[Senate Hearing 115-419]
[From the U.S. Government Publishing Office]
S. Hrg. 115-419
THE ADMINISTRATION'S FRAMEWORK FOR REBUILDING INFRASTRUCTURE IN AMERICA
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HEARING
BEFORE THE
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
__________
MARCH 1, 2018
__________
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COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
JOHN BARRASSO, Wyoming, Chairman
JAMES M. INHOFE, Oklahoma THOMAS R. CARPER, Delaware,
SHELLEY MOORE CAPITO, West Virginia Ranking Member
JOHN BOOZMAN, Arkansas BENJAMIN L. CARDIN, Maryland
ROGER WICKER, Mississippi BERNARD SANDERS, Vermont
DEB FISCHER, Nebraska SHELDON WHITEHOUSE, Rhode Island
JERRY MORAN, Kansas JEFF MERKLEY, Oregon
MIKE ROUNDS, South Dakota KIRSTEN GILLIBRAND, New York
JONI ERNST, Iowa CORY A. BOOKER, New Jersey
DAN SULLIVAN, Alaska EDWARD J. MARKEY, Massachusetts
RICHARD SHELBY, Alabama TAMMY DUCKWORTH, Illinois
CHRIS VAN HOLLEN, Maryland
Richard M. Russell, Majority Staff Director
Gabrielle Batkin, Minority Staff Director
C O N T E N T S
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Page
MARCH 1, 2018
OPENING STATEMENTS
Barrasso, Hon. John, U.S. Senator from the State of Wyoming...... 1
Carper, Hon. Thomas R., U.S. Senator from the State of Delaware.. 2
WITNESSES
Chao, Hon. Elaine, Secretary, U.S. Department of Transportation.. 7
Prepared statement........................................... 9
Responses to additional questions from:
Senator Barrasso......................................... 12
Senator Carper........................................... 14
Response to an additional question from:
Senator Capito........................................... 33
Senator Fischer.......................................... 33
Responses to additional questions from:
Senator Markey........................................... 34
Senator Merkley.......................................... 35
Response to an additional question from Senator Moran........ 37
Responses to additional questions from:
Senator Van Hollen....................................... 38
Senator Whitehouse....................................... 42
James, Hon. R. D., Assistant Secretary of the Army for Civil
Works.......................................................... 46
Prepared statement........................................... 48
Responses to additional questions from Senator Carper........ 53
Response to an additional question from:
Senator Boozman.......................................... 55
Senator Capito........................................... 55
Responses to additional questions from:
Senator Inhofe........................................... 55
Senator Van Hollen....................................... 56
Senator Whitehouse....................................... 59
Senator Wicker........................................... 61
ADDITIONAL MATERIAL
Trump Upends His Own Infrastructure Plan With PPP Comments to
Democrats, Eno Transportation Weekly, September 29, 2017....... 236
Trump endorses 25-cent gas tax hike, lawmakers say, Politico,
February 14, 2018.............................................. 239
Here's How the U.S. Chamber Would Rebuild and Modernize America's
Infrastructure, U.S. Chamber of Commerce, accessed March 15,
2018........................................................... 243
THE ADMINISTRATION'S FRAMEWORK FOR REBUILDING INFRASTRUCTURE IN AMERICA
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THURSDAY, MARCH 1, 2018
U.S. Senate,
Committee on Environment and Public Works,
Washington, DC.
The Committee met, pursuant to notice, at 10:06 a.m. in
room 406, Dirksen Senate Building, Hon. John Barrasso (Chairman
of the Committee) presiding.
Present: Senators Barrasso, Inhofe, Capito, Boozman,
Wicker, Fischer, Moran, Ernst, Sullivan, Carper, Cardin,
Whitehouse, Merkley, Gillibrand, Booker, Markey, Duckworth, and
Van Hollen.
OPENING STATEMENT OF HON. JOHN BARRASSO,
U.S. SENATOR FROM THE STATE OF WYOMING
Senator Barrasso. Good morning. Today, we will discuss the
need to modernize our Nation's infrastructure and President
Trump's plan for rebuilding infrastructure in America.
This Committee has historically taken the bipartisan lead
on infrastructure issues in the Senate. I am very pleased that
Secretary Chao and Assistant Secretary James have come to our
Committee first to discuss the infrastructure principles shared
by President Trump on February 12.
Our infrastructure drives the health, well-being, economy,
and prosperity of the Nation. We depend upon it to move people
and goods, to get to our jobs, to protect our homes from floods
and disasters, and to provide our families with clean water.
For too long, we have not prioritized the needs of these
infrastructure systems. Funding has not kept pace with our
infrastructure; needs and burdensome Federal regulations have
slowed efforts to spend the money efficiently.
The time has come to make a significant investment in our
roads, bridges, ports, and water systems. The Administration's
plan proposes to spend hundreds of billions of dollars of
Federal money to generate well over $1 trillion of
infrastructure impact.
Part of this can be accomplished by cutting Washington's
red tape. President Trump's plan prioritizes streamlining. This
will allow needed projects to start quicker and finish faster
for lower costs.
As States, counties, and towns wait to obtain permits from
Washington, costs for projects rise, and time is wasted. It
should not take a decade to permit a project that takes only
months to build. We need to speed up project delivery.
The President's plan calls for a 2-year or less limit for
Federal approvals on projects. That is a common sense approach.
Only in Washington is 2 years considered a quick turnaround. We
need regulatory streamlining so we can build these projects
faster, smarter, better, and cheaper. The President's plan also
makes the infrastructure needs of rural America a priority.
A significant portion of the Federal money proposed in the
President's plan is designated specifically for rural States.
Rural communities need to have an equal seat at the table as we
address infrastructure needs. What works in Baltimore or
Chicago may not work for smaller communities like Cody, Casper,
or Cheyenne, Wyoming. We need an infrastructure plan that
includes projects for both.
Better roads and water systems across America help us all.
Everyone benefits from safer highways and dams in rural
communities. Any plan should have significant and sustained
funding levels for rural areas.
On the Environment and Public Works Committee, we are
making good bipartisan progress on legislation to address
America's water infrastructure. We are working side by side on
water infrastructure legislation that we plan to pass later
this year. We need to expand that bipartisan cooperation to
roads and bridges as well.
America prides itself on its ingenuity and commitment to
provide infrastructure that meets the needs of its people. I
believe we can work in a bipartisan way on legislation that
will make our infrastructure even better. That process begins
today by hearing more about the President's plan.
I would like to thank both Secretary Chao and Assistant
Secretary James for joining us today and for the insights they
will provide for the Committee.
I would now like to recognize our Ranking Member, Senator
Carper, for his remarks.
OPENING STATEMENT OF HON. THOMAS R. CARPER,
U.S. SENATOR FROM THE STATE OF DELAWARE
Senator Carper. Thanks, Mr. Chairman.
Good morning. It is great to see our Secretary, and I want
to be among the first to congratulate our new Assistant
Secretary with the Army. Thank you for your willingness to
serve, and we look forward to working with you. It has been a
joy to work with both of you through the confirmation process.
Welcome, and we are glad to see you.
I am disappointed to learn that Administrator Pruitt is
unable to testify before us today despite EPA's important role
in the improvement and development of drinking water and
wastewater infrastructure. Having said that, we are delighted
that the two of you are here. I thank you for joining us.
As we consider a potential infrastructure bill, it is
helpful to hear from you, and we were glad to finally receive
the Administration's proposal last month. My statement says it
will largely be up to the Congress. I will be honest with you.
It is up to you--the two of you--as well. It is up to the
Administration. It is up to a lot of people. This is a shared
responsibility.
A big part of it is on us. We have a pretty good working
relationship here. Hopefully, that will help us along the way.
The Chairman and I agree on a lot of things. We disagree on
one or two. However, we agreed on the need for the Federal
Government to be a good partner to States when it comes to
investing in our infrastructure.
As a former Governor and State Treasurer, I know it is hard
to ask a State to go from an 80-20 funding formula, for
example, for roads--80 percent Federal to 20 percent States; it
is hard to flip that and go from 80-20, where the Federal
Government plays the major role, to 20-80 where the States are
expected to put up the 80 percent. It is hard to make up that
slack.
Some of us in the Senate met with a bunch of Governors on
Capitol Hill this week. We had a good conversation about this.
They are concerned, and you might imagine why. They are not
anxious to accept that view. I think folks in Wyoming and
people--Governors and so forth--would all be reluctant to take
that deal.
It is one of a number of places where I think the math of
the Administration's plan does not add up. Last week some
economists up the road from us in Philadelphia at the
University of Pennsylvania modeled the Administration's
proposal, and have been modeling it for a while.
They found out that at most it would spur an additional $30
billion in State, local, and private infrastructure spending.
Think about that--an additional $30 billion in infrastructure
spending. That is a far cry from what the Administration is
promising.
On the campaign trail, I think the President basically is
saying we are going to put $1 trillion into infrastructure. The
folks at the University of Pennsylvania at the Wharton School
of Business are saying, I don't think so.
I am also concerned about the Administration's proposal to
give projects incentive awards based almost entirely on the
percentage of non-Federal money they would raise, regardless of
project quality and benefits. I think we might want to rethink
that. I think there is something to be said for more money for
the leveraging of non-Federal money with the Federal money but
project quality has to be among the considerations.
Does this make it safer? Does this reduce pollution? Does
this make easier for us to get from place to place and that
kind of thing? Particularly, I am disappointed though by the
degree to which the Administration is focusing on sweeping
rollbacks to our Nation's bedrock environmental protections.
I am committed to delivering projects quickly. I know you
are, too, but safely guarding environmental projections does
not always achieve time savings. In fact, I think it rarely
does. Doing so would potentially put our communities at risk
and can deprive the residents who would be most affected by
these projects from making their voices heard.
There are a number of ways to speed up projects. Putting on
my old Governor hat, we were able to do those without
environmental harm, including many this Committee helped enact
into law and that this Administration is choosing, at least
thus far, not to implement. For example, we could ensure that
permitting agencies have enough funding to quickly complete
reviews. We could enhance coordination tools and implement new
authorities in 2020 that Congress already passed.
Unfortunately, the Administration has done the opposite by
proposing to cut permitting agencies' budgets and slashing
funding for the Department of Transportation's Infrastructure
Permitting Improvement Center by two-thirds. That does not
really speed us up. That does not give us the expedited process
we all want.
Congress--thanks to the efforts of this Committee--created
the Federal Permitting Improvement Steering Council in 2015 to
coordinate and expedite permitting. That was in 2015. I am told
that no executive director of the Federal Permitting
Improvement Steering Council has been appointed. It has been 3
years.
Major rulemakings at DOT would implement streamlining
provisions in the FAST Act and the MAP-21 Act, that I and many
of our colleagues have supported, has not been finalized. It
has been 3 years, and in some cases, 5 or 6 years. Frankly, one
of the best ways to speed up projects is to provide long term
funding, program certainty, and make grant awards in a timely
manner.
Listen to this. Time and again, research has shown that
inadequate funding is the most common factor delaying water and
transportation projects. Unfortunately, so far this
Administration is holding up grants and delaying funding
decisions. DOT released a funding notice for the INFRA Grant
Program 8 months ago but still has not awarded the $1.5 billion
Congress provided for that program. It has been 8 months.
In the first three-quarters of 2017 EPA awarded only a
third as much grant funding as the agency did over the same
period of time in 2016. The Department of Transportation's 2019
budget proposes cutting funding for all new transit capital
projects, all new transit capital projects, to cut Amtrak
funding and to just end the TIGER Program, which I think most
of us think is a pretty good program.
For an Administration allegedly interested in efficiency in
infrastructure--we are, too--it is frustrating to see so many
critical programs being canceled, mismanaged, or underfunded.
It is particularly hard to take this Administration's proposal
to spend $200 billion on infrastructure seriously when that
proposal is paired with a budget that would cut $240 billion
from existing infrastructure programs.
