[House Hearing, 110 Congress] [From the U.S. Government Publishing Office] INVESTING IN INFRASTRUCTURE: THE ROAD TO RECOVERY ======================================================================= (110-176) HEARING BEFORE THE COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE HOUSE OF REPRESENTATIVES ONE HUNDRED TENTH CONGRESS SECOND SESSION ---------- OCTOBER 29, 2008 ---------- Printed for the use of the Committee on Transportation and Infrastructure INVESTING IN INFRASTRUCTURE: THE ROAD TO RECOVERY INVESTING IN INFRASTRUCTURE THE ROAD TO RECOVERY ======================================================================= (110-176) HEARING BEFORE THE COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE HOUSE OF REPRESENTATIVES ONE HUNDRED TENTH CONGRESS SECOND SESSION __________ OCTOBER 29, 2008 __________ Printed for the use of the Committee on Transportation and Infrastructure ---------- U.S. GOVERNMENT PRINTING OFFICE 45-362 PDF WASHINGTON : 2009 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC 20402-0001 COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE JAMES L. OBERSTAR, Minnesota, Chairman NICK J. RAHALL, II, West Virginia, JOHN L. MICA, Florida Vice Chair DON YOUNG, Alaska PETER A. DeFAZIO, Oregon THOMAS E. PETRI, Wisconsin JERRY F. COSTELLO, Illinois HOWARD COBLE, North Carolina ELEANOR HOLMES NORTON, District of JOHN J. DUNCAN, Jr., Tennessee Columbia WAYNE T. GILCHREST, Maryland JERROLD NADLER, New York VERNON J. EHLERS, Michigan CORRINE BROWN, Florida STEVEN C. LaTOURETTE, Ohio BOB FILNER, California FRANK A. LoBIONDO, New Jersey EDDIE BERNICE JOHNSON, Texas JERRY MORAN, Kansas GENE TAYLOR, Mississippi GARY G. MILLER, California ELIJAH E. CUMMINGS, Maryland ROBIN HAYES, North Carolina ELLEN O. TAUSCHER, California HENRY E. BROWN, Jr., South LEONARD L. BOSWELL, Iowa Carolina TIM HOLDEN, Pennsylvania TIMOTHY V. JOHNSON, Illinois BRIAN BAIRD, Washington TODD RUSSELL PLATTS, Pennsylvania RICK LARSEN, Washington SAM GRAVES, Missouri MICHAEL E. CAPUANO, Massachusetts BILL SHUSTER, Pennsylvania TIMOTHY H. BISHOP, New York JOHN BOOZMAN, Arkansas MICHAEL H. MICHAUD, Maine SHELLEY MOORE CAPITO, West BRIAN HIGGINS, New York Virginia RUSS CARNAHAN, Missouri JIM GERLACH, Pennsylvania JOHN T. SALAZAR, Colorado MARIO DIAZ-BALART, Florida GRACE F. NAPOLITANO, California CHARLES W. DENT, Pennsylvania DANIEL LIPINSKI, Illinois TED POE, Texas NICK LAMPSON, Texas DAVID G. REICHERT, Washington ZACHARY T. SPACE, Ohio CONNIE MACK, Florida MAZIE K. HIRONO, Hawaii JOHN R. `RANDY' KUHL, Jr., New BRUCE L. BRALEY, Iowa York JASON ALTMIRE, Pennsylvania LYNN A WESTMORELAND, Georgia TIMOTHY J. WALZ, Minnesota CHARLES W. BOUSTANY, Jr., HEATH SHULER, North Carolina Louisiana MICHAEL A. ARCURI, New York JEAN SCHMIDT, Ohio HARRY E. MITCHELL, Arizona CANDICE S. MILLER, Michigan CHRISTOPHER P. CARNEY, Pennsylvania THELMA D. DRAKE, Virginia JOHN J. HALL, New York MARY FALLIN, Oklahoma STEVE KAGEN, Wisconsin VERN BUCHANAN, Florida STEVE COHEN, Tennessee ROBERT E. LATTA, Ohio JERRY McNERNEY, California LAURA A. RICHARDSON, California ALBIO SIRES, New Jersey DONNA F. EDWARDS, Maryland (ii) CONTENTS Page Summary of Subject Matter........................................ vi TESTIMONY Abramson, Hon. Jerry E., Mayor of Louisville, KY, Former President, U.S. Conference of Mayors........................... 17 Black, Doug, Chief Executive Officer, Oldcastle Materials........ 86 Buechner, Dr. William, Vice President of Economics and Research at the American Road and Transportation Builders Association... 86 Burgett, Brian, President and CEO, Kokosing Construction Company, on behalf of the Associated General Contractors of America..... 86 Corzine, Hon. Jon S., Governor, State of New Jersey.............. 17 Crosbie, William L., Chief Operating Officer, National Railroad Passenger Corporation - Amtrak................................. 52 DeCota, William R., Director of Aviation, Port Authority of New York and New Jersey............................................ 52 Dillon, Terry, President, National Utility Contractors Association, Chief Operations Officer, Atlas Excavating, Inc... 86 Drakos, Peter, President, Coastal Connect, Stanford, Connecticut. 86 Enck, Hon. Judith, Deputy Secretary for the Environment, State of New York....................................................... 52 Engler, Hon. John, Former Governor of Michigan, President and Chief Executive Officer, National Association of Manufacturers. 17 Gallegos, Gary L., Executive Director, San Diego Association of Governments.................................................... 17 Herrmann, Andrew, Senior Partner, Hardesty & Hanover, LLP, Member, Board of Directors, American Society for Civil Engineers...................................................... 52 Irons, John, Research and Policy Director, Economic Policy Institute...................................................... 17 Kiernan, Thomas C., President, National Parks Conservation Association.................................................... 52 Leyden, Thomas, Managing Director, Sunpower Corporation Systems, on behalf of the Solar Energy Industries Association........... 86 O'Sullivan, Terrence, General President, Laborers' International Union of North America......................................... 86 Porcari, Hon. John D., Secretary of Transportation, State of Maryland, on behalf of the American Association of State Highway and Transportation Officials........................... 52 Scott, Beverly A., Chair, American Public Transportation Association, General Manager, Metropolitan Atlanta Rapid Transit Authority (MARTA)...................................... 52 PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS Arcuri, Hon. Michael A., of New York............................. 116 Carnahan, Hon. Russ, of Missouri................................. 119 Costello, Hon. Jerry F., of Illinois............................. 120 Cummings, Hon. Elijah E., of Maryland............................ 124 Drake, Hon. Thelma, of Virginia.................................. 135 Hall, Hon. John J., of New York.................................. 136 Inslee, Hon. Jay, of Washington.................................. 138 Miller, Hon. Candice S., of Michigan............................. 139 Mitchell, Hon. Harry E., of Arizona.............................. 141 Oberstar, Hon. James L., of Minnesota............................ 142 Reyes, Hon. Silvestre, of Texas.................................. 147 Richardson, Hon. Laura A., of California......................... 149 Sutton, Hon. Betty, of Ohio...................................... 154 Walz, Hon. Timothy J., of Minnesota.............................. 156 Young, Hon. Don, of Alaska....................................... 159 PREPARED STATEMENTS SUBMITTED BY WITNESSES Abramson, Hon. Jerry E........................................... 161 Black, Doug...................................................... 170 Buechner, Dr. William............................................ 180 Burgett, Brian................................................... 193 Corzine, Hon. Jon S.............................................. 199 Crosbie, William L............................................... 204 DeCota, William R................................................ 232 Dillon, Terry.................................................... 243 Drakos, Peter.................................................... 266 Enck, Hon. Judith................................................ 275 Engler, Hon. John................................................ 283 Gallegos, Gary L................................................. 291 Herrmann, Andrew................................................. 310 Irons, John...................................................... 320 Kiernan, Thomas C................................................ 332 Leyden, Thomas................................................... 339 O'Sullivan, Terrence............................................. 349 Porcari, Hon. John D............................................. 353 Scott, Beverly A................................................. 358 SUBMISSIONS FOR THE RECORD Abercrombie, Hon. Neil, a Representative in Congress from the State of Hawaii, written statement of Anasstassis P. Margaronis, President of Santa Maria Shipowning and Trading, Inc............................................................ 364 Mica, Hon. John L., a Representative in Congress from the State of Florida: Letter to Rep. Charles B. Rangel and Rep. Jim McCrery.......... 368 Written statement of LifeSpan Technologies..................... 371 DeCota, William R., Director of Aviation, Port Authority of New York and New Jersey, responses to questions from Rep. Costello. 242 Kiernan, Thomas C., President, National Parks Conservation Association, supplement to testimony........................... 335 ADDITIONS TO THE RECORD Aerospace Industries Association, written statement.............. 378 Airports Council International, Gregory Principato, President - North America, written statement............................... 381 American Bikes, written statement................................ 385 American Association of Port Authorities, Kurt J. Nagle, President and CEO, written statement........................... 387 American Council of Engineering Companies, written statement..... 403 American Highway Users Alliance, Gregory M. Cohen, President and CEO, written statement......................................... 406 American Public Works Association, Noel Thompson, President, written statement.............................................. 408 American Rivers, Betsy Otto, Vice President, Strategic Partnerships, written statement................................ 412 American Shore and Beach Preservation Association, Harry Simmons, President, written statement................................... 417 American Traffic Safety Services Association, written statement.. 419 American Trucking Associations, written statement................ 421 Americans for Transportation Mobility, written statement......... 423 Appalachian Regional Commission, Anne B. Pope, Federal Co-Chair, written statement.............................................. 424 Association of American Railroads, Edward R. Hamberger, President and CEO, written statement..................................... 426 Association of State Floodplain Managers, Inc., Larry Larson, P.E., CFM, ASFPM Executive Director, and Al W. Goodman Jr., CFM, ASFPM Chair, written statement............................ 439 California Association of Sanitation Agencies, Harry T. Price, President, Fairfield-Suisun Sewer District, written statement.. 445 Cargo Airline Association, Stephen A. Alterman, President, written statement.............................................. 447 Chamber of Commerce of the United States of America, R. Bruce Josten, Executive Vice President, Government Affairs, written statement...................................................... 449 Community Transportation Association, Dale J. Marsico, CCTM, Executive Director, written statement.......................... 451 Delta Regional Authority, Pete Johnson, Federal Co-Chairman, written statement.............................................. 452 Horizon Lines, Charles G. Raymond, Chairman, written statement... 455 Intelligent Transportation Society of America, Scott Belcher, President and CEO, written statement........................... 457 Milwaukee Metropolitan Sewerage District, Kevin Shafer, Executive Director, written statement.................................... 461 National Association of Clean Water Agencies, written statement.. 465 National Association of Counties, written statement.............. 475 National Association of Development Organizations, Sharon Juon, President, written statement................................... 478 National Association of Railroad Passengers, Ross B. Capon, President, written statement................................... 482 National Business Aviation Association, Ed Bolen, President and CEO, written statement......................................... 490 National Complete Streets Coalition, Barbara McCann, Coordinator, written statement.............................................. 492 National League of Cities, written statement..................... 494 National Railroad Construction and Maintenance Association, and Railroad Cooperation and Education Trust, Charles Baker, President of the NRC and Trustee of RAILCET, written statement. 500 National Steel Bridge Alliance, Conn Abnee, Executive Director, written statement.............................................. 508 National Stone, Sand, and Gravel Association, Jennifer Joy Wilson, President and CEO, written statement................... 511 Navajo County, Board of Supervisors, written statement........... 515 Owner-Operator Independent Drivers Association, Todd Spencer, Executive Vice President, written statement.................... 520 City of Pico Rivera, Office of the City Manager, Charles P. Fuentes, City Manager, letter to Rep. Napolitano............... 526 Rails-to-Trails, Kevin Mills, Vice President of Policy, written statement...................................................... 528 Railway Supply Institute, Inc., Thomas D. Simpson, Executive Director - Washington, written statement....................... 578 San Juan County Commission, written statement.................... 582 States for Passenger Rail Coalition, Frank J. Busalacchi, Chair, written statement.............................................. 585 Transportation Departments of Idaho, Montana, North Dakota, South Dakota, and Wyoming, written statement......................... 587 Transportation disadvantaged Commission, State of Florida, J.R. Harding, Ed.D., Chairman, written statement.................... 590 Turnpike Authority, State of North Carolina, David W. Joyner, Executive Director, written statement.......................... 594 Water Infrastructure Network, written statement.................. 596 Water Resources Coalition, written statement..................... 604 Waterways Council, Inc., R. Barry Palmer, President and CEO, written statement.............................................. 608 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] INVESTING IN INFRASTRUCTURE: THE ROAD TO RECOVERY ---------- Wednesday, October 29, 2008 House of Representatives, Committee on Transportation and Infrastructure, Washington, DC. The Committee met, pursuant to call, at 9:35 a.m., in Room 2167, Rayburn House Office Building, Hon. James Oberstar [Chairman of the Committee] presiding. Mr. Oberstar. The Committee on Transportation and Infrastructure will come to order. I am delighted to see so many participants in today's hearing, both witnesses and Members, who are having great difficulty getting here on our congested transportation systems, including our Ranking Member who was delayed en route. It is usually me, but Members are unaccustomed to starting at 9:30 in the morning. But this is a very popular subject, a very critical issue, one that has attracted a great many, a wide spectrum of interests, and so we thought we had to start early. Today the hearing will highlight the role of infrastructure investment as a critical factor in restoring the Nation's economic health, like creating jobs--real jobs--real jobs in our economy. Nearly a million construction workers are on the bench. The construction industry is suffering the highest unemployment rate, 9.9 percent, of any industrial sector, and construction firms are operating on the margin or worse. Those alone are three compelling reasons for decisive action to invest in America, rebuild our economy, put Americans back to work. Going back to the Works Progress Administration of the Great Depression; the Accelerated Public Works Act of 1962, which President Kennedy wanted but did not ask Congress for, but Congress delivered it to him; and the Local Public Works Capital Development and Investment Act of 1976, initiated in this Committee, we have turned consistently in times of severe national recession to investment in the public infrastructure of the Nation to create and sustain jobs in difficult times. And we have to do that again, and we will. In September, the House overwhelmingly passed the Job Creation and Unemployment Relief Act of 2008, $61 billion to restore the economy, $30 billion for highway, bridge, public transit, Amtrak, airport, wastewater, Corps of Engineers, infrastructure investment projects, all within the jurisdiction of this Committee. Those funds were to be distributed through existing statutory formulas or administrative competitive selection processes. And the bill had no earmarks, no Member high-priority projects, no designations allowed for either the executive branch at the Federal level or the State level. Unfortunately, the White House threatened a veto, Senate Republicans stalled, and the bill died just before the September adjournment. But had the White House chosen to partner with us, construction workers would have been looking forward to real jobs this December. The need for real jobs since then has only become more acute. This Congress will not lament the Nation's economic downturn from the sidelines. This Committee will not stand idly by and watch things continue to go downhill. We have, within our jurisdiction, within our authority, capacity to revive this economy, to put people back to work, to stimulate the industrial sector. And we know specifically in this Committee, that infrastructure investment creates family-wage construction jobs and spin-off benefits that radiate throughout the economy. Those construction jobs, furthermore, cannot be outsourced to any other country. You don't build a road in front of your house with a call center in Bangalore. Those transit systems, those bridges, those highways, those rail systems, our airports, our waterways, our wastewater treatment facilities are here in our towns, in our cities, our metro areas, our rural communities. But in addition to the onsite construction jobs, there are all the other supporting--the cast of supporting jobs in our economy, those who produce the aggregates. We will hear today from the sand and gravel aggregate association, 40 percent unemployment, closing in on 50 percent unemployment, in that sector and businesses on the edge of bankruptcy. Some that already have; three in my district that have already closed. The cement sector, that is a vital underpinning in all of our construction sector. Steel, the most versatile building material in the industrial era, is down. In fact just yesterday, two iron ore mines in my district announced that they are cutting back. They are shutting down two production lines producing the taconite pellets that fuel the steel industry, because demand for steel is down. China and India were driving the hunger in the steel sector, but even their continuing force cannot sustain steel production, so we are seeing a downturn. The construction sector requires equipment. Equipment manufacturers have been cutting back. I have heard from them over the last several months. Funding for transit agencies, funding for Amtrak to buy rolling stock will generate U.S. jobs. Virginia Railway Express tells us that, if funding were available, they would immediately exercise options under a contract with MotivePower to buy 15 commuter rail locomotives, and that will help VRE meet its demand as people shift from car to rail for their commute. But it is not helping only northern Virginia. Buying those rail cars in northern Virginia helps Boise, Idaho, because that is where MotivePower manufactures those locomotives. The Muncie Indiana Transit System says that, if additional funding were available, they would exercise options under a contract with Gillig Corporation to buy four hybrid electric buses. Well, that will help Muncie, but it will also help Hayward, California, because that is where the buses are built. At New Flyer, a bus manufacturer in St. Cloud in our State of Minnesota, they are producing 23 buses a week. They could have a 50 percent increase in production and about a 25 percent increase in jobs if they had other orders coming in that they are capable of filling. So these infrastructure investments will put construction workers back on their jobs, but they also improve our deteriorating infrastructure. With the level of investment we are doing today, we are falling further and further behind, as the National Commission of Transportation Policy and Revenue reported. That has impacts on economic growth. It adversely affects our quality of life. It has effects on safety. Various economists, however, over many years--I have been in this room for a lot of years, 44, 45 going on, in fact. I started here as clerk on the Subcommittee on Rivers and Harbors. And I have heard the same tired, old arguments: "Oh, they are too slow. These infrastructure projects take too long to get going." And then, when the recession is over, they tell me, and they tell us, year after year, "Those people are still working." Well, my God, isn't that a bad thing? How awful. The trouble with those economists is that they have never had their hands on a number-two shovel. They have never had a callus on their hands among them. So we have had the experience of moving people to work with projects and the authority under our jurisdiction, and we know that we can put people to work on projects that are ready to go, designed, engineered, right-of-way acquired, EIS completed, all they need is the money. They can be under construction in 90 to 120 days, 120 days in the northern part of the country because we are starting so slowly. Snow has already fallen in my backyard in Chisolm yesterday. I got out just in time, although I am coming back with a shovel. In January of this year, AASHTO surveyed its members and identified 3,071 ready-to-go highway and bridge projects, with a total cost of $17.9 billion, that could be under construction in 90 to 120 days. Public transportation agencies, APTA, surveyed their members and identified nearly 560 ready-to-go transit projects, with a total investment cost of $8 billion. And the Council of Infrastructure Financing Authorities and the State and Interstate Water Pollution Control Administrators identified $9 billion-plus of ready-to-go State revolving loan projects. But they can't fund them because they don't have the money. So there is a backlog, there is a demand, there is a hunger, there is a need to invest. Our cities are crying out. Our cities are the front line of congestion, front line of the economic downturn in this country, and cities are the first ones to feel it. States are next. Governor Corzine, thank you for being here. And so we are delighted that you have come here to share with us. And I just want to close with some observations by Mayor Daley. He spoke to the American Road and Transportation Builders conference in Chicago last week. He said, "Chicago, like other cities, is facing declining revenues, slow growth, and increased demand for services. Every level of government in this country is facing the same. But over the years, with decline of funding from State and Federal Government for capital projects, I have been committed in our city to building what we need to do to keep the city moving forward: $900 million in our neighborhoods, $1.5 billion to reimburse development projects through the TIF program, the O'Hare Modernization Program." "And I will tell you," says Mayor Daley, "that whoever is the next President of the United States needs to address what has been an inadequate level of Federal investment into our infrastructure, including roads, bridges, highways, water systems, public transit, and school construction. We need to substantially increase Federal funding in these projects in order to help cities maintain and rebuild infrastructure, create jobs, and stimulate the economy." I tried to get the mayor to come out here and speak to our hearing today. He said, just read my statement. So I just did. And he said, "When we reduce rail and driver congestion, we improve passenger rail service, we enhance public safety, we improve air quality, we reduce noise, and we generate economic development." That is what this hearing is all about. We are not going to, as I said, stand on the sidelines and bemoan the conditions. We are here to do something substantive for this country, and we will. After this hearing is concluded, our Committee staff on both sides will meet again, as we did just in September just before recess, and assemble the elements for a bill to be introduced, to be considered when the House reconvenes November 17th. I want to thank my good friend, Mr. Mica, John Mica, our Ranking Member on the Committee, for the partnership that we have had in reviving and revitalizing Amtrak, one of the great successes of this Congress, something that we can all look forward to and that will, in its own, not only produce jobs, reduce congestion, but move America forward. Thank you, Mr. Mica. Mr. Mica. Well, thank you. And I have to start out first with a couple points of personal privilege. And one deals with the working relationship, the bipartisan working relationship I think could be an example for everybody in Congress that I have shared with Mr. Oberstar. From the very first day he took the gavel, we sat down and set priorities. We are batting 1,000, Jim. I can't tell you how proud I am of you and what we have been able to do together. The water resources bill, although you finked out on me, you went to the hospital, left me on the floor, and I had to go to the floor and pass the--I never realized this, by the way, it was the 107th veto override in the history of the Congress. But we did it together, because we are committed to build the Nation's infrastructure. That was on water resources. In all the fog of the election, everyone lost sight that the President signed--and you heard the Chairman refer to it-- the first rail passenger authorization in 11 years. Of course, we beat--our record was 7 years for a water resources measure, but in 11 years. We put reforms, as he said, in there for Amtrak. We opened the door to high-speed rail in New Jersey, the whole Northeast Corridor, 11 corridors across the United States. And we have a whole host of provisions in there--safety for passengers, to try to make sure we don't have another California. But I can't personally thank you enough at the conclusion of this. And I look forward to working with