchers, I believe the HUD-VASH program would be supporting a 
total of approximately 93,000 vouchers as of late 2017.
    Secretary Carson. That is correct.
    Mr. Dent. And then the VA cannot move forward with 
providing social services for a veteran's housing with HUD 
vouchers until in 2018 without new HUD vouchers, which the 
budget request appears to propose stopping the issuance of. And 
as you know, these vouchers are used to provide rental 
assistance for homeless veterans along with case management, 
and clinical services provided by the VA at the medical centers 
and clinics.
    Should I assume from your budget request that you intend to 
support the 93,000 vouchers that will be in place at the end of 
this year, but that you do not intend to add additional 
vouchers in the coming year?
    Secretary Carson. All the vouchers will be supported. As 
you correctly mentioned there is about 90,000, a little under 
that. About 8,000 of those are not being utilized and the $40 
million that was added in the 2017 budget brings that to 
13,000. That is an adequate number to take care of the needs 
currently, but we will--this has been a very important alliance 
between the Veterans Administration and HUD. And we feel 
extremely strongly about this and recognize that the HUD-VASH 
program has been at the leading edge of what is responsible for 
reducing homelessness in veterans by 47 percent. That is not 
good enough, obviously. We want to get it to 0 percent, but we 
will continue to work on that.
    Mr. Dent. So I will take that answer as a yes.
    Secretary Carson. Yes, absolutely.
    Mr. Dent. And if you would like to elaborate further on 
your rationale for, you know, what appears to be cuts to the 
HUD-VASH program and your plans to assist the homeless veterans 
population, feel free.
    Secretary Carson. We will always provide what is necessary, 
but, as I said, we have got 13,000 unused vouchers at this 
stage.
    Mr. Dent. Okay. Thank you. I yield back.
    Mr. Diaz-Balart. Thank you, sir. Thank you, Mr. Secretary.
    Mr. Dent. Seven seconds to go.
    Mr. Diaz-Balart. Ms. Clark, you are recognized.

                             HEALTHY HOMES

    Ms. Clark. Thank you, Mr. Chairman. Mr. Secretary, you have 
said you are particularly interested in creating healthy houses 
and healthy homes. In 2010, your Department estimated 
nationwide there was a deferred maintenance backlog of 26 
billion and that was going to grow 3.4 billion a year. But in 
this budget you are proposing to cut funding to address this 
maintenance backlog by a combined 1.8 billion. Practically 
speaking, these cuts are really going to harm efforts that are 
underway to not only modernize, but address existing health 
hazards.
    One example that has been getting some press recently are 
the Red Hook houses in New York, where the mold levels, the 
asthma rates are three times that of surrounding communities. 
How is the New York City Housing Authority, and around the 
country, how are we going to remediate that particular health 
hazard and maintain our public housing with these funding cuts?
    Secretary Carson. Thank you, that is a very good question. 
The Rental Assistance Demonstration program has been able to 
leverage Federal dollars and bring in an additional $4 billion 
recently. And if we lift the cap on that RAD program and allow 
it to expand even further, the incentives are already there to 
bring in those public-private partnerships. We find that those 
are remediating these kinds of problems much faster than the 
capital funds ever did.
    Ms. Clark. So is that the solution that you see expansion 
of the RAD, lifting the $185,000 cap? Because----
    Secretary Carson. That appears to be working.
    Ms. Clark [continuing]. One of my concerns is that I think 
that RAD has been a valuable option. It certainly has been in 
Cambridge housing in my district. They have taken advantage of 
it, but I have never seen it used without having corresponding 
CDBG funds. Ever. Do you have an example where that has ever 
happened?
    Secretary Carson. I can supply you with some examples for 
that. We can send them over to you.
    Ms. Clark. That would be great. Because, you know, it is of 
grave concern that these programs work as an ecosystem.
    Secretary Carson. Yes.

                              ELIMINATIONS

    Ms. Clark. And as we take out CDBG, if we take out SHOP, 
HOME, the HOME program alone, every dollar leverages $4.20 in 
local and private funds.
    Secretary Carson. You are speaking to the choir on that and 
we would never do anything to harm what we see as something 
that is the solution. The solution is the public-private 
partnerships and we are going to be working assiduously to make 
sure that we actually expand on those regardless----
    Ms. Clark. So then why are you eliminating them?
    Secretary Carson [continuing]. Regardless of under what 
name we do it.
    Ms. Clark. Well, I am getting more puzzled as we go. If you 
agree and I am preaching to the choir, why are you wholesale 
eliminating HOME, Choice, SHOP? I am confused.
    Secretary Carson. I again go back to my initial statement. 
We have a certain amount of pie and we have a number of people 
who are very much depending on a large portion of that pie in 
order to stay sheltered. If we do some peripheral things, a lot 
of those people will lose their housing.
    Ms. Clark. So I think this brings me back to the discussion 
you were having around the deficit. The best way to address the 
deficit and the best way to--you know, is to build a robust 
economy.
    Secretary Carson. Right.
    Ms. Clark. And to make sure that we are getting people to 
work and that we are investing--
    Secretary Carson. Agreed.
    Ms. Clark [continuing]. But that comes with investments. 
And as I look across this entire administration's budget, we 
are seeing dramatic cuts in work training programs--we just met 
with Secretary of Labor yesterday--in apprenticeships, in 
vocational schools, and career and technical education, 
afterschool programs, college affordability student loans. This 
budget as a whole is a recipe for killing our economy. And when 
you are saying I get the importance of leveraging private 
dollars to help us solve our housing crisis, but you are taking 
away all the incentives necessary to leverage those dollars, I 
am baffled at how you think----
    Secretary Carson. I think it depends----
    Ms. Clark [continuing]. This is going to work.
    Secretary Carson. I think it depends on which set of data 
you want to look at in terms of what is happening with the 
economy, whether it is improving or whether it is getting 
worse.
    Ms. Clark. Well, there will be no pipeline of ideas, 
innovation, or an educated work force if we put this budget in 
place. And I think we can look at any data that we want and you 
will find that that is the dangerous truth for the American 
people with your budget and the rest of the administration's 
budget.
    Secretary Carson. Well, the only thing I can assure you is 
that we are going to work extremely hard to use every dollar in 
this budget to get the biggest bang for the buck, and we are 
happy to work with all of you to make sure that that happens.
    Mr. Diaz-Balart. Thank you. We do not have a lot of time, 
so what I would like to do then, Mr. Price, is I am going to be 
very brief. We will go to you and maybe with that we end it. Is 
that all right, Mr. Price?

                      HOMELESS ASSISTENCE PROGRAMS

    Okay. Mr. Secretary, again, since I do not have a lot of 
time, let me talk. This committee has been really supportive of 
HUD's performance-based focus on homeless assistance programs. 
As I am sure you know, the Department shifted its emphasis from 
a transitional housing approach to a housing first approach. 
And by the way, I need to thank some of your team, your staff, 
who have worked with, for example, Miami providers, and you 
were there.
    Secretary Carson. Right.
    Mr. Diaz-Balart. And I think some great progress has been 
made. But it goes without saying that this shift, you know, 
there are some growing pains and some folks and some areas have 
been hit. We recognize that in our 2017 bill and provide 
resources to communities that lost some funding through this 
approach. And I do not know, I do not expect you have it with 
you, but it would be great if you could provide us with a 
status of additional emergency solution grant funding provided 
in--of that 2017 funding for communities that lost funding in 
the grant application, you know, the status of some of that. It 
would be great and I do not know if you would happen to have it 
there, I doubt it, but if not----
    Secretary Carson. I do not have it with me at this moment.
    Mr. Diaz-Balart. All right. Any idea of how you would 
envision some of those resources would be used to move homeless 
providers towards more performance-driven programs? Because 
that is key.
    Secretary Carson. Yes.
    Mr. Diaz-Balart. The performance is key.
    Secretary Carson. Well, yes, homelessness is a big issue. 
Over the last few years it has gone from 800,000 to just over 
500,000 so, you know, a lot of progress has been made in that 
area. And a lot of the things that we have been doing have 
helped with that, but it is an interagency issue and there has 
been a lot of private people who have been interested in it, 
too.
    I think the whole housing first concept is a good concept 
in the sense that if you leave somebody sleeping out under the 
bridge, they are going to end up in the emergency room and 
frequently end up getting admitted. A week of admission costs 
more than a year of shelter, you know. We have to, you know, 
look at the numbers and do things wisely for that reason, but I 
do not think we should stop at housing first. We should then 
move on to housing second and housing third. Housing second is 
diagnosing why they are in that condition and housing and third 
is treating it. Because if we truly want to be compassionate, 
then we do everything we can to put people back on their feet.

                       HOMELESS ASSISTANCE GRANTS

    Mr. Diaz-Balart. Mr. Secretary, I wanted to bring up, and, 
again, I am sensitive to the time constraints, I have concerns 
about the budget, the reduction of funds for homeless 
assistance grants, but it is something that we will have ample 
opportunity to speak about in the future. And with that, and 
thanking everybody for being cooperative with me on the time 
issues, let me recognize the ranking member to finish up.
    Mr. Price. Thank you, Mr. Chairman. Mr. Secretary, I do 
want to give you a chance to finish your answer if there is 
more to say beyond what you said in response to the other 
members, about what the positive side of these hard choices 
looks like. In other words, that hard choices are being made, 
it implies that some things are being cut, but others are being 
strengthened, that there are tradeoffs. I do not see much other 
than just indiscriminate meat axe cutting, to tell you the 
truth. And we were talking about maybe some things that were 
not immediately evident just for the budget numbers, so I want 
to give you a chance to respond on that.

                              BUDGET CUTS

    I also want to say something, though, about the broader 
budget situation we face. And what I would think is a kind of 
all-purpose explanation we want to avoid.
    We know that we need to get our country's fiscal house in 
order and most people I think know that that requires a 
comprehensive approach. We have two examples from the 1990s 
about balancing the budget, about paying off a good chunk of 
the national debt. It is not too hard to know how that was 
achieved, but it did involve some political pain. It involved 
some tax increases, it involved some entitlement reductions, 
and it involved discipline in discretionary spending. We, for 
reasons that are very well known, cannot seem to get back to 
that today. But I tell you just simply saying we are under 
fiscal constraints and we simply have to whack away at the 
discretionary domestic budget, there are two things wrong with 
that. It is the worst of both worlds.
    Number one, you will never balance the budget that way. We 
can eliminate your budget entirely and still have a fiscal 
problem, so it is fraudulent as a formula for achieving fiscal 
discipline.
    And number two, it is destructive in terms of the things a 
great country must do to build its economy and to build its 
future. It is a formula for disinvestment across the entire 
Federal Government. So worst of both worlds and it gives us the 
budget that is before us today.
    So I will take a back seat to no one in terms of wanting to 
confront that larger fiscal picture, but I do not accept that 
the HUD budget before us is a necessary product of fiscal 
responsibility. Far from it. It really is a disinvestment 
budget without redeeming features that are evident to me.
    I hope we can do better, I hope we can work with you and 
with the administration to, first of all, get the overall 
budget numbers in a better place and then within those numbers 
write a housing bill that really addresses our country's needs. 
But you were cut off in mid-answer and I want to give you a 
chance to----
    Secretary Carson. Sure.
    Mr. Price [continuing]. Give us a little more, a glimmer of 
hope, if you will.
    Secretary Carson. Well, tell us how you really feel about 
it. But no, I was saying that there was some things that are 
not in the budget that are very important. For instance, the 
concept of our vision/opportunity centers that we want to put 
in the proximity of all public housing. These are places 
usually that are boarded up right now, but the buildings will 
be repurposed and we will be putting into them people who can 
help the people have a vision about what actually goes on in 
the world.

                           COMMUNITY OUTREACH

    If you go to a lot of disadvantaged communities, you ask 
the kids what do you want to do when you grow up, you get about 
five answers. But there is 1,000. We need somebody to expose 
them to the other 995 and talk about how to get there.
    We need to have daycare. And the reason that that is so 
important is because a lot of women who have babies out of 
wedlock, their education stopped at that first baby, and they 
need a safe place to put that baby so they can get their GED or 
their associate's degree or their bachelor's or their master's 
and learn how to take care of themselves and, more importantly, 
teach that to their children. That is the only way you break 
those cycles.
    And also, mentorship programs have been demonstrated to 
have a profound positive effect in terms of people being able 
to finish high school. Why is that important? You look at the 
Brookings study on poverty. It said that there were three 
things that a person could do that would reduce their 
likelihood of living in poverty to 2 percent or less: number 
one, finish high school; number two, get married; number three, 
wait until you are married to have children. So things that we 
can do to sort of address the data, not the ideology, so that 
we can get people moving in the right direction. Those are 
things that will be sponsored completely by the private sector.
    I have already talked to people in the business world. They 
are very happy to sponsor these just like you sponsor stadiums 
all over the country because we live in a country of people who 
actually are very compassionate. And it has been very different 
from other parts of the world and we need to take advantage of 
that.
    Mr. Price. Thank you. Thank you, Mr. Chairman.
    Mr. Diaz-Balart. Thank you, Mr. Secretary. Mr. Secretary, 
again, let me first thank you for your time and your staff. I 
would ask the Secretary to--the committee staff will be in 
contact with your budget officer regarding questions for the 
record. I know that I have some questions and I know that other 
members will also submit those questions as well. If you would 
please ask OMB to return the information for the record to the 
subcommittee within 30 days from Friday, that would allow us to 
publish the transcripts of today's hearing and make obviously 
informed decisions when we are crafting the fiscal year 2018.
    Mr. Secretary, as you saw today, you have in this 
subcommittee folks who are knowledgeable and interested in 
these issues and, frankly, to a great degree, even to the 
details, and I know you have had the opportunity to see that. 
And obviously it is also clear that a lot of us, including I, 
have a lot of concerns about and disagreements with your 
budget, but there is no disagreement or concern on my part as 
to why it is that you are doing what you are doing and your 
service to the country, and so that makes me feel good.
    I am comforted in the fact that you have volunteered for 
this job and we know that it is a very difficult job in the 
fact that you are giving up a lot to do this, so just know that 
and I think all of us look forward to working very closely with 
you.
    Secretary Carson. It is going to be a pleasure to work with 
all of you. I appreciate that.
    Mr. Diaz-Balart. Thank you, Mr. Secretary. Mr. Price, any 
closing thoughts?
    Mr. Price. Thank you, Mr. Secretary and Mr. Chairman. Look 
forward to the weeks ahead. We have some serious challenges. We 
are ready to take them on.
    Secretary Carson. Amen.
    Mr. Diaz-Balart. Thank you. With that the meeting is 
adjourned.
    Secretary Carson. Okay.
    