Instead of funding our Nation's aging water infrastructure,
the President's fiscal year 2019 budget proposal for the Corps
of Engineers provided by Secretary James is down approximately
4 percent below the fiscal year 2018 request. For the first
time in 20 years the President's budget for construction for
this important entity is below $1 billion.
In addition to these budget cuts, the Administration
authorized no new starts in investigations to fund project
studies and no new starts in construction. That is cutting off
the pipeline for new Corps of Engineers projects.
These cuts are disturbing given the Corps' backlog. I
mentioned this 2 weeks ago, Madam Secretary, in our meeting
with the President at the White House.
The Corps' backlog is $96 billion and growing. My
understanding is we are looking at a budget proposal around $6
billion. We have a backlog of $96 billion, and we have a budget
proposal for the Army Corps of $6 billion. It will be a while
before we get through that backlog, Mr. James.
Worse, the proposal would shift the burden for financing
these projects almost entirely onto local stakeholders. Can
some of them do more? You bet they can. Should they do more?
You bet they can, but we have to be realistic, too.
Our country depends on water infrastructure investments in
part because such infrastructure helps expand our GDP. We need
to do that. Each Federal dollar spent on civil works programs
generates $5 in revenue to the U.S. Treasury, and--listen to
this--$16 in economic benefit.
The current budget proposal ignores the inherent Federal
role the Corps plays in stabilizing our economy, the important
role. These proposals are placed on the Corps and the sectors
of our economy it supports through what could be a death spiral
if we are not careful. The Administration appears to ignore
these clear benefits in developing their budget proposal while
selectively using a benefit to cost ratio to kill nationally
significant projects.
In closing, let me briefly discuss revenues. Secretary
Chao, when you testified before us last May you told us that
the Administration's Infrastructure Task Force was looking at
two issues, permitting and pay-fors. To be honest with you, I
was surprised when I finally saw the Administration's plan
devoted 15 pages to permitting while the word pay-for failed to
appear even once. Maybe I missed it, but I do not think so.
My colleagues have heard me say more than a few times that
if things are worth having, they are worth paying for. For
decades we have relied in this country on a user fee approach
to pay for much of our infrastructure, especially our
transportation infrastructure, roads, highways and bridges. In
years to come we will see an ever growing number of electric
and fuel cell powered vehicles on our roads that do not use
gasoline or diesel fuel.
In anticipation of that growing trend, 3 years ago we
adopted right here in this Committee legislation that called
for a multi-state pilot alternative revenue mechanism to fund
roads in America. We call it Vehicle Miles Traveled or words to
that effect, the road user charge. Over the next several years
we should grow the number of States in that pilot and
eventually run a national pilot of that funding approach.
Eventually we are going to morph away from taxing gas and
diesel. We will have all these hydrogen projects on the road
eventually and all these electric projects on the road. They
are not going to buy any diesel fuel or gasoline, but we need
to make sure they are going to be paying their fair share.
Unfortunately, that proposal is still a few years away.
Meanwhile, we have a growing shortfall in the Highway Trust
Fund to address.
Fortunately, several of us were in a meeting I alluded to
earlier with the President and our Secretary last month when he
repeatedly declared his strong support for a 25 cent per gallon
increase in the Federal gas tax on gasoline and diesel fuel.
That could become one important additional source of funds to
help us pay for the improvements we need.
At first, I thought he was kidding, Madam Secretary, but he
was not. When I talked to him later, he indicated he had been
talking about this for weeks.
Bo Simpson had something like roughly 4 cents increase in
gas and diesel tax over 4 years, going forward. I presented
that to the President 2 weeks ago, as you recall, and he said,
that is not enough, Tom. We need to do more. Twenty-five cents,
we should do it now.
He said he would give us air cover, political cover, and I
thought, God bless you, Mr. President. If he is serious about
that, if he is serious about something along this line, we can
do a deal here. We can get this show on the road.
Finally, let me say I believe there are others as well that
would find that bipartisan support. With the Administration's
support and the President's promised leadership, I hope we will
be able to find agreement for a much needed source of new
revenues to fund our critical infrastructure needs while we
also pursue other promising ways to get better results for the
transportation dollars we spent.
In those 15 pages I talked about of permitting reform,
there are some good ideas. There are some that are not, but
there are some good ideas there, too.
I understand figuring out how to pay for things is always
the hard part, but we were not sent here to just attack all the
easy things. We were sent here to do some tough things, to have
difficult conversations, and make tough choices to achieve
better outcomes.
I heard yesterday from our colleague and friend, John
Cornyn, with whom I was with in the gym this morning. He told
us he does not know if Congress will have time to do something
on infrastructure in this session. I gasped when I heard that,
shared with me by a reporter the other day.
I talked with Senator Cornyn about that today. He did not
think he had said that. That is great. I hope he didn't because
we have plenty of time, and we ought to have plenty of time to
do infrastructure and transportation. That is what people sent
us here to do. They want us to do the hard things.
If we do, with apologies to Mark Twain, we will amaze our
friends and confound our enemies. Let us do both.
Thank you so much. Thank you for letting me go on.
Senator Barrasso. Thank you, Senator Carper.
I would like to now welcome our guests: Hon. Elaine Chao,
Secretary, United States Department of Transportation; and Hon.
R. D. James, Assistant Secretary of the Army for Civil Works.
I would like to remind the witnesses that your full written
testimony will be made a part of the official hearing record.
We ask that you please keep your statements to 5 minutes so we
may have time for questions.
I look forward to hearing your testimony beginning with
Secretary Chao.
Madam Secretary.
STATEMENT OF HON. ELAINE CHAO,
SECRETARY, U.S. DEPARTMENT OF TRANSPORTATION
Ms. Chao. Chairman Barrasso, Ranking Member Carper, and
members of the Committee, thank you for the opportunity to be
here today.
Infrastructure is the backbone of our world class economy.
It is the most productive, flexible, and dynamic in the world.
It is a key factor in productivity and economic growth. Yet,
the challenges are everywhere.
With respect to surface transportation infrastructure,
traffic congestion and delays cost drivers nearly $160 billion
annually. About one-quarter of our Nation's bridges are
structurally deficient or in need of improvement. More than 20
percent of our Nation's roads are in poor condition, and the
transportation needs of rural America, which account for a
disproportionately high percentage of our Nation's highway
fatalities, have been ignored for too long.
That is why 12 government agencies have been supporting the
President on a comprehensive Infrastructure Initiative, which
the President announced as a priority in the 2018 State of the
Union address. Transportation is just one component. The
Initiative includes--but is not limited to--drinking and
wastewater, energy, broadband, and veterans' hospitals as well.
It is designed to change how infrastructure is designed, built,
financed, and maintained in communities across the country.
The goal of the President's proposal is to stimulate at
least $1.5 trillion in infrastructure investment, which
includes a minimum of $200 billion in direct Federal funding.
The guiding principles are to: one, use Federal dollars as seed
money to incentivize infrastructure investment; two, provide
for the needs of rural America; three, streamline permitting to
speed up project delivery; and four, reduce unnecessary and
overly burdensome regulations.
In addition, a key element of the proposal is to empower
decisionmaking at the State and local level. They know best the
infrastructure needs of their communities.
Half of the new infrastructure funds would go toward
incentivizing new State and local investments in
infrastructure. A quarter of the Federal funds will be
dedicated to addressing rural infrastructure needs, as
prioritized by State and local leaders. As a former Secretary
of Labor, I am pleased to note this plan also has a work force
component to help workers access the skills needed to build
these new projects.
The department is also implementing the President's One
Federal Decision mandate announced in August 2017 to help speed
up the delivery of new infrastructure and reduce costs. In
fact, the Department is working on a new process to handle the
permitting of complicated, multi-agency projects to meet the
President's new expedited time line.
In addition to permitting reform, the department is doing
its part to help grow the economy and create jobs through
regulatory reform. Costs associated with new DOT regulations
decreased by $312 million in 2017, and the department is on
track to decrease these costs by at least $500 million in 2018.
By incentivizing new investment in infrastructure,
eliminating overly burdensome regulations, providing support
for rural America, and streamlining the permitting process, the
department is helping to improve our quality of life and build
a brighter future for all Americans. This Administration looks
forward to working with all of you on these very important
issues affecting our country's economy, vitality, productivity,
and also quality of life.
Thank you again for inviting me, and I will be happy to
answer any questions you may have.
[The prepared statement of Ms. Chao follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Barrasso. Thank you so very much for your
testimony.
Mr. James, please proceed.
STATEMENT OF HON. R. D. JAMES,
ASSISTANT SECRETARY OF THE ARMY FOR CIVIL WORKS
Mr. James. Good morning, Mr. Chairman, members of the
Committee, and Ranking Member Carper.
I am honored to testify before you today on the
Administration's recently released infrastructure plan and the
water resources needs and challenges of our Nation. I look
forward to working with you to advance the delivery of our
Nation's water resources infrastructure through innovative
approaches and streamlined processes.
The Army has played a significant role in the development
of the Nation's water resources in the past. The Army maintains
our Nation's coastal navigation channels, inland waterways,
dams, navigation locks, flood control levees, and hydropower
plants.
These projects help prevent flooding in our river valleys
and along our coasts and facilitate the movement of
approximately 2 billion tons of waterborne commerce. They also
provide 24 percent of the Nation's hydropower.
Much of our Nation's infrastructure is aging, as you know,
and requires significant amounts of resources to maintain. The
traditional approach to constructing and maintaining these
projects is not sustainable.
The Administration's infrastructure legislative principles
released on February 12, 2018, provide a common sense approach
to addressing these issues. The legislative principles directly
applicable to the Civil Works mission fall within six general
areas.
The first is water resource infrastructure. The
Administration's principles would remove barriers and provide
new authorities to expedite the delivery of infrastructure
projects through a variety of mechanisms focused on revenue
generation, streamlining project delivery, and innovative
acquisition approaches.
The second area is inland waterways. For this area, the
combination of new and existing revenue streams combined with
non-Federal partnerships would enable greater efficiencies and
innovations for our Nation's inland waterways.
The third area is associated with incentives in the form of
grants to non-Federal entities. These are intended to encourage
innovation, accelerate project delivery, and increase State,
local, and private participation.
The fourth area pertains to the Water Infrastructure
Finance and Innovation Act. This Act provides for incentives in
the form of low cost loans, which are intended to encourage
innovation, accelerate project delivery, and increase State,
local, and private participation.
The fifth area involves environmental reviews and
permitting. In addition to broad environmental and permitting
reforms, the principles would further streamline the Civil
Works Section 404, Section 10 of the Rivers and Harbors Act,
and Section 408 programs to timely support decisions while
maintaining the environmental protection provided by the law.
Finally, the last area applicable to Civil Works'
responsibility is divestiture. The infrastructure legislative
principles authorize Federal divestiture of assets that would
be better managed by State, local, or private entities. The
Administration's infrastructure proposal is an opportunity for
the Army to apply new financing approaches and streamline the
processes to meet current and future needs of the Nation.
I recognize the importance of streamlining environmental
reviews with the goal of shortening timelines to an average of
2 years while still protecting the environment. In particular,
I am looking to eliminate redundant and unnecessary reviews,
concurrencies, and approvals.
In addition to the Administration's legislative proposal, I
will look internally at the Civil Works organization's
authorities, policies, regulations, and procedures to identify
opportunities for increased efficiency and effectiveness. I
want to stop focusing on the process and focus on the results.
Simply put, the Army must ensure that we put the Federal
funds we are entrusted with into the ground effectively and
efficiently. To me, let's move the dirt is the goal.
In closing, the time has come for us to focus on outcomes
as we rebuild America. The way we use our water resources
significantly impacts the economic advantage afforded to us by
our river systems. It will determine if we protect and restore
the capital assets afforded healthy ecosystems, and it will
determine how we protect life and property from the coast to
coast threat of flooding.
I look forward to working with this Committee in the future
to improve the ways that we can invest in our water resources.