you, as we tackle the biggest transportation highway infrastructure measure. And we are both committed to make that come in on time, and we will figure out the budget together. But thank you, again. I just also want to take one moment. In the campaign season, sometimes things that happen--and I just have to mention this. And it does, in a way, relate to transportation. But last Saturday night in my district, we lost an absolutely beautiful, wonderful, young lady. Her name was Clare Skinner. Today, actually in just a few minutes, they are going to have a service in Deland, Florida, for her. She was killed in an automobile accident. She was leaving a campaign office. She was a graduate of the University of North Florida and had volunteered on the McCain campaign, was leaving later in the evening, and was killed just north of St. Augustine, Florida. I visited with her family yesterday, and my heart and soul is with them today. And, you know, I was thinking about this, Mr. Chairman. I asked the staff, they said since 2001 about 280,000 people have lost their lives in automobile accidents. And that is something we really need to concentrate on, a component of our next bill, in memory of Clare and all the other families that have had that horrible news. I can't even imagine what they have experienced. But today my heart, my soul, my prayers are with the Skinner family at this most difficult time. And I think we will remember Clare as we look at some of the safety measures and other things that we can incorporate into new legislation. Mr. Oberstar. I will join with you in offering my prayers for her and for her family. Mr. Mica. Thank you. And I do also want to thank you for the manner in which you have conducted this. I know you got a call from the Speaker, and she said she wanted our input on our measure and asked me to join with you, and we are here. We can't get everyone here. I think we got 18 witnesses. We will all probably have hemorrhoids by the time this one is over. [Laughter.] But I did have some that we couldn't get in, Mr. Chairman. And I would ask unanimous consent--these are statements. We start out with aerospace industry, Airports Council, it goes on and on, air transport, right down to the trails folks. But, if we could, I---- Mr. Oberstar. Without objection, all testimony we receive will be included in the hearing record. Mr. Oberstar. I thought it was All-Bran, also, for hemorrhoids. Mr. Mica. All-Bran? Okay, you recommend that. We will put that in the next stimulus package, too. But the other thing--well, this is a very important hearing. And we do have people that are hurting. We need to move the economy forward, and we have to create jobs. I think sometimes it is not always how much money you spend, it is also how you spend it. And we want to do that in a responsible fashion. I told a group of local leaders yesterday, you know, that you can tell the difference--we were talking about earmarks, and some of this bill will be earmarks and projects--but you can tell the difference between a bad earmark and a good earmark. A bad earmark is sort of looking at pornography. It is hard to define it in sort of legal terms, but you know what it is when you see it. And we don't want bad earmarks as part of this stimulus package, and particularly coming from the T&I Committee. Mr. Oberstar and I, I think we have a pretty firm agreement in not larding this bill down with a whole host of pork projects. I think we are both committed to making certain that, in fact, the measures that are approved would be projects that have been vetted, that have been approved at various levels, that aren't airdropped in unexpectedly at the last minute. So I think we have a pretty good firm commitment on that, and we don't want this to become a vehicle for everyone to be putting another ornament on a Christmas tree in the coming holiday season. But we do know that every billion dollars in spending on infrastructure, on highway and transportation expenditures does result in 35,000 new jobs. And I think that people out there that I have talked to--I have been on the campaign trail, like many of you--they would prefer a paycheck rather than an unemployment check. And we could do it. There are some innovative things that are pending, too. I have tried to get one of our colleagues here today, Thelma Drake, who is on the Committee. And it is amazing, you know, sometimes you think you know quite a bit. I have been on the Committee for 16 years; you have been on twice as long almost, Mr. Chairman. But Thelma Drake took me down to Norfolk, Virginia. And we discussed maritime highways, cost-effective ways of moving goods in the United States. Thelma Drake showed me the Heartland Corridor project. It goes not only from her district in Norfolk, but all the way to Columbus, Ohio. Ohio certainly would need that help. But building the infrastructure in a coherent fashion is so important. It is also important that we have an energy component. You spoke a bit about that. I mean, you are starting to sound like a Republican here. I got some of the things that we want to do. And one is to create jobs through energy- effective measures. And nothing could be more effective than, again, moving goods in a fuel-efficient, energy-efficient, environmentally efficient manner. There are two things, Mr. Chairman, that I want to mention that are not within our reach but have come to my attention, and maybe we can work with the other Committees. One, I have gone back and I have heard some of the governments are having trouble, because of the financing meltdown, in obtaining financing for these projects. So we need to talk to the other Committees of jurisdiction, and maybe we could do a joint letter or something, to get them to help us make certain that, if we do a package, that we can help other States. It is nice for us to stay we are going to do this project or that, but if they can't get the financing or they can't move the project or they are stuck, then they don't go forward. So I think that that is something, in a bipartisan manner, we can do. And one of the things on our side of the aisle that we want to do is provide some tax relief for American businesses to create jobs. And that deals with section 179 that allows businesses to expense equipment. And that will really start the wheels in motion. We have seen some of that in the past. Those things are not in our jurisdiction, but I hope that you and others would lobby, me, for them. So, we are the largest Committee in the Congress, and sometimes, you know, everybody else is out there campaigning; this falls to us to kind of get the job done. I think people are counting on us on move the economy, job creation forward. And the great thing is, when you go back out there--Mr. Oberstar and I have been here quite a bit, trying to keep the Committee and the Subcommittees and our legislation; and we have been the most productive Committee in Congress, bar any-- but you do see the greatness of this country, and anything is possible. If government sometimes works as a partner, not as an obstacle, and properly works with the private sector, all things are possible in this country. So I look forward to you, in a difficult time, moving forward a positive package. And thank you again. Yield back. Mr. Oberstar. Thank you very much. I greatly appreciate those comments and your suggestions about tax relief for business. Going back to John F. Kennedy, investment tax credit has helped to stimulate the economy. The rail industry is looking for such relief. And that is something we could partner on. I want to thank, again, Members for coming long distances to participate in today's hearing. You come from the Pacific Northwest, from California, from Iowa, and even from a long journey, probably in time, across the District of Columbia. Mr. DeFazio? Mr. DeFazio. I thank you, Mr. Chairman. I will try to be brief. I just think what we are talking about here today is the potential to make a major change in direction for the country. And that is to begin to practice what I would call trickle-up economics, as opposed to trickle-down. I was one who didn't vote for the bailout. And I think throwing that money at the top at Wall Street hasn't done a whole heck of a lot of good for the underlying economy. And I think the stock market reflects that. What we really need to do is get back to basics. We need to put people back to work. We need to rebuild our infrastructure so we are not detouring trucks, as in my State, over the Cascade Mountains--they head south to California; we are not seeing bridges collapse, as in your State, Mr. Chairman, and elsewhere. We have long-neglected our infrastructure. These are jobs that can't be exported. They are jobs that will be constructed with American goods, American labor. They will spill over into supporting small businesses, local communities. They will make the United States of America more efficient in terms of just-in-time delivery and its economic competitiveness around the world; improve our public health, if we are dealing with water and sewer systems. And if we are dealing with transit, they will help us resolve our issues in terms of dependence on foreign oil. As you documented, and I won't go back over it again, there are billions of dollars of projects ready to go. I am tired of hearing from the pointy-head economists who say, oh, these infrastructure projects take too long. Well, even if they did take too long, they are investments we need to make. And, secondly, there are some economists now, including a recent Nobel laureate, who said, actually this recession is probably going to be so long and so deep, that argument won't hold sway anymore; that we are going to need this investment, we are going to need jobs 6 months from today as much or more than we do today. So hopefully we will not be yet deterred as a Congress into giving back more tax benefits for people to either, you know, save--that is very meritorious--to pay down credit card bills-- that is good because we are overindebted--or to buy junk made in China, which puts the Chinese back to work, which doesn't help our economy a whole heck of a lot. So direct investment in our infrastructure would be of much more benefit to the Nation today and for many years to come. Thank you, Mr. Chairman. Mr. Oberstar. I thank the gentleman. Ms. Miller, thank you very much for coming all the way back from the neighboring State of Michigan. Mrs. Miller of Michigan. Thank you very much, Mr. Chairman. Let me just say how delighted am to be here, and I certainly appreciate your calling this hearing. I think it is incredibly important. It is no secret that my great State of Michigan is probably the most economically challenged State in the entire Nation. As it is often said, the Nation gets a cold and Michigan gets pneumonia. And we have some unbelievable challenges right now. But I am a firm believer that the economics throughout history, quite frankly, has always followed the transportation grid. I don't care if that was wagon trains back in the early part our Nation or the railroads, the interstates, the aviation links, et cetera. And so I think if the Congress does have an economic stimulus package, that focusing on transportation needs is an incredibly critical component of how we do put people back to work. And I think it is very important, as we look at projects that really are ready, that have been vetted, as has been mentioned--when you called this hearing, I have five counties that I represent, I called all five of my county road commissions just to see how many projects they thought could happen rather immediately. And there are certainly many, many of them. And I know that is not inherent to my counties; that is throughout the entire Nation. And it is very important that we do put people back to work. And I also wanted to make mention and welcome one of the greatest Governors that Michigan ever had, Governor John Engler, who now is with the National Association of Manufacturers. I am appreciative of him being here today. And when he was the Governor of our State, he did a number of things to help build our transportation grid, build Michigan 1 and build Michigan 2, where for a very conservative Republican, he recognized how important it was for the State to take on bond indebtedness and look for the match so that we could advantage our State of Federal transportation dollars. And that, I think, commitment obviously will be demonstrated again today. But I am delighted to work shoulder to shoulder with you, Mr. Chairman, and our Ranking Member and everybody on this Committee as the Congress does move forward, hopefully, for an economic stimulus package, which is very, very important, that a large part of it is transportation. It does put people back to work; it is a jobs program. It keeps us competitive in the global marketplace, and we see what is happening in China and India, et cetera. It is very important for us to do this. And, at the end of the day, as you say, people continue to work. It feeds on itself. It is a wonderful synergy there. And we have something to show for the dollars that we have expended that help as a component, again, for economic stimulus going forward. Thank you very much. Mr. Oberstar. Thank you. I appreciate those comments and your words about Governor Engler. We remember very well in Minnesota, when we were struggling with Jesse Ventura, how Michigan leaped ahead. In order of seniority, Ms. Norton. Ms. Norton. Thank you very much, Mr. Chairman. I know you know how much I appreciate this hearing, because I have been pressing for an economic recovery package for some time, as you have, Mr. Chairman. I certainly do believe that we had to do some kind of bailout for the top of the economy, for the frozen credit markets and financial institutions. But I believe that the anger of the American people came from seeing a bailout at the top of the economy while the real economy was left struggling. And, at that time, I thought we would have been much better off if we had done the economic recovery simultaneously. Actually, the House tried, because before we left we did get an economic recovery package of some kind out. Of course, it failed in the so-called other body. Now we are back, and we are going to have to do an even bigger one, because the longer you wait, the more you have to pump in quickly. Now, the motto of this Committee has long been "Jobs, baby, jobs," if you will forgive me, because when the transportation and infrastructure programs create jobs, they will have the most beneficial effect on a flailing economy, because T&I ripples through the rest of the economy and wakes up other sectors. Pure and simple, that is the history of T&I. As Chair of the Subcommittee responsible for Federal real estate and development, I know firsthand the beneficial effect Federal construction can have on employment and overall economic development throughout the United States. In the 106th Congress, for example, in a bipartisan bill in this Congress, we passed the Federal Center Public-Private Development Act. And this was a very short piece of legislation. It has transformed a part of Southeast Washington, the Federal development along M Street, brought in the private sector with new office buildings, hotels, housing, and the neighborhood gym, the Nationals Baseball Stadium. Now, the GSA owns 196 million square feet of space and leases an additional 150 million square feet throughout the United States. Well, you can't lease if people aren't building. And we lease much more than we buy. This scale of ownership and leasing makes the GSA the most important factor in the commercial real estate market. When the economic recovery and jobs bill is enacted, GSA, I want to assure you, Mr. Chairman, is ready to commit within 90 to 120 days several nationwide contracts for major repair and alteration projects and energy conservation and alternative energy projects with a value of approximately $1.5 billion. GSA is also prepared to infuse an additional $500 million into the economy with contracts for Federal construction. Two other entities close to home, Mr. Chairman, with significant real estate needs are the Smithsonian Institution and the Architect of the Capitol. Both entities are posed to commit contracting funds within 90 to 120 days after enactment of the economic recovery and jobs bill. The Smithsonian has identified the Arts and Industries Building and repairs at the National Zoo as pressing needs. The Office of the Architect of the Capitol is also ready to immediately commit $22 million for construction projects grounded in energy savings and energy conservation. And if I may say so, Mr. Chairman, if the Federal Government starts up this alternative energy sector by indicating that we are prepared to put our big foot in there and invest, then you will see the prices go down and you will see others more rapidly use energy alternatives and conservation. The Federal entities, Mr. Chairman, are ready and eager to participate in the economic recovery, and along with Federal leasing and construction to stimulate the private sector which we know stands ready to continue if there is the kind of stimulus that would get private-sector development moving again. Thank you very much for this hearing, Mr. Chairman. Mr. Oberstar. Thank you for that compilation, which I think is very important, extremely important for us to understand. It is a good point of departure. Mr. Boswell? Mr. Boswell. Thank you, Mr. Chairman. I will be very short. I would associate myself with what you said earlier, and other Members, the few with us. Something that you and I have discussed at some length over the last several months is, you know, stimulus, you know, we are better than roads and infrastructure, so we have to do it any way. We have to do it. It must be done. And much has been said, and I will just echo, it is good- paying jobs that can't be exported. A dollar spent in the community and all of your communities is going to turn at least three times, maybe seven. That is stimulus. And we have to do it anyway. So it is very, very important. It might be the time--I was thinking about the Ranking Member's statement about what else we could do in this--to do the laboratory investigation on how to make these roads last longer. It might be time to think about that, or at least start it. And lastly, I would like to ask those of you from your extensive background, we are going to have to fund--this is not the purpose of this hearing, but it is on the table, it is coming--how are we going to raise the revenues to keep up with our transportation infrastructure. We have to do that. And just doing it like we have been doing it is not going to work. And it is going to be a heavy lift, a big decision, but I think those of you that are Governors and mayors and involved so much, with all the background you have and information at your fingertips, that you have to participate. And we might as well be prepared. And if you want to make some comment today, we would probably welcome that. But we are here to try to stimulate the economy, which we must do, we must do. So, Mr. Chairman, I thank you for calling this. I will have to be out for an hour because of another commitment, but I will be here until then, and I will be back for the rest of the time. Extremely important. Thank you for making sure this is happening. Thank you very much. Mr. Oberstar. I appreciate your coming from Iowa. And, you know, from University of Iowa, ITS Service, that they are engaged in work on pavement longevity. Mrs. Napolitano, thank you for participating, from California. Mrs. Napolitano. No, sir, thank you. And I am very, very happy to be here even though I haven't been to bed yet. I took the red-eye to be here with you and the rest of the Committee. This is a much-needed critical recovery plan for America. I won't reiterate what everybody else has been saying over the good-paying jobs, over the reduction of congestion and addressing some of the other things that are really quite critical to our communities. I also did meet with some of my leaders. In fact, yesterday I was in Sacramento talking to the--can't even think of his title--Mr. Garamendi, in regard to some of the issues we were talking about in the paper. And not only are they interested in transportation, but also with some of the implications of water and what it can mean for California and some of the other areas that are close to us. My home, of course, in southern California is--we deal with 20 percent of Nation's cargo, roughly. And that creates a lot of environmental safety, economic issues. And so, yes, we would be more than happy to provide some of these ready-to-go projects that have really been hanging, because, as you well have noted, there is not enough funding at the local level, State level, to be able to carry out those projects. I would like to just point out, there are two specific ones; in one of my cities, there is a boulevard which separates, it is grade-separated but the sides have been starting to buckle. And the city has been trying to get the railroad--I have been trying to get UP to work and try to ameliorate it, because that will stop 40 trains a day bringing cargo to this area, to the rest of the United States. And that is getting to a critical situation. And the other area is, of course, the expansion of the Santa Ana Freeway. I call it the largest parking lot in the United States, because it is bumper to bumper almost 24/7. And the list goes on. But I also have a request of you, Mr. Chairman, and that is to accept into the record a copy of a letter from the city of Pico Rivera in regard to the grade separation; and also a letter from the California Association of Sanitation Agencies that refer to some of the issues that they are facing and would like to have considered. Mr. Oberstar. Without objection, the letters will be included in the record. Mrs. Napolitano. Thank you, sir. We do have grade separations that are ready to go. In fact, they are working on them right now. So that we would hope that we can be able to be successful in getting them into the list, because they are ready to go. A lot of other things that I would love to--I will maybe put some of the questions later on that clarify some of the issues that I know that I have and some of my constituency have. But I certainly thank you and those that came up to be able to be with you today. And I yield back. Mr. Oberstar. Well, of course we thank our Speaker, who is another Member of the California delegation, for her persistence in pursuing the issue of infrastructure, and thank her for the initiative in moving forward and giving us this directive. Mr. Cummings, Chair of our Coast Guard and Maritime Subcommittee. Mr. Cummings. Thank you very much, Mr. Chairman. And I want to thank you for convening this critical hearing to give us this opportunity to examine how investments in needed infrastructure improvements can help support our Nation's economic recovery while contributing to our renewed economic growth over the longer term. Mr. Chairman, I join you in feeling the pain of the American people. And I am trusting and hoping that, just as we were able to bail out Wall Street almost overnight, that we will be able to bail out Main Street through the stimulus package. Our Nation confronts a staggering economic crisis that reaches now to every industry, every community and essentially every family. Despite unprecedented interventions, interventions which I believe should come with strict conditions, a recession appears likely. Our Nation has already lost 760,000 jobs so far this year, including 340,000 jobs lost in the construction industry alone. Too often in the past, Congress has failed to take action to support economic recovery until after the worst of an economic crisis has passed. To ensure that we don't make the same mistake again, the Congress should enact legislation now that will support both our immediate economic recovery and our long-term growth. Though it is not the purview of this Committee, I believe that such legislation must include the extension of unemployment benefits and the expansion of food stamps and some type of job training provisions. This legislation must also provide funding for infrastructure projects that can be initiated during the coming months. Declining revenues into both the Federal and State transportation trust funds are destroying jobs, leaving States struggling to keep up with maintenance needs and causing States to delay planned projects. My own State of Maryland and that of Ms. Edwards recently announced more than $1 billion in cuts to its multiyear transportation program, as Maryland Transportation Secretary John Porcari will be discussing during his testimony. In this economic environment, investments and infrastructure, unlike apparently bailouts to banks, can effectively create good-paying jobs while supporting the repair and expansion of the infrastructure that will carry a recovering economy forward. Importantly, Mr. Chairman, as Chairman of the Subcommittee on Coast Guard and Maritime Transportation, I believe that it is imperative that the Federal infrastructure investments target waterborne transportation as well as the other surface modes. For example, under the Truman-Hobbs program, the Coast Guard is currently altering several bridges around the country to ensure that they are not obstructions to navigation. Accelerating these bridge modifications will provide additional jobs while improving navigation. Additionally, I note that the second hearing I convened in the Coast Guard Subcommittee during the 110th Congress examined short sea shipping, Mr. Chairman, which is the movement of goods by water from one U.S. port to another or between a U.S. port and a port in Canada. During that hearing, the Subcommittee received compelling testimony indicating that one of the biggest impediments to the expansion of short sea shipping is the harbor maintenance tax. The harbor maintenance tax adds costs to waterborne transportation that are not applied to land-side transportation. Additionally, because the tax must be paid by each shipper with a piece of cargo on a ship, rather than by the owner of the ship, and because cargo can even be double- taxed under certain circumstance, the harbor maintenance tax has the perverse effect of encouraging transportation by modes other than water, which only adds