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                                           Thursday, June 15, 2017.

                      DEPARTMENT OF TRANSPORTATION

                                WITNESS

HON. ELAINE CHAO, SECRETARY, DEPARTMENT OF TRANSPORTATION
    Mr. Diaz-Balart. Before I begin, I know that all of our 
minds are a little bit, in many ways, elsewhere because of the 
incidents yesterday at the baseball practice field. And I just 
wanted to, once again, mention how all of us are praying for, 
obviously, the Whip, Mr. Scalise, the two brave police officers 
that were injured along with a member of the staff, and a 
former member of the staff, who were injured. So we cannot 
forget them and we do not forget them, and we wish their full 
recoveries.
    With that, this morning we welcome Secretary Chao to 
testify on the fiscal year 2018 budget for the Department of 
Transportation. I do not have to tell any of you that Secretary 
Chao comes to this position with, frankly, one of the most 
impressive records of public service that anyone will ever see.
    Having served as chair of the Federal Maritime Commission, 
Deputy Secretary of the Department of Transportation, director 
of the Peace Corps, and Secretary of the Department of Labor, 
and, you know, not to mention a number of leadership positions 
in the private sector and the not-for-profit sectors.
    Madam Secretary, you have led large and complex 
organizations, and I will tell you that I think all of us agree 
that we are fortunate to have someone of your expertise, of 
your experience, of your knowledge as heading DOT, as we are 
facing some challenges of course. We always face challenges, 
but nobody is more prepared than you. So we are grateful that 
you have agreed to, once again, come back to public service, as 
you always have.
    Thank you for your service to our Nation. I look forward to 
working with you to maintain and improve the safety of our 
transportation system, all the while ensuring that our 
infrastructure investments lead to economic growth and really 
to improve the day-to-day lives of the American people, which 
is really what we are talking about.
    The budget request for the Department of Transportation is 
16.3 billion in discretionary budget authority, and a total of 
75 billion in total resources, including obligation limitations 
for service transportation and aviation programs.
    Now, safety is this committee's top priority for DOT. I am 
pleased that the budget request places priority on safety 
programs, Madam Secretary, funding several programs consistent 
with the FAST Act and continuing many of the safety priorities 
in the previous 17 bills. So I think that is, frankly, very 
good news, in addition to focusing on safety of our 
transportation network.
    Now, we obviously must ensure that we grow our economy and, 
yes, through fiscally responsible transportation investments. 
And in doing so we must make sure that we do not leave rural 
America and economically distressed areas behind. As we make 
the tough decisions that face us for the 2018 budget and 
beyond, I want you to know that I want to work with you, that 
we want to work with you to make sure that we continue, for 
example, air service to small towns and remote communities, and 
I want to make sure that we address the passenger rail needs 
for our rural communities.
    I also want to take a careful look at transit as an 
important component of our transportation network. We can and 
we must make, obviously, tough choices in Federal spending. We 
all have to do that, we have to be willing to do that.
    I have some concerns about the administration's proposal to 
terminate the Department's work with local governments on 
several dozen transit projects, but I look forward to working 
with you and through all of those very difficult issues.
    I look forward to a spirited discussion about the 
administration's proposal to transfer air traffic control 
operations and facilities to a corporate nongovernmental 
entity. We are dealing with a monopoly, whether it is the 
monopoly controlled by the government or a monopoly controlled 
by somebody else, it will still be a monopoly.
    I have not been shy of saying that I believe that we should 
maintain the air traffic control system that is accountable to 
the public. It is owned by the public and it should be 
accountable to the public, and I do not see any other way to 
achieve this than to continue our congressional oversight role.
    And I believe that preserving the public's voice, frankly, 
is the only way to maintain our airspace as a national asset 
and protect access to all users, commercial aviation, general 
aviation, and, this is key, new entrants, such as drones and 
commercial space operators. And frankly, in many cases we do 
not even know what they are, but we know that it is going to 
happen now, it is starting to happen now. So we must, to the 
maximum extent possible, protect the right of the traveling 
public as well.
    It is not a secret, our airspace is the most complex in the 
world with an unmatched safety record. We can work together to 
build on that safety record, and I look forward to it, and open 
the airspace to more and more users. Also make sure that we are 
not limiting it, but that we open it to more and more users as 
technology changes, some of which are beyond our current 
imagination, but that are starting to happen right now.
    So, Madam Secretary, just know that I look forward to 
discussing this issue with you today, and for not only today, 
but continuous conversations in the weeks and the months ahead. 
Secretary, I appreciate your attention and the attention the 
President has given to infrastructure last week. Improving our 
Nation's infrastructure is an area where we can find common 
ground and make real improvements to the daily lives of the 
American people, not only in their ability to get around, but 
also, frankly, to help our economy.
    So, I really, really look forward to working with you, and 
my colleagues with this subcommittee to make smart investment, 
to go after waste, to cut red tape, and to protect the 
taxpayers. So, again, first thank you for your service to the 
Nation, thank you for appearing before us today.
    And with that, I would like to yield now to my ranking 
member. Mr. Price, you are recognized, sir.
    Mr. Price. Thank you, Mr. Chairman. Welcome, Madam 
Secretary, we are glad to have you here this morning. I want 
to, first, associate myself with the chairman's remarks about 
yesterday's tragedy, and the concern we all have for our 
colleague Steve Scalise, of course. And in particular, I want 
to acknowledge David Bailey, one of the police officers who was 
injured, and we are very proud of him. He is a North Carolina 
Central University graduate, and we have followed his progress 
over the years.
    We really have come together, as we must come together, as 
an institution and as a country, I believe, in face of this. 
And I hope some good will come of it, but, in the meantime, we 
are dealing with real personal difficulties, tragedies that 
command our attention and our good wishes.
    We are here this morning to examine the 2018 budget request 
for the Department of Transportation. This system that we are 
funding facilitates the flow of commerce and impacts every 
American. We know that investing in transportation 
infrastructure keeps us safe and improves our economy, it 
creates jobs.
    Unfortunately, we also know that we are not doing so well, 
according to objective observers such as the American Society 
of Civil Engineers, whose 2017 report card gives America's 
infrastructure a grade of only D+. The report concludes that we 
need to invest nearly $4.5 trillion just to bring our 
infrastructure from poor to good condition.
    We have heard a lot recently about the need to reduce 
bureaucratic red tape to encourage more private investment in 
transportation projects. These are laudable goals, but they 
will not deliver the transformative results we need without a 
core of robust Federal funding. To maintain and modernize and 
improve our Nation's transportation system, we must take bold 
steps to reduce the backlog of deferred maintenance to move our 
transportation infrastructure back to a state of good repair.
    And we must make strategic investments in new technologies 
to make transportation safer and more efficient. The challenge 
before us is clear, and it will only get worse without action 
on the part of Congress and this administration. I have to say, 
I think this budget proposal falls short of that mark. The 
result largely adheres to the funding levels agreed upon in the 
FAST Act for programs that rely on trust fund dollars, but 
overall budget authority will be cut by $3.1 billion, or 16 
percent.
    The brunt of these reductions falls upon discretionary 
accounts designed to advance public transit rail and other 
multimodal projects that are critical to our Nation's 
transportation future. For example, the highly competitive 
Capital Investment Grants Program would be discontinued for all 
projects that currently lack full funding grant agreements 
despite the fact that funding for this program was increased 
just 2 months ago in the bipartisan Omnibus package.
    Ending the CIG program would completely upend dozens of 
badly needed transit projects across the country, including two 
in my home district in North Carolina. In most cases existing 
funding amendments from State and local governments would no 
longer be enough to move forward with construction, dooming 
many projects to failure. We should be encouraging more State 
and local investment in transit, Elimination of the Federal-
matching dollars will have exactly the opposite effect.
    Equally concerning is the proposal to zero out TIGER 
funding. Here, too, I could point to successful projects in my 
district, in my State, that leverage funds from other sources, 
so this is a very successful grant program. It supports 
innovative projects, multijurisdictional projects of regional 
and national significance. They are difficult to fund through 
traditional Federal programs. TIGER grants are awarded on a 
competitive basis, and every member here knows how competitive 
that process is, how far the demand for funding exceeds the 
current supply.
    Congress provided 500 million for another round of TIGER 
grants in the Omnibus package; it is zeroed out in this budget. 
Passenger rail also fairs poorly. The Department seeks to end 
Amtrak's national routes by slashing investment in the national 
network of Amtrak by more than 50 percent.
    The request also proposes a 28 percent cut, incredibly, for 
the heavily traveled Northeast Corridor. Meanwhile Amtrak is 
breaking ridership records, and more Americans are looking to 
rail to meet their traveling and commuting needs. Support for a 
robust national rail system has been reaffirmed by members of 
both parties, including the most recent long-term 
Transportation reauthorization bill.
    And again, we have strong validation from North Carolina 
where traveling from Charlotte to Raleigh, or the other way, 
has become a model of efficient and pleasant transportation.
    Madam Secretary, you stated on several occasions that 
safety must remain a top priority of the Department, yet the 
budget request would cut funding in several critical safety 
accounts. I will just quickly tick them off: the operations and 
research account at NHTSA, the safety and operations account at 
Federal Railroad Administration, the pipeline safety account, 
the Pipeline and Hazardous Material Safety Administration, and 
aviation safety activities within the FAA's operations 
accounts.
    I am puzzled by these cuts. I hope they do not represent a 
lack of commitment to key safety functions. We need to know how 
the Department plans to maintain safety with fewer resources at 
its disposal.
    Quickly, briefly, I want to shift gears and address air 
traffic control. The administration has endorsed the outlines 
of Chairman Shuster's privatization proposal. I have grave 
concerns about this. I have said that repeatedly. This would 
sever FAA's aviation safety and air traffic control components. 
The government-sponsored corporation model envisioned by 
Chairman Shuster and President Trump would reduce transparency 
and oversight, while allowing for fee increases, diminished 
access to the national airspace for many aviation stakeholders.
    It would also represent an unprecedented giveaway of 
taxpayer-funded assets to an untested private entity. And it 
would threaten the progress we are making, threaten FAA's 
ongoing efforts to modernize air traffic operations under 
NextGen. That process has accelerated in recent years, 
delivering billions in savings to airlines and customers. So, 
the budget request not only unrealistically assumes the quick 
transition to a private ATC entity, it also defers capital 
investments in FAA's air traffic control infrastructure for the 
upcoming fiscal year. That seems to be directly at odds with 
the notion of improving ATC operations.
    Of course the major transportation put forward by the 
administration is the much-discussed infrastructure initiative, 
and this is something that has potential I believe for 
bipartisan support. But we do not have enough to work with. It 
is a six-page document. Rather, they mention 200 billion in 
Federal outlays that supposedly would leverage 800 million in 
private and non-Federal investment, and, of course, we would 
need more details about this to even begin to assess it.
    Before I close, we need to acknowledge that we still have 
no budget resolution, no topline spending number, no 
subcommittee allocations. There is talk of rushing to assemble 
a Republican-only Omnibus package. I think that is a recipe for 
failure. It would represent a complete abandonment of the 
regular order.
    Even if we reject the administration's draconian cuts to 
nondefense discretionary spending, the appropriations process 
is at risk of completely breaking down if we are forced to 
write our bills to sequestration levels. We have seen this 
happen in the past year when we lacked bipartisan budget 
agreements. Bipartisan budget agreements are required given the 
requirements of the Budget Control Act if we are going to have 
workable allocations so that we can cooperatively write the 
Transportation, HUD, and other appropriations bills. I know we 
want to work in this cooperative fashion, but we also know what 
is going to happen to enable us to do that.
    Madam Secretary, I look forward to your testimony today, 
working with you to ensure that vital transportation programs 
are adequately funded. So, thank you. And thank you, Mr. 
Chairman.
    Mr. Diaz-Balart. Thank you, Mr. Price. Now I am 
particularly honored and pleased to welcome one of the busiest 
leaders in this entire process, and that is chairman of the 
full committee, Mr. Frelinghuysen.
    Mr. Frelinghuysen. Thank you very much, Mr. Chairman, Mr. 
Diaz-Balart. It is a pleasure to welcome back Secretary Chao to 
another stint serving our public so well. Thank you very much 
for being here, Madam Secretary. We look forward to your 
testimony.
    Let me just add on to both Dr. Price and Mr. Diaz-Balart, I 
think many of us were shocked to the core yesterday. Obviously, 
we pray for the quick recovery of those that were badly 
wounded, and, may I say, we have raised the profile of the 
important role of our Capitol Police.
    But may I say, a lot of what you do, Secretary, is you have 
within your purview, or just outside your purview, the men and 
women who protect our harbors, our tunnels, our airports, our 
train stations. Sometimes we pass by them, we acknowledge them, 