Thank you, Mr. Chairman and members of the Committee. This
concludes my statement. I look forward to taking any of your
questions.
[The prepared statement of Mr. James follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Barrasso. Thank you very much to both of you. We
appreciate you being here today.
Many of the members of the Committee are here looking
forward to asking questions. Before we do that, we have two
pieces of housekeeping.
One is, in order to assist Chairman McCain in his absence,
Senator Inhofe is going to be chairing the Senate Armed
Services Committee hearing today. I ask permission of my
Republican counterparts that as he arrives, he be allowed to be
recognized for questions at that time.
The second is that we have a series of three roll call
votes beginning at 11:45 a.m. It is my intention to complete
our hearing by noon in order for all of us to fully participate
in the voting on the floor.
With that, Madam Secretary, thank you again for being here.
Earlier this year Congress passed a budget that designated
an extra $10 billion a year for infrastructure. As the head of
the governmental department that spends the most Federal
dollars on infrastructure, would you agree, Madam Secretary,
that an extra $10 billion per year would make a substantial
difference to States, including Wyoming, Delaware, and others,
and is a good start in our efforts?
Ms. Chao. There is approximately $4 trillion in
infrastructure needs in this country, so every dollar counts.
Thank you.
Senator Barrasso. I am showing you a chart, Madam
Secretary. As you can see from the chart, on average, highway
projects take the longest time to complete the environmental
impact statements, longer than rail, longer than public
transit, longer than electricity transmission. It is the
highway projects, on average, that run 6 and a half years.
Do you agree that streamlining is critical in terms of
speeding up the needed investment in our Nation's highways?
Ms. Chao. Absolutely. There are many private pension funds
that are very interested in investing in public infrastructure.
Yet, in a number of States, the private sector is disallowed
from participating in the financing of public infrastructure.
That is one issue.
Two, while I see a great deal of enthusiasm from the
private sector, pension funds, and others to participate, one
of the hurdles they face is the lack of ready projects to be
financed. If the permitting process can be speeded up and also
from a common sense, less bureaucratic way of doing things,
they can be streamlined, and it will actually make more
projects available for the private sector to invest.
Senator Barrasso. Mr. James, the Committee has already held
two hearings this year related to enacting the Water Resources
Development Act legislation. In light of those hearings, it is
clear that the Corps needs to have the right tools and
flexibilities to carry out water infrastructure projects.
If implemented, how would the Administration's
infrastructure framework ensure the Corps has the proper means
at its disposal for important water infrastructure projects? I
can think of one in Wyoming, the Jackson Hole ecosystem
restoration. How do we make sure those are delivered
efficiently, effectively, and at the lowest cost for the
American taxpayer?
Mr. James. Mr. Chairman, you just discussed with the
Secretary the situation I feel has held up our way of doing
business in the Corps for a long time. That is the fact of
multiple agencies overseeing the environmental impact
statements as we go through developing those.
Under President Trump's plan, there would be one agency in
charge of that, one decision, one agency, and the agencies will
work together with the understanding that they do not have 6
years to complete an environmental impact statement.
As far as the other things the Corps does, part of it is
planning, designing, engineering, and finally getting to
contracts and construction. We are trying. The Corps has
already internally made great steps and strides toward
improving their process.
I am working with General Semonite and his key staff. We
will further dig into that and try our best to address it so
that those processes do not take as long, and what money we are
afforded can then be put in the ground rather than in the
process.
Senator Barrasso. We appreciate General Semonite being
here.
You have testified a number of times before the Committee.
Thank you for being here with us today to join in the
discussion.
Mr. James, current authorities allow the Corps to receive
funding from other entities such as natural gas companies and
railroads to augment existing regulatory resources. It is done
so that permit evaluations can be expedited under Section 404
of the Clean Water Act and Section 10 of the Rivers and Harbors
Act.
What benefits or drawbacks do you foresee if this authority
were to be expanded to allow the Corps to receive funding from
any non-Federal entity to augment existing regulatory
resources?
Mr. James. Sir, I would like for you to give me the
opportunity to let my staff get back with you immediately on
that. I have thoughts, but I do not want to give you the wrong
information on that, if you will, sir.
Senator Barrasso. I would also ask that they look into if
there are any additional considerations that would help the
Committee understand what additional authorities would help the
Corps further expedite the processing of evaluating the
regulatory permits.
Mr. James. Absolutely. We will work on that and get back to
you. I appreciate that.
Senator Barrasso. Thank you very much.
Senator Carper.
Senator Carper. Secretary, you have only been on the job
for a short while, and you have shown great wisdom in your
response to that last question. When you do not know the
answer, say so. Tell us you will get back to us, and make sure
you do. That would be great.
Secretary Chao, I mentioned in my opening statement that
the folks at the University of Pennsylvania's Wharton School of
Business--including an economist who I think was a former Bush
Treasury official--evaluated the Administration's claim that
$200 billion in spending will somehow produce $1.5 trillion
overall.
The folks at the Wharton School of Business stated that the
Administration is off by 98 percent. In other words, for every
$100 it has claimed, the amount of money being generated, funds
being generated from this proposed spending, 98 percent of that
will never materialize. Other experts, including the Heritage
Foundation, of all people, have looked at Wharton's report and
say it is spot on, which kind of surprised me.
Let me give you a chance to respond to these experts and
briefly walk us through how we take $200 billion and turn it in
to $1.5 trillion even though States tell us they are cash
strapped, and we know the vast majority of projects to repair
or replace infrastructure will not attract private investment.
Explain how that works.
Ms. Chao. Obviously, we disagree with both the Heritage
Foundation and the Wharton Institute. It actually takes people
with real life business experience to know how it works.
We see it in the TIFIA loans, with the Build America
Bureau, and also with the RRIF loans. We give $1 that leverages
$14, basically in credit, and of the $14, there is 40 times
leveraging overall investment spending. We see it every day in
the Build America Bureau.
Senator Carper. I am not from Missouri, but on this one,
you are going to have to show me.
Madam Secretary, the department elite has a key role in
negotiating a win-win situation outcome on fuel economy and
greenhouse gas tailpipe standards with California. I have been
concerned that no real negotiations with California have
occurred to date.
I am also concerned about press reports that the
Administration may choose to weaken the standards far more than
any automaker has asked for. I have asked them all. I have
asked Detroit, I have asked 10 of them, what do you need in
terms of standards. They said not as much as the Administration
apparently thinks we are asking for. We are not.
We need a win-win situation here. This is ripe for a win-
win situation. I want to ask your commitment to do two things.
I do not think they are too difficult things to do.
As the process moves forward, let me ask you to commit to
do two things. One, I have heard that the Transportation
Department and EPA staffs are not working together as well as
they can and should in this regard.
I just want to ask if you will direct your political and
career staff to answer all of EPA's questions about the
Transportation Department's model and analysis quickly and
completely. That is my ask.
Ms. Chao. I would be more than glad to answer
transportation questions. As for what happens at the EPA, I
will talk with the Administrator, but it is up to him.
Senator Carper. I want to make clear I am asking you to
direct your political and career staff to answer all EPA's
questions about the Transportation Department's model quickly
and completely. That is what I am asking.
Ms. Chao. I will do what I can, but I do not understand
that question. If it is another jurisdiction, I cannot make
them answer that.
Senator Carper. We are asking your department to answer the
questions asked by another part of the Administration, EPA.
Ms. Chao. Right, and I cannot do that. They have to answer
their own questions.
Let me also disabuse you of the idea that we are not
working together on this, because we have been. In fact, we
have held almost daily meetings at the White House with EPA and
the Department of Transportation on this issue, and California.
In fact, I have had the Acting NHTSA Administrator, Heidi
King, fly out to California several times in an effort on our
part to try to come together and understand and work together
with California. From our point of view, I feel quite confident
that we have really tried.
Senator Carper. Madam Secretary, I am going to ask you to
hold it right there, because what I have repeatedly heard from
EPA, from within the Department of Transportation, and from the
folks in California, the CRRV, that there are no active
negotiations underway, that the give and take you are telling
us about is not occurring. Let us have an off-line conversation
about that.
What I have heard is deeply concerning, and I want to make
sure you are hearing the same thing I am hearing.
Ms. Chao. If that is happening, I want to know about it, so
thank you for bringing that up.
Senator Carper. We are talking about permitting reform. We
have done a lot. We need to do more. My hope is we will have an
oversight hearing that actually looks back to 2012 legislation,
what we asked for and what has been done and one that looks at
2015 legislation, what has been asked for and what has been
done.
I will ask three questions for the record. Why has the
Administration failed to appoint an executive director to the
Federal Permitting Improvement Steering Council? You have had
several years to do that.
Why has the department not finalized all the MAP-21 and
FAST Act streamlining rules? In some cases, you have had 3
years. In other cases, you have had 5 or 6 years to do that.
Why has the Administration proposed to cut the budget for
permitting agencies, including the DOT's Infrastructure and
Permitting Improvement Center?
Those are legitimate questions. We do not have time to
respond to those today, but those are good questions and need
to be answered.
Thank you very much.
Senator Barrasso. Thank you, Senator Carper.
I would like to submit for the record about TIFIA and RFIA
because the history of these programs has successfully
demonstrated that Federal funding can be significantly
leveraged. We have testimony from Jennifer Aument to this
Committee in July 2017.
Without objection, that will be submitted.
[The referenced information was not received at time of
print.]
Senator Carper. May I make a similar unanimous consent
request to submit the University of Pennsylvania Wharton School
analysis that indicates only 2 percent of the moneys in fact
would be generated?
Ms. Chao. I would be more than glad to provide comments to
that as well.
Thank you.
Senator Barrasso. Without objection.
[The referenced information follows:]
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Senator Barrasso. Senator Inhofe.
Senator Inhofe. Thank you, Mr. Chairman.
I appreciate you coming to me. I am chairing the Armed
Services Committee hearing at this time, but what we are doing
here is so significant. I am very excited and positive about
it.
Just to clarify, we have been in contact with our
committees, two committees, Commerce and Environment and Public
Works, the White House, and the Administration many, many
times. We got a good running start, and good things are
happening.
I was encouraged by the President's proposal. I think we
can all come together, and there is no better evidence of that
than a joint Wall Street Journal article written by Senator
Whitehouse and me just last week.
I ask unanimous consent that it be made a part of the
record at this point.
Senator Barrasso. Without objection.
[The referenced information follows:]
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Senator Inhofe. I am very serious when I say this, Madam
Secretary, because Senator Whitehouse is one of the more
progressive Democrats. I am a conservative Republican, and we
agree on this stuff.
There is an old document nobody reads anymore called the
Constitution that tells us what we are supposed to be doing
here, defending America, and they called it post roads back
then, so we have every intention of doing that.
The Harvard Harris Polls show that 84 percent of Americans
responded that we need to invest more in our infrastructure,
and then they talk about different methods of paying for all
this.
I do think when we look at this we need to consider the
additional revenue that will be coming in as a result of the
increase in economic activity. It works out for each 1 percent
increase in economic activity; it develops about $3 trillion
over 10 years of additional revenue.
This worked back in the middle 1960s with Kennedy and
certainly worked with Reagan. That needs to be considered.
Secretary Chao, I will be looking forward to working with
you. Our Oklahoma Department of Transportation has shared with
me that for each year of delay of a project, 3 percent of cost
actually goes up. Timing is important.
When funding is scarce and hard fought to earn, it can
really limit what our States and local entities can accomplish.
I appreciate the Administration's recognition of this fact with
their focus on project delivery reform.
We did a great job in the FAST Act with a lot of the
project delivery reforms. It was huge, so we got a lot more
miles done than we would have otherwise. At that time, I
chaired this Committee, and Senator Boxer was the Ranking
Member. We did accomplish some things.
Can project delivery be both timely and environmentally
sound? I would ask you to respond to that, if you would.
Ms. Chao. Of course. Out of the 30 different regulations
required by the FAST Act, everything has been done except for
two. They should be coming out by June of this year.