to congestion on our roads. I introduced legislation, H.R. 1499, to exempt short sea shipping from the harbor maintenance tax. The CBO has prepared a preliminary estimate indicating that this measure would cost only $12 million in total forgone revenue to the Harbor Maintenance Trust Fund over 10 years. Given the Harbor Maintenance Trust Fund's multi-billion-dollar balance, this is an affordable investment to expand the environmentally friendly movement of freight by water. And I urge that it be considered for inclusion in any new legislation enacted by Congress to support economic recovery. Again, Mr. Oberstar, I thank you for convening this hearing and for continually pushing for our Nation to invest in our own future by investing in our infrastructure. Thank you. Mr. Oberstar. Thank you very much for that very thoughtful statement, well-expressed. Mr. Sires, we will skip over you, because I am going to give you the introduction of one of our star witnesses, and you can make your statement at that time. And, Ms. Richardson, also from California, great to have you here. Ms. Richardson. Thank you, Mr. Chairman. I am pleased to join you and Ranking Member Mica and the rest of my colleagues today as we examine the impact of transportation employment stimulus from the Federal Government that could provide, really, a shot in the arm to our economy and to the job market. There is no more important issue facing Congress, and I thank you for holding this timely hearing today. As you know, Mr. Chairman, this is not the first time the House has traveled down this road. As far back as FDR's administration in the 54th Congress, they worked on creating the Works Progress Administration to create construction jobs and to stimulate the economy in the aftermath of the Great Depression. Just last month, we passed a job creations package here in Congress. Unfortunately, though, the Senate and the administration did not support its passage, and the efforts for hardworking Americans failed. Now it is time to take a second bite at that apple. To combat this trend, the Congress has to act responsibly and to act now. We know that, for every $1 billion spent on transportation infrastructure projects, it creates over 35,000 jobs. There are thousands of highway projects right now that can be undertaken that many of us have alluded to this morning. Specifically, in my district, the Southern California Association of Governments, also known as SCAG, which is mandated by the Federal Government to research and draw up plans to address the region's transportation needs, has transportation initiatives in aviation, goods movement, and corridor planning, amongst many others, that could really impact our transportation planning. SCAG has identified 58 State highway projects and over 200 transit projects listed for LA County alone. These projects are proposed over a 6-year period and could provide a steady source of employment for our region. I can tell you unequivocally that, without significant public funding, the bridges and roads critical to our competitiveness will surely decay if we don't make the commitment now. Finally, Mr. Chairman, it is no secret unemployment is on the rise. In my district, there are some portions that are as high as 14 percent. A new, bold economic recovery plan is critical. The best investment has been and will continue to be for America to get Americans working again. I thank you for your time. Mr. Oberstar. Thank you very much. Ms. Edwards of Maryland, fresh off a resounding endorsement from The Washington Post for re-election. They don't often cast such kind words in their editorials. And the first term, to earn that, that is terrific. Ms. Edwards. Thank you, Mr. Chairman. I have the good fortune of having The Washington Post as our hometown paper, Ms. Norton. Thank you, Mr. Chairman, and really for your leadership on transportation and particularly for your commitment to investments that I believe we need to make in mass transportation. And this is a really important hearing that we are holding today, and I, too, associate myself with my colleagues' remarks, who commented about our failure to include an economic stimulus package in the bailout bill that we passed just several weeks ago. And I think we are seeing the results of that failure today. And so it is important that we act now. I also want to thank all of our panelists here today, and particularly our MarylandSecretary of Transportation John Porcari. He is here on behalf of AASHTO today, but we never want to forget to mention that he is really from Maryland. And I know his commitment, as well as our State, to deep investments in mass transportation in our transportation infrastructure. And as my colleague, Mr. Cummings, has already pointed out, in our home State, Maryland has already faced $1.1 billion worth of transportation projects that have been cut or delayed because of our State's budget concerns. And this at a time when we need those investments, as we do around the country, not just to stimulate the economy, but to create jobs, to improve quality of life, and to make the kind of investments I believe we need in infrastructure. It is not just about the short term, but also about our long-term global competitiveness. I know the feelings of so many people in my congressional district and like myself who, this morning, thought I only really needed 40 minutes to get to work here, and it turned out that, in fact, I needed an hour and 40 minutes to get to work. And this happens routinely because we are stuck in traffic. I live in the Wilson Bridge corridor, a corridor that really should be open down 95 to facilitate our commercial development all along the 95 corridor. And yet so many of us as commuters are stuck in that corridor, actually hindering the movement of goods throughout the 95 corridor. And so I share the concern that we may, you know, spend some time in the short term widening some of these roadways when really what we need to be doing is making investments in mass transportation for the long haul so that we improve our competitiveness. You know, in our district, our parents are challenged to get home to child care and pick up their children from daycare, and they are paying $1 a minute and $2 a minute in overtime because they are stuck in traffic, and at a time when wages are, in fact, flat-lined. So this goes deeply to the quality of life and the affordability of families that is impacted by the kind of transportation infrastructure we have or we don't. And, you know, we know that transportation projects provide growth and create opportunity and prosperity. And so I am looking forward to us figuring out a way to make investments in the short term and marry those with the kind of investments we need for the 21st-century economy. And I know that there is always a challenge of doing a project that is in the hopper today, and I think that that is really important. But it is also important for us to look at some of those long-term projects and figure out what we can jump-start today so that, 10 years from now, we are not faced with exactly the same circumstances, wondering why we made the mistake in the failure of not investing for the long-term. And so, Mr. Chairman, I thank you. Mr. Oberstar. Thank you very much. You really touched the core of living in urban congested America. The Chair yields to the gentleman from Florida, our Ranking Member, for a unanimous consent request. Mr. Mica. Just a quick request here. This will actually follow up Mr. Cummings' comments which I support, which is repeal of the harbor maintenance tax. It is a tax on the domestic movements of goods by vessels. I had mentioned before there are some things outside the purview of our Committee, and the letter I have is addressed to Mr. Rangel, Mr. McCrery, the leaders of that Committee, signed by 27 of my colleagues on this side of the aisle. And there will be things in this package that will impact jobs and the economy and transportation of a tax nature and so we support that and ask that it be put in the record. Mr. Oberstar. Without objection it will be included in the record. It is also a matter I supported in the previous Congress that was not acted on and hasn't been acted on in this Congress. So let us proceed. All right. Witnesses, you have heard from Members of the Committee and now it is our turn to hear from you. And to begin, I will ask the gentleman from New Jersey, Mr. Sires, to introduce our--make his opening comments and introduce our first witness. Mr. Sires. Thank you, Mr. Chairman. And thank you for holding this very important meeting. I would also like to thank you for coming to the district. I think you and I saw a very prime example of investing in our infrastructure: all of the jobs that were created, all of the development around the areas. And they were all permanent, good paying jobs, so I just want to thank you for coming to the district. Mr. Oberstar. I am glad that there is still work for the gentleman to do after Chairman Jim Howard and Chairman Bob Rowe presided over this Committee for many years. I didn't think there was anything left to pave in New Jersey. But there clearly is work yet to be done, and you are going to do it. Mr. Sires. Again, thank you. And I have the honor today of introducing our great Governor from the State of New Jersey. As a former CEO of Goldman Sachs and a former Member of the United States Senate Banking Committee, his testimony is especially relevant to the current economic issues that we are facing. Governor, I am very interested in your experience in trying to get financing for some of the projects that we need in New Jersey. I know that you have been working very, very hard. So if you could address that as you address the Committee, that would be very helpful to us. You know, New Jersey has been hard hit by the troubles in the financial market and the rise in unemployment rate is a cause for concern. At the same time, New Jersey is proud of its varied transportation and infrastructure systems. Enhancement of these systems will create thousands of good paying jobs and benefit the entire State. I am pleased to have Governor Corzine testify today. His unique perspective, both the economic and the transportation, would surely guide the Committee as we do our work in putting together a good stimulus package. Governor, I know what you have inherited, I know what you are going through. I was part of the New Jersey process. So it is with a great deal of pleasure that I introduce the great Governor of the State of New Jersey, Governor Corzine. Thank you. TESTIMONY OF HON. JON S. CORZINE, GOVERNOR, STATE OF NEW JERSEY; HON. JERRY E. ABRAMSON, MAYOR OF LOUISVILLE, KY, FORMER PRESIDENT, U.S. CONFERENCE OF MAYORS; GARY L. GALLEGOS, EXECUTIVE DIRECTOR, SAN DIEGO ASSOCIATION OF GOVERNMENTS; HON. JOHN ENGLER, FORMER GOVERNOR OF MICHIGAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, NATIONAL ASSOCIATION OF MANUFACTURERS; AND JOHN IRONS, RESEARCH AND POLICY DIRECTOR, ECONOMIC POLICY INSTITUTE Governor Corzine. Thank you, Congresman Sires. And it is great to be with you, Chairman Oberstar. I appreciated your quick remarks on how well we had done in history. I can only hope that that is not a warning for the future. Ranking Member Mica, it is good to be with you. I want to say to everyone on this Committee, one of the great things about it is its great bipartisanship and how people work together. That has been true of the Congressman from New Jersey, Frank LoBiondo and certainly Congressman Sires and I. I am grateful for that. This is not a subject that has an R&D next to it. I also want to compliment you on the rail passenger reauthorization which is extraordinarily important for the Nation as well as those of us who are quarter States that benefit from it, and your foresight in H.R. 7110, which is putting transportation and infrastructure at the forefront of the stimulus package. The rest of the world will catch up, and that is what we are all here to support today. It is through your efforts that I think we will move directly in that area. Two weeks, ago as the Congressman suggested, I called an emergency session of my State legislature to talk about the deteriorating economic conditions. They are really quite substantial. We are looking forward, not positively, but looking at three or four quarters of negative growth, unemployment rates reaching perhaps 8-1/2 percent, a serious dislocation from the financial services industry compounding what is happening in the national economy. And this is going on across the Nation in every State, every local community and numbers are quite staggering. And without some kind of help from the Federal Government, you are going to see the State and local governments become a very negative force in aggregate demand in the upcoming months. Our red ink will be about 4- or 500 million more than we anticipated when we put a budget together at the end of June; and next year, 3-1/2 to 4 billion necessary cuts just to balance our budget for which we have a constitutional responsibility. I clearly and respectfully recommend that we move strongly with an economic package, one that I hope will be in the 1-1/2 to 2 percent GDP. That would be 250- to $300 billion range and it should happen post-election, not post-inauguration. And within that package, as what we recommended in the State of New Jersey, it should have a very strong component of infrastructure. Surely we have to deal with our most vulnerable, the housing crisis, those struggling with the cost of food and fuel and unemployment. And we need to have tax structural changes that would promote business climates, and we are doing that in the State. But there is nothing more important than this infrastructure investment. The centerpiece of my program was to push every one of my cabinet officers to accelerate, ready-to-go projects; 3-1/2 to 4 billion of these we think we can put on the ground in the next 6 months; 1.5 billion of them in the next 90 days. This will create 40,000 jobs that would not be otherwise in place. And it has to be done, in my view, on a national basis. And the last recommendation I made to my legislature was catch the next Amtrak to Washington and come down here and shake the tin cup and talk to all of you, because we really do have a serious problem. Without action by the Federal Government, you are going to offset in State and local governments much of what is taking place. Wall Street needed some kind of stabilization action. We need stabilization action at the local level. I will say that it is important that one understand that these projects can move now, and it is important to understand something I heard one of the Congresswomen say: We need to align these projects with our long-term objectives. We shouldn't be doing make-work projects. We need to make the projects that are aligned with our long-term objectives and needs consistent with where we go. This is not pork barrel, this is about win-win. And your package that you put together that was resisted in the White House would have created 834,000 jobs; 834,000 out of the infrastructure program that you put together, according to the numbers that your staff suggested. That has more than offset what jobs we have already lost in this economy. It is time to move if you want to put people to work. And I will say, parochially speaking, I am glad the Chairman has come to the greater New Jersey/New York area. One of those long-run aligned projects is that mass transit tunnel we have talked about. This time of adversity should be translated into a time of opportunity with respect to our infrastructure projects. We should not lose the opportunity to invest in our future, our children and our grandchildren's future. I have much more I can say on the subject. Thank you very much for having me. Mr. Oberstar. Thank you, Governor Corzine. I compliment you and your predecessor, particularly you, for making New Jersey the template for America in a mode shift to transit. New York City has certainly a more than 10 percent mode shift to transit. Chicago does. But New Jersey as a State achieved it. If we did that nationwide we would save the equivalent of all the oil we import from Saudi Arabia, and that is 550 million barrels a year. And the tunnel project you referenced just a moment ago, you and I talked about way back when you were still in the Senate, late one night--maybe it was early one morning about 1:00 a.m.--in the Member's Dining Room, and I regret that it has taken so long. I think the Federal Transit Administrator regrets that it has taken so long to move things along, but the CEI will be gone next year. Cost Effectiveness Index out, done, through. No more manipulating of the law beyond the law. Mayor Abramson. Mr. Abramson. Thank you, Mr. Chairman. Thank you to the Ranking Member, Mr. Mica, and thanks to the Members of the Committee for allowing the mayors to be here. I am a past President of the U.S. Conference of Mayors and I am very pleased to submit to you the Conference's Mainstream Stimulus Plan that has been submitted into the record. Now, everyone in this room clearly understands the economic crisis that our country is going through, but I can tell you that on Main Street, in the cities and counties throughout this country, we are feeling it directly. The unemployment rate is raising. As was said earlier, close to 800,000 jobs have been lost in 9 months. Families in our hometowns are losing their savings; retirement nest eggs are being literally evaporated; they are losing their homes. Sales are down, businesses are going through difficulties they haven't gone through in a generation. Mr. Chairman, the mayors--in our stimulus package, we are not asking for a bailout. We are not asking for a rescue. But we are asking for an investment that immediately will create real jobs and I emphasize that "immediately" will create real jobs. Now, the city of Louisville is a merged city-county with a population of about 700,000, and we reflect the crisis that is going on in every other community throughout this country. And yet the metropolitan communities like Louisville are truly the economic engines of this country. And if we are going to move this country out into a nationwide recovery, I would submit to you the economic engines are going to have to lead the way. Mr. Chairman, following your philosophy throughout your tenure in Congress, now more than ever a partnership between Washington and the local communities must be reestablished, and we feel like the Mayors' Main Street Stimulus Package that we submitted is the first step in that direction. The Mayors' stimulus plan will improve the country's infrastructure that is literally falling apart, will deliver real jobs immediately, and will help small businesses on Main Street be able to energize and create local jobs themselves. Earlier this week, Majority Leader Steny Hoyer visited Louisville, and I had around the table for him to listen, my director of roads and bridges, my director of sewers, my director of water and transit and schools and workforce training and my director of housing. And he heard ready-to-go programs, proposals that were on the table, literally ready to go within a 90- to 120-day period, of over $250 million in Louisville alone, and that we estimate, without any question, not only would stimulate the economy but we could finish those projects by the end of 2009. Ready-to-go projects like school modernization, bridges and road repairs, sewer and water repairs, public housing modernization, and the purchase of hybrid buses to expand our transit services. Literally, in 90 to 120 days we can be ready. Let me summarize the points of the Conference of Mayors' proposal, and you will notice that many of them draw directly from the September House-passed stimulus package. We asked $9 billion be set aside for transit agencies to purchase rolling stock. The demand for public transportation is up, and yet none of the bus systems and none of the public transportation systems are able to meet it at this point in time. We need more hybrid buses and more vans on the streets, $1-1/2 billion ready for the airport improvement program. That fund has been stagnant for several years. A billion--$250 million for Amtrak. You did an outstanding job, as was said by the Governor, in terms of your most recent passage of Amtrak investment, but track, bridges and tunnels still need assistance. And over $18 billion we request in water and wastewater grants to assist in rehabilitating aging water and sewer infrastructures. As you know, 740 cities have consolidated sewer overflow problems in their communities. We just signed--EPA has these enforceable consent decrees. We have one in Louisville that is going to cost us $800 million. You have one in Duluth, Mr. Chairman, Cincinnati, Pittsburgh, Birmingham, et cetera. We need assistance to ensure that our water and sewers are ready to go. We are $7.5 billion to repair and modernize schools and $2.5 billion to repair and upgrade public housing. Mr. Chairman, there are three other quick ones that I want to go through that I think are important: $32 billion we request for critical ready-to-go highway projects in metro areas and throughout States, throughout the rural areas of our States. Repair the bridges, repair the roads, widen the farm- to-market roads. We agree that the STP program is the right vehicle to deliver the funds. It provides the maximum flexibility for these projects. But we are strongly opposed to dropping local communities out of the decision making as the September bill that was passed in this House did, because we believe as you set up the MPOs around this country, that the local folks need to be a part of that decision making process to know where that investment will both assist both the folks who live in the community as well as business folks. We talked about a $10 billion infusion of community development block grant moneys. You used that in New York City post September 12th. You used community block grants post Katrina. You used community block grant moneys again in your neighborhood stabilization program most recently passed. We think that would create immediate jobs for construction of public facilities, et cetera. And, finally, we really agree with the statements that were made dealing with green jobs for Main Street. And you could, with $5 billion invested in the energy efficiency conservation block program that you, Mr. Chairman, have strongly supported, as have other Members of your Committee. It would make a significant difference. We are ready to go at the city levels. We can create those jobs now. Not government jobs, but private sector jobs. And when you put it all together, 90 to 120 days, you put investment out there, we will make sure people go back to work in cities and counties throughout the United States. Thank you, Mr. Chairman. Mr. Oberstar. Thank you very much for a spirited presentation. I love the energy and the enthusiasm. And your Main Street Stimulus which I read last night--and I will make sure we distribute that widely in the House. Mr. Abramson. Thank you, Mr. Chairman. Mr. Oberstar. Louis Mumford, whom I call America's urban philosopher, wrote: The city is the academy of learning, it is the temple, it is the hall of justice, it is the crossroads where the issues of civilization are joined. I concur. They are joined in your testimony. Mr. Abramson. Thank you. Mr. Oberstar. Mr. Gallegos, on behalf of the---- Mr. Gallegos. Good morning. And thank you, Chairman Oberstar and Ranking Member Mica and Members of the Committee. I am honored to be before you today to testify on the important role that our Nation's regions can play and are playing on developing and implementing infrastructure. Please accept my written statement for the record to supplement my remarks that I will make here today. Again, I am Gary Gallegos. I am the executive director of the San Diego Association of Governments. I am a member of the National Association of Regional Councils and Executive Director's Council. I am here today to stress the need for Federal investment. Mr. Mica. Excuse me. If you could move the mike over. Mr. Oberstar. There is something wrong with it. We are going to get a replacement for you. Mr. Gallegos. Thank you. Mr. Oberstar. We will get a replacement. Mr. Gallegos. Again, I am Gary Gallegos, the executive director of the San Diego Association of Governments. And I am here to stress the need for Federal investment in our Nation's infrastructure and to illustrate how regional councils are part of the solution. SANDAGis a statutorily created agency serving more than 3 million people in the San Diego region. The 18 cities in the county comprise SANDAG, which serves as a forum for regional decision making. SANDAG serves as the Federal designated metropolitan planning organization for the San Diego region and is responsible far beyond what is required for the typical MPO. Unlike many MPOs or council of governments nationwide, California invests in SANDAG the authority to decide and direct where State and Federal funding in a region will be used. Vesting this degree of authority within the regional agency is in large part what has helped SANDAG be so successful in moving infrastructure projects. Mr. Chairman, all of our region's face severe underinvestment as our needs outstrip our ability to fund critical infrastructure. Both urban and rural America are sitting on billions of dollars of unfunded dormant projects, as we have already heard this morning. The convergence of a softening economy, rising unemployment, population growth and the clear need to invest in our national infrastructure provides us with a unique opportunity, we believe. The question is: How can Congress best direct funding both to provide jobs and at the same time create a world-class globally competitive transportation system in the process? Let me offer San Diego as a successful example. Absent clear Federal leadership, the State of California and SANDAG are pressing forward with many self-help projects that are funded using SANDAG's $14 billion voter-approved local sales tax program known as TransNet, which is funding highway transit and local projects throughout our region. The State of California has also made an investment in the State's infrastructure. In 2006 our voters approved a $43 billion infrastructure bond for transportation in a wide range of projects. SANDAG