but sometimes we do not expect that at some point they might 
have to put their lives on the line. I would just like to take 
this opportunity to recognize their role and raise their 
profile.
    Today's hearing is an important part of our oversight 
duties to the committee. After all, the power of the purses 
resides here on Capitol Hill. As Secretary of Transportation, 
you are responsible for maintaining and improving our Nation's 
infrastructure and protecting it. As we pursue policies and 
programs to grow our economy, so, too, we must grow our 
infrastructure to support it.
    In that context, I would like to bring up a critical 
project for our national economy, the Gateway Project and the 
Hudson Tunnel Project. As you may know, the Northeast Corridor 
Regional Rail, encompassing over 50 million people between the 
District of Columbia and Boston, produces over $3 trillion in 
output, equal to 20 percent of our gross national product.
    Safe and reliable passenger rail service is essential to 
that economic opportunity, whether it be the East Coast, the 
West Coast, or somewhere in between.
    Rebuilding the Hudson Tunnel is of vital importance to our 
region, and certainly to my home State of New Jersey. Given the 
clear benefits of these projects and the disastrous 
consequences of inaction, I am concerned about the fiscal year 
budget provision limiting funding for capital investment 
grants, what we commonly refer to on the committee as New 
Starts. I am eager to hear, either in this setting or outside 
this room, how the Department plans to support this vital 
infrastructure proposal for the New York/New Jersey region.
    I have also taken note of the administration's proposal to 
spend $200 billion on targeted Federal investments to leverage 
private sector resources so that the end result is at least $1 
trillion in total infrastructure spending. I would like to hear 
more about the specifics for this proposal, and how it will 
improve our infrastructure planning for State and local 
governments.
    We welcome you, Madam Secretary. And thank you, Mr. 
Chairman, for the time.
    Mr. Diaz-Balart. Thank you, Mr. Chairman. Madam Secretary, 
obviously your full written testimony will be submitted, 
included in the record. You are recognized now for 5 minutes. 
Thank you so much.
    Secretary Chao. Good morning and thank you for being here 
to discuss the President's fiscal year 2018 budget request for 
Transportation. My colleagues and I share your thoughts and 
prayers for those injured in yesterday's incidents, and we are 
so grateful that the Capitol Police were there.
    On transportation, we all share the same goal: to ensure 
that our country's transportation systems are safe, dependable, 
and ready to adapt to transformational new technologies. The 
President's 2018 budget represents a bold vision for our 
transportation infrastructure. The administration has carefully 
studied our current spending patterns, and it has taken a 
closer look at programs that may not be meeting their intended 
purposes, have outlasted their usefulness, or could be replaced 
with new initiatives that will better address future 
transportation needs.
    The President is requesting $76 billion for transportation. 
This request fully funds surface transportation programs 
included in the FAST Act and provides steady State funding for 
the majority of other transportation programs. The budget 
provides new policy direction in several key areas.
    First, our transportation infrastructure is crumbling and 
in urgent need of attention. To address this concern the 
President has proposed long-term reforms to change the way 
infrastructure projects are regulated, funded, delivered, and 
maintained. The President's plan will create incentives for 
additional State, local, and private funding and will ensure 
that Federal funding is leveraged to maximize infrastructure 
investment. The President has identified a total Federal 
commitment of $200 billion for infrastructure improvements, of 
which a portion will be directed towards rural America.
    Next, the President's fiscal year 2018 budget also includes 
a proposal that represents a major shift for the FAA. Despite 
spending billions of taxpayers' dollars, over decades of effort 
the government has not been able to fully implement state-of-
the-art air traffic control technology. Air traffic controllers 
still use paper strips to keep track of flights and pilots are 
guided using 1960s technologies, radar, for example. Congestion 
and delays cost more than $25 billion annually in higher fuel 
costs, lost productivity, not to mention our quality of life. 
By 2020, air passenger traffic will soar to over 1 billion 
annually. Air freight is expected to more than double over the 
next three decades. Drones and unmanned aircraft systems will 
have to be integrated into the national airspace. Without 
change, the current air traffic control system will be unable 
to keep up.
    So this administration has proposed moving air traffic 
control operations to a nonprofit, nongovernmental, independent 
cooperative. The safety regulatory oversight functions will 
remain at FAA. And this would also involve and solve a 
longstanding conflict of interest issue with the operating 
entity, air traffic control, regulating its own safety. More 
than 50 countries worldwide currently have this structure of 
separating out air traffic control and air safety regulations.
    Finally, the President calls for reforming some of our 
other transportation programs, like FTA's capital investment 
grants programs, the discretionary portion of the Essential Air 
Service, and Amtrak's long distance routes. The President also 
recommends that we revisit the TIGER grant programs.
    The infrastructure principles outlined by the President 
will highlight alternative ways to fund worthy projects using a 
different funding formula moving forward. It also will 
recognize the administration's commitment to rural America as 
we revitalize our transportation infrastructure.
    Thank you very much for the opportunity to appear before 
you today to discuss the President's budget. I am actually 20 
seconds ahead of time. [Laughter] I will be more than glad to 
answer your questions.
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    Mr. Diaz-Balart. Thank you, Madam Secretary. And we try to 
keep on time here. So we will proceed with the standard 5-
minute rounds, alternating sides. I want to thank the members 
of the subcommittee. We are pretty strict here, Madam 
Secretary, in trying to keep to the timeline and, of course, I 
get a lot of help from the subcommittee chairman in doing so.
    With that, Madam Secretary, as I mentioned in my opening 
remarks, I have drawn a very bright line to really my 
opposition to transferring air traffic control systems to what 
in essence is a corporate monopoly. It is a monopoly that will 
remain a monopoly, the question of who is going to run it. And 
so I am obviously wide open to finding ways to improve the way 
that FAA makes decisions and investments. And I welcome, by the 
way, working with you and your suggestions as to how I can even 
do my job or our job better. We are always subject to doing a 
better job.
    The problem, though, is that I am concerned that the 
proposal would reduce or even eliminate, frankly, the public's 
voice in something as critical as our national air traffic 
controller. While I am open, and I have for decades been open, 
to privatization and competition, this is not privatization. 
This is a monopoly that will remain a monopoly except that all 
the assets that have been paid by the taxpayer will be 
transferred over to this other group. And I think it 
potentially could, frankly, create great risk if we were to 
hand decisions over to an unaccountable corporate board. And so 
that is the only level of accountability that I am hearing in 
this bill through this board of directors. But I just do not 
see how a board of directors made up of good people, but from 
different industries, are going to do anything other than 
support the issues of their industries, of their special 
interests.
    So, yes, I agree that our current system, like everything 
else, is imperfect, but it does give a guaranteed voice to the 
public interests. And so that is one of the issues, Madam 
Secretary, that I want to continue to talk with you about.
    In addition to basic accountability to the public, I also 
want to make sure that we preserve our Nation's airspace as a 
place of innovation. I know that is something you are committed 
to as well. You know, we are seeing an explosion of new 
entrants into the space, as you mentioned, drones, commercial 
space operators, new general aviation technologies. And in this 
next generation we will be moving people and goods through the 
air in ways that are beyond what we see today. And so that is 
why, again, handing that decision to a board controlled by 
special interests, I am sure they will be good men and women, 
to me would be like handing the streets over to the taxicab 
commission right at the time when Uber and Lyft were entering 
into the marketplace.
    But I do want to say where one of my greatest concerns is. 
Right now the FAA has extensive engagement with communities 
when new airline routes are planned that could bring, for 
example, higher levels of noise over neighborhoods, and we hear 
that in this subcommittee all the time. So right now the public 
can go to Congress if the FAA is unresponsive. But the 
corporation would have no such obligation when they create new 
routes or when they change the frequency of those routes. So 
this goes to the health, the home values, the basic quality of 
life. So, you know, how do we address this issue with a board 
that has no direct public accountability? None whatsoever.
    So, again, I have other concerns and we will talk about 
those at a future time, Madam Secretary. I just wanted to, 
again, start that conversation, and we are going to have many 
more, but to just throw some of the issues that are concerning 
to me. So I would like to ask a couple of questions about it. I 
do not have a lot of time.
    So would the traveling public have any say on new fees 
charged by this new entity? And I know it is in the early 
stages, so I do not know if it is even fair to throw these 
things at you right now, but, you know, any idea about, for 
example? Would the public have any say, any input as to any new 
fees that would be charged?
    Secretary Chao. The public would have the same recourse to 
appeal to their congressmen and to their senators on fees like 
they do now. That part will still be the same. What we are 
seeing now is a very congested airspace. Our airspace is the 
safest in the world, but delays and congestion plague air 
travel. And with increased traffic, with new entrants like 
drones and unmanned aircraft having to be integrated into the 
national airspace, we need to upgrade the technology to ensure 
that new entrants and that there is a system that can respond 
to all this new traffic and congestion and delays.
    And this is not a new idea. It has been proposed decades 
ago by the Clinton administration. What we are trying to do is 
to allow the air traffic control system to have the latest 
technology with which to manage the airspace. So for noise, for 
example, noise regulation would still remain at the FAA. So 
what we are doing is actually addressing one of the major 
issues that has been longstanding, and a conflict of interest 
of the air traffic control system regulating its own safety. We 
are separating that out. There will be a safety component which 
stays with FAA, the air traffic component will be independent 
and separate.
    And on noise, that still stays with FAA. So citizens will--
the new air traffic control system has to respond to the same 
regulations, the pollution regulations, noise regulations. And 
if people are unsatisfied, they would have the same recourse. 
They can go to their congressmen, their senators as well.
    Mr. Diaz-Balart. Madam Secretary, I try to keep myself on 
time as well, but we will continue this conversation.
    Mr. Price.
    Mr. Price. Thank you, Mr. Chairman. Madam Secretary, I want 
to first ask for your assurance on a matter that includes the 
entire appropriations process, and it has to do with the 
reports that the White House has ordered agencies to ignore 
Democratic oversight requests. The administration seems to be 
saying that Democratic oversight has no legitimacy, that 
oversight is the prerogative of the majority party. That is a 
new level of partisanship that is unprecedented. It is 
unacceptable, will only worsen gridlock in Washington. So I 
want to just ask for your assurance on this. What is your 
policy? What is the policy--it is your Department with response 
to----
    Secretary Chao. I will be more than glad to answer that, 
but I would like----
    Mr. Price. Let me ask you a couple of related questions----
    Secretary Chao. Sure.
    Mr. Price [continuing]. About your policy in your 
Department. Is there any policy or guidance that you know of 
that would prohibit or delay responses of ranking members of 
congressional committees or subcommittees? Is there any policy 
or guidance that would prohibit or delay responses to 
Democratic members of Congress? And if such policies are in 
place to prohibit or delay responses to ranking members or 
other Democratic members, was that developed in consultation 
with the White House or the OMB?
    Secretary Chao. There are a lot of questions. So let me 
say, first of all, it has always been my policy to work on a 
bipartisan basis with members of Congress. Having said that, I 
think it is worthwhile clarifying that previous 
administrations' policy regarding oversight requests has always 
been to work with the majority chairman. And I will quote from 
a DOJ opinion, ``The executive branch's longstanding policy has 
been to engage in the established process for accommodating 
congressional requests for information only when those requests 
come from a committee, subcommittee, or chairman authorized to 
conduct oversight.''
    This opinion also says, with regard to responding to a 
request from individual, ``Members who are not committee 
chairs, the executive branch has historically--historically--
exercised its discretion in determining whether and how to 
respond following a general policy of providing only documents 
and information that are already public, or would be available 
to the public, through the Freedom of Information Act.''
    So in terms of requests from members who are not committee 
chairs, regardless of party, the DOJ opinion makes clear in its 
final paragraph that the response depends on the circumstances. 
I am reading obviously from the recent opinion that has been 
made public. It probably puts into writing what has always been 
the established precedent.
    I am not here to anger anybody and I will say that from my 
point of view, to the extent that I can, it is my intent to 
work fully with both sides of the aisle.
    Mr. Price. Well, that statement of intent that you just 
appended to the other things you said is the kind of assurance 
that I have gotten, and other ranking members have gotten, in 
asking your counterparts across government. So for you to 
revert to some kind of supposed precedent that there is some 
kind of unique channel to the chairs of the--who represent the 
majority party, the way I asked the question represents my 
historical understanding and my experience in numerous 
committees and in numerous administrations. I have never heard 
what you articulated made explicit or, for that matter, as 
just--it just does not reflect my experience. And so there is 
something new here.