On the other issues about one Federal decision announced
last August 2017, this actually addresses more than the FAST
Act. It addresses multi-departmental, multi-agency
coordination.
We are finding as we implement what the FAST Act has asked,
there are larger problems about permitting that spans the
entire Government, which is why we need to tackle the rest of
the permitting processes in the other departments on a multi-
agency basis.
Senator Inhofe. Your first response, people should pay
attention to that. We have actually done that. It has been done
now, so we can do it again.
Secretary James, I do have a question I want to ask you
concerning the Corps of Engineers. However, it is a long one,
so I am going to submit that for the record if that is all
right.
Mr. Chairman, thank you for giving me this priority.
Senator Barrasso. Thank you, Senator Inhofe.
Senator Merkley.
Senator Merkley. Thank you, Mr. Chairman.
I wanted to start with Mr. James by asking you about the
tribal villages along the Columbia River that we had a chance
to discuss before. These are the villages that were flooded by
building dams on the Columbia River. We rebuilt the city that
served the Caucasian population but did not fulfill our
commitment to the Native American tribes to rebuild their
villages.
I think you indicated some interest and support for this. I
just wanted to check in and see if you are prepared to help
champion getting this long overdue commitment done.
Mr. James. Yes, sir. I do think that is the right thing for
this country to do. The tribes that were moved out of their
homeland areas have been promised housing in other places. We
should do that as a Nation. There is no question about that. I
look forward to working with you in the future and will help
with your efforts in doing that.
Senator Merkley. Thank you very much. I sure appreciate
that.
Secretary Chao, I wanted to ask you about the basic
question of Buy America and Buy American referring to U.S.
sourced steel and inputs for what we build as a U.S. Government
and Buy America, U.S. sourced steel and other products for
projects funded by American grants, U.S. Government grants.
In his inaugural address, President Trump said, ``We will
follow two simple rules, buy American and hire American.'' Is
the President still standing by this pledge for buy American?
Ms. Chao. Absolutely, at the Department of Transportation.
Senator Merkley. Thank you, because here is the thing. Buy
America is not mentioned at all in your infrastructure
proposal. It is not mentioned in the context of the
transportation and water projects; it is not mentioned as a
requirement in the infrastructure grants; it is not mentioned
in the issue of relocation of utilities; and it is not
mentioned in the requirements for the airport improvement
program, so on and so forth.
Can you pledge to insert Buy America and Buy American into
these proposals so that we will buy American made steel?
Ms. Chao. There is an executive order outstanding on
January 20, so I think it is quite clear that is governed by a
different authority. But you make a good point, and I will
certainly consult with the White House on that.
Senator Merkley. Thank you. Actually, unless it is in the
legislation issuing these grants, it will not actually be
compelling. I would like to work with you to achieve that
vision and that objective.
Ms. Chao. If I may add one other thing, we are actually
applying the Buy America to all these grants, so thank you.
Senator Merkley. Thank you. I appreciate that a great deal.
The second thing I wanted to explore is the challenge of
whether we are simply moving chairs around on the deck of our
infrastructure Titanic. In that regard, I have a chart I would
like to show you.
This chart shows that the President's budget is taking a
total of $280 billion out of infrastructure: out of the TIGER
grants, $5 billion; out of the Highway Trust Fund, CBO
estimates $164 billion; out of the new starts, almost $20
billion; out of Amtrak, $7.6 billion; Army Corps of Engineers,
$14 billion; CDBG, $30 billion; home grants, incredibly
important to so many areas for housing, $9.5 billion; public
housing capital, $19 billion; the Economic Development
Administration, so important in rural areas, $2.5 billion;
aviation, $3.6 billion; and rural water, $5.1 billion.
These total $280 billion. If we look at what is going on
here, we are cutting $280 billion for infrastructure here and
adding $200 billion over here. That is a net loss on
infrastructure. How does that fulfill the vision of an
aggressive infrastructure program?
Ms. Chao. I think there is a disagreement about the purpose
and use of Federal funding, which is obviously a discussion
point for us and why we are all here.
The numbers you mentioned are compared to the 2018 fiscal
year. If you look at 2017, it is actually not a cut; 2018 went
up, and therefore, that is how you consider it a cut.
Nevertheless, the FAST Act increases the mandatory portion by
more than 4 percent. Overall, the DOT budget is pretty much the
same in 2019 as well. The $200 billion that has been moved has
been inserted into the infrastructure proposal which is in
another part of the overall Federal budget.
Senator Merkley. I thank you for your answer. I am not
persuaded by it. It appears to me we are not making the type of
commitment we are pretending to make. I will close with this
because my time is up. How quickly it passes.
Folks back home are saying--let me get this straight. We
take our resources and build something. The Federal Government
puts in a tiny amount of money, and then they take credit for
it. This is the 80-20 versus the 20-80 split we heard
previously.
They are saying, we simply do not have the 80 percent, so
we will not build under this structure. Quite frankly, they
consider it a bit of a farce to put in a tiny bit of money and
then claim credit for the entire thing. There is a lot of
concern that this is not really going to fly in terms of
motivating or enabling infrastructure that we desperately need.
Senator Barrasso. Thank you, Senator Merkley.
Senator Moran.
Senator Moran. Mr. Chairman, thank you very much.
Madam Secretary and Mr. James, thank you for being here.
I have just a couple of comments before I ask questions of
the Under Secretary.
For you at the Department of Transportation, I want to
raise the topic of hours of service, a topic that never seems
to end, at least in my life as a representative of a rural
State in particular. For you Madam Secretary, I want to raise
the mandate on the electronic logging device.
There is a 90-day extension that expires March 18, a few
days from now. I need your help with the Federal Motor Carrier
Safety Administration working with the livestock industry to
delay the implementation of ELD.
This really is an hours of service issue, and how do you
haul livestock, live animals, and comply with the mandate, the
hours of service law. From a humane and common sense point of
view, what we have to date does not work, but the rubber, so to
speak, is hitting the road because of the ELD mandate changing
the method by which truckers record their hours of service.
There is a petition pending, a request for a delay. March
18 is around the corner. That is a 5-year delay request, but
this issue needs more attention than just this issue of
electronic logs. I thank you for your nodding yes and hope that
is a suggestion that you will help us try to find a solution in
the matter of just a few days.
Ms. Chao. I am very concerned about this issue. I have
heard a lot on this issue from various rural Senators and
Congressmen. Exemptions or waivers are one way, but we are also
tied legislatively, so we hope to work with you on addressing
that on a larger basis.
Senator Moran. We are working legislatively in the
appropriations process, potentially in the omnibus bill, but
March 18 is a very short period of time. They have allowed a
90-day delay, which gets us to March 18, which we appreciate,
but it does not go far enough.
Second, Madam Secretary, in your confirmation hearing, I
submitted to you a question about the commercialization of rest
areas. You indicated in your written response that you would
adhere to the existing law.
Congress has voted on the issue of commercializing rest
areas, and overwhelmingly--I think the vote was 86-20 that
voted against this commercialization.
I do not have a specific question, but I would just
highlight for you your answer to me. The present plan in front
of us from the Administration does include commercialization
proposals.
Again, as a rural legislator interested in those local
businesses and franchisees, we have a concern about that
commercialization and the competition that could come in an
unfair way.
Ms. Chao. I hear you.
Senator Moran. Thank you, ma'am.
To the issue of water resources, in 1 minute, 58 seconds, I
want to raise two topics with you. One is the way that lack of
resources is a common denominator, a complaint that you would
have and that I would have in regard to our ability to do water
resource projects.
I wondered about the process by which the Army Corps of
Engineers has now gone to a three phase process in what used to
be a two phase process. We now have the feasibility phase, the
PED phase, and the construction phase.
Mr. James, my question is has there been any consideration
of reducing those three phases to two? Because once we get
through the first two phases, which take a period of time, then
there is no money for the construction phase. Can we shorten
the first two phases into one in the hope that those projects
are not lingering as long as they do today waiting for the
funding?
Mr. James. Those are internal negotiations going on inside
the Corps of Engineers. To answer your question, those are
three completely different things. We are looking at
streamlining. We know we want to quit wasting a penny here if
we can and add the pennies and put a dollar to ground. That is
what we want to do. I have the commitment from General
Semonite, and we are going to do that.
However, the three phases you talk about I think we will
streamline each one of them, but I am not sure we could do away
with both of those, I mean one of those, because they even have
different types of engineers and planners working on them.
Senator Moran. I thank you for your answer. If you will
follow up with me, that will be fine.
Mr. James. I will do that, sir.
Senator Moran. Thank you very much.
My final point to you is I have noticed a particular
problem we have in Kansas related to the Corps. I will not ask
a question because I am out of time. But I would highlight for
you, we have ongoing dam work that the surface of the dam is a
State highway. That requires a detour over the dam for the next
several years while construction is ongoing.
There are no resources to provide the detour route around
the dam construction the Army Corps of Engineers is involved
in. We need the Army Corps of Engineers to work more closely
with State and local governments in advance of making the
decision so that a solution can be found for alternative
routes.
Mr. James. That is very reasonable.
Senator Moran. Thank you.
Senator Barrasso. Thank you, Senator Moran.
Senator Cardin.
Senator Cardin. Thank you, Mr. Chairman.
I thank both of our witnesses.
Secretary James, I want to talk about our high priorities
for Maryland and our region in regard to environmental
restoration and sites for dredged material. I asked you a
question specifically about Poplar Island, which is an ongoing
project in the President's budget. I first want to acknowledge
General Semonite's letter that I received this past week in
which he has completed the Chief's report on Mid Bay, which is
the next staging area to continue the program.
I appreciate General Semonite's comment, ``I consider this
a very important project for our ecosystem and navigation
system.'' That is what Poplar Island was authorized for, the
first of its kind that would be a win-win situation for our
navigation and for our environment. Congress specifically
authorized it for that purpose and has funded it.
I understand in the President's budget submission, he
reclassifies the project to compete solely on navigation rather
than on the dual purpose and provides $21 million of funding
which is an inadequate amount of money. We hope to address that
during the appropriations process.
I am not sure legally what basis the President has in the
budget submission to change the authorization by Congress. I
would just ask your cooperation to please check the legality of
that but more importantly, to work with us because the bottom
line is we want to be able to continue this policy which has
been extremely successful for navigation and environment where
we have the local community strongly supporting the site
locations, and we have been able to maintain our channels.
My request is if you would personally take a look at this,
work with us, and work with the regional delegation so that we
can make sure Poplar Island can receive what it needs for its
last diking and be able to complete its mission. We then hope
to transition to Mid Bay.
Mr. James. How much time do I have?
Senator Cardin. If you are going to tell me, I agree with
you completely, you can take as much time as you want.
Mr. James. I have been briefed on this area, the dredging
and the Poplar Island situation. I could not answer that if you
posed it as a question right now for sure. My staff will get
back with you on the specifics, and I will be happy to work
with you as we go forward.
Senator Cardin. I appreciate that.
Mr. James. I have an overall theme and feeling on dredging
and dredge disposal in our country. The fact of it is that a
lot of our dredged material placement is turned down and not
allowed because of ``environmental objections.'' It actually
prevents dredging, due to the increase in cost, from taking
place. It is not just up the north coast; it is all around. As
we move forward, as I can get out of the cradle, I intend to
talk to the other permitting agencies about that and see if we
can agree on a way forward.
Senator Cardin. I appreciate that.
I will return the question; how much time do you have? If
you do, I would invite you to join me, Senator Van Hollen, and
others to visit Poplar Island. I think seeing it would be
extremely important in understanding what has been achieved by
keeping our channels open but also the restoration of a major
part of the Chesapeake Bay, a former habitable island that now
is a plus for our environment.
I welcome working with you on that issue but recognize that
Congress specifically did authorize that project.
Mr. James. Thank you.
Senator Cardin. The second point I want to make, Mr.
Chairman, in the remaining seconds, is to Secretary Chao.