is currently pressing on several infrastructure projects that will create a better transportation system and bolster our economy. In September we opened the first segment of our I-15 managed-lane project, which will create a 20-mile multimodal facility that includes a BRT and public transportation incorporated into a multimodal facility. This $1.3 billion investment is an example of a successful partnership at all levels of government. SANDAG invested local sales tax dollars and successfully competed for over $400 million in funding through the infrastructure bonds passed at the State level. Congress has also appropriated funds for this project. At the regional level we have the capacity to undertake and deliver major transportation infrastructure. The tremendous progress is based on our commitment that our region is made the focus on corridors and not just on individual modal projects. Within I-15, we planned for, secured environmental clearance, and developed the concept for the entire corridor. This approach has allowed us to treat these projects much like an accordion, where we can either contract them or expand them to meet the investment. And this has allowed us to be competitive and to be able to get construction projects quickly to construction. We have several other corridors totaling about $3 billion in the San Diego region that are ready to go: pieces like Interstate 5, Interstate 805, State Route 52 and our rail corridors. Mr. Chairman, we are also continuing to press the innovation cycle in San Diego by undertaking a third border- crossing project in partnership with CALTRANS. SANDAG has now obtained the authority to set tolls and levy fees on a new highway. This revenue would not only pay for the highway but would pay for the border crossing itself. Arguably, a new international border is a Federal responsibility. However, SANDAG's elected officials and other leaders recognize the importance the border infrastructure plays in our economy, and these improvements mean more jobs and more income flowing into the region. Regions and States have moved forward aggressively to address our transportation challenges, but we cannot invest in our Nation's transportation infrastructure alone. As a Nation we recognize the value of building the national network through the interstate program. Today we have an even more urgent need to rebuild and grow the system. Mr. Chairman, in conclusion let me conclude by stating that we and other regions across the Nation are ready to partner with the Federal Government in the stimulus program that will put people to work. Thank you. Mr. Oberstar. Thank you very much for your statement. You have much more detail in your written presentation than you could possibly deliver and that will all be included in the record. And I make the point for all witnesses. But I was very impressed last night as I read through all of the details. Governor Engler, in your role as the CEO of NAM, we are doubly delighted to have you here. With Ms. Miller, I remember your years as Governor and our adjoining States, although on the map it doesn't look like we adjoin, but you have that little stretch of Lake Superior that is just a bit offshore in my district. So we are really neighbors. So we certainly appreciate your leadership in Michigan at a time when we had our problems at home in Minnesota. Thank you for being here. Your statement is an excellent resounding support of infrastructure. Mr. Engler. Thank you very much. Thank you, Mr. Chairman, Ranking Member Mica, Committee Members. Thank you for the opportunity today to come and represent the National Association of Manufacturers about infrastructure investment and economic recovery. We represent nearly 11,000 members, over 13 million men and women who work, making and inventing things in America. The adequacy and the efficiency of our Nation's transportation infrastructure underlies the core of our economic prosperity and helps keep our manufacturers competitive both domestically and internationally. NAM members are predominantly reliant on motor carriers to deliver finished products to their customers, but many also rely on air fright to deliver time-sensitive and high-value cargos; railroads for raw materials as well as finished products; the inland waterways for efficient and bulk-sized movements; and seaports for export to overseas markets. So we welcome today's hearing on public investments that improve and modernize our transportation infrastructure. At this time of great economic uncertainty, we will assist in the national recovery by doing, Mr. Chairman, as you spoke earlier, assisting steel mills in keeping going, cement trucks rolling, engine and equipment manufacturing lines moving, and Americans employed. Eighty percent of our Nation's freight measured by value moves across our roads, highways and bridges by truck. The deteriorating condition of our surface transportation infrastructure and an estimated $78 billion in costs associated with traffic congestion have a negative impact on the manufacturing economy. Beyond wasted time and added fuel consumption, there is a fact that the cost of this congestion tax doesn't even tell the whole story. An internal NAM study showed nearly 20 percent of our small- and medium-sized manufacturers reported that they risk now losing a customer due to bottlenecks or other traffic delays that have worsened over the last 5 years. There are many more industries and NAM members; you are going to hear from Oldcastle Materials. Doug Black later on will testify they could use the assistance, and additionally we believe more Federal transportation investment will be of great relief to the States and localities; we are hearing that testimony this morning. And even the Federal agencies to make progress on transportation infrastructure projects that are ready to go and are critical, as Governor Corzine mentioned, as part of an overall strategy for the economy. At the same time, the condition of our Nation's infrastructure where transportation has reached a breaking point, and we can't continue to defer critical maintenance and capacity-enhancing projects. America's manufacturers believe strongly as you do, Mr. Chairman and Ranking Member, that we have a national infrastructure crisis. And we need the long- term, 25-year strategy that goes well beyond these short-term fixes. The current revenue going into the highway trust fund is unstainable. The $8 billion fix last month was necessary, but as we recognize, only a temporary patch. We certainly express appreciation for all of the work that went into that effort over a period of time at this Committee, in the Congress, and ultimately getting the signature. However, we come here today because we certainly don't feel we have to wait for surface transportation reauthorization in the fall. There is an opportunity now to provide the States with $18 billion in critical funding for transportation infrastructure projects that Governor Corzine testified to and we are talking about, and will throughout the day. This project is ready to go. Although Federal infrastructure investment by itself certainly can't calm the financial markets, although maybe the news of this hearing yesterday jumped that market to 900 points--I would have to rely again on Governor Corzine to put it in its context for us. But there is no question targeted funding to transportation infrastructure in a stimulus bill will provide a solid down payment to future investments and will have lasting economic benefits. To ensure those benefits are realized, States should agree to be held accountable for these projects. Again, the Governor touched on that. We should not allow unnecessary red tape also to prevent quick action, additional highways and bridges. There are other opportunities along the inland waterways which move major energy and agriculture commodities, both export and domestic use. A billion to a billion and a half dollar Federal investment would expedite 16 job-creating lock and dam projects that this Congress has already approved, while the aviation sector anticipates 1 billion passengers as soon as 2015. Right now we have got the right environment to undertake a billion dollars in airport construction projects that would support safety and security and projected capacity needs, as well as, I think, consider fast-tracking our transition to a satellite-based air traffic control system. Our global competitors already heavily invest. Anybody watching the Olympics saw the progress in China. Now China's government has recently announced they are going to allocate even more infrastructure building in the wake of the downturn. Australia, a similar move there. Other countries, the same thing. To keep U.S. business manufacturers competitive, we are going to have to invest more than 2.4 percent of our GDP in public infrastructure spending. At the same time, I believe strongly that private investment must be welcomed and encouraged in this economic climate. In closing, the NAM supports and believes the case is strong for the Federal Government to commit resources to transportation infrastructure projects that are ready to go, will provide meaningful and long-lasting public benefit to our economy. We had a recent meeting in D.C. I even cite the CEO of Verizon who gave this wisdom, I think, to the NAM Board of Directors. He said if there was a lesson in the Wall Street and financial services implosion, it is the importance of allocating capital to those things that really add value, build businesses and create wealth for American workers and investors. Mr. Chairman, Mr. Mica, Members of the Committee, that is exactly what you are talking about. We appreciate the opportunity to testify today and look forward to your questions. Mr. Oberstar. Thank you very much, Governor Engler. And if you hadn't cited that from your--the last comment from your testimony, I was going to paraphrase it because I think it is so pertinent, so to the point. Things that really add value, build businesses and create wealth, and that is transportation. Maybe we can just stop right there. Dr. Irons, I heard you on public radio this morning. You made a splendid statement which is covered in your written remarks. Please proceed. Mr. Irons. Thank you. Thank you, Chairman Oberstar and Ranking Member Mica. Thank you for the opportunity to testify in front of the Committee. And I am glad to hear you are still inviting economists back to the Committee. I hope my head is not too pointy for your taste. I would like to spend a couple of minutes to describe the prospects of the job market and also to address one of the main critiques of the use of infrastructure in a recovery package: mainly that these investments would be too slow to impact the economy. As you know, the U.S. Labor market has been struggling with job losses since the start of the year. The economy has lost 760,000 jobs since January, and the unemployment rate has risen to 6.1 percent, up from 4.7 percent one year ago. The future is bleak as well. The credit crunch appears to be spilling over from Wall Street to Main Street, with both consumers and businesses having trouble obtaining credit. The forecasts of future unemployment vary, but looking at past recessions suggests that unemployment in the range of 8 to 9 percent would not be surprising. The total number of jobs lost in the last two recessions as measured from the start of the downturn to the bottom was 1.6 million jobs lost in the 1990 to 1991 recession and 2.7 million lost in the 2001 recession. Labor market weakness can persist for months or years even after the start of a recession. In the 1990 to 1991 recession, it took 11 months for employment to hit bottom and it took a total of 32 months to fully recover to pre-recession levels. In the 2001 recession, it took 30 months to hit bottom and a full 4 years to recover. If we look at employment only in the private sector, the recovery was even slower. The bottom was reached between 2 and 3 years after the start of the recession, and the recovery took between 3 and 4-1/2 years after the onset of job losses. Thus we can expect continuing weakness in the labor market for another 2 to 3 years with total private and construction employment taking as much as 4 years to fully recover. Let me turn now to the role of infrastructure investment in an economic recovery package. My written testimony contains additional analysis of the economic impact, but let me address one aspect here. These investments have often been criticized as being too slow, as you noted, to have an impact in an economic downturn. It is true that infrastructure projects have not always been timely; however, there are several reasons why such criticisms are less founded today and why a properly designed package can have a swift impact on jobs in the economy. First, Congress itself can reduce the delay by quickly passing a recovery package. You can also require that States and localities must begin projects within a certain time period, such as 90 days or 120 days from date of enactment. Second, in a time when there are huge unmet needs, spending can have a more immediate impact because virtually every State, locality and school district will have already identified ready-to-go projects that are simply waiting for funding. And you heard about many of those today and you will hear about some later on today as well. Many of these projects include maintenance-and-repair backlogs that exist because of inadequate funding. Third, recent experience demonstrates that major projects can be implemented quickly. As you know from your own statement, the tragic collapse of the I-35 bridge in Minneapolis occurred in August of 2007. Concrete was flowing this past winter and the bridge is now open for business. So we know that we can undertake major projects and complete them quickly. Fourth, a well-maintained infrastructure is clearly in the national interest and there are many projects that will need to be undertaken at some point. For example, we will need to eventually repair or replace many aging sewer systems across the country. And we know that demand for public transit is increasing as energy prices rise. An acceleration of funding for these projects will address needs and create jobs at the same time. Even if a project is not perfectly timed, the funding should not be considered to be wasted or ineffective. Finally, infrastructure investments should be seen as an insurance policy against a prolonged downturn. As I mentioned before, it can take a substantial amount of time for the labor market to recover, and so Congress is unlikely to miss the window of opportunity. A broad-based recovery package should be at least as large as the package passed in January and should include at least $75 billion in infrastructure investments with a focus on ready-to-go and fix-it-first projects. Such an investment would by conservative estimates create over 1 million jobs. If you look at estimates that are more in line with what you mentioned here today, then we could create significantly more than 1 million jobs, up to 2-1/2 million jobs if you look at it in terms of 35,000 jobs created per $1 billion spent. My written testimony contains additional information on the industry-by-industry impact of such an investment. But let me just note that the investments would spill over beyond just the construction industry to impact a wide range of industries across the country and across industries. You will likely hear today about a range of ready-to-go projects. It is clear to me that there are enough projects to allow Congress to invest significant resources and see resulting job creation and economic growth in a relatively short period of time. Again, let me thank you for this opportunity to present to this Committee, and I also look forward to your questions. Mr. Oberstar. Thank you very much, Dr. Irons. And it is always delightful to have positive testimony from an economist. I had referenced at the outset the Works Progress Administration of the Roosevelt years. And characteristic of our investment in real things, those projects are still there serving America. We have a baseball field in my hometown, which was the inspiration for Field of Dreams. It is still there: the stadium, the wall, and city hall and the fire department in Chisholm. All were built in 1936, 1937, 1938. Seventy years later they are still serving the public. You can travel all around America and see these projects that were built to create jobs but to last a lifetime. Now, Governor Corzine, AASHTO at our request, our Committee's request last year, produced a list of projects that has grown to 3,000-plus now, submitted by each of the States. If you get these funds, and we are successful with the Speaker's rigorous initiative here and her very firm commitment to move this infrastructure proposal ahead, will the New Jersey DOT fund the projects in the priority listing as submitted to AASHTO, depending on the amount of money? Governor Corzine. It absolutely will adhere to the prioritizations that are established both from the Federal regulations and what we have established at the State, and those were submitted under those formulations. And this is a precious resource. And so I think that there is an absolute commitment. At least I know that is the case in New Jersey and I know among most of the Governors that I have close relationships with, that this is not about pork-barrel feeding. This is about making sure that we are putting money against the most important needs. There are always going to be arguments about regions within States as there are regions within the country. But we will adhere very strictly to objective standards and those that have been submitted. I would add, we are going to do this, what I talked about in our testimony, whether there is an additional stimulus package or not. We are so convinced that we can lean against the winds of this rising unemployment in the real economy, that we have put new toll hikes in place at some political capital being expended, both at the Port Authority of New York, New Jersey, and also in our toll roads. But it is essential that we create these jobs now and it is the right thing to do if you are going to take those kinds of risks to move forward. It needs to be done by objective standards and that is what we will follow through as is in the submissions. Mr. Oberstar. I very much appreciate that. The Congress gets a lot of bad rap for Member high-priority projects, as we call them. And the surface transportation earmarks come out of appropriation bills and are in a different arena, totally different from what we do here. And yet there are designations. There are changes at the executive branch, at the national level, that the State level make once they get their hands on the list. You have submitted the list and you have made the commitment that you will adhere to it. Governor Engler, you talked about targeted funding. I assume that is what you mean, being specific with the State revolving loan fund projects, water and sewer, wastewater treatment. You know what the needs are in Michigan, you know what they are from your members all across this country. Industry can't expand their production if the wastewater treatment facility can't absorb that increased output. Mr. Engler. That's right, Mr. Chairman. I think the Governor hit on it. You would work through a priority list. Most of those priority lists--I know we began the process of a 5-year plan and tried to lay out for 5 years ahead what projects should be worked on in what order. And I am sure--I haven't seen the specifics in Michigan-- but in State after State we have seen notification of projects being pulled back as the revenues have fallen short. And States like Michigan are interesting. New Jersey probably has some of this, where the construction season isn't completely year round, too. You have to get ready to go. And one of the things I think is so smart to hold this hearing now, even though there is an election next week, is to get ready because you want to get your bids done in the winter States. Minnesota would be this way. You want to get those done in the winter so the minute that frost is out, if you are talking about a highway project, you are ready to go. You have got that work planned, and you can get more work done in a short construction season if you have got the planning done. Our friends in California work at this year round, but it is a little different organizational approach. And the targeting I think is to get these highest priority projects in some order to be done. You have had a lot--I am more talking transportation infrastructure. We have had other kinds of projects that get raised here. But I do think that the recipients in this case, certainly, also should be willing to come back and say this is what this means in terms of jobs. This is the economic impact. That information is almost always available. We talked about that when we do local projects. Mr. Chairman, I don't want to answer long, but I do want to read just from a release out of Australia that was kind of interesting because it involved the new Prime Minister there. And he talked there about the bank-rolling local councils to deliver small projects with short lead times such as local roads, bridges, to keep the economy moving, shield communities from job losses, reduce growth that will stem from the crash of the global and capital stock markets. And in this case they are talking, in that Nation, about $600 million. That is a big number for them. But that is what they are thinking. China, on the other hand, they budgeted for rail investment $175 billion from 06 through 2010 to make up their underinvestment in the past. A little different story. Mr. Oberstar. Good examples. And you go from a nation that has a population the size of California or a little bit smaller, to one who has more people after the decimal point than we have in the whole United States. I will withhold there and recognize our Ranking Member, Mr. Mica. Mr. Mica. Thank you. I will dive right in here on a couple of issues. First of all, Governor Corzine, I want to extend an invitation to you and the State of New Jersey. On Thursday, November 20th, I will, at 2:30 in the afternoon--you don't have to come, but I want your highest-ranking transportation person on rail issues. I am going to convene a meeting to make certain that this administration moves forward on the passenger rail and high-speed rail provisions that we put into law recently. Of course, New Jersey is one of the biggest players in this, so we look forward to your participation on Friday, and that is at 2:30 on Friday, the 21st. I will have a meeting at a location to be determined. And that will be the 11 other corridors across the United--10 other corridors. You are one of the key ones, because that is the only real right-of-way that Amtrak owns, and one of the most logical for a high-speed railway that would solve many of our problems, aviation congestion, take folks off the highway. So I would hope that you could participate in that. Governor Corzine. I will try very hard. Either myself---- Mr. Mica. Well, it is not necessary for you, but someone that can move this forward. The provision we put into law does kick this off. I am not sure if you are aware of it. The day the President signed it, within 60 days the administration has to issue RFPs, requests for proposals. So we want yours to be one of the first and hopefully one of the most successful. And it would have one of the biggest impacts. If we have success in that corridor, not only will we change the dynamics of transportation, but we will impact all the other corridors that want to have a successful effort in dragging the United States kicking and screaming into the 21st century of high-speed rail. So thank you. And I welcome your participation. And this is going to transcend administrations. This isn't a Republican or a Democrat project. This is a project for the benefit of the--or these are projects for the benefit of the Nation. Dr. Irons, I think you are the one that talked about the I- 35 bridge. Yeah. I stood on the I-35 bridge in Minneapolis and held up a sign that had three numbers on it, 437. 