    And what does your assurance mean? I mean, you say where 
possible you will respond. What kind of----
    Secretary Chao. Well, I do not want to get into an 
argument, and I am not being disrespectful, but I have been in 
the Federal Government before, in the executive branch, and 
this has been the precedent before regarding oversight. I am 
not talking about information relevant to policy making, but 
rather investigations inquiries.
    So, but having said that, there are circumstances--I can 
say to you I will work with both sides of the aisle the best 
that I can. And there will be some issues on oversight that it 
must come from the chairman, whether it is Democrat or 
Republican. That has been a longstanding practice. And I have 
been in government in the executive branch when the majority in 
Congress was Democrat.
    Mr. Price. Well, I must say it has not been my experience. 
And the kind of issues the chairman just raised, the kind of 
things that are our day-to-day grist for the mill here, airport 
noise, you know, the kinds of bureaucratic snafus that develop, 
I mean, we have so many things that we need to bring up with 
you in these hearings and questions for the record.
    Secretary Chao. And we welcome that. The issue is 
oversight. This is not a blanket policy of not answering 
requests. It is an issue specifically related to oversight. So 
we, of course, will help members on both sides of the aisle 
with technical assistance, with information, with constituent 
services. You will find that in my record, you know, we always 
are very, very responsive. But I think in this particular case 
it refers to oversight.
    Mr. Price. Well, oversight is about oversight of executive 
performance, agency performance. The Appropriations Committee 
is the epitome of congressional oversight and it has 
historically been nonpartisan, bipartisan. That the 
administration is called to account no matter who the president 
is, no matter what the party division is, the administration is 
called to account by this committee. That is the American 
system, the power of the purse.
    Secretary Chao. I totally agree with you.
    Mr. Price. And the notion that that would somehow in your 
mind be segmented----
    Secretary Chao. It is not only in my mind, sir.
    Mr. Diaz-Balart. Well, it looks like it is in the 
administration's.
    Secretary Chao. This is a memo that we have received.
    Mr. Price. Yes, that is right. And I--all right.
    Secretary Chao. Yeah. And it is public.
    Mr. Price. You have made it much more explicit than other 
secretaries have and we certainly will need to explore this 
further.
    Mr. Diaz-Balart. Thank you, Mr. Price.
    Mr. Culberson.
    Mr. Culberson. Thank you, Mr. Chairman. Secretary Chao, I 
appreciate your service to the country and I can confirm that 
that has indeed been the policy under President Obama. And when 
he was first elected, under the 4 years when the Democrats were 
in the majority here, the administration followed that exact 
same policy that you just read. So you are exactly right.
    And, of course, we all work together. I know Mr. Price 
works very well, we all work together very, very well on any 
oversight or concerns that, Mr. Price, the minority have. I 
know our chairman would work with them arm-in-arm to make sure 
that the appropriate oversight is conducted.
    But I wanted to focus on a superb speech that President 
Trump gave with the Secretary at the Department of 
Transportation, Madam Secretary, where he pointed out that it 
only took 4 years to build the Golden Gate Bridge and only 5 
years to build the Hoover Dam, and less than 1 year to build 
the Empire State Building, but that today it can take 10 years 
and far more just to get the approvals and permits needed to 
build a major infrastructure project. He pointed out that, for 
example, in highway permitting it includes 16 different 
approvals, including 10 different Federal agencies, being 
governed by 26 different statutes. And in the case of an 18-
mile road in Maryland, they had to build--excuse me, get 
approval and permitting. They spent $29 million for an 
environmental report weighing 70 pounds and costing $24,000 per 
page.
    President Trump quite correctly said at that speech, and he 
is absolutely right about this, I was not elected to continue a 
failed system. I was elected to change it. All of us in 
government service were elected to solve the problems that have 
plagued our Nation. We are here to think boldly, we are here to 
think big, and rise above petty partisan squabbling. It is time 
to start building our country and we are here to take action.
    He is absolutely right. I am tremendously proud of the bold 
agenda that he has taken to cut through all the red tape when 
it comes to transportation. And I wanted to ask specifically, 
much of this lies within your authority. I wondered if you 
could talk to us about what you have done and what you can do 
with the authority that you already have as Secretary to 
combine the party process, to let them make sure they go in 
parallel to accomplish what the President has asked.
    And then, number two, this committee is better equipped 
than any other to help the President achieve his agenda with 
our authority over the power of the purse. That, as James 
Madison said, is the single most powerful check and balance on 
the executive branch.
    So, number one, what can you do and have you done to speed 
up the permitting process? And then, secondly, what can the 
chairman and this subcommittee, working arm-in-arm in a 
bipartisan way, do to help simplify the permitting process for 
the critically needed infrastructure projects that President 
Trump is so correctly focused on?
    Secretary Chao. The administration issued an executive 
order very early in the administration coming on board. And 
this executive order takes a look at the regulatory aspects 
that delay infrastructure projects, and so----
    Mr. Culberson. It is to set up the council that was 
designed to--is that the council that the President set up?
    Secretary Chao. Yes, that is the infrastructure council, 
number one; deregulatory council as well.
    Mr. Culberson. To examine the process and come up with a 
report and recommendations?
    Secretary Chao. Right. And, as you mentioned, it talks 
about ways in which the permitting process can be streamlined: 
if there are sequential processes, whether they can be made to 
occur concurrently; if there are duplicative regulatory 
processes, whether that can be collapsed or consolidated. And 
this is also an effort throughout the government. So in the 
Infrastructure Task Force there are about 16 different Federal 
agencies. And so the Department of Transportation is also 
working with EPA and with Department of Defense, Army Corps of 
Engineers, with Fish and Wildlife, and many other departments 
in an effort to see how we can work better together to 
facilitate and speed along some of these infrastructure 
projects.
    Mr. Culberson. I guess really what I am driving at, and you 
are right, of course, it does need to be carefully examined and 
thought through, but the President's right that he was elected 
to think big, act boldly. What could be done to speed that up? 
I mean, we have had a lot of councils and commissions before to 
study things, but you have the authority, I believe, already to 
cut through a lot of this red tape and create parallel 
permitting, and no committee in Congress is better equipped 
than the Appropriations Committee to support you in that 
effort. The chairman has got your back, we have got your back. 
What can we do to help speed that up in order to really act 
quickly and boldly.
    Secretary Chao. Well, the President has also made it very 
clear that he would like to reduce the infrastructure 
regulatory process from 10 years to 2 years, and so he is very 
results-oriented, and we are looking at that.
    Mr. Culberson. I look forward to working with you on that. 
I know the chairman is as well, and Mr. Price. And please come 
to us with specific suggestions so that we can help that 
process along as quickly as possible. Thank you very much.
    Secretary Chao. Thank you.
    Mr. Diaz-Balart. Thank you, Mr. Culberson. We are honored 
to have the ranking member of the full committee. I know you 
have been running around between hearings, Ms. Lowey.
    Mrs. Lowey. Thank you very much, and I am sorry but we have 
a defense hearing, EPA hearing, and I have the privilege and 
pleasure of attending them all.
    Madam Secretary, we have had the opportunity to meet 
before, and I congratulate you on taking this position. But I 
am truly shocked with the report I just received while I was in 
another committee. I understand there was a question from Mr. 
Price that you have referred to the Department of Justice 
guidelines about responding to oversight requests, and that you 
stated that you will respond to committee chairs and work with 
the minority when possible. I have known you for a long time. I 
have been in this Congress for 28 years; I cannot believe that 
this is true. Does this mean if I have a request and I send you 
a substantive request you may or may not, or your Department 
may or may not respond? You could not have said that.
    Secretary Chao. I have always worked across the aisle, and 
I want to reassure the members on the dais that I will always 
work with the committee, and if there are specific incidences 
where you have not received a response, please come to me. I 
will be more than glad to work with you.
    Mrs. Lowey. So, you are saying, you said to the committee, 
but you would respond to my request as ranking member of the 
minority, as well as you would to our distinguished chair, 
which, frankly, with whom I work very closely and I have 
enormous respect? And I just want to make this clear that on 
Appropriations, we always say there are Democrats, Republicans, 
and appropriators. So, I just want to hear you say you will 
respond to requests whether we are a Democrat or a Republican. 
You do not have to agree with me, but, I think, each of us--
Democrat, Republican--deserve a response. Could you respond 
again?
    Secretary Chao. I will try my best.
    Mrs. Lowey. I will take that as a yes, you will respond 
to--I do not understand when you say you will try your best.
    Secretary Chao. I will try my best and I have some 
discretion under the OLC opinion. You know me.
    Mrs. Lowey. I do.
    Secretary Chao. And my history, I have always worked----
    Mrs. Lowey. So, just say yes, of course, I will respond to 
you.
    Secretary Chao. I cannot quite say that with regard to 
investigatory document requests. It is a narrow category.
    Mrs. Lowey. Then that leaves a question, Madam Secretary. 
So, think about it while I ask another question because I am 
really surprised that you would not say, of course, 
Congresswoman, you know me, I will respond whether it is a 
Democrat or a Republican. One more chance.
    Secretary Chao. It has always been my history to work with 
both sides. I have always done it that way and will continue to 
do so. But there is precedent that oversight questions are 
handled in a certain way. Again, we are not talking about 
requests for data or information needed for developing 
legislation or any information a member needs to help 
constituents.
    Mrs. Lowey. Let me just say this and I will get on to 
another substantive question because the chairman is being very 
generous with me. You do not have to agree with me, you do not 
have to agree with my distinguished colleagues, and we could 
have healthy debates because that is what Congress is all 
about. But I am really shocked that you would not just say, of 
course, I will respond, whether it is a Democrat or Republican 
or a citizen.
    So, I'll go on to the next question, and I would like to 
follow-up on Mr. Price's infrastructure plan question. I am 
concerned that the President's plan lacks actual funding and, 
instead, would put a burden on State and local taxpayers to pay 
for those programs. This would be particularly catastrophic in 
a State like New York, which gives more in Federal tax dollars 
than it receives from the Federal Government. You remember 
hearing that from Senator Moynihan who documented that many 
years ago.
    So, if New York is getting less in tax dollars and giving 
more, already pays some of the highest taxes in the country, it 
would be unfair, in my judgment, to force New Yorkers to pay 
for even more, particularly when many infrastructure 
developments and economic gains in New York benefit the economy 
of the entire Nation. Do you have more details about how 
President Trump plans to pay for his infrastructure plan, and 
how will you ensure this infrastructure plan does not force 
States and localities to raise taxes to pay for federally 
directed projects?
    Secretary Chao. The President has always emphasized the 
need for new infrastructure, and he has talked about a trillion 
dollars, $200 billion of that will be direct government 
funding. Some of the monies will come from sale of public 
assets, and then the remainder will be a combination of 
partnerships and cooperation between the public and the private 
sector and through leveraging the Federal dollars, which will 
be used like a seed capital that will allow more innovative, 
more creative financings. And that leveraging through public-
private partnership is actually seen more often. But, right now 
we have certain States that do not allow the private sector to 
fund public infrastructure, and so, we want to be able to let 
the private sector come in and, if they want to, fund public 
sector infrastructure projects. And if there are ways in which 
they can participate that will help alleviate the burden on 
taxpayers, I think that's something that we should welcome.
    Mrs. Lowey. Mr. Chairman, thank you for your generosity of 
time. I will just conclude by saying I am a strong supporter of 
public-private partnerships, but I am strongly opposed to a 
proposal when President Trump has emphasized infrastructure, 
and without help from the Federal Government for the new Tappan 
Zee Bridge, as you know, that is going up; and without 
redevelopment of LaGuardia Airport and Kennedy Airport. A lot 
of these infrastructure programs create real jobs and if the 
private sector wants to contribute, that is great. But I know 
you know the town of Harrison, and I know that my constituents 
would be very upset if their taxes are going up to pay for 
responsibilities of the Federal Government. It just does not 
make sense to me.
    So, I would like to continue this discussion because most 
people today who responded to President Trump were people who 
said, I am tired of paying taxes that keep going up and up, and 
President Trump was very forceful about infrastructure, 
creating jobs. So I do not think they knew when they responded 
to his comments that they are going to pay for those 
infrastructure projects.
    Secretary Chao. They are going to pay either way. If it is 
a trillion dollars in direct government funding, that is taxes.
    Mrs. Lowey. That is taxes, but it is the Federal 
responsibility, and when you see all these cuts that we have in 
the domestic side of the budget, there is a real concern.
    Secretary Chao. Which is why we need the private sector to 
be involved so we can leverage their input and their 
participation as well.
    Mrs. Lowey. I am delighted to have the private sector 
involved, but I do not want, frankly, the responsibility for 
these major infrastructure programs that the President talked 
about, and how he was going to create jobs, fall on the tax 
base of our local citizens.
    Thank you. Thank you, Mr. Chairman, for your generosity.