I am not going to go through all the revenue issues. I do
not understand how we are going to get to $1.5 trillion. I do
not understand the $200 billion because I think it is recycled
money, so we are not really putting up any more.
I say that recognizing that we have challenges. In the
Washington region, I have a special interest. I commute back
and forth from Baltimore every day. It is a challenge. We need
better transit; we need better commuter rail; we need better
ideas on rapid rail.
Obviously, we have to work with the community to make sure
that what we do is consistent with what the community wants,
but we need to have the resources in order to move those
forward. These are substantial investments that under the
current funding laws are going to be a challenge to get. We
need additional funding in order to achieve that.
The last point I really want to put on the table is that we
have a tremendous backlog in maintenance. Before we build a lot
of new roads and bridges, are we sure that our current roads or
bridges will not collapse? Do we have a commitment to maintain
our infrastructure as part of this initiative?
Ms. Chao. The overall funding for roads and bridges in
America is assumed 84 percent by the States and local areas.
Actually, the Federal funding is only 14 percent. Putting that
aside, I think maintenance is very important. We want to work
with you on that.
Senator Cardin. Thank you, Mr. Chairman.
Senator Barrasso. Thank you very much, Senator Cardin.
Senator Ernst.
Senator Ernst. Thank you, Mr. Chair.
I want to thank Senator Moran for bringing up the EDL
mandate issue. I want to go a little further and ask Madam
Secretary if there is a specific date on which the DOT will be
getting back to our livestock haulers on that.
Again, the time period is running out. It is just about 2
weeks away. We do need to have an answer there. Do you have a
date that we can expect the DOT to respond?
Ms. Chao. I think the larger problem is the hours of
service. If we do anything, it will be another extension.
Senator Ernst. OK.
Ms. Chao. Another waiver.
Senator Ernst. Waiver.
Ms. Chao. That is not a permanent solution, so we need to
have a legislative fix of some sort.
Senator Ernst. I do agree. We can expect that waiver to
occur before the mandate runs out?
Ms. Chao. I am sympathetic.
Senator Ernst. OK. We hope to see that.
Ms. Chao. A decision will have to come up before March 18.
Senator Ernst. Thank you, Secretary. I did hear from a
hauler yesterday that they are very, very concerned about this.
Thank you for that.
I would like to also visit with you, Secretary, about rural
broadband. I was really glad to see that the Administration
recognizes the importance of rural broadband deployment and
making it eligible for funding in the framework of a rural
infrastructure program.
The Federal broadband loan and grant programs, such as the
FCC's Universal Service Fund High Cost Program and the USDA's
Rural Utilities Service, are already in place. I am wondering,
why then did the Administration decide not to do direct funding
through the existing programs?
Not all States are going to have the level of expertise or
programs in place to efficiently build out their broadband. I
do understand the significance of doing block grants to the
States, but why are we not utilizing existing programs? Do you
maybe have some thoughts there?
Ms. Chao. I will look into that. I have not seen it, but
you brought it up. Basically, 25 percent of the funds will go
to rural America, and then it is going to be up to the Governor
and the States as to how they want to spend that. Broadband
obviously is one area we would encourage them to pay some
attention to.
Senator Ernst. Absolutely. Broadband is very, very
important to rural areas. I do understand that we will have a
quarter of the dollars allocated for the infrastructure package
going to those rural areas.
However, we also want to make sure there is expertise
involved with building out some of those broadband networks. We
will encourage you to go in and look at that or those working
on that program just to make sure those dollars are as
efficiently used as possible for rural areas.
Ms. Chao. Let me add one more thing. That goes through the
FCC.
Senator Ernst. Yes, thank you. I appreciate that. We will
want to work with the FCC on that, but we are glad it was
included in the infrastructure package.
Secretary James, of course I am going to bring up one of my
favorite topics, our Cedar Rapids flood mitigation project. It
does apply to a number of other Senators as well that have
projects affected by the benefit to cost ratio.
I sent a letter to you and General Semonite in early
February looking for answers to some of the questions I have
about how the Corps determines which low BCR projects are
funded under the significant risk to human safety exception.
I have posed this question numerous times to both General
Semonite and Director Mulvaney. We have not really figured out
how those determinations are made for that safety exception. Do
you have an update on how those determinations are made and
when I will be receiving an official response?
Mr. James. No, ma'am. Since your letter, I have not been
updated on that. I did ask the question, and the answer at that
time, which was a short answer because we were weaving through
everything, was that there has not been one excepted since
2012, I think it was.
That is not a very good answer, and I am not giving you
that for an answer. If you will allow me a few more days to get
deeper into it myself, I will give you a call, meet with you,
or whatever and try to figure this out.
The way the budget is written and the other factors that go
into making that determination of BC ratios just will not fit
for the Corps to legally do that work right now. However, I
want to look forward with you and work a way forward to see
what we can do on it.
Senator Ernst. Thank you, Mr. Secretary. If it does require
a legislative fix, we need to figure that out so that rural
areas, those low cost of living or low property value areas do
have a fighting chance to be considered.
Mr. James. Yes, ma'am. I cannot suggest that to you, but I
can give you any information you ask for.
Senator Ernst. Yes. As far as the safety issue as well, a
life in Iowa is just as valuable as a life in California or New
York.
Thank you very much. I appreciate it.
Senator Barrasso. Thank you, Senator.
Senator Gillibrand.
Senator Gillibrand. Thank you, Mr. Chairman.
Madam Secretary, last month the NTSB issued reports on two
rail accidents that occurred last year in Queens, New York, and
Hoboken, New Jersey. In these reports, the NTSB found that
engineer fatigue caused by undiagnosed severe obstructive sleep
apnea resulted in the crashes in both instances.
This is not a new issue. The engineer of the train that
derailed in the Bronx in 2013 also suffered from undiagnosed
sleep apnea. This is a problem in other modes of transportation
as well, including trucking.
Addressing this problem is on the NTSB's most wanted list
for transportation safety improvements. All of this is why I
was very troubled when the Department of Transportation
announced it was withdrawing a proposed rule on screening rail
engineers and truck drivers for obstructive sleep apnea.
Given you have withdrawn the proposed rulemaking, what does
DOT intend to do to address this very real and urgent safety
concern?
Ms. Chao. Senator, since you brought it up, I will take
another look.
Senator Gillibrand. OK. Thank you very much. I am very
grateful.
The second issue is about the Federal Transit
Administration, which is an agency of your department. It has
issued a rating of medium to low for the Gateway Program's
Hudson Tunnel Project, which is the second lowest possible
rating. This rating means that the project is not eligible to
move forward to the next phase in obtaining a Federal New
Starts grant.
How did the FTA take into account the funding the States of
New York and New Jersey have committed to providing for the
local share of the project, which is 50 percent, over $6
billion?
Ms. Chao. First of all, this rating was done by the career
folks, so it occurred in the FTA multi-layers before it even
comes up to the political appointees.
No. 2, we are not anxious for a fight on this. But for New
York and New Jersey to consider funds debt that we have given
them as part of their equity back to us is something that we
disagree with. In our calculation, New York and New Jersey are
putting in 5 percent not 50 percent.
We will continue to talk about this. But using TIFIA loans
and RRIF loans as part of equity is not how we define equity.
Senator Gillibrand. Right. But the Administration has
spoken about a desire to have more local skin in the game when
it comes to funding infrastructure projects, so that the
Federal Government is not bearing the full cost. Do you think
that Federal loans which require repayment by the State or the
local entity count as having skin in the game for the purpose
of providing local cost share?
Ms. Chao. It is like a mortgage. If you have to put in 20
percent mortgage, and you get another loan and you put down
your down payment as for the 20 percent, that is not really
equity. That is just another second mortgage that further
encompasses the house.
Senator Gillibrand. Right, but if you are only putting in
loans and not putting in any funding through grants, it means
that we are paying for the whole project.
Ms. Chao. No, because our loans are 50 percent, so you are
counting back the 50 percent we are giving to you in loans as
equity.
Senator Gillibrand. Right, but we are paying for it. The
same way you actually own the house, you own the house.
Ms. Chao. Over time, but there has to be some equity in
there. I do not want to argue with you because this is a huge
issue. It is huge to you, it is important to me, so let us
continue to work on it. I think it is a further definition of
what equity is and what the local participation is.
Senator Gillibrand. OK. How would you like to work forward
to move this project forward?
Ms. Chao. I am open to your suggestions as well but perhaps
we should get our groups together. I will have our staff work
with your staff.
Senator Gillibrand. Let us do that. Thank you.
Ms. Chao. Thank you.
Senator Barrasso. Thank you, Senator Gillibrand.
Senator Capito.
Senator Capito. Thank you, Mr. Chairman.
I want to thank both of you for being here today.
Madam Secretary, I am very excited about the
Administration's attention to rural development, particularly
in infrastructure. I am pleased about the 25 percent proposed
funds that would address the unique needs of rural America. I
echo Senator Ernst's feelings on the broadband issue.
Let me ask a question. We have received a lot of questions
on how you are going to match this, what States are going to
do, and what private entities are going to do. Obviously, in a
State like West Virginia, private investment would be very
difficult to attract.
Because the Administration says raising new non-Federal
revenue will be given a 50 percent weight, I live in a State
that is very challenged, cash strapped, and rural; however,
last year our voters voted via referendum to approve a sale of
$1.6 billion in road bonds. You might ask how we did that. We
did it with a lot of push from the Governor and the Secretary
of Transportation. We also did it because there was a feeling
from the ground up that we needed to do something about our
deteriorating infrastructure on the State level.
At one of our institutions in West Virginia is a radio guy
named Hoppy Kercheval, and he came up with a great advertising
theme. I am recommending this to you. It was FTDR. He just
played it every day on statewide radio. It stands for fix the
damn roads, and it worked.
I want to make sure, even though this was passed last fall,
that when we move forward with this infrastructure, we are
going to be able to retroactively grab that money as part of
our match. I know it is in the infrastructure proposal, but
when it talks about years 0 to 1, you only get X percent. It is
unclear how much weight we are going to be able to have for the
$1.6 billion we have, as a cash strapped State, already put
into something we feel very passionate about.
I would just bring this to your attention. I do not know if
you have a comment on this, and where you think this goes. The
States that have already made this move do not want to be left
out and only be looking forward instead being able to look
retroactively to a year or two previous.
Ms. Chao. I want to compliment West Virginia for its
creativity and innovation. It can be done as has just been
shown. Two, I also understand that not every rural region or
State can have that kind of access or can do that.
That is why the rural component of the infrastructure
proposal is not competitively bid but would be somewhat on a
formula basis. Of course that is subject to the will of
Congress. What you are talking about is a look back.
Senator Capito. Right.
Ms. Chao. The look back currently is 3 years.
Senator Capito. Right.
Ms. Chao. But I hear you, and I will go back to the White
House and talk to them about it.
Senator Capito. Just a little more specificity in the rural
area. I know I have been in numerous meetings with you and
others where those of us who represent rural areas really
emphasize the difficulty of attracting that private capital.
Thank you.
Secretary James, I wanted to talk to you about our
waterways and the fiscal year 2019 budget request from the
Corps. The Lower Mon locks, which are important obviously to
moving cargo down through the Ohio River, were built in 1907.
They are very antiquated and need repair. Our barge operators
have already supported a tax increase, but they are not seeing
the dollars coming to the areas most frequently utilized.
I would like to ask you why does the Administration not
propose spending any money on the Lower Mon Kentucky or
Chickamauga projects in fiscal year 2019?
Mr. James. The reasoning, as I understand it in my short
time being on the job, is they do not meet the benefit-cost
ratio that is required for those kinds of work.
Senator Capito. Are you saying it is down on a priority
list, or are you saying we are just going to close them, and
let them deteriorate to where they can no longer be used? What
is the long term plan here?
Mr. James. I do not have that yet, ma'am.
Senator Capito. Maybe we could work together on it.
Mr. James. I would be happy to work with you further on it.