437. It wasn't a mismatched sporting event. It was the number of days it took to complete that bridge. But the problem we have is process, and it takes so long. I mean, Governor Engler and Governor Corzine and the rest of you leaders from some of the local communities know how long. We had sitting in those same chairs some of the folks from the TEA-LU Commission that looked at what we should do in the next transportation bill. They said that if the Federal Government gets involved, it takes two to three times as long and sometimes costs three to four times as much. Is that your observation, Dr. Irons? Mr. Irons. Well, I think it depends on the project. Brand- new projects where you are building, say---- Mr. Mica. Changing the footprint, the dynamics, right? Mr. Irons. Yeah. If you do something that is a brand-new project it is obviously going to take longer. Mr. Mica. But we can speed up the process. Mr. Irons. We can absolutely speed up the process. And you will hear people that have firsthand knowledge---- Mr. Mica. 437 would be a great model. So maybe as a component, it doesn't cost anything to speed up the process. Certainly we don't want to run over the environment. We want to make certain everybody gets a shot at some, say, maybe their legal right to contest a project, et cetera. But we can speed up the project. No money, just speeding up the process would help maybe in some things that we do. Got another question for you. You know, you gave us some figures, 201--we lost 2.17 million jobs at a previous time. 1.6. I have heard about 800,000 we have lost in the last year. And if I use my math of 35,000 for a billion, well, we could cover ourselves with maybe--well, get to a $30 billion package--we could cover the jobs we have lost. And if you multiply that out if we got into this bad shape, even a $90 billion package would take care of the whole thing. Now, my question would be money spent versus tax incentives for the private sector to undertake some of these things. What kind of balance--I mean, we are going to probably do a package of over 200 to $300 billion. Well, even 90 billion, if I spend a whole lot on transportation infrastructure, will cover me for recreating the jobs, or at least providing money to cover the jobs that have been lost. What should the mix be? Mr. Irons. I will trust your math on those numbers. But you are right, there are different ways you can stimulate this kind of investment, either direct spending or tax incentives. The evidence I have seen out there shows that a direct expenditure tends to have a bigger bang for the buck than does tax incentives for these kinds of projects. Or for economic activity, more generally speaking. And I think when you look at the projects that are available out there, we know these are things that can be done right away. The advantage of doing it in a direct expenditure way, you know they are going to be done, you know the money is going out the door in a specified amount of time. With tax incentives you are a little bit unsure about what that impact will be. With the tax incentives, it depends very much on how they are designed. You can design tax incentives that just reward companies for what they are going to do anyway, and you can design tax incentives that actually create new economic activity. So it is hard to answer that question in the abstract, you have to know how those incentives are designed. But we do know there is a significant bang for the buck with direct expenditures. Mr. Mica. Governor Engler, tax policy is important. You have heard my 179 stimulating jobs through, again, tax policy. It is not our Committee, but there are things that--in fact, transportation creating jobs. How do manufacturers feel about that? Mr. Engler. Manufacturers love tax cuts. Especially when we have got the highest tax manufacturing economy in the world, virtually. Our very high corporate tax rate, very high corporate capital gains tax rates, are tough to deal with in terms of global competitiveness. Now, you take a small- to medium-sized company that is maybe a supplier in one of these areas. I would say that, you know, they are helped by any type of tax reduction. But you are talking big projects here that need public investment. I mean, I am not--it is hard to get there. We aren't ever going to have a bunch of small businesses get together and build a road very easily. So we have got to have them healthy. I would say if we look at one of the real advances in the way in which we have been able to leverage transportation infrastructure--which has been through a lot of innovation--you yield--some of that is in the Oldcastle testimony. You will hear from them later. But a lot of new things that are done, R&D credits are very helpful. That ought to be permanent and much more substantial because new technologies, new ways of building better, whether it is a bridge or just a surface for a road. But I really think on this that, you know, we have got to come up with financing tools, we have got to come up with--I think there are certainly public/private partnerships that can work for part of it. I don't think that they can do as much as maybe U.S. DOT believes can be done. And sometimes users have to pay. I mean, that is one of the things that, you know, Governor Corzine addressed this. Depending on what you are talking about, historically we always felt school buildings had some relationship to property values. So the idea that, you know, somebody built them and somebody doesn't, you know--those are different kinds of things. Sewer water, again user pay has been kind of a way that gets done, electric transmission. But you were on to something with the question to Dr. Irons, if I can just quickly close on this point. You can save billions and billions of dollars by wringing delay out of the process. I am not sure that the Federal Highway Administration needs to overlook--once Governor Corzine's transportation department has finished all their planning, it needs to sit for a year in Washington being checked again. I don't think that the Environmental Protection Agency under a NEPA claim, if something is already an interchange, it has to spend a year or 2 with the State and the regional people doing full-blown environmental impact statements to see if the bridge which has weakened in its construction, because it has been there 45 years now, can be rebuilt in the same spot. It is still going to be a bridge. Pretty much the same impact on the environment. That is a lot of cost that we are--and what that does is let people come in and try to hijack some of the budget for some other purposes often. So there is a lot that could be done to wring this out of the system and facilitate some type of fast-track authority. That is what you had in Minneapolis to get that bridge done that fast. And can we fast-track some of these projects here? Now, most of these that are ready to go, in fact, are ready to go because they have already walked through the gauntlet. You might have some new projects that will be ready to go if you can fast-track the permitting, and that is a complicated thing that we have got to work with you on. Mr. Mica. Well, thank you. In the short term we do have to address the stimulus package. In the long term I am sure we are going to invite you back, because I do--I am a strong advocate of a national strategic infrastructure and transportation plan, which we do not have, and then also a way to finance it and then speed up the process is key components of our long-term solution. Thank you, Mr. Chairman. Mr. Oberstar. Thank you very much for those comments and for your observations, Mr. Mica. Governor Engler, on that point--and Governor Corzine--in the current, SAFETEA legislation there is a provision--about 20 pages of legislative language that I crafted at the request of our then-Chairman, Don Young, to expedite projects, to take this vertical process, turn it on its side, put them all together, all the interests that have permits to issue, not just EPA, not just National Trust for Historic Preservation, but all of them together at the same time to come together, agree on a time frame, a timetable in which they can expedite moving ahead on the project. Now, it hasn't been used by all States and I am disappointed that that hasn't been done. But in the next transportation legislation, we are going to create an Office of Permit Expediting in the Federal Highway Administration, along with an Office of Livability. And to do that, Mr. DeFazio will be leading the charge. So I yield to the gentleman from Oregon. I recognize him at this time. Mr. DeFazio. Thank you, Mr. Chairman. I would note there seems to be a decided lack of interest on the part of this administration in fully implementing and utilizing the streamlining you spent so much time in reaching consensus on, and it was not an easy consensus between those in the construction industry and the States and the various jurisdictions and environmental representatives. And I think that there is a lot of unrealized potential there that could save a lot of time in these projects. And I am--hopefully, we can make it even more clear in the next bill that we want that done and we want it--we just have no patience with this. Not all economists, Mr. Iron. I am sorry, I shouldn't have been so global. I didn't say all economists. I said those pointy-headed ones that constantly criticize infrastructure. And you in your testimony say that you envision we would do this enhanced investment with deficit spending; is that correct, right? Mr. Irons. That is right. Mr. DeFazio. Is there anyone on the panel that disagrees that this would be a circumstance under which we would look at basically borrowing to invest in these sorts of projects? Anyone disagree with that? Mr. Engler. I don't disagree with the premise. But I think in fairness to the work that gets done, there is a significant benefit to the Treasury when we do this kind of work. And for hesitancy here of getting counter with the CBO, it might be somewhat dynamic if you put thousands of people back to work, companies start building roads, there is economic activity. And that has a positive effect on GDP. And so it is not--the deficit that sometimes gets scored is a lot less in reality than might be reported, because we are not getting credit for the income that is being generated over here on the other side. Mr. DeFazio. But, you know, the fight likely to be here on the Hill is there has been, you know, commitments made to continue with pay-as-you-go, and I expect we will have some discussion of that. But I believe in this circumstance, you know, waiving those congressional rules, I can certainly justify borrowing money to invest in roads, bridges, highways, transit, other projects that actually put Americans back to work, utilizing American products, make the country more productive, help with just-in-time deliveries and a whole host of things that will last for 30, 50, 80 years than many other things the government does. So I just wanted to make sure there was consensus. Governor. Governor Corzine. I would say you raise a point, and the response from Governor Engler is consistent. There are a lot of us on both sides of the aisle that would argue that there needs to be a separation of operating budgets from capital budgets, so that you could actually do greater return and objective analysis of how long-term investments were made, and therefore would not give up the disciplines of pay-as-you-go, but would look at long-term return factors on how that would be done. I happen to have a burr on me on this one. I ran a National Commission on Capital Budgeting, and would love to see that outside the budget process. Some of us do more of that rather than less in our State budgets. I would say it is not nearly as good as it should be. But I think there needs to be a separation in the public's mind about these kinds of efforts that end up having, as the Chairman suggested, impact for great grandchildren and great-great grandchildren as opposed to only the impact in the short run. So I think this is a topic that I hope would actually get some centerpiece of discussion as time goes on. Mr. DeFazio. No. I have long advocated we should have capital budgets. I wasn't familiar with the Commission, I will have to get my staff to find that report and dust it off. But I absolutely agree with you. Mr. Gallegos. Congressman, if I could add, I might suggest that at the local level, with local sales tax, we have a process where we go through to make that evaluation whether we should wait until we collect enough tax or whether we should borrow and move forward. And we have found that in most cases it has been more to our advantage to move forward because the cost of delaying the project and the cost to the public outweighs the cost of interest. And in most cases, for over 20 years we've been making that calculation at the local and regional level, and there may be some wisdom to be found in what local and regional governments are doing in terms of trying to make that decision and decide whether they wait until they've got enough money or whether they borrow to do the project. And we have, I think, had a fair amount of success in doing that and been able to leverage literally billions of dollars to advance our infrastructure. Mr. DeFazio. Excellent suggestion. And of course, today, you probably were doing that with tax anticipation notes or some other form of bonding that might be a little difficult in the current market. But that certainly is a good suggestion. And what we are proposing--and I think this was addressed by a couple members of the panel--is that, first off, what we propose in the stimulus is a 100 percent Federal share. So we are not having to worry about the local jurisdictions raising the match, particularly in this environment. And then we also said that--and there was some disagreement represented between urban areas and States, but we just didn't feel we could target the money down to particular metropolitan areas because some might be ready to go, some might not. So we did choose the States. And we wanted ready-to-go projects. And we also do have a provision that if the money isn't committed within 6 months, that someone else is going to get it. I mean, we are serious about spending this money. So we've got that. And I think we have got some good consensus here. But if I could, just for a minute, look to the future, Mr. Chairman, because I am going to be wrestling with this, ideas about further infrastructure investment, particularly dealing with the deficit longer term. If we can't get the capital budgets, Governor, we are looking at a gas tax where the revenues are actually falling and the needs are growing. And I am just curious if anybody here has any great insight or ideas on where we might raise some additional funds, or could we again justify longer term, if we don't have capital budgets, we have a scoring problem, but more borrowing to fill some of the gap in our transportation infrastructure? Mr. Engler. I certainly want to associate myself with the remarks of Governor Corzine. The capital budget is very key because it is what every company uses, it is what virtually all of the States use, and it should be separated. And then this makes us--it still isn't free, but at least it is a better way to visualize this. And we are on State balance sheets now under Gadby actually reporting, we are showing some of that capital side which never was showing before, so you can actually find that in State fiscal reports. But I think you are looking at a combination--and I think capital budget is key, but I do think there is going to have to be new revenues. Actually, in Michigan, one of the toughest fights we had, and Congresswoman Miller referred to it, is we actually raised the nickel of gas tax, tried to--and then earmarked back just a few years ago, a penny. But for bridges at the time, we had some of the earliest interstates, therefore we had the earliest problems on bridges. The rest for capacity, and obviously sharing with local. I do think that there is a lot of creative energy out around public and private partnerships and the way that they can work. And we are seeing some things being done there. Michigan is a State that didn't toll roads initially; we have only got a couple of bridges with tolls on them, but the new technology is allowing for some types of congestion pricing, perhaps. There is lot of conversation. We have been trying to have this conversation through our association with lots of different groups because what do you pay for and what do you get credit for. The point I made earlier, there was an awful lot of work done in States and localities on sort of a TIFA model of a tax increment financing that's making investment. The valuations came up and there was a revenue flow. In one sense, that model does work in the Federal budget. As I said, if you start spending a few billion in transportation, you are generating revenue for the Treasury, does that then just become extra money and the Treasury goes over to help pay for health care, Social Security, or could there be a gains sharing on some of that? I think it ought to be looked at as part of that. And I think debt does matter. It has been mentioned, Mr. Gallegos has mentioned it in terms of their data, but look at the price of the inputs over the last couple of years, if you had had money and been able to maintain a steady program, your pricing on steel and cement and all of these other--fuel, asphalt, would have been much different; you would build many more miles with the same dollars had you been out there in the market. One of the benefits of this stimulus is probably catching, timing-wise, a pretty good time because a lot of those prices have come back down a bit. So there is a benefit for that. But we are happy to gauge long term on the important question you are posing. Mr. DeFazio. Infrastructure investment on sale. Mr. Irons. I think when you look at the investments in infrastructure, they benefit the general economy. So looking beyond just a dedicated revenue stream I think is important. Looking at general revenues would be a valid way to find additional revenue for infrastructure spending. The second piece is, these are investments, they fit the classic definition of investment; you invest money today, you get a return tomorrow. And as such, financing for these kinds of projects seems completely reasonable to me. So I think it is important to raise additional revenue to help finance this, but I don't think it necessarily needs to stop you from investing today. Mr. DeFazio. Anyone else have a quick thought? Mr. Gallegos. I would add to that, at a bare minimum, we have got to protect what we have got right now and at least look at indexing it, because I think the buying power of the gas tax is going down, we are not investing enough, and at a bare minimum, there are going to be no free lunches, but at a bare minimum, we have got to protect the buying power that we have today. Mr. Abramson. And I would just say that, when you are talking about a country that has an energy policy to drive less and drive hybrid, the paradigm has got to be changed in terms of how you are going to fund highways and public transportation, it simply has to be completely changed because it is out of sync with the rest of the policy that we are implementing. And one of the things that you said, Congressman, I am not sure that I agree--in fact, I don't agree--with your statement that the States would be able to get those founds out much more quickly than the MPOs that you all set up for those local communities that understand where it is needed and where it is most effective to have---- Mr. DeFazio. What I said is, if Congress were to, say, direct money to the MPOs, there may be some who have projects ready to go, there may be others who don't. We thought if we sent it at the higher level, that the States would work in concert with the MPOs. We don't want the MPOs to be ignored, and perhaps we need to clarify that to the States. Mr. Abramson. And the STP funds, as it exists now, a portion of them go to the MPOs to be designated and developed. And we would hope that that would continue. We have great relationships with our brothers and sisters at the State capitals, but the reality is, as you all saw when you set up the NPO, the reality is the folks who have got the boots on the ground right there on the sidewalks in those intersections and in those metropolitan areas really understand in a much keener way, we would submit, the flow and the need of traffic enhancements. Mr. DeFazio. Thank you. Thank you, Mr. Chairman. Mr. Oberstar. Thank you for those very thoughtful observations, stimulating and very good discussion. I just want to come for a moment to capital budgeting. In this room 20 years ago, my colleague on the Republican side, Congressman Bill Clinger from Pennsylvania, I was Chair of the Investigations Oversight Subcommittee, held an extensive hearing on capital budgeting. And in the course of the hearing, we had David Stockman of the Reagan OMB who said he was totally opposed to a capital budget. And we asked him why. And he said because if you establish it, then Congress will want to fund it. We said, we are funding it now aimlessly, without a plan, without priorities. And eventually he came around to the idea of a capital budget and said he would include one. And we moved a bill, ultimately, to direct establishment of a capital budget. But under the Reagan administration it became an annex to the U.S. budget, where it remains today. Ten years ago, there was the Clinton administration commission to study capital budgeting, but it was staffed with OMB experts, so to speak. Well, they are the same crowd that if Castro came, they would grow a beard; they never changed, they never changed their mind. And it doesn't make any difference who is in the White House, the OMB crowd doesn't like this stuff. So we have to start all over again. We have to do, as Governor Engler, you said, and Governor Corzine, as you are doing--excuse me, with a beard--and establishing a capital budget. We have got to do that, and we will next year. We will move it from this Committee. Mrs. Miller, you've waited a long time. Glad to have you here. Mrs. Miller of Michigan. Thank you very much, Mr. Chairman. In fact, I want to make a similar observation to the question that you started out with, because the Congress is often criticized for our earmarking process, and sometimes justifiably so, but I think there are many, many earmarks that are really done with the best of intentions of local Members of Congress trying to make sure that their area gets attention that perhaps is not being--they think is not being directed from the governors sometimes. And so I would just mention, respectfully, that governors are not immune from subjective criteria, I think, sometimes, of where some of these funds are going. And even in our State of Michigan, under a former governor, the amount of administrative costs and many Federal resources that were sent back to the States were very low; they were maybe 6 or 7 percent. Under our current administration, they take right up to 20 percent off the top for almost all the Federal resources that we send perhaps because of the budget challenges that we face, some of it may be understandable. But still, I just wanted to raise that concern because we do want to be certain that local municipalities are being heard very clearly in this process and that the funds are getting into the locals, as the Federal Government really wants to from a stimulating standpoint. And I would also mention, and I think Mr. DeFazio mentioned about the match program. And I want to talk about that just for a moment because I will tell you, if we have any kind of criteria for match under this program, which we normally do, communities in my area, certainly in Michigan, we don't have a match. That is why we have this enormous backlog, there is just not the match. Everybody is just crying out for what are we going to do. We are leaving all these Federal resources on the table because we do not have the matches. And actually, in the House, that we passed on September 26, I will just read this briefly, that "the Federal share payable on account of any project or activity carried out with funds made available under this heading shall be 100 percent of the total costs thereof." Unfortunately, this did die in the Senate, as was mentioned. It would have been a great thing to do before we broke for October here. And I just mention that because, if there is any comment on how important it is that there not be a requirement for a match, that it is greatly reduced or it won't be able to be utilized. And also, just looking for a comment, you know, the highway funds are distributed under this current formula that we have. I am very sensitive to this because Michigan is a donor State. We did a little better in the last transportation bill, but we still are a donor State. And I just wonder if there is any comment on, if you really go to the core of economic stimulus, don't you want to put the dollars where it is most needed? And wouldn't it be most fair to be using a formula that is reflecting the current economics? For instance, a State that has the highest unemployment in the Nation, yet is not going to be getting the economic stimulus that other States that have less than half the unemployment rate that we might have in a State like Michigan, or the Governor mentioned almost 8 percent in New Jersey? What are the thoughts of the panel on really getting the economic stimulus to the States that need it rather than using a formula that does not reflect what the intent of the Federal Government is right now to help the patients who are really sick? Governor Corzine. Let me just make the point that I was projecting that I thought we were going in that zone. We have actually been paralleling the Federal or the national unemployment average. We are actually slightly lower than that 5.8 percent. But it is, I think---- Mrs. Miller of Michigan. We wish we were at 5.8 percent. Governor Corzine. The comment that you put the money against the needs I think is a fair concept. We had that with regard to homeland security allocations of resources, which is a fair debate. And to some extent, particularly when you are talking about a stimulus package, that may be more the case than what you would do on an ongoing fundamental SAFETEA-LU or SAFETY-TEA, or whatever the next program will be called, where you have to have a more fundamental allocation of resources by the negotiation process that happens here. But I think that--you point out that governors can have their own prejudices. I think what you need to do is make sure that each State has a process on how those funds are actually distributed that is objective and can meet some kind of criteria. And I think the Chairman asked me whether we were going to live with the kinds of allocations or distribution of funds as according to the historic submitted and approved projects. And I think that is one way that you could handle that. We are certainly not trying to hurt our local communities; we want to work together on those. But you do have to have some kind of allocation process. And you have the same problem with one region versus another region. We have north and south Jersey getting all kinds of hootenannies about who is getting what in those kinds of projects. And so you need someone to make sure that standard objectives are allocated as we go across the entity that receives the money. Mr. Gallegos. I would add that, in addition to just a formula, that having some performance metrics to ensure that the investment being made is generating the rate of return that you are looking for would be also helpful instead of a peanut butter approach that spreads it all over the country. But having said that, and at the risk of sounding more than just a Californian, but more like an American, is I think the interstate system is a good example of what makes it work as a system. And I think from my perspective, every time we get into a debate about which State won and which State lost, I think we all lose because we have got to figure out how to raise the tide so that we can develop a system that will make this Nation competitive globally. And for California, having a transportation system that works, but when we get to Arizona or Nevada or Oregon it doesn't work may not do a lot for us in the long run. So as we have those performance metrics, I guess I would advocate with you, Congress, that we need to have sort of