    Mr. Diaz-Balart. Thank you. Thank the gentlelady. I am 
going to ask the members, obviously, the ranking member of the 
full committee is always going to have some leeway, but I will 
ask the members now to please adhere to, as much as possible, 
to the 5-minute rule.
    Mrs. Lowey. Let me thank you again for your generosity and 
your constant willingness to work together on this committee in 
a bipartisan way.
    Mr. Diaz-Balart. Thank you, Madam. Thank you, Ms. Lowey. 
Mr. Young will have to be a little bit less lenient than we 
were with the chairman and the ranking member.
    Mr. Young. You just took 5 seconds off my time.
    Mr. Diaz-Balart. No, you can have those. We have not 
started the clock yet. And for being so nice, I will give you 5 
minutes and 5 seconds. How is that?
    Mr. Young. All right. Thank you, Mr. Chairman. Secretary 
Chao, thank you for being here today. Thank you for your past 
public service in other departments, and what you are doing 
today. I have already admired your bipartisan approach, your 
fair approach to your role in leadership and administration, so 
thank you for that.
    I want to talk about infrastructure. In your statement, you 
say, ``Our transportation infrastructure is aging,'' and I 
think we can all agree with that, and ``that we need a focused 
approach to address this problem.'' I think we also need a 
focused approach to address new advancements in transportation, 
new technologies, new vehicles, when it comes to taking a look 
at what an infrastructure looks like when you have autonomous 
vehicles; when you have artificial intelligence.
    Should we be looking at a different approach or a different 
way to ensure that the next transportation grid is ready to go 
for the 22nd century and not be stuck in kind of an analog 
approach as we have in the past? Do we need different surfaces, 
different tracks within roads? Do we need sensors out there? 
Will all the vehicles be talking to each other? I just want to 
make sure that we are all thinking about this as we go into the 
new century.
    And the future is here. It really is. How do you see these 
new technologies influencing an infrastructure package?
    Secretary Chao. All that you are discussing is currently 
being examined and reviewed in various aspects of the 
transportation infrastructure proposal. The infrastructure 
proposal does not just have transportation. It includes other 
departments, other areas, for example, energy, water, veteran 
affairs, and possibly broadband; that is yet to be determined. 
But what you say about autonomous vehicles on the ground and in 
the air is partly a reason why the air traffic control system 
is being considered in terms of the need for upgrade and the 
need to be kept abreast of state-of-the-art technology. And on 
the roads, we are, obviously, thinking more about how do we 
accommodate the concerns with autonomous vehicles on the ground 
in terms of traffic, but also in terms of safety, security, and 
privacy.
    So, all those issues are part of the national dialogue that 
needs to occur as we talk about this infrastructure proposal. 
It will be, actually, probably three different phases, meaning 
it will be short term, medium term, and long term. Right now, 
we are talking about the short term, which is a trillion 
dollars over 10 years; it cannot be funded as our friends on 
the other side of the aisle would like, by direct Federal 
funding. That would create a tremendous adverse impact on our 
deficit and also introduce potential havoc with the private 
sector markets with such a large injection of Federal funding.
    So, there are States I mentioned that do prohibit public-
private partnerships. While that is not the only solution, 
public-private partnerships should not be discriminated 
against, and the private sector, if capable, should be allowed 
to invest in public infrastructure.
    So, all of that is going on and there is a short-term and a 
long-term consideration of all of these issues.
    Mr. Young. We have had some very interesting hearings 
already with the private sector on the new technologies, 
autonomous vehicles, what it means, how can we adapt to it. The 
Department and this committee, we need to keep being engaged on 
this issue. But, more importantly, for us and for you and your 
Department, I think, it is imperative that we are really 
engaging the private sector every day because they are driving 
this, and with consumer demand, as well.
    I have about 35 seconds. If you add the 5 seconds, I have 
40. The Highway Trust Fund, you know, it has not been self-
sustaining since 2007. Because of advancements, again, in 
technologies, innovation, with new vehicles out there, new 
fuels, and ways to power vehicles, how do we ensure those using 
our roads and bridges are paying their fair share? You know, 
kind of pay-to-play on our roads, and are not getting away with 
not contributing? We want to make sure that we have an up-to-
date transportation infrastructure program for our roads and 
bridges. Because there could be disparity out there because, I 
think, more and more with technology, you are going to have 
vehicles who are not paying into the Highway Trust Fund, but 
are using the system.
    What ideas does the DOT have that we all should consider? 
And if you cannot name any, just give me some sense of 
confidence that you are thinking about this because we need to 
think about it.
    Secretary Chao. Well, there are various ways to fund the 
infrastructure proposal. There is a working list of 13 to 17 
under discussion. None of them are attractive. We all want the 
benefits, but there will be groups that will not like one or 
another financing solution. But the longstanding problem of the 
Highway Trust Fund has been resolved until 2020.
    But as we prepare for fiscal year 2019 budget, which is 
going to be coming up this summer, and as we talk about the 
infrastructure proposal, we have to--and I am underscoring your 
point, that funding the Trust Fund exclusively with the 
gasoline tax is not going to be sustainable. So, we do have to 
take a look at other options. And we have not yet made any 
decisions, nor any conclusions, nor any agreement among 
ourselves as to how to do that yet. But, suffice it to say, 
that nothing is off the table.
    Mr. Young. Thank you for your testimony and being with us 
today. Mr. Chairman.
    Mr. Diaz-Balart. Thank you. Mr. Quigley.
    Mr. Quigley. Thank you, Mr. Chairman. Thank you, Madam 
Secretary, for being here. I do not see the boldness. I think 
you look at what you talked about, an aging infrastructure, but 
who is using what? In our urban areas, we are about an $85 
billion state of good repair. The Chicago Transit Authority 
carries more people than Amtrak nationwide in a month. And when 
you combine the state of good repair there and with METRA, the 
numbers are staggering. These are not conducive to public-
private partnerships. I am all for those. For to use it as we 
have, this bold new idea, we are going to do this, is 
extraordinarily limited with where people are going.
    Millennials are not buying cars. They are doing rideshares, 
they are riding bikes, and, thank God, they are using public 
transportation. But I have an antiquated, 100-year-old, rickety 
transit system that is carrying more people all the time.
    In this budget, the grants, the capital investment grants, 
are cut in half. So, what are we saying? We are going to have a 
bold new idea to transport people the way we did 50 years ago. 
Where is the boldness? How does public-private partnerships 
work? And how can you assure that they are going to rebuild or 
provide positive train control in all of our light rail systems 
and around the United States as a whole?
    Secretary Chao. The infrastructure proposal is going to 
address four principles: One is to target Federal investments 
on most transformative projects. Two is to encourage States and 
localities to take their own action, with Federal aid coming in 
terms of streamlining regulations and permitting. Three is to 
tap into the private sector capital and management methods. And 
four is to align the infrastructure with the entity best suited 
for operation and maintenance. We are going to give the States 
a great deal of flexibility, and they are going to have a lot 
of say in how all of this is to be spent.
    Mr. Quigley. Look, METRA and the Chicago Transit Authority 
are not worried about permitting. They are not worried about 
the State getting in their way, increasing demand. And the fact 
that public-private partnerships are not going to help them at 
all, some of this just takes Federal dollars. So, you have 
outlined four things that do absolutely nothing for those two 
entities, and take away half of the funding to make them 
continue to have rolling stock. And let me tell you, these 
folks are Democrats and Republicans. My metro trains come 
through Chicago, but they go out to my friend Peter Roskam's 
district.
    These are all people who, right now, these are entities 
that need resources, at some point in time, you have got to 
rebuild track and you have got to repurchase rolling stock. 
They do not have that. Nationally, the backlog on repairs is 
extraordinary. So, outlining four things that will help private 
sector entities or States move forward with permitting means 
almost nothing to them and their most vital need.
    Secretary Chao. Approximately 84 percent of transportation 
dollars come from the State and local funds. I am not saying 
that we are not going to participate. What I am saying is, 
under the infrastructure proposal, the States and localities 
will have great freedom and great flexibility.
    Mr. Quigley. Let us just say you put more money into a 
trillion-dollar infrastructure package. You just took away half 
the funding for the Direct Grant Program, and the States 
matched those dollars, so you have done nothing. Right now you 
have cut them in half; this is absolutely vital. So, let us 
just say, you come back and say, well, we are going to have 
this trillion-dollar package and some of that is going to 
include--you will have just taken it from one spigot and put it 
into another. That is assuming that you even do this.
    Secretary Chao. Well, obviously we disagree with some of 
the priorities and some of the missions and some of the 
purposes.
    Mr. Quigley. And where is----
    Secretary Chao. So, what we are doing is repurposing it. 
So, we are basically going to----
    Mr. Quigley. So, you are taking money, in a sense, from 
mass transit and putting it where?
    Secretary Chao. That is going to be in the details of the 
infrastructure which will be coming out--proposal which will be 
coming out in the fall of this year.
    Mr. Quigley. We have just got to have some inclination. You 
have given us the lead on this that we do not care as much 
about public transportation.
    Secretary Chao. No, I did not say that.
    Mr. Quigley. But you cut it in half, so you have got to--it 
cannot be a priority if you cut it in half.
    Secretary Chao. It will be reshifted, repackaged, and 
repurposed in the infrastructure proposal.
    Mr. Quigley. For what?
    Secretary Chao. And the details of which have not come out 
yet, but states and localities will have the freedom to apply 
for grants to address their individual infrastructure needs 
whether that is transit systems or something else.
    Mr. Quigley. Where would you send it if it is not for 
public transportation?
    Secretary Chao. Well, that decision has not been made yet, 
but states and localities will have flexibility.
    Mr. Quigley. Okay. Thank you.
    Mr. Diaz-Balart. Again, also we are thrilled to have 
chairman emeritus. And by the way, Chairman Rogers is the one 
who gave me this chairmanship originally. So, for those of you 
that are happy that I am chairman, you thank him. Those that 
are not happy, he is the one to blame.
    Mr. Chairman? I apologize.
    Mr. Rogers. Thank you, Mr. Chairman. And you are doing a 
great job and I am glad I had the wisdom name you to this post.
    Madam Secretary, good to see you. Welcome to the Hill. Good 
to see you outside of Kentucky, although we love you back there 
as well.
    Secretary Chao. Thank you.
    Mr. Rogers. Infrastructure, of course, is the name of the 
game this year. We are all tired of traveling on old streets, 
bridges that are falling, waterways that are not being 
traversed properly, and the like. So, we share your enthusiasm 
for doing something big on infrastructure improvement.
    I noticed on page 2 of your statement where you list the 
key elements, the key principles of the infrastructure plan 
that will involve 13 Federal departments and agencies in 
concert. The first principle that you list is that the monies 
would be spent on the most transformative projects. Tell me 
what that means.
    Secretary Chao. I think the President would like something 
that is bold, that is innovative, something that will really 
speak to the future and address the concerns of the future. 
Having said that, I understand your question, and that is you 
are concerned about rural America.
    Mr. Rogers. Yes.
    Secretary Chao. And I come, as you know, from a State that 
is a very rural, so I am concerned about access, ridership, and 
the ability of rural America to be part of the American dream 
as well. There will be a separate title to the infrastructure 
proposal that will address rural America. The dollar amount has 
not yet been decided, but we are very cognizant of the needs of 
rural America.
    Mr. Rogers. Where is the center of the effort to finance, 
the study how to finance the infrastructure improvements? Where 
is that research going on? Is that in your Department?
    Secretary Chao. I think you asked how will this all be paid 
for?
    Mr. Rogers. Yes. I am asking, who is studying that portion 
of the problem?
    Secretary Chao. At the White House?
    Mr. Rogers. Yeah.
    Secretary Chao. All of us. Prior to your arrival here, we 
talked about various different ways, that there is a plethora 
of ways, 13 to 17, very commonly discussed ways to pay for 
infrastructure. As of yet no decision has been made-, no 
agreement, I should say, has reached a consensus. None of the 
payment forms are ideal. At this point, suffice it to say that 
nothing is off the table. And as you mentioned, there are about 
16 different government agencies in the infrastructure task 
force that are grappling with how to pay for all this.
    Mr. Rogers. Well, given the financial situation of the 
country and of the States and localities, it is pretty plain 
the money to do whatever we are going to do has got to come 
from somewhere else, i.e., private sector. Do you agree with 
that?
    Secretary Chao. Yes. And again, in an effort to be 
bipartisan, I understand that our colleagues--our friends on 
the other side would prefer 100 percent Federal funding of $1 
trillion, and I had just said that, unfortunately, that would 
increase our deficit quite a bit, and it would actually also 
create some havoc within the private markets because it would 
be such a large presence of Federal dollars.
    So, the President is looking more toward using $200 billion 
in direct Federal funding, in infrastructure using that as seed 
money, and selling off some public assets, and using the 
Federal amount to entice or to partner with the private sector 
in some creative, innovative public-private partnerships, which 
we have seen in the past.
    Mr. Rogers. Yes. There are examples of this. For example, 
Indiana, 10 years ago or so, sold the cross-State toll road for 
billions of dollars, and then used those proceeds to build the 
roads around the rest of the State. Is that a possible way to 
go here?
    Secretary Chao. Toll roads certainly are an increasingly 