I apologize, but I just do not have a grasp on that. I do know
that is why no work has been done on them, and they have not
been budgeted, because of their BC ratio.
That is about it that I know right now, but I would be
happy to go forward working with you.
Senator Capito. Thank you very much.
Senator Barrasso. Thank you, Senator Capito.
Senator Van Hollen.
Senator Van Hollen. Thank you, Mr. Chairman.
Secretary James, first of all, let me thank you for your
testimony.
I just want to associate myself with Senator Cardin's
comments and questions with respect to both the success of
Poplar Island in the Bay and the Mid Bay project. They are
really important to navigation for the channel for the Port of
Baltimore.
I look forward to working with you and your team. We have
been and will look forward to continuing to work with you and
your team on that.
Secretary Chao, thank you for your testimony.
When it comes to modernizing our infrastructure, this is an
issue that brings people together. I remember the night
President Trump won. The one substantive issue he talked about
was modernizing our infrastructure. A lot of us would have
liked to see us move earlier, but we are glad to try to move
forward now.
I guess my question does go to the simple budget math. One,
I have serious questions about the leverage ratios in what used
to essentially be a Federal program. Our highway program is 80-
20. You have flipped that on its head for the purposes of this
new proposal to 20-80.
I support many of these private-public partnerships. You
and I have worked together on the Purple Line in Maryland. We
believe that will be a successful private-public partnership,
but if you look at the funding sources, almost half comes from
the Federal Government.
That was really required to leverage both the State and
local component as well as the private component as part of
that project. I think there are very serious questions about
the leveraging math that is being used.
I have a question about the overall budget math, following
up on Senator Merkley's question because it really does seem
like an effort to give with one hand. Of course we cannot give
in terms of this transportation plan because we do not know the
funding source for the Federal share, and taking away with the
other.
What is your estimate of the current 10 year shortfall in
the Transportation Trust Fund?
Ms. Chao. As I mentioned, the mandatory part of the
department increases 4 percent, so pretty much the budget is
the same. It is also the same compared to fiscal year 2017. It
ramped up for 2018. That is what people are comparing to but in
2017, that was always the level.
Senator Van Hollen. I serve on the Budget Committee. We
just had OMB Director Mulvaney recently.
Ms. Chao. The $200 billion actually is put in for the
infrastructure.
Senator Van Hollen. I know that is a separate fund. You are
putting in $200 billion, but we do not know what the source of
funding exactly will be, but you are cutting, as Senator
Merkley pointed out, in other parts of the budget, well over
$200 billion in infrastructure.
For example, you were just talking to Senator Capito about
rural areas. You cut $5.1 billion in the 10-year budget out of
rural water and wastewater grants. When you add it all up,
including the shortfall.
Ms. Chao. That is not in my budget.
Senator Van Hollen. I know, but it is the case, is it not,
that one of the uses of the $50 billion that can go to rural
areas is for rural and water infrastructure? Isn't that part of
the plan?
Ms. Chao. My infrastructure portion is only transportation.
Senator Van Hollen. I am talking about this whole plan.
Senator Capito raised the importance of the $50 billion plan.
One of the eligible uses for that is water and sewer. The
President's budget cuts $5.1 billion from that pot of money.
That is just one example.
The other big one is the shortfall in the current
transportation program that allows for Federal 80 and State 20.
My question is, do you have any plan as the Secretary of
Transportation to fill that estimated $160 billion shortfall
over the next 10 years?
Ms. Chao. That whole issue about the Highway Trust Fund has
to be addressed because it is solvent until 2020 because of the
FAST Act.
Senator Van Hollen. I just want to know if--as of today--
you have a plan.
Ms. Chao. I want to work with Congress on that.
Senator Van Hollen. OK.
My last question, Mr. Chairman, goes to following up on
Senator Carper's question.
The President has now said on a number of occasions that he
does support an increase in the gas tax to fund this $200
billion plan. My question is very simple. Does the President
mean what he says about increasing that?
Ms. Chao. You should ask the White House.
Senator Van Hollen. Have you been in meetings with him?
Ms. Chao. Yes, I have.
Senator Van Hollen. Has the President told you he supports
an increase in the gas tax?
Ms. Chao. I think you need to ask the White House.
Senator Van Hollen. I am asking you.
Ms. Chao. I do not divulge conversations with the
President. I think every Cabinet member will say that.
Senator Van Hollen. OK. We are talking about a $200 billion
plan which many of us think is already too small to start. The
leverage assumptions, many of us think, are way off, but even
that $200 billion is right now a hallucination until we have a
real funding source. I am just curious if the President meant
what he said.
Ms. Chao. I agree with you we need to find pay-fors. That
is very important. There is no agreement on that, so we need to
work on that.
Senator Van Hollen. I am just wondering if the President
has found a pay-for, which is what he has said, in the gas tax.
But we will follow up, if he has not told you, the Secretary of
Transportation.
Ms. Chao. You will have to ask the White House.
Senator Barrasso. Thank you, Senator Van Hollen.
On Nebraska Statehood Day, the Senator from Nebraska,
Senator Fischer.
Senator Fischer. Thank you, Mr. Chairman. It is Nebraska's
birthday, and I am pleased to be here. I thank the panel for
coming.
Secretary Chao, I was pleased to see that the
Administration included provisions to delegate review and
permitting authorities to the State. This builds on the work
Congress did with SAFETEA-LU and also with MAP-21 to delegate
that NEPA authority to the States.
My Build USA Infrastructure Act includes similar
provisions. Under my proposal, the States would be given the
purview over the design, permitting, and construction
authorities currently under the Federal Highway Administration.
In your view, what do you see as the benefits of delegating
these authorities to the States? I see them as being able to
stretch current tax dollars so we can move forward with
infrastructure projects.
What is your view, Madam Secretary?
Ms. Chao. First of all, State and local authorities know
best what the needs are within the community. We want to be a
partner to the States. Two, as you mentioned, they know best
also how to leverage, work, and partner with other sources of
capital and revenues.
Senator Fischer. Right. Many of us tend to focus on where
new revenue is to come from. One of my deepest concerns is how
we can better spend the revenue, the taxpayer money, we are
already charged with spending in a responsible manner. Thank
you.
As you know, Nebraska is currently in the process of
assuming NEPA authority for transportation projects. Can you
provide me with an update on that process?
Ms. Chao. It has been a great pleasure to work with
Nebraska. You need to go back to the Department of
Transportation and let them know we have really enjoyed working
with them. We hope to sign the MOU very shortly.
Senator Fischer. Oh, good. That is wonderful to hear.
We tend to benefit from consistent formula funding for
infrastructure projects in the State. It seems unlikely that
Nebraska will benefit from some of the President's proposals
when it comes to incentive programs or transformative projects.
Would it be correct to say the President's infrastructure
proposal intends to supplement current infrastructure funding
mechanisms such as the Federal Highway Administration's formula
funding programs instead of replacing those programs?
Ms. Chao. You are absolutely right. The dollars we are
talking about are on top of what is in the budget ordinarily
and on a formula basis.
Senator Fischer. As I was looking through the proposal, 80
percent of the funding under the Rural Infrastructure Program
would be allocated to the Governors to provide States with
flexibility. You mentioned that earlier. It is based on a rural
formula.
My question here is the rural formula is based on rural
lane miles and rural population. But how does the
Administration plan to define rural for the purposes of this
funding? I know across the Federal Government there are many,
many definitions for rural. What are you specifically looking
at?
Ms. Chao. You were also talking about leveraging the
funding. We are very concerned about rural America. On the
specific question, I have to confess, someone told me, and I
cannot remember now for the life of me. Let me get back to you
with an answer on that.
The whole issue as to how we define it, I think, but rather
than speculate, I was told this, and I just cannot remember. I
will get back to you on that.
Senator Fischer. That would be great. For example, a lot of
times, rural gravel roads are included in a formula, paved
roads; the current definition used by the Federal Highway
Administration, I would be interested to know if you are
looking at the USDA, some of their definitions of rural as
well.
If you could get back to me, that would be great.
Ms. Chao. I will certainly do so.
Senator Fischer. Thank you.
Also on the rural infrastructure program, the proposal
included language to develop rural interstate projects. An
important interstate expressway project we have in Nebraska is
in our panhandle. That is the Heartland Expressway. It is part
of the larger Ports-to-Plains Corridor that runs north to south
across this country.
When it is completed, the Heartland Expressway will provide
greater access for our agricultural products to the country and
help to have this multi-lane, divided highway access. Can you
elaborate on how rural interstate projects would qualify for
rural funding under the President's proposal? Is there anything
specific on rural interstates, especially when they connect
through States from Canada to Mexico, like the Ports-to-Plains
Project?
Ms. Chao. The department has sent guidelines and
principles. We did not send legislative language. That is an
indication that we want to work with the Congress on how to
define some of these things.
Senator Fischer. We will look forward to working with you
on that.
Thank you so much, Madam Secretary.
Secretary Barrasso. Thank you, Senator Fischer.
Senator Whitehouse.
Senator Whitehouse. Thank you, Chairman.
Welcome to both of the witnesses.
Let me start by saying we have heard a great deal in the
course of this hearing about rural infrastructure. I would like
to focus a little bit on coastal infrastructure. America has
coasts. Some of us represent States that have coasts.
Along those coasts, we are seeing very serious predictions
of very considerable sea level rise, including predictions that
continue to come from the Federal Government under this
Administration. Working with NOAA, Rhode Island is looking at
as much as 9 feet of vertical sea level rise by the end of the
century.
If that were to happen, Amtrak is gone through Connecticut.
The map of my State would have to be redrawn. A considerable
amount of our wastewater infrastructure, which tends to be low
because of where it stands in the gravity flow, has to be
relocated. Coastal highways, coastal evacuation zones, and
flood maps mean an enormous amount of work has to be done to
prepare for what we now have been very strongly told by the
Federal Government is coming at us.
I am a bit concerned that words like coastal, sea level
rise, or storm surge--things we have to live with and prepare
for--do not appear in the infrastructure plan. I am hoping that
as we develop this plan, you will be accommodating of that fact
and of our coastal States' needs that infrastructure be
designed, redesigned, and maybe even relocated for the
foreseeable prospect of that kind of damage.
Ms. Chao. Senator, you and I have talked about this issue.
I know that it is highly important to you.
Senator Whitehouse. I may not be the only one. There are a
bunch of us that are coastal.
Ms. Chao. You have brought this up many times with me. I
had not thought about that, so let me take a look at the
outline.
Senator Whitehouse. Thank you. I just want there to be a
little reflex in your mind that whenever you hear rural, you
also think, rural and coastal, rural--oh, and coastal.
With the Corps, unfortunately, we are not much better off,
Mr. James. The Corps' proposed fiscal year 2019 budget asks for
about $1.5 billion, $1.481 billion to be exact, for its Flood
and Coastal Storm Damage Reduction Program.
Out of that, $1.48 billion, we can identify $40 million
that is marked for coastal projects. The remaining $1.44
billion is marked for inland projects. When you look at what is
coming at our coasts, when you look at what NOAA is telling us
to expect, when you look at what the Department of Defense is
telling us to expect, when you look at the preparations the
Navy has to make for its Navy bases, it is really hard for me
to understand why there has to be a 37 to 1 ratio in favor of
inland projects over coastal projects. How do you defend that
to coastal States?
Mr. James. Sir, I remember discussing this with you during
my confirmation hearing.
Senator Whitehouse. I can be like a bad penny; I keep
turning up on this stuff. I think every one of my colleagues
would be equally exercised if an essential feature of their
State was overlooked completely by a factor of 37 to 1.
Mr. James. My answer to you on that suggestion is that it
is not 37 to 1, it may be 37 to 1 of the entire dollars, but
all of the projects are processed and considered the same,
whether they be coastal or inland. That tells me there is just
a lot more inland projects that require flood damage assistance
than coastal.