a national vision and look as how we pull this together as a system. Mrs. Miller of Michigan. With the Chair's indulgence, I know I am running over my time, but I would like to ask one question, particularly of the Mayor--and by the way, I happened to be in your beautiful city for the Kentucky Derby 2 years ago, and bet Barbaro actually wins, first and only time ever been at a horse race. He only had $20 to bet, but he won. And I thought, what is the big deal with this horse racing? You bet, you win, you leave. Mr. Abramson. Nothing to it. Mrs. Miller of Michigan. I am kidding. But Louisville is certainly a beautiful, beautiful town. And as you were mentioning about the performance standards, perhaps I could ask this question: The local communities are about to have, hopefully, a huge infusion of these transportation dollars, and there will be enormous public pressure to make sure that we have transparency, that the dollars are audited, that there is not waste, fraud, abuse, et cetera. And do you believe through the Mayors Associations, et cetera, that the communities are ready with project managers, that there is enough expertise on the ground? I mean, all of a sudden here is all of this, go make sure it is all spent properly. Is there a comfort level that we can have with that? Mr. Abramson. You know, over the years, we have had Federal programs like the Community Development Block Grant that we have had to dot the I's, cross the T's, be clear in terms of the transparency for not only our constituents, but for the Federal oversight that occurs. So there is no question about that, that we can follow that avenue. What you are asking is, will there be enough project managers? And I can tell you that in terms of cities and counties across this country, if we are given the opportunity to be able to have these found funds where we are making a commitment to you that within 90 to 120 days we will be ready to go and they have already been reviewed, assessed, and the bridge needs to be fixed and the road needs to be widened and the school needs to have the library upgraded, et cetera, there is no question that additional project managers will come on as part and parcel of the overall program to ensure that we can dot the I's, cross the T's, and be transparent as you would request and as we would want. Mrs. Miller of Michigan. Thank you very much. And thank you very much, Mr. Chairman. Mr. Oberstar. That raises a very important--before I go to the next member, Dr. Irons, if we don't follow strictly the allocation formulas for the Federal Aid Highway Program and the formulas that are established in the Transit program, how would you otherwise distribute these dollars; according to unemployment rate by State? Unemployment rate by economic sector? Unemployment rate by construction sector? Unemployment rate by industrial sector within States? Mr. Irons. That is a very good question. We can write as complicated a formula as we can dream up. You know, I would look, first and foremost, at unemployment rates as being an indication of the overall health of a State. So that would be the first place I would look. Now, you can look at unemployment rates by industry, by construction industry or other industries. First of all, I would hesitate to do that because I wouldn't want to get too precise because you are basing this on estimates and unemployment rates by sector by sector. And the more finely grained you get, I think the less accurate you can be in a lot of ways. So I might stop it at unemployment rate and use that as a guide to help allocate funds to different places. But let me add to that that, in thinking about a recovery package, the infrastructure piece is only one piece of that package. And if unemployment extension is part of that package, that will automatically help States with high unemployment rates. If we have some assistance to States in terms of direct State aid through Medicaid formula or other formulas, that will provide aid to States that need the most help already. So I just want to urge you to think about this in terms of a larger recovery package, not just as the infrastructure piece alone. But I think beyond that, if you were to write a formula, I would start with unemployment rate to begin with, and maybe look one level down at construction employment. But I think probably unemployment is the right level to be at. Mr. Oberstar. Thank you. And Mrs. Miller, it is something that we will have to talk further about. Now, Ms. Norton. Ms. Norton. Thank you very much, Mr. Chairman. I have got one question for Dr. Irons, and then a question that is really for both Governor Corzine and Mr. Gallegos. I had a town meeting in one of these rooms. Among those here was Alice Riven, who happens to be a resident--we are very fortunate for that--and a number of other Federal experts and local developers. You say in your testimony, Dr. Irons, that you think $75 billion is what you propose, but you can see that this would not fully even offset the losses. Ours, of course, is only $30 billion. Now, Alice, although not at the town meeting because this question wasn't particularly asked of her, but I heard her say--as they say on CNN--that it would take several hundred billion dollars to have an effect on an economy of this size and on a crisis of this size. You say that you expect that doing, I suppose, the $75 billion could have a "swift impact on jobs and the economy." Now, the reason I ask this question is I began to wonder. You talk about recessions in your testimony, page three of your testimony, since 1945, but you, I think quite rightly, focused on the most recent recessions. I am telling you, I find those figures absolutely frightening. You cite 1990-1991 and 2001, both of those recessions lasted only 8 months. Now, only 8 months, nothing like this kind of crisis. And you said it took the labor market 11 months to 30 months, respectively, to finally hit the bottom--I am not talking about recovery now, but financially sail on down to where it was going to rest. And you said further, with sluggish growth even hitting bottom, it took 32 months and 48 months to regain the total number of jobs that existed prior to the downturn. You know, one reason one wonders, well, whether it would ever get back to that number of jobs--because some of it may have been falsely "created," and I am really trying to avoid the kind of disappointment we see at the bailout. People did not understand that we didn't know what we were doing, that we were dealing in a global economy, that we are feeling our way. We didn't even invest in the banks at first until Europe did. I mean, we know at least as little about what we are doing as Roosevelt did, and it took him 5 or 6 years to even get to a stimulus package because they were so afraid of inflation. So I looked through your testimony to see whether or not you did what economists hate to do, which is to say, look, this is when we think you will begin, you in the real economy will begin to feel some impact of, God help us, $30 billion or even $75 billion. So could I just ask you to take, you know, call it a wild guess if you want to, but given the figures you have given us, the first thing I have to ask is, there weren't any stimulus packages then, were there, in those two recessions of any kind? Mr. Irons. There was a very small one that came right after President Clinton was elected, but it was nothing of the magnitude that we are thinking of. Ms. Norton. Because remember, those were back in the day when everyone thought that if you spent Federal money, whew, that is a terrible thing to do, you ought to be cutting taxes. Now, we at least are going back to the Keynesian notion that you have got to spend money when there is a recession. All right. So we did nothing then. And what bothers me, Dr. Irons, is doing nothing got us these horrific figures. I really hate the one about 11 months to 30 months to even hit the bottom, when I don't think any economist of our stature would say that we are probably going to do that more quickly now. If so, please put that on the record so as to give me some hope here. But I would like to know your guess at how long people out there would say oh, yes, Congress has done something, I can tell it, as they are not saying yet because the bailout is harder to understand. Mr. Irons. Yeah, I come to this as somewhat of a pessimist, as you see from the testimony. Unfortunately, I am not out of line with the rest of my profession. The economists think that this is going to be a bad recession, that the 2001 recession, which recovered relatively quickly compared to past recessions, is not really in the cards. We had a construction boom right after the 2001 recession; this time we are going to have the opposite. We have seen the opposite. So I think the numbers are going to be at least as bad as I have presented there, which I am not happy to say. Now, the question becomes, what do we do about it? And the package that I have proposed in this testimony and elsewhere is on the order of $175 to $200 billion spread out in a number of different policy areas, not just infrastructure. Other concepts are thinking bigger numbers, $300 billion to $400 billion. The economy is about $14 trillion, so you need to have a big enough stimulus to have an impact. The $150-200 range is about 1 percent of GDP. That is not going to solve your whole problem. It will make the bottom less bad, it will make the recovery quicker, but it will not stem the tide that we have seen already and that has been building, both with financial markets, gas prices, housing markets and the credit crunch. So let me just add one piece, which is, I think the advantage of what you are doing here today is that people understand job creation through building roads, bridges, public transit, and doing everything that we have talked about here today. People don't understand the Wall Street bailout. I barely understand the Wall Street bailout, and I have studied this for a long time. People understand if you build a road, if you put a shovel in someone's hands, that creates a job. And so I think the advantage is, if you put significant resources into creating jobs through infrastructure, people get it. And a lot of the economy is driven by confidence. If people see, okay, there is a package coming that is going to be putting people to work, that is going to create the confidence for businesses to start to invest again, that is going to create the confidence for banks to start loaning again. And I think the bailout package, from my perspective, was something that was needed, but it is not sufficient to get things going again. This kind of a project can really help to create a core in the real economy to make the recession shorter and to make it less steep. It is not going to solve everything, but it is a start. Ms. Norton. And I suppose you would say this is not a time to worry about deficits. We are going to keep deficits in line, but that has been the major, frankly, concern here, that you have to pay for everything, et cetera. Well, that was the Roosevelt mistake near the end of the `30s; they were calling it the "Roosevelt Depression." And that is when he began to do all the programs that stimulated the economy. And I hate to say it, but what really stimulated the economy was World War II. And, by the way, you are in a war now that is not going to do a thing because they are making these tanks and all the material throughout the world and not here. Finally, Governor Corzine, I don't know if you listened as closely as I did to what Mr. Gallegos said about the regional approach. Now, my understanding is that approach is particularly effective in a large rural area. Here in the National Capital Region we have taken a regional approach to homeland security, a large portion of the Homeland Security money in particular. A lot of it has to do with things that if they weren't coordinated with the States would be wasteful. I spent some glorious years in New York City and remember Port Authority, controlled by New York and New Jersey as I recall it. But I am wondering whether or not metropolitan areas, which seem to be dominated by big cities, but which also have rivers, have many kinds of projects, highways that cross boundaries, I wonder if there is any chance for Gallegos approach of regional work to be successful in big city areas which have regions around them which also are pretty citified, or whether it is more efficient for these areas to simply work piece by piece without that kind of coordination. Governor Corzine. Well, first of all, you mentioned one of the greatest success stories, I think, in America with regard to regional coordination, which is the New York/New Jersey Port Authority. It has its bumps in the roads on occasion, but we have a tremendous bi-state infrastructure, our highways, airports and ports, that is really quite extraordinary in the context of American infrastructure. We have something that works a little less well in the Delaware Port Authority, which is Pennsylvania and New Jersey, although, depending on the relationship of the Governors at a particular time, it works very well, or sometimes a little less effectively. And there are a number of other regional transportation groupings that we have in the State of New Jersey that are really quite effective. And if we don't actually work together--I admire what is going on in Louisville and the county that surrounds it that the Governor--excuse me, maybe will be Governor someday--the Mayor actually believes is a classic example of looking for the economies of scale and the synergies that exist there. So, yes is the answer. And I think, actually, the concern about this--and this is where the Mayor and I might disagree--I think the majority of States will use those resources through its existing facilities, much of which requires the collaboration of the State through these regional organizations to start with. If we were to receive the kind of potential support that has been talked about here this morning, we are going to use the facilities we have because that is where the priorities came from to start with. That is how we built those priorities and that is how we will fund those priorities. So I think you have to be concerned about it because there will be situations where that cooperation hasn't been practiced in history, but I think it has very much so here. Mr. Oberstar. I have to intercede at this point. We committed to Governor Corzine that he would be able to leave at noon. I think Governor Engler has a similar commitment. I want to recognize Mr. Sires at this point for a comment or question, and then, Governor, we will hold you excused. Mr. Sires. I would also like to add, Governor, as you know, they just regionalized the Emergency Management Services between New York and New Jersey also. So it is a great example for the rest of America. Governor, unemployment is rising across the country. In New Jersey, for example, I know that you mentioned before it went from 4.2 to 5.8. Knowing your efforts in the last few months and the investment that New Jersey has made, how would this stimulus package add to stop this rising unemployment, and how many jobs do you anticipate this will impact? I know that working on the Hudson-Bergen Light Rail extension, there are approximately 20,000 jobs that are there. But for the rest of the State, how is that impacted? Governor Corzine. Well, first of all, let me identify with Dr. Irons' remarks. This is one of those places not only can you see palpably what job creation will occur, because people are holding shovels, but it actually is the single best near- term way to put the economy into motion. Now, some of the other things that are included in Dr. Irons' package and others are going to protect the economy from shriveling in other areas. And I am not here saying don't do anything about Medicaid or Federal matching programs there or food stamps, but if you want to put the bridge to get us into a strengthened position and get the economy restarted, you used the word Keynesian, Ms. Norton, this is the time to do that. This is where you create jobs. And I use a lower denomination, I use about 10,000 jobs per billion dollars for school construction and transportation projects in New Jersey. Other people I have seen 47,000. I have a hard time counting the heads that actually fit with that. But we are creating real jobs when you do what you all have already committed to do here in the House, and certainly out of this Transportation Committee. You know, I passionately believe that you should take the steps that will allow us to bridge this recessionary valley that we are going through and do it in conjunction with our long-term best interests. It is not like we have overspent on maintaining the safety of our bridges or the adequacy of our highways or the air traffic control system or any of these things; these are things that we should have been doing anyway. So this is not make-work, this is getting us into a position where we are creating real work at a time when it would not otherwise be done. And I am very sensitive to the pay-as-you-go and believe in fiscal responsibility, but this is one of those times if you thought $700 billion was necessary because there was a crisis, there is going to be a crisis--there is a crisis in the labor market, it is going to grow, as is demonstrated by history, and it is time to act on these issues. I congratulate you for having this hearing and for what you are doing, and I hope we can get to a positive conclusion. Mr. Oberstar. Thank you very much, Governor. Thank you for overstaying your time. And we hold you excused, and we are grateful for your contribution that you give both as Governor, Senator and as financier from Wall Street, which was discredited after you left. Ms. Norton. Mr. Chairman, could I hear the answers from Mr. Gallegos and perhaps Mr. Abramson to the question I asked before? Mr. Oberstar. Briefly. Mr. Gallegos. Very quickly, I would offer that the San Diego model, I don't think you need the San Diego, but if we look at that same model is working in Los Angeles, it is working in the San Francisco Bay area, it is working in the Sacramento area. And I would also submit that, as we try to tackle climate change, that that is another element that I thing is going to force more of this regional collaboration because we have got to connect the dots between how we are using land use and transportation and energy policy and all these other policies have got to come together. And I think California has a good model to share. Mr. Abramson. And I would only add that the MPOs that you all set up do go across State lines. In my own community, you have an urbanized southern Indiana which is right across the Ohio River from Louisville, we sit with colleagues from the counties and cities in Indiana joining with us. And those kinds of area development approaches, where you have got to literally flow economic products, services and people back and forth across the river and throughout the region end up being very successful. And they have gone forward in many communities across State lines toward developing what we would all want for our hometowns. Ms. Norton. Thank you, Mr. Chairman. Mr. Oberstar. Now Ms. Napolitano. Mrs. Napolitano. Thank you, Mr. Chairman. And I share some of the concerns that my colleagues have brought up, but I would like to ask Mr. Gallegos, one of the things that bothers me, Mr. Gallegos, is that the small cities sometimes do not have the ability to have a place at the table because the larger cities end up taking most of the funds and sometimes what is left is divided amongst many that cannot afford to have their own representation, their own ability to attract those funds. You state that the stimulus would help regions across the country to implement ready-to-go projects, and the region States would benefit from concerted efforts to streamline Federal processes. I have a question about Federal process. What specific streamlining would you suggest, as a Sandbag--and SCAG would be the same thing, I would ask them the same question--what would be some of the processes that need streamlining to be able to effectively cut the time frame that would put these projects on the go immediately or at least within a short frame of time instead of having to wait, given that sometimes some of these Federal agencies do not have enough staff to be able to do the job? Mr. Gallegos. I would offer as a very quick example, in California we have the California Environmental Quality Act, CEQA, that by a lot of arguments is just as complicated as the National Environmental Quality Act, NEQA, and yet we can get a CEQA level document done in our State project of moderate complexity in 1 to 2 years. The moment we Federalize that document--and we very often choose to Federalize them because we want flexibility to use as many different colors of money to make the projects work--it takes a minimum of about 5 years to get a NEQA document worked through the Federal level. And it is the same stuff, it is just more people are looking at it. And there is a case in point where in the last bill you did do some streamlining, and you are sending some of that back to the States. But there is an example where you can cut a couple of years out of the process and still not hurt the environment. Mrs. Napolitano. Mr. Chairman, maybe we can look at that in the future. But you also mentioned that sandbag issues bonds backed by sales tax revenues, and plans to continue issuing bonds backed by toll revenues. Any chance that the credit crisis would affect those revenues? Mr. Gallegos. Obviously, yes. But I am very proud to say that we have recently received a Triple-A bond rating from the rating agencies. And I think the key to that is these are local decision makers that understand land use policies that are making decisions. And the credit markets are looking for these kinds of investments. The McCrorys of the world, as an example, are investing in these kinds of investments because they are steady; these roads are going to be there for a while, they are going go continue to generate revenue. And who better to put in control than your local mayors? Mrs. Napolitano. Well, coming from local government I couldn't agree with you more, because it takes time to filter down to the local level in many instances. I would like to ask Dr. Irons, would you describe the type and number of jobs that would be created by additional infrastructure investment? And beyond the impact of jobs, if you would touch upon the link between the infrastructure investment and the increased productivity in economic growth, and its sustainability. Mr. Irons. Yeah. I mean, like I said in my testimony, when you create jobs through infrastructure investment, I think a lot of people think of those purely as construction jobs, but they do have a reverberating effect throughout the economy. Some early work that we have done, which is included in my written testimony, illustrates exactly what industries those jobs in. The best we can tell, and it is very hard to link some of these jobs estimates, is that these are good jobs, meaning that they tend to pay above average based on what industries they are and some other characteristics of the people that are hired in those jobs. For example, I am giving you a number here, for every thousand jobs created in construction, there will be a total of 610 upstream jobs, meaning supplier jobs, as a result. Most of those are in manufacturing, retail, professional, scientific and technical services, administrative support, and waste management. So what we find is, when you look at how many jobs created and kind of jobs, they are very broad based, and they tend to pay slightly above average compared to an average job. Mrs. Napolitano. But given the situation we have found ourselves in the last almost 10 years--a decline in training, a lot of recidivism in some of the industries, loss of manufacturing--will we be able to have enough adequate trained personnel, adequate working labor to be able to fill, if we are going forth with all of these projects and putting this kind of money in, because then we may not have enough engineers to be able to complete the projects, we may not be able to have--I don't know, it is just something that I would like for you to address. Mr. Irons. My impression, and I have not done the research to fully substantiate what I am going to say, but it is my distinct impression that we do have the capacity out there to engage in this. Part of the reason why I say that is, is when you look at the job losses that have already occurred in the construction industry and in the manufacturing industry, manufacturing job loss is not just a recent phenomenon, this has been going on for years, construction, we all know what is happening with construction jobs from the housing downturns. So we have seen declines in two of the primary industries that would support this kind of investment. So that leads me to believe that there is excess capacity out there to engage in these projects. And frankly, I would love to test that; I would love to see if 75 billion, or however much, would exhaust our supply. I think it is going to take a long time to do that. But like I said, it is my impression that we do have the capacity out there. Mrs. Napolitano. Were you able to take a look at what happened back in--I can't remember the years, maybe in the '30s and '40s with the WPA, the circumstances about creating work projects to be able to get the economy going during that depression? Mr. Irons. In a lot of ways, the two time periods are not necessarily comparable, I don't think. I think a lot of the jobs that were created during that time period were more of the shovel variety of building roads, bridges, and using very simple technologies. A lot of the construction sites today are more high skilled in terms of the level. Mrs. Napolitano. Excuse me, Hoover Dam is not a small site. Mr. Irons. No, I agree. But there is a variety of resources that were created then compared to now. So I think two things; one thing, I think there is capacity, but I think there will likely need to be some job training done--not necessarily this year, but next year or the year after, and without the jobs there, it makes no sense to train. So this is going to be a case where you have what is called a demand-pull in economics, where