popular way to finance infrastructure, but I understand both 
sides, that some people might not like toll roads, but it is 
very effective to finance new roads.
    Mr. Rogers. All of us do not like toll roads, but some of 
us may tolerate tolls. But the selling, what I am talking about 
is the selling of the asset. And I assume the buyer of that 
highway would need to enact tolls in order to pay off the 
purchase price.
    Secretary Chao. This actually is a big issue, whether we 
sell off these public assets. And actually there is a 
discussion going on about concerns about selling public 
infrastructure to foreign interests, and whether there is 
sentiment that that is not desirable. And so we are thinking 
about some lease and buyback. I mean, these are one of many, 
many ideas that are being surfaced as to how we can finance it.
    Mr. Rogers. Good luck to you. And thank you. I yield back.
    Mr. Diaz-Balart. Thanks, Mr. Chairman. Representative 
Clark.
    Ms. Clark. Thank you, Mr. Chairman. And we are delighted by 
your appointment, and I want to thank Chairman Rogers for that. 
And thank you, Madam Secretary, for being with us today.
    And I also want to thank you for your commitment on the 
Green Line Extension in Massachusetts, and for being up in 
Boston recently. A lot of hard work has gone into that project, 
and it would not have been possible without the assistance of 
your Department. And so, we thank you for that.
    And I have lots of substantive questions, but I really was 
struck by your comments earlier in response to Ranking Member 
Price, especially today, the day after such horrifying events 
and attacks on our colleagues yesterday. So, I just want to 
make sure that I understand what you are saying.
    There was a Letter of Counsel to the President on May 1, 
2017. Is that the opinion that you are citing from DOJ?
    Secretary Chao. What I am trying very, very hard to say--I 
am not trying to anger anybody--especially as you mentioned, 
``after what happened yesterday.'' But this is DOJ reiterating 
established precedent, and I do not seem to be given credit for 
that. It is. I have been in the government before, it is----
    Ms. Clark. So, just precedent or not, there is a line in 
that note that also says it is established precedent, but it 
reads, ``Individual members of Congress, including ranking 
minority members, do not have the authority to conduct 
oversight in the absence of a specific delegation by a full 
House committee or subcommittee.'' Is that your understanding 
of the law?
    Secretary Chao. That has always been the case with every 
executive branch oversight defined narrowly--documents 
requested for investigations, not for policy evaluation or 
review.
    Ms. Clark. So that is a yes?
    Secretary Chao. I am committed to working with those 
members of this committee----
    Ms. Clark. No, I just want to know if that is your 
understanding, that individual members do not have any 
authority to conduct----
    Secretary Chao. That has always been precedent regarding 
investigatory document requests. That has been the precedent.
    Ms. Clark. Okay. So that is your understanding of the law 
and the policy of Department of Transportation?
    Secretary Chao. It is not just Department of 
Transportation, this has been executive branch precedent for 
previous administrations----
    Ms. Clark. But you are the Secretary of Transportation. 
That is your understanding and policy?
    Secretary Chao. It is throughout government, yes.
    Ms. Clark. Okay. And your understanding is that is 
throughout the executive branch?
    Secretary Chao. Yes. I said that is the--the executive 
branch, it has always been that way.
    Ms. Clark. All right. I am going to move on.
    Secretary Chao. Through every administration.
    Ms. Clark. I am going to move on to positive train control.
    Secretary Chao. Yes.
    Ms. Clark. Which is a big issue back in States like 
Massachusetts, and really across the country. As the FAST Act 
authorized $199 million out of the mass transit account to 
create this grant program, but States like mine, are trying to 
meet the deadline for implementation, but have struggled to 
find the financing to complete the installation.
    My understanding is that the application for this grant 
program has not yet been fully implemented. As a result, you 
have to complete two different applications: one for TIFIA, one 
for, is it RIF, RIFR, I am not exactly sure I have that right. 
Can you give us an update on how this implementation is going 
and whether there has been progress in streamlining this 
application process?
    Secretary Chao. I can speculate, but let me do my due 
diligence and get you, specifically, information, and I will be 
pleased to work with you on that.
    Ms. Clark. Okay. That would be helpful, because I think it 
has become a redundant application process. It is really 
causing some problems in meeting the deadlines.
    Secretary Chao. I will look into it.
    Ms. Clark. On the State maritime academies, they are 
essential to a vibrant U.S. Merchant Marine, and ensuring 
America's sealift capacity and, frankly, they are key to our 
national security. These academies rely on training ships to 
fulfill their education mission. The TS Empire State at SUNY 
Maritime College is now 56 years old. Its lifetime is expected 
to end in 2019. The TS Kennedy at the Massachusetts Maritime 
Academy is 51 years old and its useful service life is 
estimated to end in 2025.
    The 2017 NDAA directed DOT to complete the design of 
replacement vessels. And I am hoping that you can tell me, has 
the design of the national security multi-mission vessel been 
completed? And can you give me an update of the replacement of 
these ships?
    Secretary Chao. The Mass Maritime and SUNY Maritime are two 
great maritime academies, universities, and they graduate 
outstanding young men and women every year. I am familiar with 
this. These two ships are the oldest. They need to be replaced 
at some point. Unfortunately, it is an issue of cost as well. 
One ship will cost $300 million. For all the maritime academies 
that will be about over a billion dollars in direct outlay.
    So we are looking at this issue. And I just recently spoke 
with the Mass Maritime president, and also New York Maritime 
president, so this is an issue that has to be somehow 
addressed. Perhaps one way is to find a renovated vessel, but 
then there are waivers required because it would not be U.S.-
built, but that could possibly be $15 million per ship. So, we 
are looking at different ways to address this problem.
    Mr. Diaz-Balart. Congressman Valadao.
    Mr. Valadao. Thank you, Chairman. Thank you, Madam 
Secretary, for your time today.
    Madam Secretary, last month the Department of 
Transportation approved a $647 million Federal grant arranged 
during the last days of the previous administration to the 
Caltrain Electrification Project. The power equipment will 
eventually be used by the State's bullet train from Los Angeles 
to San Francisco. The grant requires that the State match the 
official's--requires that a State match that officials have 
indicated will come from Proposition 1A, approved by voters 
specifically for California's High-Speed Rail Project.
    With the use of Prop 1A funds, it is being challenged in 
court. If these funds do not become available, what happens to 
the Federal grant? And reports indicate that California high-
speed rail is very unlikely to secure private funding. Do you 
have any confidence in them being able to match the Prop 1A 
funds going forward?
    Secretary Chao. That is actually a concern that Caltrain 
needs to consider very carefully themselves. The timing of this 
particular contract was very sensitive. It was signed off on 
January 17, 2017, 3 days before the end of the previous 
administration. However, there is a process by which that goes 
up to the Congress for 30 days, disputes or rebuttals or 
challenges can occur. That really did not happen.
    And when the Omnibus basically inserted $170 million into 
this, it made the cut for full funding agreement, and the 
Department signed it. So, for those that are involved in the 
project, they have the funding for 2017. For future years, they 
do need to be thinking ahead as to what they want to do.
    Mr. Valadao. How do you plan on holding them accountable 
for spending those Federal dollars, to make sure that they are 
properly accounted for, but also properly spent? I mean, the 
whole High-Speed Rail Authority has faced a lot of scrutiny. 
All 14 members of the Republican delegation from California 
signed a letter to you specifically asking you not to, at least 
until they did an audit and gave us some sort of background.
    So, I will go with my second question. Prior to the 
approval of this Federal grant, all 14 members of the 
California Republican delegation sent a letter to you regarding 
high-speed rail being an infeasible, counterproductive project, 
but it also cited that the project's cost increased, reductions 
in its scope, and its failure to secure State and private 
funding. Our request was to block any pending Federal funding 
until the State High-Speed Rail Authority completes an audit of 
the project and its finances, and those findings be made 
public. Do you think that was too difficult a request on our 
part?
    Secretary Chao. I am very much aware of that letter. In 
fact, we tried very hard to work with both sides of the aisle 
to come to some resolution, but when that Omnibus bill came 
through with the full consent of both Houses of the Congress, 
there was no choice. It was $170 million we were obligated to 
award. They had to proceed. Now, going forward----
    Mr. Valadao. And there were some statements from your 
office that you were planning on sending more, depending on the 
future appropriations----
    Secretary Chao. I do not have any money. If there are 
future appropriations and it is dictated by Congress, of 
course, I have to send it. But there is a natural process of 
monitoring that goes on for every single one of these projects, 
and so those natural processes will be in place and there will 
be monitoring of this project to see that monies are not wasted 
and that they are aptly applied.
    Mr. Valadao. Madam Secretary, as you are undoubtedly aware, 
California has received $3.55 billion in Federal funding. Our 
finance report from the Federal Railroad Administration admits 
that the High-Speed Rail Authority is unlikely to meet spinning 
deadlines established by the grants, and would, therefore, be 
forced to forfeit upwards of $220 million back to the Federal 
Government. And I am concerned that the authority will start to 
use the grant money as a slush fund, spending on frivolous 
projects outside the high-speed rail's project.
    Does the Department of Transportation require detailed 
reports on how the California High-Speed Rail Authority is 
spending those Federal dollars? And do you feel that the 
Department has proper oversight over where those funds are 
being spent?
    Secretary Chao. I do. I have only been there 4 months, but 
according to what I have seen so far, it is a very professional 
organization and there are processes in place to monitor how 
funds are spent. This is really a matter before the Congress. 
We execute the law as it comes from the Congress, and so the 
money was mandated and it needed to go out.
    Mr. Valadao. All right. Thank you. I yield back.
    Mr. Diaz-Balart. Thank you, sir. Mr. Aguilar.
    Mr. Aguilar. Thank you, Mr. Chairman. I appreciate it. And 
just to follow up on that, Madam Secretary. There was a 
difference of opinion, as you mentioned, on that Caltrain 
issue, and our office and I personally heard from business 
leaders in California who were concerned.
    When you talked earlier in your answer about seed capital, 
you talked about making sure that the Federal Government has 
seed capital as a priority to spur investment. I think 
conflating high-speed rail and Caltrain is not fair. This is a 
line that is already operating, that is hundreds of millions of 
dollars of planned investment that those individuals have taxed 
themselves to do. And I think electrification is something that 
is helpful for the environment, will reassure that line, and 
push more commuters through that transit mode, which should be 
our responsibility to help. So I appreciate the consideration 
that your agency put forward in making that award.
    I did want to shift briefly to TIGER grants. In my 
community we were awarded an $8 million TIGER grant. That is a 
Redlands Passenger Rail Program. It connects a popular transit 
center and terminates at a local university. In between the two 
are job centers, as well as a local VA healthcare facility, and 
will create thousands of jobs connecting low-income residents 
with alternative and affordable transit routes. And I heard 
your comments and read your testimony about TIGER previously, 
but given the benefits of this program in my district and in 
other districts around the country, what did the DOT use to 
rely on to decide that the elimination or phasing out of this 
program would be beneficial to our national infrastructure 
system? What type of data was used? Yeah.
    Secretary Chao. I think the purpose was to basically--there 
was a basic philosophical disagreement on whether to retain an 
unauthorized program from the Stimulus act that are used in an 
earmark-like way to fund certain projects. But having said 
that, it is the will of the Congress and so you certainly have 
every prerogative to restore what you think is beneficial. This 
is a new administration, so the President may have different 
priorities.
    Mr. Aguilar. Are you saying that TIGER grant funding was 
earmarks? Is that what I heard you say?
    Secretary Chao. Earmark-like.
    Mr. Aguilar. Earmark-like, okay. I think----
    Secretary Chao. But, again, this is a matter before----
    Mr. Aguilar. I am new to the committee. I defer to the 
ranking member and the chairman to describe the program and 
those who helped craft the language in prior administrations or 
in prior Congresses, and then there clearly are prohibitions 
against that. So I think I would take issue with that 
characterization.
    But I will say that creating programs that help our 
communities is exactly our role here in Congress. None of us, 
to my knowledge, inserted, you know, any language specific to a 
project. We are prohibited from doing that.
    Secretary Chao. You are right, it is competitively bid.
    Mr. Aguilar. It is competitively bid and the administration 
is responsible to decide.
    Secretary Chao. But that should be in the corpus, you know. 
We would prefer that it be authorized rather than have it kind 
of like siphoned aside for some specific purpose.
    Mr. Aguilar. Yet your----
    Secretary Chao. But having said that, we are willing to 
work with you. And for those that--obviously, this is a very 
popular program. Members of Congress like it and so we will 
respond to the will of Congress.
    Mr. Aguilar. So you disagree with our ability to siphon 
aside funding or take issue with it. The administration may 
take issue with it, but you are creating something that you are 
going to roll out in the fall that would siphon aside hundreds 
of millions--hundreds of billions of dollars in projects that 
would be up to the administration to suggest.
    Secretary Chao. No, we are not saying that at all. We have 
yet to unveil our infrastructure proposal. So that is to say 
that we do not know whether distribution of the funds will 
occur one way or the other. That is still under advisement and 
discussion.
    Mr. Aguilar. How do you view--and back to your comment 