Senator Whitehouse. I do not want to be in a position in
which the budget does not authorize funding for coastal
projects, that it is $40 million out of $1.4 billion, with the
result that people do not apply because they look at that
budget and say, it says in huge letters the coastal communities
are not welcome here.
Maybe they are not participating because they take a look
at this and say, oh, my gosh, this is all for inland and upland
stuff. That is an invitation for us to stay away. I do not want
to be in a situation where we are not getting projects because
of the budget, and you are saying that is because there are not
enough projects in there.
There is a circularity to that argument that leaves coastal
communities in real trouble. I do not think coastal projects
should be second class citizens in your budget by this kind of
a factor of 37 to 1.
I know Mississippi is important. I know it floods. I know
there are upland floods in other places. But for crying out
loud, when you are looking at a 9 feet sea level rise coming
along our coasts, there is a lot of infrastructure work that
needs to be done to prepare for that.
I hope you will find a way to send a signal to our
organization and to coastal communities that coastal projects
are, in fact, welcome here and are, in fact, a key, a critical
part of the Army Corps' task.
Mr. James. I have no problem with that. That was not my
personal thinking to begin. I was just trying to explain to you
if we had 100 flood risk damage reduction projects in this
country and 50 were coastal and 50 were inland, from what I
understand right now, it would be equal application to those
two areas.
Senator Whitehouse. We will see. That is not what the
signal is from the budget.
I just want to close by saying I do not ascribe this to
you. I do not think you personally have any distaste for
coastal projects. We have talked our way through this before. I
have full confidence in your personal judgment, but the Army
Corps is a big bureaucracy, and 37 to 1 is a very big signal in
a budget. I will leave it at that.
Thank you.
Mr. James. Senator Whitehouse, as important as it is to
you, I will get with the Chief and his team, get with my team,
and let me get back with you. If I have said anything that is
not right or if I was right, let me make sure.
Senator Whitehouse. I appreciate that. You have been great
to work with. Thanks.
Mr. James. Let me make sure.
Senator Barrasso. Senator Sullivan.
Senator Sullivan. Thank you, Mr. Chairman.
I appreciate, Madam Secretary and Secretary James, your
being here. I think the Administration's principles on
infrastructure actually were a really good start. We appreciate
the opportunity to work with you.
I want to reinforce what Senator Carper said earlier. I was
a bit surprised by the leadership in the Senate, on my side, on
the Republican side, saying they did not look like they were
going to have time. We should make more time. If we do not have
time, let us work weekends.
Every American believes this is important. I think it is a
great opportunity for bipartisan support. I am not sure what my
leadership was talking about, but I think this is a huge
priority. I know it is for you, Madam Secretary, and the
President. Let us get to work. We should create time. This is a
good opportunity. You are seeing it here in this hearing.
Secretary Chao, I want to thank you for the Alaska visit
and the summit we had on infrastructure. The Sterling Highway
is now starting to move forward. It only took 25 years of
permitting delays. Other than that, it is starting to look
good.
In your previous comments this morning on the importance of
permitting, you touched on it a bit. Can you talk a bit about
this whole idea of the funding actually for infrastructure in
some ways can be a function and will be a function of how
aggressively we address permitting reform, meaning if you have
significant permitting reform?
You know I have a bill, the Rebuild America Now Act. Mr.
Chairman, I would like to submit for the record an op-ed I had
with the head of the Laborers International, Terry O'Sullivan,
on the importance of permitting reform.
Senator Barrasso. Without objection.
[The referenced information follows:]
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Senator Sullivan. Madam Secretary, can you touch on that,
how permitting reform is actually, in some ways, a driver of
how much money we are going to be able to get with regard to
particularly private sector money into broader infrastructure
in America?
Ms. Chao. As was mentioned, with every year's delay in
permitting, there is an increase of a minimum of 3 percent.
Project costs increase every year the longer they are stretched
out.
Second, the permitting aspect, we are not talking about not
protecting the environment; we all care about the environment.
We are talking about common sense ways to reduce duplicative,
redundant, sequential permitting which can actually be done
concurrently, or we can have sister agencies share information.
As of now, within the Department of Transportation, one
office in Transportation does their own study; they do not
share with another office at the Department of Transportation,
thereby lengthening the whole process. The other thing also
with permitting is the private sector, which is very eager to
finance a lot of these public infrastructures, would be
deterred if indeed permitting were to add years of delay and
increase their risk.
Senator Sullivan. On highways, the average time it takes to
permit a bridge in New Jersey, New York, or Rhode Island is
like 6 or 7 years. If we could bring that down to 1 year or a
year and a half, you will have less uncertainty and more
private sector dollars.
By the way, as you know, Madam Secretary, the UK, Canada,
and Australia all permit infrastructure projects in a year,
year and a half, or 2 years. This is not something radical. The
radical position is how delayed we are. Isn't that the case?
Ms. Chao. Yes. In fact, when you talk about Sterling
Highway, when I went to visit Alaska, it was actually 35 years
in the making, to get that to a remote Alaskan village that
really needed help.
Senator Sullivan. You are not going to get private sector
money.
Thank you. We want to continue to work with you on that.
Secretary James, I wanted to talk briefly about wetlands.
My State has over 60 percent of the Nation's wetlands--60
percent in Alaska for the whole country. We have wetlands
totaling approximately 270,000 square miles. That is larger
than the State of Texas.
When we have Section 404 permitting requirements with the
Corps and EPA, and the mitigation requirements that come with
that, it is almost always a disproportionate cost and delay
with regard to infrastructure in Alaska.
We will have some questions for the record. I wanted to ask
you very quickly, a number of us have been looking at the Clean
Water Act, relevant regulations from the Executive agencies
from both Democrat and Republican administrations previously
that give Federal agencies sufficient flexibility and latitude
to take Alaska's unique circumstances into consideration of
wetland permitting processes because the vast majority of the
wetlands in the country reside in my State.
It just takes an inordinate amount of time to get through
the Section 404(c) permitting. Can I get your commitment, Mr.
Secretary, to work with us on these kinds of flexibilities that
we believe already exist in the regs and the laws, to work with
you and your office on this kind of flexibility on Section
404(c)?
Mr. James. Yes, sir. I would be happy to.
Senator Sullivan. I want to thank you again, and General
Semonite, on the work you have done with regard to the Port of
Nome. You may have heard just recently there was a cost share
agreement between Nome and the Corps for the study of the port
there. I think we have made good progress on that. I appreciate
that.
Mr. James. Thank you.
Senator Barrasso. Thank you, Senator Sullivan.
I would like to point out the vote is going to start in
about a minute. We still have four people to ask questions. We
have 5 minute rounds. I am going to have to ask you to please
hold it within the 5 minutes for each of those.
Senator Markey is next.
Senator Markey. Thank you, Mr. Chairman.
I welcome you here, and clearly we want to have a huge
infrastructure program that opens up in our country. We need it
desperately.
The way I look at the formula in the Trump proposal is that
it takes $200 billion in existing Federal infrastructure money
and repackages the same money as a new program. Then, in step
two, it flips the formula from 80 percent coming from the
Federal Government and 20 percent from local and State
government to 20 percent coming from the Federal Government and
80 percent that would come from the State and local
governments.
Maybe it is like the miracle of the loaves and fishes; it
did work 2,000 years ago. But I just do not think it is going
to work here where the local governments cannot come up with 80
percent of the money and the reason we need national
infrastructure bills is that they need the help and they need
the Federal Government to come in.
I will be honest with you. My fear is I just think that
Wall Street will say, we will come in and help, but they will
have to be paid. That is going to be tolls they are going to
want to impose on drivers, on communities as a way of getting
paid. That is how Wall Street operates.
As a result, it changes the relationship between the
infrastructure in our country and ordinary citizens. I just
think they will wind up being tipped upside down and having
money shaken out of their pockets ultimately to pay for
infrastructure that historically, under the 80 Federal and 20
local funding, was subsidized by the government in order to
make sure the roads are there for everyone.
I have a big problem with the math. I just do not think it
is going to work. I agree when Wharton and the Heritage
Foundation agree upon something, and they are agreeing with Ed
Markey, that there is new recombinant political DNA that is out
there that requires a better explanation of how these projects
will get built.
I do know that Wall Street would love to have the National
Environmental Policy Act to just be gutted and be dramatically
watered down. That is what this infrastructure proposal does.
It takes the constitution of the environment for the last 50
years, the National Environmental Policy Act and makes
fundamental changes.
One, it would cut the amount of time the public has to sue
over bad projects from 6 years down to 150 days. That would be
great if you want to be a Wall Street firm and get a quick
return on your investment.
However, if you are a community, and all of a sudden you
hear there is a brand new road coming through a whole section
of town, and you are told you have 150 days to mount a battle
against a Wall Street law firm that is just going to truncate
your rights, that is going to be, I think, something that is
very disastrous for local communities all across the country.
Second, the bill also expands the ability of agencies to
simply decide that certain types of projects have no
environmental harm at all; the agency decides it. It is a
single agency, by the way. One agency would make the decision.
Secretary Zinke would be able to decide that pipelines can
go through parks, and the other agencies would not be able to
get into the middle of that. Similarly, the EPA would be
truncated in their ability to be able to make decisions that
were appealable because the Secretary of Transportation would
make all of these decisions, and the agencies would not be
involved.
I just have a problem with the formula. I would like to
give you a chance to respond to it because that is the core of
it. The money is not sufficient, and the environmental reviews
are truncated.
Ms. Chao. I do not have that.
Senator Markey. Whatever you can do.
Ms. Chao. I think it is important to emphasize that we want
to do this on a bipartisan basis. As we go forward, these are
issues you are concerned about. Let us talk about them.
Senator Markey. I still have 12 seconds to say that if it
is not changed, if there isn't a fundamental change made, then
citizens are going to wind up with their environmental
protections being watered down. They are going to be tipped
upside down and have money shaken out of their pockets to pay
for the fees in our country.
Ms. Chao. As I mentioned, we have no intention of diluting
any environmental protections. If you look at the bureaucratic
way in which permitting occurs, a lot of it does not make
sense. They are redundant, duplicative, replicate one another,
and discourage communications among sister agencies. There are
many, many ways in which the permitting process can be
streamlined and improved without compromising on environmental
protection.
Second, on the roads and bridges, the 80-20 rule only
applies to interstate; 84 percent of the roads and bridges that
are in each State are funded by the State. The Federal
Government's share is only 16 percent. Overall, infrastructure
is traditionally actually funded by the States. It is only for
the interstate that the Federal portion comes in.
Senator Markey. Which is the essence of this.
Ms. Chao. The infrastructure is everything actually. The
infrastructure proposal is whatever a local community wants.
They decide and make a targeted appeal to this competitive
process. The more creative and innovative they can be in
financing, meaning if they can get more private sector and
other party involvement, they actually will be in a better
position to win the Federal grants.
Senator Barrasso. Thank you, Senator Markey. I appreciate
your questions.
Senator Boozman.
Senator Boozman. Thank you, Mr. Chairman.
Thank you for being here. We appreciate your hard work. We
also appreciate the fact that you are honoring your commitment
to make yourselves available periodically. It is very, very
helpful.
Secretary Chao, I would like to ask you a question. It is
not under your purview in the sense that this is a water
question. However, since you are such a major player in the
infrastructure package, I really think we are in a situation
now where you cannot think in terms of just one thing.
We can put in our roads, runways, and railways, but if you
do not have the water infrastructure to back that up, it simply
does not work. We are in a situation now where things are
aging, and there is a tremendous need.
Senator Booker and I have introduced the Securing Required
Funding for Water Infrastructure Now, the SRF WIN Act. We have
had tremendous success with outside organizations and multiple
sponsors in Congress.
We are trying to make it such that we allow the State
Revolving Funds--the SRFs--to bundle multiple drinking water
and wastewater projects together and submit them to the EPA for
approval through the Water Infrastructure Financing and
Innovation Act, the WIFIA Act, the WIFIA Program.