you have the demand for jobs, that will then lead people into the job market, it will create the demand for job training, and then, if we can couple these investments with expanded job training, that creates a recipe for a growing economy. Mrs. Napolitano. Where would the job training come from? Mr. Oberstar. We are going to conclude on that point because we have two more Members and we have 14 more witnesses. Mr. Cummings. Mr. Cummings. Thank you, Mr. Chairman. I want to approach this from another angle. Mr. Irons, basically what I have seen, and I sit on the Government Reform Committee where we do investigations, looking at AIG and others, one of the things that I have noticed is that when the public see those hearings and hear about the misuse of funds, the bailout, they get very angry. And what is happening in our country is that there is a distrust on the part of government with regard to the bailout, And this is my concern. And I am trying to figure out how do we make sure we deal with this. Here we have what I believe to be a project that we need to do--as a matter of fact, I would be very upset and disappointed if we don't do it. But how do we make sure that we put the kinds of provisions in there--and I think we all agree, several of you have said it, these are jobs that people can feel this, I think you, Governor Engler, talked about it, they know that this is happening and they feel good about it. And you said that, too, Mayor. But how do we make sure that they fully understand that it is just not for the construction worker, but it is something that is going to truly go to--as a piece of dealing with this economic situation? Now, there are two other pieces to that. We know that two of the major problems is consumer confidence and investor confidence. How do you see what we are doing here impacting those things? Because this is very important. In other words, I want to make sure that when the Chairman is defending his portion of this bill, that he has every single argument that he can possibly have to say, okay, we are not only creating jobs, we are not only dealing with infrastructure, but we are also doing some other things, if you deem it appropriate, that we are helping to build up consumer confidence, build up investor confidence, which is very important. And what kind of provisions do we need to put in the legislation to assure that we are getting that word out? Do you follow me? And I see, Governor Engler--this is directed at either one of you, or both of you. Mr. Irons. I very much take your point. And I think the advantage that this kind of bill has, this kind of spending has is that this could actually get things moving--I echo the Governor's remarks. A lot of the bailout package that you have worked on is to stop things from getting worse. This is helping things get better. So I think that argument can be made very forcefully and I think it would help consumer confidence and investor confidence. The other piece I would add to that as well is, if this is part of a comprehensive package, then I think it helps out consumer confidence and investor confidence. I think that the trouble we got into with the financial bailout package was, for this entire year, from AIG to individual investment banks, it was a piecemeal approach, we did one bank, we did another bank, and then finally we did a big $700 billion bailout package; of course by then things had gotten much worse. So I think this kind of a package, you know, has potential--I am not saying it will--but it has potential to restore some of the confidence on the investor side and the consumer side. Exactly how you put in place the mechanisms necessary to create trust that this is going to have an impact is a really hard question. I don't think I have a very good answer for you. But I agree that whatever we can do to do that, I think it is important to go ahead and do that. Mr. Cummings. Governor Engler. Mr. Engler. I think it is probably more of a political question than an economics question because I think you are touching on something I think is really important. I think it is the performance of elected officials and their institutions, and it is at every level. And so this is one that offers an opportunity to engage, as you have done today with this panel, a governor, a regional official, a local official, and to talk about really a partnership that is being formed. That is what you are offering. And the creative way in which you are structuring this is to say, look, in the immediate right now, we have got projects ready to go, local projects across the country are going to get built, local officials are going to defend those, and they are going to be on board with this. And I think that is how you deal with the idea. And I think Mr. Chairman mentioned it and Mr. DeFazio mentioned it, and actually Mr. Mica did as well, the transparency of the letting the people who are going to be getting this money to put a list out there within a certain number of days, and be open about that. I think all of that shows that you are acting, you are not micromanaging, you have set some policy guidelines from Washington, you have made some funds that are urgently needed available. And then the local people engage, and they help sell that story. And frankly, that is something they can do on this issue that they couldn't do on the rescue package. I know in your case, your meeting with Drew Greenblatt, you listened very effectively and communicated that. But I think on this one, you get a lot more help because people actually understand it and they can explain it right alongside you. I have watched some of the Members out on the trail try to explain this rescue package, and it is painful. And it is not their fault, it is just so big and so globally interconnected it is very difficult to say, by voting this way or that way this is what changed. Mr. Cummings. I see my time is up. Let me just close with saying this. We really need to emphasize the things that you all have said this morning, that if you get one construction job, it then has the benefit of having this rippling effective to all of these other jobs. And I think that is the kind of thing that we really have to get out, too. My time is up. Thank you, Mr. Chairman. Mr. Oberstar. The technical answer to the gentleman's question is to introduce into this process, which I have directed staff to undertake, is to have a monitoring mechanism that we will have a report on the progress of implementing this legislation within 2 months of enactment, what is happening to these dollars--and maybe it is 3 months. And then every month to have a report on progress on these projects. It is something that I learned from the Local Public Works Act of `75, and then of `78, that we were weren't able to measure--I held hearings on this subsequently--we weren't able to measure month to month or 2-month or 3-month periods the progress being made. Only at the end did we come back and evaluate, and then we had reports from the GAO and the inspectors general and said, oh, well, you should have done these things. Well, we have learned some of those lessons. We need to reintroduce them into the process and to have a monitoring. That is something we are going to do in the next transportation bill; we are going to have to have a periodic progress report on investing of those next transportation dollars so that when we come to the end of the 6-year period and then scratch our head and say why is this transit project still taking 14 years to get off the ground? Why is it taking 3 years to do a one- inch overlay on a rural road? Governor, you know from sitting in that Governor's chair that is not a pleasant question to answer. Well, I don't want to have to have us answer to those. Ms. Edwards, you have been very patient. Ms. Edwards. I just want to point out that, in addition to other pointy-head economists, Paul Krugman notes in The New York Times on October 17th that this is exactly the environment in which we need to engage in deficit spending to support infrastructure. And I just want to quote here that he notes, "This is a good time to engage in serious infrastructure spending which the country badly needs in any case. The usual argument against public works as economic stimulus is that they take too long. By the time you get around to repairing the bridge and upgrading that rail line, the slump is over and the stimulus isn't needed." And he concludes that, "The responsible thing right now is to give the economy the help it needs," and he is directing whomever the next President is and certainly this Congress now that it is not the time to worry with the deficit. And so, Dr. Irons, I want to go back to your point on this kind of deficit spending and ask you, what is the harm if we sort of overshoot the mark, in terms of spending for transportation infrastructure, especially if that is exactly what we need over, you know, a course of time? Mr. Irons. Well, of course, the harm is you might have safe roads, efficient transportation, clean schools. [Laughter.] I am of the variety that these are investments that need to be done, let's do them sooner later than rather than later, let's create jobs now. And I think a lot of the spending is money that would spent anyway. Let's accelerate it to the current time, where we need it the most. So, in the long run, I think we should view this as moving money from future years to current years. And what we really care about is the long-run deficit, not the deficit of this year or next. And so I think it is important to have some level of fiscal responsibility over the long run. But this is exactly the point in time. And Paul Krugman, having just won the Nobel Prize, I think maybe we should listen to him on this. This is not the time to worry about the short-run deficits. We have long-term challenges that everybody knows about, but this is not the time to worry about those. Ms. Edwards. Thank you. I am curious on transportation construction industry jobs. We have a set of folks who are, for those 120-day projects, they are moving ready to move into those jobs right now because they have lost their jobs. And then we have a set of projects that need to be invested in that may be 6 months and out for a whole bunch of folks who need to be trained up for those jobs. And so, wouldn't you agree that we need the investments in that job training at the outset, so that by the time those jobs are created 6 months down the line we have folks in the workforce trained up and ready to go? And, again, these are complex jobs. These are not, you know, the pitch and shovel jobs of old. Transportation industry jobs now are incredibly complicated, and we need to train up a workforce for them. Mr. Irons. Yeah, I absolutely agree with that. I think it is especially true when you look at a lot of the efforts now on green jobs. And there is, I think, an aspect of green infrastructure, green transportation. And a lot of these jobs are more skilled jobs than just working with a shovel. So I think you are absolutely right. If we know we are going to have to fill some of these jobs because we have the demand for the jobs through investments that might get done soon, we should put into the pipeline training so that we can take advantage of those opportunities down the road. Ms. Edwards. And lastly, I would appreciate a comment from any of the other panelists. We had a hearing just a few weeks ago on regional planning processes. And I am curious about how one could prioritize those kind of projects that have value in a region that may cross States, say, the I-95 corridor in this region. Or we talked with a mayor in Denver about their transportation project. That we might find a way to privatize those things that have broader consensus within a region that have a deeper impact across State lines. Mr. Gallegos. Maybe I could share at least how in San Diego, I think the key to this has been trying to establish, adopt an evaluation criteria before you start politicizing who screams the loudest and what gets what project. And so we have been blessed in that our elected officials have bought into adopting the evaluation criteria before we start for the call of projects. And, quite frankly, that has allowed us to be disciplined and make sure that we are not just spreading the peanut butter around, but that we are going doing what I call "wow" projects--"Wow, it finally get started," and, "Wow, it is done," and, "Wow, it works"--because we are making these corridor investments and we are not just sprinkling the resources around the region. But I think it starts at the regional level with having really good evaluation criteria to help you ground yourself on how you make some of the investment decisions you make. Mr. Abramson. And I would also say, since the work was done by Bruce Katz over at the Brookings Institute, to focus on metropolitan economies and to understand that really the economic engines of this country are no longer just a State or a county or a city, but they are metropolitan areas, wherever they may be located geographically, to create the jobs, to create the economic growth, and it goes on and on. So, to me, that is the future. And, to me, that kind of thinking, you are hearing it among mayors and county officials more than ever before, getting beyond the sort of parochial approach and realizing that we are an economic unit outside my border, across the Ohio River into Indiana, into rural counties surrounding me. And all of a sudden now, we are in this together. And we begin economic development approaches as a region, we begin investment in roads as a region, education as a region. That is going to keep the strength of those metropolitan areas to help this country move out of the present economic crisis into a much brighter day for America. Mr. Engel. My comment, just to close the door, goes back to the workforce. Just a caution: On workforce training, it is very important to have the long-term funding in place. We have done way too much workforce training in this country for jobs that weren't there. And so I see it as not as requisite a part of a short-term stimulus package but essential, given the demographics of our workforce, to longer-funded--when we get into reauthorization, we start thinking of a 10- and 20-year strategy. Then there are all kinds of opportunities, and we really can talk to people about having a future. But to train them up and know not know there is a long-term program at the back end of that training ends up leading to disappointment. And we have had plenty of that in those kinds of programs. Ms. Edwards. Thank you. I think my time has long expired. Mr. Oberstar. Thank you. And, on that point, Governor, closing the door, we are going to be closing the door on this panel. But Mr. Mica and I have both talked about that very point you raised, of training. The building trades have a great relationship with the construction industries in which jointly they develop training programs. And in the TEA-21, Mr. Shuster suggested and I concurred that we establish funding for the building trades. We created 3 million jobs in that 6-year period. Mr. Mica, our Ranking Member, do you want to close out this panel with any observations or questions? Mr. Mica. Well, again, I appreciate their coming out. I think we all see the need to move forward, move forward in an expedited fashion. One of my concerns is the thing getting bogged down. In fact, I just, while we were talking, I got this picture. This is an 80-foot, 60-foot, I guess, fiberglass bunny. I guess you could term it an infrastructure project, but I guess it is going to be a nice art addition to the Sacramento airport, is it? I have to make sure I get this right. They voted 3-2 to put this up. But, you know, we don't want fiberglass bunnies being financed by a stimulus package. This may be well-intended. It may be very good art. But someone just told me that this is a project being promoted by an entity. And we have to put protections in that we do create jobs and that we do build the infrastructure but not support things or, again, pork kind of projects that don't merit Federal investment of hard-earned taxpayer dollars. I can't submit the red bunny for the record, but I have a story about it that we will put in the record. And I thank you all for being with us. Mr. Engel. We will just hop on out of here. Mr. Mica. You are going to hop out of here? Mr. Oberstar. I would assume that that bunny is in the terminal, it is not on the air side of the airport and not eligible for AIP financing. Mr. Mica. I hope and pray. Mr. Oberstar. No, it is not. All right, I thank this panel for their splendid contributions. We will come back to you at a future time. Governor Engler, we look forward to working with you next year in the authorization bill on a whole host of ideas that we have discussed and that you have expressed here. And, at this time, I ask unanimous consent to include in the record a statement from the California Association of Sanitation Agencies and from the city of Pico Rivera, relevant to the statement that they submitted by the gentlewoman from California, Mrs. Napolitano. Our next panel includes the Honorable John Porcari, Secretary of Transportation with the State of Maryland; Dr. Beverly Scott, now Chair of the American Public Transportation Association and general manager of MARTA and a friend of long standing, a dear friend of long standing. It is so good to see you, as is Dr. Porcari. The Honorable Judith Enck, Deputy Secretary for the Environment, State of New York; Mr. William DeCota, director of aviation, Port Authority of New York/New Jersey; Mr. William Crosby, chief operating officer for AMTRAK; Mr. Andrew Herrmann, senior partner, Hardesty & Hanover, American Society of Civil Engineers Board of Directors; and Mr. Thomas Kiernan, president of the National Parks Conservation Association. I am so glad to have all of you here. And thank you for your patience. We initially had thought we would have a lunch break, but 1 hour of statements by Members, 2 hours for the previous panel. Happily, we are not interrupted, as we usually are in hearings, with votes on the House floor and motions to do this and that, so we can continue uninterrupted. And we will just continue without a lunch break. Those who are hungry can enrich the Rayburn cafeteria, if you wish. It is right one floor below us. And now we will begin with Mr. Porcari. Thank you very much for being here. It has been a pleasure working with you over the several years that you have served the State and served the cause of transportation nationwide. TESTIMONY OF HON. JOHN D. PORCARI, SECRETARY OF TRANSPORTATION, STATE OF MARYLAND, ON BEHALF OF THE AMERICAN ASSOCIATION OF STATE HIGHWAY AND TRANSPORTATION OFFICIALS; BEVERLY A. SCOTT, CHAIR, AMERICAN PUBLIC TRANSPORTATION ASSOCIATION, GENERAL MANAGER, METROPOLITAN ATLANTA RAPID TRANSIT AUTHORITY (MARTA); HON. JUDITH ENCK, DEPUTY SECRETARY FOR THE ENVIRONMENT, STATE OF NEW YORK; WILLIAM R. DECOTA, DIRECTOR OF AVIATION, PORT AUTHORITY OF NEW YORK AND NEW JERSEY; WILLIAM L. CROSBIE, CHIEF OPERATING OFFICER, NATIONAL RAILROAD PASSENGER CORPORATION - AMTRAK; ANDREW HERRMANN, SENIOR PARTNER, HARDESTY & HANOVER, LLP, MEMBER, BOARD OF DIRECTORS, AMERICAN SOCIETY FOR CIVIL ENGINEERS; AND THOMAS C. KIERNAN, PRESIDENT, NATIONAL PARKS CONSERVATION ASSOCIATION Mr. Porcari. Thank you, Mr. Chairman and Ranking Member Mica and Members of the Committee. I am John Porcari, secretary of the Maryland Department of Transportation. I am here today on behalf of the American Association of State Highway and Transportation Officials. We would like to thank the House leadership for aggressively moving forward with an economic recovery package and for this hearing today on how infrastructure investment can have an immediate and long- lasting impact on our economy. Today I would like to cover three points. First, an immediate and long-lasting economic gain can be realized from investing in our transportation capital assets across all modes--highway, transit, rail, aviation, ports and waterways. Second, the unprecedented fiscal crisis already facing at least half of the States is taking a toll on our ability to preserve, maintain and operate our transportation systems. And third, States have highway and transit projects that are planned and ready to go, and the construction industry has machinery and people ready to go to work. These projects can support thousands of good-paying American jobs. Congress can help get projects moving. I point out that capital investments are fundamentally different from other kinds of government spending. Transportation dollars are converted to physical assets that will last 50 to 100 years to provide future generations with a modern, globally competitive system. Such investments create and maintain well-paying, made-in-America jobs. Getting projects under way this winter and spring will support much- needed employment and put vital equipment back into operation. We would respectfully suggest that the economic recovery package contain two types of transportation infrastructure projects: first, the quick turn-around projects, such as bridge re-decking or pavement resurfacing, for which bids could be awarded within 120 days. With funding, more than half of the States could initiate construction in late winter or early spring on these projects. States with a year-round construction season could work over the next few months, as well. Second, we need funding for more complex, larger projects that are ready to go but may need up to 6 months to award bids and begin construction. In Maryland, for example, we could obligate within 120 days nearly three dozen highway projects, costing approximately $150 million. One, for example, would overlay a three-mile section of an urban interstate, which would add 15 years to the pavement surface life. We know we need to do this now; we are not able to do it now. We have similar projects in our rural areas. Today's economy, coupled with last month's unprecedented Highway Trust Fund cash flow crisis, has resulted in ever- increasing numbers of postponed or cancelled projects nationwide. As you know, 9 months ago, States identified more than 3,000 projects totaling over $18 billion for which contracts could be awarded within 90 days. Today, that number in dollar value is considerably greater. Due to State budget crises, almost half the States have been forced to shelve projects, reduce services and eliminate State agency positions. In Maryland, we have deferred $1.1 billion in transportation capital projects in our 6-year capital program because we simply do not have the State revenue to proceed. Last month's cash shortfall in the Highway Trust Fund and crisis on Wall Street has had a chilling effect on the municipal bond market as well, tightening States' abilities to move forward with critical projects. Maryland has postponed $425 million in a GARVEE bond issuance. We are hopeful that recent activity in the market will allow us to move forward with a bond sale sooner rather than later. Today, we simply do not have the State revenue to proceed. While the funding we are discussing today will not alleviate the problems in the bond market, this new infusion will dramatically help States address some of the immediate needs in their infrastructure programs. AASHTO supports emergency funding, as well as the following program adjustments to accelerate the transportation investments: First, temporarily suspend the 20 percent State matching requirement on Federal funds. Second, apportion the funds to States based on their overall levels of apportionments or using the obligation authority formula. A category-neutral apportionment is needed, as well. And third, Congress must eliminate this year's $8.5 billion proposed rescission of contract authority that is required in SAFETEA-LU. That looming rescission has caused many States to delay project planning and contract awards. Beyond highway projects, States have critical needs in transit, rail, maritime, aviation infrastructure and the like, such as resources for the Army Corps of Engineers to maintain the proper depth and width of shipping channels, system preservation for transit, as well as funds to accelerate safety and operational improvements, and passenger rail projects under the Intercity Passenger Rail Program. Mr. Chairman, these infrastructure investments are literally the foundation of America's future economic growth and prosperity. Thank you for listening. The State departments of transportation are happy to work with you and your Committee and the Congress on this important legislation. I will be happy to answer any questions you may have. Mr. Oberstar. Thank you very much, Mr. Porcari. And, of course, I will have some questions later, but I can't resist an observation. You referenced providing sufficient resources for the Corps of Engineers. As Mr. Mica said at the outset, we overrode the President's veto on that water bill, the Water Resources Development Act. But then the President didn't include a single one of those 920 projects in his budget for the current fiscal year, not a single one, none. It was almost an act of spite: "You override my veto, I won't fund the projects. You figure out a way to do it, Congress." Now, that is not acting in the best public interest. There was an overwhelming vote by the House, by the Senate, to proceed with those investments that are necessary, to restore the Everglades in Florida, restore the wetlands in the gulf, protect against hurricanes, the levees in Louisiana and all along from east Texas through to Florida. And as Governor Engler referenced earlier, the locks on the Mississippi River; there are five locks that slow down--because they were built in the 1930s, 600-foot length. Barge tows are 1,200 feet. It takes 820 hours round-trip from northeast Iowa to bring grain through the export facility in New Orleans. You need a second lock at Sault St. Marie in the Great Lakes to facilitate downbound grain and coal traffic and downbound iron ore to the steel mills. We need to upgrade the St. Lawrence Seaway. We have work on the east coast, the ports in your State of Maryland, the port of New York/New Jersey. All of these, we would have had people working if the administration had put money into it and respected the will of the Congress, which is the will of the people. Dr. Scott, thank you very much for being with