before about seed capital, because I do think, as you mention, 
and in your transit document, as your transportation document 
mentioned in your factsheet that so much investment is 
occurring at the local level. Local voters in my community have 
taxed themselves to build infrastructure projects. As a local 
mayor, I was on the authority that allocated those funds.
    How do you differentiate the seed capital, as you 
mentioned, for some projects, yet in TIGER and other projects 
you do not view that as seed capital that is helpful to the 
creation of jobs and the movement of goods and bodies?
    Secretary Chao. Well, the TIGER grants, you know, I know 
that they are very popular, but they were created as an aside 
in the 2009 Stimulus bill, kind of like a separate aside, pool 
of funds. And I think it would make much more sense if they 
were all put together in a large pool where they could be 
leveraged for projects proposed by States.
    Mr. Aguilar. Thank you, Mr. Chairman. Thank you, Madam 
Secretary.
    Mr. Diaz-Balart. Thank you, sir. Mr. Joyce, you are 
recognized.
    Mr. Joyce. Thank you, Mr. Chairman. Good afternoon, Madam 
Secretary, and thank you for being here today.
    I have heard from a number of constituents and local 
leaders in my district who are worried about the scope of the 
metropolitan planning organizations, or MPOs; that they have 
grown too big and that they have begun to impede on surrounding 
communities. While I appreciate their directive in providing 
cohesive regional planning, it is important to me that we do 
not continue down a path of federalizing community planning.
    Can you shed any light on the administration's view on this 
and if there might be some push now or in the future to alter 
this range of authority?
    Secretary Chao. We have heard from a number of members on 
both the Senate and the House, and we actually are--I think we 
have actually rescinded all that, and I will check on that for 
you, the metropolitan planning authorities. Yeah.
    Mr. Joyce. That is good news. Moving right along, as you 
notice, and I understand there have been some questions asked 
prior to this, but this subcommittee recently met with field 
experts working on emerging transportation technologies, 
including autonomous vehicles. And I am encouraged by this 
research thus far that indicate these vehicles have extreme 
potential to make our roadways safer. So I wanted to make sure 
we are doing everything we can to support further development 
of these vehicles and, hopefully, one day, their widespread 
use.
    You recently visited the Transportation Research Center 
located in my home State of Ohio. Nearby TRC, along Route 33, 
the Ohio Department of Transportation has initiated underground 
installation of 35 miles of high-capacity fiber optic cable. As 
you know, this cable will help provide researchers with the 
data necessary to further develop autonomous vehicles and 
design roadways that are compatible with their use. Now, call 
me biased, like my chairman does, but I believe the Buckeye 
State given everything from varying weather conditions to 
innovative centers like TRC, is uniquely positioned to test and 
rapidly deploy these technologies.
    I might ask you what role of support to our safety-making 
agencies, such as NHTSA, do you see these proving grounds 
playing? And how can this committee or your Department best 
equip them to carry out the work you think valuable to the safe 
deployment of autonomous vehicles?
    Secretary Chao. These proving grounds are very popular. And 
the last administration, a few days prior to departure, had 
issued sort a Good Housekeeping, seal to about 10 proving 
grounds. We are in the process of looking at all of that.
    What I hear, actually, from major automotive manufacturers 
and other entrepreneurial entities that deal with autonomous 
vehicles is actually that they are going to Australia. They are 
going to other countries where there is much less regulation 
that governs how they are to test, where they are to test, and 
under what circumstances. So I do not think the issue is which 
State gets these proving grounds. The issue is how do we make 
the whole United States more open to innovation while 
respecting the safety regulations that we have? But how do we 
make it more welcoming of these new technologies rather than 
have these companies, American companies, go overseas to test 
their products?
    Mr. Joyce. Well, I certainly agree with you and I applaud 
your efforts to keep them here. But in Ohio, as you well know--
--
    Secretary Chao. You have one in particular that did not 
make it.
    Mr. Joyce. Correct, and one that the State has invested a 
lot of money in, as well, and it is----
    Secretary Chao. I actually went there to visit.
    Mr. Joyce. I know.
    Secretary Chao. Yes.
    Mr. Joyce. That is why I mentioned that in my notes and we 
are very happy that you went there and had the opportunity to 
visit and, hopefully, that in review of this you take that into 
consideration. Because as you are well aware, you know, Ohio 
had these two brothers named Wright that created flight. And we 
had a guy named John Glenn, who was in the Senate with your 
husband, who flew around the world for the first time in a 
capsule. And Neil Armstrong, an Ohioan, was the first one to 
step foot on the moon. So we like to be out front in these 
technologies and we certainly think that we have invested a lot 
of money in TRC and would appreciate you giving it your look. 
Because we do not want to lose any business to Australia.
    Thank you very much, Mr. Chairman.
    Secretary Chao. Well, thank you for bringing that up again.
    Mr. Diaz-Balart. Thank you, sir. Mr. Dent.
    Mr. Dent. Thank you, Mr. Chairman. Good afternoon, Madam 
Secretary.
    I represent a large portion of the Lehigh Valley of 
Pennsylvania. And in recent years, we have seen a growth in 
freight traffic and operations, which includes truck, rail, and 
air modes of transportation. This trend is expected to continue 
and industry is expected to grow even more. Part of this growth 
is the result of increased online commerce and changing 
customer expectations about the speed of delivery. This kind of 
growth presents economic and employment opportunities, but it 
will also require that our infrastructure keeps pace with these 
types of developments.
    As the transportation system assumes a growing role of 
supporting commerce, how does your Department anticipate 
addressing the increased needs to maintain our Nation's roads, 
bridges, railways, and airports, specifically in the areas that 
are seeing increased freight activity?
    Secretary Chao. Freight is very important. We sometimes 
forget that, but it is a lifeline for the economic vitality of 
our country. So part of the infrastructure proposal will also 
include consideration of freight. There are passenger rail 
issues with freight lines, and intermodal efficiencies that are 
desirable to facilitate the rapid movement of freight. So we 
are very much aware of those. And I do not want to--I cannot 
say too much about specifics yet, but freight is obviously a 
very big concern.
    Mr. Dent. Can I ask, I will ask you, too, just about the 
infrastructure package and how we might pay for this? I 
understand the public-private partnership nature of this whole 
thing, which I certainly think is important, but there is 
probably going to be a public component, as well. And a 
durable, sustainable revenue source will be important. Has the 
administration taken a position on how through maybe tax reform 
we might be able to find that durable, sustainable source? And 
are you open to the user fee, the highway user fee?
    Secretary Chao. In the beginning part of our discourse 
internally, there was discussion about having this be part of 
the--having some portion of tax reform be involved in funding 
infrastructure. Those discussions, it seems, have ebbed. It may 
come back again, but as of now, I think Secretary Mnuchin has 
already said that tax reform will not be part of the funding of 
infrastructure. But that, again, may change.
    And the second issue you mentioned was?
    Mr. Dent. No, that was mostly it. That was mostly it, these 
user fees.
    Secretary Chao. Everything is still on the table.
    Mr. Dent. How to fund----
    Secretary Chao. As a gasoline tax you mentioned.
    Mr. Dent. How to fund it. Yeah, the user fee.
    Secretary Chao. Yeah.
    Mr. Dent. The highway user fee.
    Secretary Chao. The user fees are--and the gasoline taxes, 
I mean, that obviously is a very quarrelsome issue among some 
quarters. And so what I can say is that nothing is off the 
table.
    Mr. Dent. Okay. Final question. The administration and 
Congress, as we consider this infrastructure and transportation 
package, I believe that we have an opportunity to begin 
integrating some new technologies that will greatly benefit 
Americans in their daily lives. One of these technologies, of 
course, is hydrogen fuel cells, and they have the potential to 
be a clean alternative energy to power vehicles with no carbon 
emission, only water vapor.
    As you may know, a number of States have made commitments 
to adopt zero-emission vehicle standards for the auto industry. 
And as Co-Chair of the Hydrogen Fuel Cell Caucus, I know that 
fuel cells, hydrogen fuel cell vehicles are just one technology 
option that automakers are pursuing to meet these obligations. 
So I guess how is your Department working with the industry to 
remove any possible barriers to entry and ensure a successful 
rollout of hydrogen infrastructure?
    And I know that the previous administration was not 
particularly supportive of hydrogen. Just wanted to hear your 
thoughts.
    Secretary Chao. We are looking at all new technologies. The 
basic principle is that we want to encourage innovation and 
entrepreneurship, and this is a new area that we are looking 
at. We have just gotten into office, so we do not have a 
conclusion on that yet, but we are looking at it.
    Mr. Dent. Thank you. I will yield back with 20 seconds to 
spare.
    Mr. Diaz-Balart. Thank you, Mr. Dent. Madam Secretary, 
there is a lot of interest, so what I am thinking is let us do 
another round. We will limit it to 3 minutes per question and 
answer.
    We have had multiple hearings, Madam Secretary, regarding 
NextGen programs and I think there have been some great 
successes in this partnership with the private sector, whether 
it is issues like Automated Dependent Surveillance Broadcast 
(ADSB) or Datacom development or the NextGen weather programs. 
I think those are programs and I may submit some questions, but 
those are issues that I think are looking like really good 
successes and I want to get some feedback from you, but I do 
not think we have enough time to do that today.
    I do want to briefly talk about the NextGen Advisory 
Committee. This committee has been set up as a public-private 
partnership to guide the NextGen decision-making. Do you think 
that that body, this body, is an effective body to help guide 
our air traffic investments for the future?
    Secretary Chao. It is an advisory committee?
    Mr. Diaz-Balart. Yeah.
    Secretary Chao. I have not met with them. I have met 
individual members. I have not met with the committee in total 
yet. It is about 35 members and they meet about 3 times a year. 
They certainly offer a great deal of assistance. They are 
people are steeped in various aspects of the aviation industry. 
And I think it is always good to get a diversity and variety of 
opinions and advice.
    Mr. Diaz-Balart. And I do not know if you have had the 
opportunity to look at some of the stakeholders and determine 
if that is the appropriate list of stakeholders represented. I 
do not know if you have had the opportunity to look at that 
yet.
    Secretary Chao. I have a list here. I always think it is 
always helpful to get as broad a representation of industry 
stakeholder groups wherever possible, whenever possible.
    Mr. Diaz-Balart. Yeah. And also, Madam Secretary, if there 
are ways that you think we can improve that, improve the 
effectiveness of that, that is one of those things that, you 
know, I would like to be in touch with you. I do not know if 
you have any ideas at this stage.
    Secretary Chao. Of course. I do not say this enough, but we 
want to work with the committee, we want to work with the 
Congress, and we are very open to your ideas.
    Mr. Diaz-Balart. Well, Madam Secretary, you have a history 
of doing that and so, again, thank you for saying that. But 
more important than the words, you have a history of doing 
that, which is why I think all of us are thrilled that you 
accepted to do this and to once again serve here.
    Have you been able to see the benefits that we have seen to 
date regarding the ADSB, which is the Automated Dependent 
Surveillance Broadcast? Catchy name. Now that it has been 
completed have you had the opportunity to see how that is doing 
and the benefits?
    Secretary Chao. It is actually one of the successes of the 
whole NextGen effort. I commend FAA and I commend the men and 
women at the FAA who are doing a tremendous job despite 
difficult circumstances. They have been able to maintain the 
system, work through the air traffic control, despite 
challenging circumstances. I mean, the system is as safe as it 
is and it is as good as it is not because of the current 
government structure, but in spite of it. And so I think it 
says a lot about the men and women who work there, but we want 
to do better.
    And as I mentioned earlier, we are going to disagree on 
this, is that we are thinking about the future----
    Mr. Diaz-Balart. Well, we will be working through these 
issues.
    Secretary Chao. You know, we are thinking about the future: 
increased traffic, increased congestion. When we talk about the 
NextGen, the project that you mentioned, it is ADB, you know, 
we are talking radar here. With radar it is a sweep, once in 6 
seconds, and within 12 seconds an airplane travels 1 mile. So 
we need to be in a GPS system and not still tied to 1960 
technology of using radar. We have the technology now.
    That is just one example and there are many other examples 
of where the new technological advantages which are available 
to us, we are still not--FAA, air traffic control--we are still 
not quite up to speed on, and that is what we need to improve 
on.
    Mr. Diaz-Balart. Madam Secretary, and again, this is a 
conversation we will continue to have. I do want to note that 
the U.S. has deployed the ADSB GPS technology. The issue is not 
that the technology is not available. The issue is that the 
airlines need to equip themselves with it. But anyway, those 
are conversations that I look forward to having with you.
    Secretary Chao. Okay.
    Mr. Diaz-Balart. And again, I am thrilled that----
    Secretary Chao. I have an answer to that one, too, but we 
can discuss----
    Mr. Diaz-Balart. We will continue.
    Secretary Chao. Yes, we will continue this.
    Mr. Diaz-Balart. This is a long conversation. And again, 
Mr. Price.
    Mr. Price. Thank you, Mr. Chairman. Madam Secretary, I want 
to quickly achieve some closure on your earlier conversation 
with me and Ms. Lowey and Ms. Clark, saying that the reason you 
obviously took us aback is that your answer departs from what 
we have heard, what I have personally heard from other cabinet 
secretaries about this matter, in my personal case, Carson, 
Kelly, Mnuchin.
    Secondly, I assure you it is not a question of your good 
will. We do not doubt your good will. The question is a matter 
of policy, the obligation that anyone in your position has to 
respond to oversight inquiries from duly elected members of 
Congress, and particularly the committees charged with funding 