Because every State is AAA bond rated, and all of our
projects have ratepayers, the SRF WIN Act really answers some
of the concerns of Senator Markey in the sense that we can have
tremendous leveraging ability. These are not grants. These are
actually getting paid back.
As a result of that, I really would encourage you, as you
are putting together these things, to look at this. Hopefully,
the Administration can support, and hopefully you can support
it in an effort, as I said, to take the dollars we can and
leverage as much as we can in a common sense way.
Ms. Chao. I will bring this back to the White House and
also the EPA Administrator.
Senator Boozman. Good. Thank you very much.
Secretary James, it is good to have you here also.
Arkansas is a rural State that relies heavily on
agriculture, as you know very well. In fact, we are the No. 1
rice producing State in the country, third in cotton, and the
list goes on and on. Ag is No. 1 in our State, as it is in so
many other States throughout the country that we forget about,
and adds about $16 billion to our economy. Many hardworking
Arkansans rely heavily on the inland waterways and ports to
ship their crops across the Nation and export them all over the
world.
Tell us the consequences for rural and agriculturally
dependent States if we do not invest in our Nation's inland
waterways and ports. Do you feel that the Administration's
principles for infrastructure properly address America's inland
waterways?
Mr. James. I do feel that the infrastructure bill does
address the waterway system. His submission of that bill to us
allows us to be able to move forward. It does cover our inland
waterway infrastructure.
You and I know this. For the other members and for the
record, if the inland waterway of the McClellan-Kerr Arkansas
River shuts down, everything from mid-Oklahoma down to the
Mississippi River would be shut off. It is a huge amount of
prosperity, a huge amount of interstate commerce that comes
from that.
The same goes for every other running navigable stream in
our country. A lot of them are provided by locks and dams as
most of our inland waterway infrastructure is in locks and
dams. The Mississippi below Cairo, Illinois, is not; it is a
free flowing stream which requires a lot of maintenance due to
the major flooding that the lower Mississippi Valley receives.
Without the navigation, there is no way. Grain would be
spoiled on the ground, and our balance in trade would quickly
go out the back door. Because, as I understand it, for years
and years and years now the balance of trade has been supported
by the agriculture community.
Senator Boozman. Thank you very much.
Thank both of you again for your hard work. We appreciate
it.
Senator Barrasso. Thank you, Senator Boozman.
Senator Booker.
Senator Booker. Thank you very much.
Out of respect for my colleague, I want to try to go really
quickly.
First, just a hearty thank you to both of you for your
testimony, your commitment to your jobs, and the mission of our
country.
Secretary Chao, I am grateful to have you here again. Thank
you for your willingness to engage with my team and the other
four Senators dealing with this Gateway project. You have been
incredible. We had a meeting at the White House with the
President just on this issue. You came to Senator Schumer's
office for what I thought was a very constructive dialogue.
You indicated to Senator Gillibrand that to deal with some
of these issues, we probably need to get our teams together
again. Would you be willing to commit to meeting again with
Senator Schumer and us as we did a few months back?
Ms. Chao. Of course.
Senator Booker. Great.
Ms. Chao. I would also add that Gateway is not one project.
There are nine projects involving $30 million.
Senator Booker. Multiple projects. You and I are both
familiar and do not need to state for the record, but time is
running.
The second thing is, you committed also that you will come
up and visit us and see the project. We have had Republicans
and Democrats do it. It is stunning to go through the tunnels
and see the crisis. That commitment stands, right?
Ms. Chao. I have been trying to do that.
Senator Booker. I know. You and I have been trying to work
our schedules.
Third, the multiple projects that are involved, I heard the
back and forth between you and the Senator on loans, how they
are counted and the like. Is that the standard now for all
projects in America that the Federal commitment does not count
as a State commitment, the loans? Is that new?
Ms. Chao. I am not so sure this is new. It has always been
that way, No. 1. Second, we would disagree; there was never any
Federal commitment. It was a verbal commitment, a verbal
sentence given at a rally, a political rally no less. There was
no commitment from the Federal Government.
Senator Booker. No, no, I understand. But the downgrading
is because of?
Ms. Chao. It has always been this way. Loans are not
counted as equity.
Senator Booker. That contradicts your Web site. Can I read
what your Web site says?
Ms. Chao. OK.
Senator Booker. From the FHWA Web site, it says ``TIFIA,
the proceeds of a secured TIFIA loan, will be used for any non-
Federal share of project costs required under Title 23 or
Chapter 53, Title 49.'' That is what your Web site says. It
contradicts what you are saying here.
Ms. Chao. Then I need to look at it. Thank you for bringing
it to my attention. I will take a look at it.
Senator Booker. OK. Take a look at that. We should have a
fair standard because I know these programs. This would crush
every area of our country if you shifted that to what you
represented to the Senator. Your Web site says this, and my
familiarity with that.
Ms. Chao. Thank you for bringing it up. That is not my
understanding, but let me take a look at it.
Senator Booker. I really appreciate that.
The last thing is to champion the great work you guys are
doing. The Department of Transportation's efforts on the
Gateway Tunnels' environmental impact statement has been
amazing and inconsistent with what everyone has been saying,
let us cut the regulatory time.
My understanding is the Gateway Project Development
Corporation has finalized their environmental impact statement
and is on track for a final EIS pending DOT approval at the end
of March. This is an incredible achievement. They are literally
cutting in half the typical amount. This is actually you all
cutting bureaucracy and cutting time. I just want to make sure
of commitment by the Department of Transportation and
everything is on schedule to achieve something we all can brag
about as testimony to the Trump administration's cutting red
tape. Can we make sure we get that done by March 31 as was
committed?
Ms. Chao. I would love to promise you that. I don't know
whether I can. I will take a look at that.
Senator Booker. OK. Because we have made incredible time.
Out of respect to my colleague, I will end early.
Ms. Chao. Thank you.
Senator Barrasso. Senator Duckworth.
Senator Duckworth. I thank Senator Booker for being so
generous with his time.
Thank you, Mr. Chairman and Ranking Member Carper.
Secretary Chao and Secretary James, it is so nice to see
both of you again.
Secretary Chao, I see a lot of philosophical similarities
between the President's infrastructure proposal and the goals
of DOT's Infrastructure to Rebuild America Grant Program
established last year, the INFRA Grant Program.
I understand both seek to align Federal investments with
national and regional economic goals. There is some emphasis on
leveraging Federal funds with non-Federal funding, including
public-private partnerships and also to promote innovative
solutions to improve project delivery. Is it fair for me to say
that?
Ms. Chao. Yes.
Senator Duckworth. As you know, the 75th Street Corridor
Improvement Project in Chicago, which is part of the CREATE
Project, meets all of INFRA's program goals. The project
provides robust national and regional benefits, would increase
national freight and passenger railway activity, and is
reflected by the support of nine different Midwestern States,
each of the Class I railroads, and numerous corporate
interests.
In fact, a study by the University Illinois highlights that
three-quarters of the CREATE Program's impacts would actually
occur outside of the Midwest. More than 65 percent of the
project costs are already committed through a public-private
partnership.
Given the robust support and alignment of the goals of all
levels of government, the environmental review and record of
decisions are also complete, so the project can move forward as
soon as you give it the green light. I am asking that you give
this critical project your full consideration as you finalize
the INFRA grant awards moving forward.
Ms. Chao. I will certainly do so.
Senator Duckworth. Thank you. Do you have a sense of when
the INFRA awards might be announced?
Ms. Chao. We have to get the TIGER grants out which will
hopefully be in the next 2 to 3 weeks. After that, then we will
turn to the INFRA so hopefully by the summertime if not sooner.
Senator Duckworth. OK. Back to the infrastructure proposal,
the Administration is calling the plan a major investment in
our Nation's infrastructure. Yet, as my colleagues have noted,
the President's fiscal year 2019 budget cuts more
infrastructure than would be invested.
How is this a major infrastructure investment when you
propose spending less than we already do?
Ms. Chao. I think this is a policy difference. We can talk
more about that. What is important is that this infrastructure
proposal needs to be done on a bipartisan basis. If we can
separate out from the budget, go forward, and take a look at
the infrastructure, we very much look forward to working with
both the majority and the minority in the Senate and the House.
Senator Duckworth. We are going to need more than $200
billion to be able to move forward.
Ms. Chao. Absolutely we are. That is where we need to have
the private sector involved, and we need to leverage the funds.
Senator Duckworth. Also, I would like to state that I join
my colleagues who mentioned their concerns for our livestock
haulers with the EOD deadline coming up. I have heard from
people in Illinois who haul cattle, hogs, and even equine. This
is a real issue in our ag States. I would appreciate your
attention to that.
Mr. James, as I know you are aware, our inland waterways
have long enjoyed a Federal-private partnership through a
diesel fuel tax paid by barge operators that covers 50 percent
of the cost associated with maintaining and modernizing our
locks and dams.
I was troubled to hear that the Administration's budget
seeks to alter that longstanding relationship by promoting a
per vessel fee to fund our aging locks and dams. Again, as you
know, that is a non-starter for commercial operators who would
bear the cost.
Would it be easier and more practical to consider
alternatives that allow the Corps to keep some of the revenues
that you already generate but are required to deposit into the
U.S. Treasury like recreational fees and hydropower revenue?
For example, with the hydropower revenue, you generate
around $1.5 billion that goes into the Treasury. If we could
keep a small percentage of that within the Corps of Engineers,
you could actually apply some of that to some of the associated
cost with the maintenance.
Mr. James. Senator, that is an interesting proposal that I
have heard many times throughout my career, even before I
became the ASA. It is a very interesting proposal. I would be
willing to look at some numbers with you or the Committee at
any time that would be of interest to you. It is very
interesting to me. Thank you for that question.
Senator Duckworth. Thank you very much for your interest.
That is all the questions I have.
Senator Barrasso. Thank you very much.
I appreciate the members being here.
I have a request for a submission for the record. We, at
the Committee, received numerous requests for submissions for
the record from different organizations impacted by the
infrastructure policy.
In order to ensure the full breadth of the policy options
are included in the record, I ask unanimous consent that they
be added to the record.
Without objection.
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Senator Carper. No objection.
Senator Barrasso. Senator Carper.
Senator Carper. I want to make two unanimous consent
requests.
I just want to say to both of you thanks for being here and
thanks for your willingness to take on tough jobs. Albert
Einstein used to say, ``In adversity lies opportunity.'' There
is a lot of adversity here but actually a lot of opportunity.
I think with your leadership--the leadership of our
Chairman and other Democrats and Republicans--we can make
progress. We really need to on these fronts. I look forward to
doing that.
In the spirit of that thought, Mr. Chairman, I have two
unanimous consent requests to submit for the record. One, I ask
unanimous consent to submit for the record the White House
infrastructure proposal summary document that states that
overall, for highways, ``28 percent of funding is Federal.''
I would also note that the same document indicates that if
we look at just capital expenditures, Federal funds currently
support more than half of all spending on highways--not just in
Delaware, but in the United States across the country.
I have a second unanimous consent request, if I could, Mr.
Chairman. I would ask unanimous consent to submit for the
record the January 2018 GAO report entitled Highways and
Transit Projects. In that report, GAO notes that it previously
reported that 99 percent of highway projects are not being held
up by complex NEPA reviews. Meanwhile, Federal Highway
Administration officials expressed ``Categorical exclusions
still constitute the vast majority of NEPA reviews for highway
projects.''
Thank you, Mr. Chairman.
Senator Barrasso. Without objection, so ordered.
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Senator Barrasso. The time has now expired on the vote, and
we need to get to the floor. I do want to thank the members who
have attended.
I especially want to thank our esteemed guests, Madam
Secretary, as well as Assistant Secretary James. I want to
thank you for your time, and I want to thank you for this
crucial discussion regarding the Administration's
infrastructure plans.
People may submit additional questions for the record. The
record will remain open for 2 weeks.
Thank you again for being here and joining us.
With that, this hearing is adjourned.
[Whereupon, at 12:10 p.m., the Committee was adjourned.]
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