and overseeing your Department.
    Let me ask you about capital investment grants, New Starts. 
Your budget request upends the precedent of Federal support for 
transit projects, specifically the budget would cut off Federal 
funding for new transit projects and those currently in the CIG 
pipeline, and spare only those projects with full funding grant 
agreements already in place. I want to ask you about that in 
particular, that pipeline.
    I applaud you for advancing projects like Phoenix, 
Pittsburgh. They went into project development. The New York 
Canarsie Line went into engineering. Going forward are you 
going to continue to rate, review, and move projects through 
the pipeline?
    And B, what about Small Starts? The fiscal 2017 Omnibus 
provided funding for 10 Small Starts projects. When do you 
expect to sign Small Start grant agreements for those projects 
and award the funds to the sponsors?
    Secretary Chao. It is actually a more complicated answer 
which I do not think you will appreciate, but the current 
guideline from the administration is that for New Starts, that 
there is going to be--if there is not funding, then I cannot 
sign the full funding agreement. And if I cannot sign the full 
funding agreement, obviously there is no funding. But it really 
depends on the Congress.
    Right now, for those that do not having funding, I will not 
be able to sign it.
    Mr. Price. There are some that do not have the full 
increment, as you say. As I understand it, there is through the 
fiscal 2017 bill there is full funding for six of those.
    Secretary Chao. Yes, and they are actually listed. So if 
you are on that list, you will get funding. If you are not on 
that list, then you will not.
    Mr. Price. All right. Can you tell us about the pipeline 
going forward, since our time is limited? What about the 
continuation of----
    Secretary Chao. There will not be any New Starts.
    Mr. Price [continuing]. Rating and reviewing and moving 
projects through?
    Secretary Chao. Yeah, the administration does not support 
New Starts.
    Mr. Price. Well, on what basis did you advance Pittsburgh 
and Phoenix and New York Canarsie?
    Secretary Chao. I think they were already defined as New 
Starts.
    Mr. Price. They are moving into----
    Secretary Chao. There is actually a list, so.
    Mr. Price. They are moving into project development. They 
are moving into engineering. That is a process that is ongoing. 
Is that process going to stop?
    Secretary Chao. I do not think so. I mean, these cities, 
they will have to now consider what they want to do. If they do 
not have the funding beyond 2017, what will they do? So that is 
a question and I cannot answer it for them. They may go to 
public-private partnerships. They may find other sources of 
funding, but that is something they are going to have to 
consider.
    Mr. Price. You have no answer for them. You are going to 
continue to move them into these various phases, these early 
phases, but there is no----
    Secretary Chao. I think we are pretty----
    Mr. Price [continuing]. But there is no----
    Secretary Chao. The good part----
    Mr. Price [continuing]. Resources.
    Secretary Chao. But the good part is if you are on that 
list, as I mentioned, of fiscal year 2017 or for that is for 
the fiscal year 2018, if you are on that list, you can be 
assured of some certainty. If you are not, it is probably not 
going to be funded. So it is pretty clear.
    Mr. Price. Well, there are----
    Secretary Chao. And then alternative plans have to be made, 
obviously.
    Mr. Price. All right. My time has expired. There are 
projects in this kind of----
    Secretary Chao. Let us discuss that offline.
    Mr. Price [continuing]. Betwixt and between discussion.
    Secretary Chao. Okay.
    Mr. Price. It is a situation, so we do need to have some 
understanding of that.
    Secretary Chao. Yes, then let us discuss this further and 
see.
    Mr. Price. All right. Thank you.
    Secretary Chao. Thank you.
    Mr. Price. Thank you, Mr. Chairman.
    Mr. Diaz-Balart. Thank you, sir. Mr. Valadao.
    Mr. Valadao. Thank you, Chairman. Madam Secretary, 
livestock haulers in my district and across the country have a 
challenging task of balancing both the safety of motorists and 
the health and welfare of animals being transported. 
Unfortunately, the impending December 18, 2017, electronic 
logging device, ELD, enforcement date and existing hours of 
service rules do not adequately accommodate this subject of the 
trucking industry. Industry members and authorities have 
expressed the need for delayed implementation of the rule to 
address concerns and provide sufficient training and education 
for the uniformed compliance and enforcement.
    While motorists safety remains a top priority, so does the 
welfare of our animals. What long-term solutions do you 
recommend to ensure both motorist safety, as well as animal 
welfare? Probably not one you spend a lot of time on.
    Secretary Chao. I am sad to hear that. Of course we want to 
protect our pets, our livestock.
    Mr. Valadao. It is mostly geared to livestock.
    Secretary Chao. Yes. I will look into that.
    Mr. Valadao. All right.
    Secretary Chao. I do not have the answer to that.
    Mr. Valadao. In your opinion, are ELD devices able to 
accurately distinguish between the times that a truck may be 
running, but not yet on the road? For livestock haulers this 
would include time to the initial loading location, time spent 
waiting, and time loading. In the future, would the Federal 
Motor Carrier Safety Administration be willing to work with the 
livestock and insect industry to provide further exemptions or 
flexibility for them under the hours of service rule?
    Secretary Chao. I am not familiar with this subject as you 
mentioned, but I look forward to working with you and your 
constituents.
    Mr. Valadao. Thank you. I really do appreciate that.
    Chairman, under my time limit, so I yield back.
    Mr. Diaz-Balart. You know, I was very proud of how this 
committee always sticks to the timeline. Today we have not been 
doing that great, but it is okay.
    Ms. Clark.
    Ms. Clark. Thank you, Mr. Chairman. Madam Secretary, I 
would like to return to the maritime academies. We talked about 
their essential role in sealift capacity, our national 
security, but there have also been very troubling recent 
reports of sexual misconduct at the Merchant Marine academies 
that really allege a hostile culture for the female midshipmen. 
And these reports of unwanted sexual advances, harassment, and 
assault have caused the academy to suspend its Sea Year 
Program.
    So I have two questions for you. How is your Department 
going to handle these allocations? And also, how is your budget 
and your proposed expenditures going to ensure the safety of 
female midshipmen during their Sea Year when most of these 
incidents occur?
    Secretary Chao. I am obviously very concerned about these 
issues, as are my colleagues at the Department of 
Transportation and at MARAD, so we are investigating this. And 
the dollar amount that you specifically mentioned, it has been 
increased from $380,000 for education, advocacy, counseling, to 
almost a million dollars now. But we are very concerned about 
this issue and obviously we need to do something about it 
because, as you mentioned, it is connected to the accreditation 
issue and it is a safety issue.
    Ms. Clark. Right. We had the Inspector General in several 
weeks ago and we were talking about this issue. Are you working 
closely with them on this issue?
    Secretary Chao. Yes, and I say yes although he has the lead 
on the investigation, of course.
    Ms. Clark. Yeah, yeah.
    Secretary Chao. We are kept apprised and he will give 
recommendations and we will see where we go from there. But 
obviously, we are very concerned about it and so if you have 
suggestions, we would love to work with you, as well.
    Ms. Clark. All right. We will welcome that opportunity. 
Thank you. One minute back to you, Mr. Chairman.
    Mr. Diaz-Balart. Mr. Aguilar.
    Mr. Aguilar. Thank you, Mr. Chairman. I will not take 
Representative Clark's minute. I will stick to my own.
    Madam Secretary, as a member of the committee one of our 
areas of responsibility is to make sure that these funds are 
invested wisely, and I know that you share our concern about 
that issue. And one of the ways that some agencies have sought 
to utilize technology is by using geospatial analysis and 
technology. FEMA has done this, has utilized this technology.
    Do you think that it would be beneficial for the Department 
of Transportation to employ technology to apply a more kind of 
real-time view of where we are with our transportation 
infrastructure system, with the projects that DOT is funding, 
where they are in the process, what is getting complete at what 
stage, or are those being completed? Would you be more open to 
looking at how we use technology in the Department in order to 
advance the priorities, to make sure that the American public, 
similar to what was done with the stimulus years ago, in a 
tracking fashion that individuals can track what projects are 
being awarded and where they are within the pipeline? Is there 
more than we can do and help you with?
    Secretary Chao. That is very interesting.
    Mr. Aguilar. Yeah.
    Secretary Chao. Yeah, I do not know. That is----
    Mr. Aguilar. You have--I know you discussed----
    Secretary Chao. I understand your concern. Yeah, that is an 
interesting concept. I would be more than willing----
    Mr. Aguilar. And I know you discussed before your 
reluctance to support siphoning aside money, but one of the 
ways--one of the areas----
    Secretary Chao. The transparency and it allows people to 
find out what is going on, yeah.
    Mr. Aguilar. Absolutely.
    Secretary Chao. Yeah, sure.
    Mr. Aguilar. And one of the ways that Congress has asked 
you to prioritize the budget and the agency has accepted, 
obviously, and there is funding within fiscal year 2017, as 
well as the fiscal year 2018 request, is transportation 
planning and development. So I just wanted to know your 
thoughts on how we do a better job of managing those projects, 
having a more, you know, real-time analysis of where we invest 
or funds.
    Secretary Chao. The real-time analysis is the key because I 
believe that the Transportation Department has a good handle on 
monitoring funds, how it is being used, whether the funds are 
being used for the purpose they were intended, all that.
    Mr. Aguilar. Sure, sure, absolutely.
    Secretary Chao. So I think we have a good monitoring 
system. I mean, after all, we are grant makers----
    Mr. Aguilar. That is correct.
    Secretary Chao [continuing]. And so we need to monitor for 
distribution.
    Mr. Aguilar. Yeah. No, no, no, no, and I am not 
questioning----
    Secretary Chao. But your----
    Mr. Aguilar. Yeah.
    Secretary Chao. So you are saying on real time----
    Mr. Aguilar. Yeah, yeah.
    Secretary Chao [continuing]. Which is very interesting.
    Mr. Aguilar. No, I am not questioning----
    Secretary Chao. Yeah.
    Mr. Aguilar. Yeah, I am not questioning the ability of your 
staff.
    Secretary Chao. So we like to----
    Mr. Aguilar. Right.
    Secretary Chao. So I would like to hear more about that.
    Mr. Aguilar. Yeah, I am not questioning the ability of----
    Secretary Chao. And maybe we are doing that already, but 
that is a very interesting thought.
    Mr. Aguilar. Sure, sure. No, and I think your ability to 
provide oversight is totally fine from the grant side. I am 
just saying, yeah, as you mentioned, from a transparency 
perspective, you know, is there more that we can do to show the 
American public, you know, where the investments are occurring?
    Secretary Chao. Well, if you have ideas, again, we are very 
open to discussing them with you.
    Mr. Aguilar. Sure. I appreciate it. Thank you so much.
    Mr. Diaz-Balart. Thank you, sir. Let me recognize the vice 
chairman of the subcommittee, Mr. Joyce.
    Mr. Joyce. Thank you, Mr. Chairman. In trying to go through 
with the question I asked you about the MPOs to begin with. 
There was a bill, 496, that the President signed that talked 
about the merger aspect, but I was talking more about the 
expansion aspect of the MPOs. And I do not see it addressed in 
there, the fact that they are going into neighborhoods and 
telling or dictating to communities how they should grow 
forward. Is that something we can address with you offline as 
we move forward?
    Secretary Chao. Of course.
    Mr. Joyce. Okay.
    Secretary Chao. Let us talk about that. Our rulemaking last 
spring dealt with mandatory MPOs.
    Mr. Joyce. Great. Thank you very much.
    Mr. Diaz-Balart. Thank you, sir. Madam Secretary, let me 
first thank you and also your staff for your participation here 
this afternoon. The committee staff will be in contact with 
your budget office regarding questions for the record. I know 
that we will all have a number of questions to be submitted and 
I would imagine that, again, all of us would do that. If you 
could please work with OMB to return the information for the 
record to the subcommittee within 30 days from tomorrow, that 
way we will be able to publish the transcripts of today's 
hearings and make obviously informed decisions when crafting 
the fiscal year 2018 bill.
    I would be remiss, Madam Secretary, if I did not say, you 
know, obviously you are a well-known entity for those of us who 
have been here, and your reputation has always been one of 
obviously talent, but also responsiveness and accessibility. 
And I just want to tell you that you have proven that that has 
been the case; that you have been exceedingly responsive to our 
requests and you have been accessible. So just know that that 
does not remain unnoticed and that we do appreciate your 
continuing willingness to work with us.
    And I will tell you that I for one, and all of us, look 
forward to a very close working relationship. You know, we have 
to be working very closely. And again, I think all of us are 
thrilled that it is you, not only because of your history, but 
because you have demonstrated already in the short time that 
you have been there and that you remain as accessible and as 
responsive as anybody.
    So thank you for your service. We look forward to 
continuing to work with you.
    Mr. Price, any closing remarks?
    Secretary Chao. Thank you.
    Mr. Price. Well, thank you, Mr. Chairman. I also thank you 
for your discussion here with us this morning. We will all have 
further questions that we want to explore for the record, but I 
join the chairman in gratitude for your appearance and a desire 
to earnestly work on these transportation issues. You are 
leading a department that is at the forefront of our country's 
economic wellbeing, the quest for new and better jobs. And it 
has a history of relatively bipartisan cooperation and 
support----
    Secretary Chao. Yes.
    Mr. Price [continuing]. Both in the Congress and in the 
various stakeholders that you work with. That will be very 
important going forward in divisive times to find some way to 
invest in our country's transportation future. So thank you so 
much.
    Secretary Chao. Mr. Chairman, Ranking Member Price, thank 
you so much for the opportunity because I want to reinforce 
again I have been in this Department before. It has always been 
bipartisan and that is the spirit with which I proceed, and I 
look forward to working with all members of the committee.
    Mr. Diaz-Balart. Thank you, Madam Secretary. The meeting is 
adjourned.
    Secretary Chao. Thank you.
    
    
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