us. Ms. Scott. Thank you, Chairman Oberstar, Ranking Member Mica and Members of the Committee. I do not have to tell you how much our national public transportation industry and American families across our country desperately need your continued leadership as well as your urgent and bold action to get America moving. We firmly believe that your leadership, combined with plain old American grit, ingenuity and tenacity, must combine to turn this economic crisis and set of serious global environmental challenges into an opportunity to be better, do more, and hopefully keep the faith by providing for future generations what our parents did for us: hope in the future by planting the trees whose shade most of us will not live under. Today, with the impact of fuel costs and the devastating economic uncertainty from failing banks and falling stock prices, people from all walks of life in communities of all sizes from everywhere across our country are looking for immediate relief to help with basic necessities, like daily transportation needs that can unfortunately consume up to 25 to 30 percent of some household incomes--common-sense solutions and long-term investments that significantly move the needle on our economic prosperity, overall quality of life andunquestionably restore America's premiere global position. Candidly, while I am not much of a betting woman, I often say that if I had only one sure bet to make that would appreciably move our national needle forward, I would place that bet on a significantly greater investment in national public transportation infrastructure and services and, in so doing, provide much-needed affordable transportation options to immediately help the household budgets for millions of Americans, put Americans to work, improve economic competitiveness, help our energy independence and homeland security, and positively impact our environmental sustainability. As you prepare for our next Federal transportation authorization, your work to make transportation infrastructure a critical element of this stimulus package will help to set the stage for that critical legislation. In my own State of Georgia and across the Nation, transit providers are stretching every available dollar to meet the rapidly increasing demand for transit service. Last year, 10.3 billion trips were taken on U.S. public transportation. That is the highest number of trips taken in 50 years, and ridership continues to soar. Unfortunately, many transit projects on the drawing boards are unfunded because of a lack of dollars at the State and local levels. So your earlier discussion today about local match relief for these critical investments is vitally important. APTA has just completed a new survey of transit systems, and it identified a minimum of $8 billion in ready-to-go projects that could move ahead within 90 days. These projects will create new economic activity and put thousands of people to work building much-needed infrastructure. In the Atlanta region, MARTA carries more than 450,000 passengers per day, or the equivalent of moving the population of the entire city of Atlanta every day. We provided service for over 14 million customers in September of this past year, which was a 13.3 percent increase over the prior year. And other regional transit providers, like the Georgia Regional Transportation Authority, Cobb Community Transit, and Gwinnett County Transit, are also moving additionally thousands and thousands of more people and cars off of our congested freeways every day. I want to cite just a few examples of how transit agencies across Georgia could make immediate use of an increased Federal investment. The Columbus transit system, METRA, could immediately use $900,000 to acquire three replacement clean fuel buses. And Hinesville Liberty County, home of Fort Stewart, could use 200,000 to purchase smaller passenger buses under an existing contract option. At MARTA, we could use stimulus funding for several facility projects. We have an immediate need for $12.4 million to construct a new park-and-ride facility in suburban DeKalb County, which is the most densely populated county in the State of Georgia. This project's design is complete. Construction could proceed within 90 days of our ability to be able to, in fact, have increased funding. In Clayton County, the ridership has been absolutely staggering. They need to immediately wind up increasing by an additional 12 buses. These projects in Georgia are just the tip of the iceberg. I have many projects that we noted in my testimony. Just to highlight some from other parts of the country, not surprisingly the Chicago Transit Authority's ridership has also grown exponentially, up 21 million rides compared to 2007. They could immediately use $166 billion to replace aging buses with New Flyer diesel-electric hybrid buses. With another $18 million, they could quickly begin a much-needed track renewal program. And California, the Capitol Intercity Rail Corridor can immediately use $6 million for construction at the San Jose rail station. But the reality for us is, unfortunately, today, as the demand and the desire for public transit is clearly on a significant rise, many transit providers are currently being forced to choose between raising passenger fares or cutting service to make up for shortfalls in local funding and the increased cost of diesel fuel. Thirty-five percent of transit providers in a recent survey conducted by the American Public Transportation Association reported that they have cut their services or are examining that possibility. And many others are having to do the same thing as it relates to fares. Here is just one example. Very recently in Eugene, Oregon, Lane Transit, they have in fact experienced a 17 percent increase in terms of ridership, and at this point in time they are having to look at making a 15 percent reduction in service. So there are Lane and hundreds of systems like Lane Transit across this country that are trying and wanting to do more and are doing more with less but they cannot make bricks without hay. And an increased investment is urgently needed. So we applaud your efforts, Chairman Oberstar, Ranking Member Mica, Mr. DeFazio, and the other sponsors of the Saving Energy Through Public Transportation Act of 2008. This bill provides important relief for transit systems facing severe cuts, and it is essential that its provisions be included again in the next stimulus bill. I am going to go very quickly. As you are likely aware, in addition to shrinking local sources of transit funding, 31 of the Nation's largest transit systems in 18 States, including MARTA, are facing an immediate financial crisis as a result of the current trouble in the credit markets that is resulting from the lease-in/lease-out sale-leaseback transactions that were largely conducted in the 1990s through 2003, 2005. These transit agencies, through no fault of their own, are being forced into technical default on these deals, because AIG and other insurers who served as guarantors for the leased assets in the deals have lost their credit ratings. The effect of this spend-down, if you will, wind-down, could in fact have as much of an implication as somewhere between $2 billion to $4 billion on local transit agencies. We are not the only ones who have entered into such transactions. We would suggest that if you look at many municipalities across the country, there could be unintended consequences as a result of some of these actions. So what we are asking is that the U.S. Treasury has the power under the recent bailout package to take over the role of AIG and other insurers in SILO/LILO transactions. We hope to work with this the Committee to contact Treasury and urge them to act on our behalf immediately. And if that fails, we will certainly be looking to work with you to have a specific legislative remedy. In spite of all these challenges, as a veteran of more than 30 years in this industry, I can honestly say that what we are experiencing is a transit renaissance. We have more riders now than any time in the last 50 years and increasing numbers of Americans who would use transit service if it were reasonably available. There is a growing national recognition of the need to preserve our environment for future generations and an understanding that changes in personal travel behavior and freight movement that reduce carbon dioxide emissions are key. And finally, there is recognition that we cannot build our way out of traffic congestion any more than we can rely on just gasoline for our future energy needs. We urge the Congress to move forward with an economic stimulus package that recognizes the value of investing in our Nation's public transportation infrastructure. This is the kind of essential public investment that provides both a vital and common-sense set of real solutions, and, in the final analysis, an investment that keeps on giving by making it possible for people and communities to help themselves. Thank you very much. Mr. Oberstar. Thank you. Your complete testimony has a great deal more detail that is very, very valuable for our purposes. Ms. Enck? Ms. Enck. Good afternoon. My name is Judith Enck. I am Deputy Secretary for the Environment in the office of Governor David Paterson. Thank you, Chairman Oberstar and Members of the Committee. I really appreciate you shining the spotlight on these issues. And I am going to talk about water, where we have severe funding needs, specifically wastewater infrastructure. Today in New York, we have 200 municipalities that are under consent orders for violations of the Clean Water Act. Typically, these communities are discharging inadequately treated raw sewage into our waterways, and they are doing it because they don't have the money to upgrade their sewage treatment plants. I believe that this is the environmental sleeper issue of the decade. I believe that the public doesn't know the full scope of this problem. If they did, I think they would support investment in wastewater infrastructure. And, more interestingly, I think they would also support investments in green infrastructure. We need to lay the pipes, but we also need to take some common-sense, environmentally sustainable steps to deal with wastewater and storm water. Our wastewater infrastructure is in dire straits. One reason is because Federal funding has declined 70 percent--70 percent--over the last two decades. This inadequate investment today is putting the environment and public health at risk. Sewage is harmful to public health, the environment and the economy. It contains viruses, bacteria and toxins. And if people have contact with polluted water, they can be exposed to a range of water-borne diseases. Today, in New York State, one in seven water bodies do not meet water quality standards. Beach closings are a regular event, including in many tourist towns. We have 70 major shellfish beds that remain too polluted to use, and that is really hurting our commercial fishing industry, particularly on Long Island. The Governor requested with the legislature, our DEC, to do a study of wastewater needs in New York. So we did this study last year and found that New York State alone needs $36.2 billion over the next 20 years to upgrade our sewage treatment plant and make a commitment to green infrastructure. New York is not alone. The Association of State and Industrial Water Pollution Control Administrators recently surveyed States. They found, of the 25 States that responded, there was a $9 billion need from these 25 States for projects that are ready to go today. So this is not just over long span of time, but projects that could move right away. When it comes to this water pollution challenge, I am afraid we are facing a perfect storm, because States like New York are facing unprecedented budget deficits. Governor Paterson testified this morning, documenting that our State is facing a $12.5 billion deficit next year alone, and we project a $47 billion deficit over the next 3 1/2 years. Our State has never faced a deficit of this level. So we very much need Federal funding in this area. I want to specifically say that, in New York, we have 412 projects ready to go if only we had the funding. And the way we do our SRF, we leverage the funding, so we spread the dollars out more. We have a number of applications before us and believe that this year we can only fund 16 percent of the applications before us. Making these commitments will also create scores of new jobs. Various analysts say that some 30,000 to 47,000 jobs are created for every $1 billion invested in infrastructure. We very much need these jobs in New York, particularly in upstate New York. One final point: My written testimony has lots of examples of projects that are ready to go today. We think that reinvigorating the Clean Water SRF through the legislation that you introduced earlier this year would go a long way in addressing the problem. And we are particularly interested in the loan forgiveness provision for hardship communities. We are also very interested in green infrastructure improvements, whether it is vegetated wetlands, tree plantings, porous pavement. These are all strategies that not only reduce runoff and save tax dollars in treating the runoff, but they also improve the quality of life in our cities. When you think about the majestic lakes and rivers and bays in your home State, the public has a real affinity for these natural resources. They don't want them degraded. There is a real aesthetic value to it, along with an economic value. New York depends a lot of tourism. We have communities up and down the Hudson River where, not long ago, people didn't want to live or play or recreate or work in these communities. And because of the investment in improving wastewater infrastructure plans up and down the river, these waterfront communities are now magnets for economic growth. So not only do these investments make environmental sense, they also make economic sense. We know the State has a role to play, but getting an infusion of cash into the SRF program is absolutely critical. Thank you very much. Mr. Oberstar. Thank you very much for your testimony and for the wealth of detail you provided with it. Mr. DeCota? Mr. DeCota. Thank you very much, Mr. Chairman. I want to thank you, I certainly want to thank Ranking Member Mica and other Members of this Committee for holding this hearing. You have heard from a lot of different industries. I am representing my own airport system, ostensibly one of the largest airport systems in the world, but also the other 439 airports in this country in discussing infrastructure needs. I don't need to tell you about the economic challenges that have confronted the airline industry, which, of course, have also impacted airports themselves--the decrease in air travel, upon which we depend for revenues, the slowing economy, the financial market crisis. This Committee recognized that early. In fact, the House did include $600 million in additional AIP funding in the last economic stimulus bill that the House passed in September. We appreciate that very much, because you were very early in the process of recognizing the need for investment. And as Congress considers a second economic stimulus package, I really can't think of any clearer linkage between transportation investment and the road to recovery than investment in infrastructure. The economic impact that such infrastructure has is absolutely enormous in terms of, not just the impact of the construction, the measurable economic benefit of the operations, but also the trade, the travel, the commerce, the tourism, the ripple effect is absolutely massive. In the New York-New Jersey region alone, the aviation industry that is anchored around Kennedy, Newark, and La Guardia Airports serves more than 200 cities, serves 70 different countries. And it is all through that investment in infrastructure and it is all through the visitor spending. And it is 500,000 jobs, it is $20 billion in wages, it is $60 billion in economic activity. In fact, Newark Airport, Mr. Chairman, I will mention was developed in 1934 under a program similar to the WPA, which you discussed. It was built under the CWA. And that original terminal is still an active part of our airport. So you are absolutely on target. On behalf of my colleagues at airports, I would like to encourage you to include the $600 million again in this economic stimulus bill, and even to consider something higher, perhaps $1 billion. The higher funding level would help stimulate the economy and create 35,000 jobs. It would expedite construction of critical safety, security and capacity projects across the country. And investing in airport infrastructure creates more than just jobs; it creates jobs in the community. But airports don't just want funding. It is easy to come here and ask for a lot of funding. And we do need it. There is $50 billion worth of AIP-eligible projects which are in the pipeline. Many of those are ready to go. But we rely upon revenues as a source of--for capital development, but the biggest revenue source that we have for funds comes from the sale of airport revenue bonds. The subprime mortgage meltdown and the credit crisis really has caused serious problems for airports. The bond market has basically collapsed. It has forced airports to defer bond- funded projects, and it has also created a situation where there are higher interest rates. And, unfortunately, the Federal tax law unfairly classifies the vast majority of airport bonds as private activity bonds. As you know, interest payments on bonds from private activity bonds are subject to the alternative minimum tax. And basically we are asking you to consider recommending eliminating the AMT on private activity bonds, because that could help airports around the country save a lot of resources. It actually would have a much bigger impact on our ability to raise money with the revenues that we have and allow us to move forward with projects that we have postponed because of that. Also, as a result of current market conditions, airports are facing a significant spike in debt service. They have limited refunding ability on that debt service and restructuring opportunities. We are also asking you to consider that, to mitigate the increase in financing costs, airports are urging you to include provisions in the next economic stimulus package that would give airports temporary flexibility on how they can use PFCs and AIP entitlements for debt service. Now, being from the New York region, I also need to mention another potential challenge to airport investment which not only affects us as well as at least 25 smaller cities. And that really is the administration's highly disruptive proposal to auction off slots at airports controlled by the Port Authority. Not only do they not achieve the objectives that have been alleged by the administration of reducing congestion delays, but they really threaten investments carriers have already made, because they are going to lose slots, and how do they use the investment. And we are very thankful to you, Chairman Oberstar and other Members of the Committee, for previous expressions of support. Our big fear is that flying to New York becomes move expensive, it is less money available for travel, it is also less revenue coming into airports, and therefore an inability to invest. And withdrawal of the final slot rules is the only way to really help to meet the infrastructure goals of this hearing. I regret the need to mention that. Instead, we really should be focused on expanding capacity of the system. That, obviously, is best done by investments. And another big investment we need to highlight is investment in the modernized air traffic control system. I want to thank the Members of the Committee for passing a multiyear FA reauthorization bill that increases the PFC cap, increases AIP funding, and that would also help expedite next- gen improvements. We need to deploy next-gen technologies as quickly as possible, because an expanding aviation system that generates high-paying jobs underpins future economic growth and reduces congestion flight delays that has plagued the New York region is really part of that road to recovery. Again, Chairman Oberstar, Ranking Member Mica, Members of the House Transportation and Infrastructure Committee, I want to thank you for allowing me to participate and represent airports. I can assure you that, with Federal support, we will maintain our commitment to our travelers, the communities we serve, that we will provide infrastructure to maintain regional economic prosperity and to meet current and future demand that will keep us on that road. Mr. Oberstar. Thank you very much, Mr. DeCota. That was splendid testimony. I just want to assure you that, while the Senate did not act on the aviation bill that we passed in September of 2007, it will be one of the first items of business of the new Congress. We will move it before the next administration gets its feet in the stirrups and can mess things up, whichever administration that happens to be. Mr. Crosbie? Mr. Crosbie. Good afternoon. My name is William Crosbie. I am the chief operating officer for Amtrak. It is a position I have held since 2003. I am responsible for daily operations and for the engineering and maintenance work necessary to keep the fleet of more than 300 trains a day on track and on time. As the first Amtrak officer to appear before this body since the President signed H.R. 2095, the Rail Safety Improvement Act, into law, on behalf of our president, Alex Kummant, and the 18,800 other employees of Amtrak, I would like to thank those Members of this Committee who played such pivotal roles in getting it passed. To Chairman Oberstar, Mr. Mica, Ms. Brown, Mr. Shuster, I would extend our heartfelt appreciation for all your efforts. We are confident that this act will do much to strengthen Amtrak and encourage more effective intercity passenger rail service in the years to come. You heard a lot about growing ridership on the transit side in earlier testimony. We have a similar experience. You have heard a great amount of information in terms of infrastructure needs. You will hear in my testimony a lot about our needs. And I heard earlier, too, a fact that there is this issue of timing of projects and getting the work done with the funding. Last year, for example, in Amtrak, in our engineering department, we spent 100 percent of our general capital, and we ended up deferring some projects because we did not have adequate funding. I want to start by mentioning the growth in ridership we have experienced. Fiscal year 2007 was a record year for Amtrak ridership, and we broke that record in fiscal year 2008. Our total ridership grew more than 11 percent this year. And while some of that growth was on our traditional well-patronized Northeast Corridor, we have seen growth on corridors in the Midwest, California and elsewhere. As the economy has softened, we have seen some drop in ridership on the NEC, and we are keeping a close eye on our other corridors. We are a little concerned about the near term, but we recognize that this is a moment to plan and invest for the future. These are long-term capital investments. Rising gas prices have contributed significantly to our ridership growth. Railroads enjoy some inherent mechanical advantages, and those translate into economic advantages, particularly in a time of rising fuel prices. We do have some increased costs, but economies of scale allow us to move large numbers of riders without a corresponding increase in cost. And our Northeast Corridor services are electrified. Electrification allows us to run faster. That is not dependent on imported oil. But the infrastructure is aging and capital-intensive and requires a program of continuing investment to keep lines and equipment in operation. Amtrak needs five kinds of investment: investment in the Northeast, where we own the railroad and parts of the electrical infrastructure; investment improvements on existing routes; investment in our existing fleet; investment in new equipment. And if we are to fulfill the vision that is embodied in the recent Amtrak reauthorization bill, we are going to need money to expand our range of corridor offerings. That is the fifth category. Our immediate capital needs fall into two categories: infrastructure and rolling stock. We have already budgeted for the return of 12 Amfleet cars to service in fiscal year 2009. And we would like to get all 81 Amfleet cars that are currently out of service back into service. This will help us deal with growing needs. The infrastructure needs of the Northeast Corridor are also pressing. Currently, our engineering staff estimates that we could get to work relatively quickly on $70 million of projects previously submitted to the Committee staff; for example, station and facility projects requiring no special scheduling to avoid disruption to trains. And some of the work could be done by contracting with construction firms. In addition to these projects, we have identified $87 million worth that could be undertaken if the money was forthcoming. Approximately $11 million of the $160 million total will be directed toward projects that could improve Amtrak's compliance with the Americans with Disabilities Act. One area where we would invest is in our aged and aging mechanical facilities, particularly the Wilmington and Beech Grove shops, which are over a century old. Our mechanical facilities are in great need of improvement and rehabilitation, and targeted investment would improve working conditions and shop efficiency for a relatively small cost. Our electrical traction system is one of our great advantages. It allows us to move trains up to 150 miles per hour. But much of this infrastructure dates from the 1930s. The frequency converters shown here on our Harrisburg line were installed in 1938. Failures in the electrical system can bring the entire railroad to a halt until we can substitute diesels or make repairs. As part of the process of returning the Northeast Corridor to a state of good repair, we have begun reconstruction of the ventilation and access systems, and firefighting equipment for the tunnels that allow trains to reach Manhattan from north and south. We do not currently have enough money to fund the program at the desired level. But with the addition of around $11 million, it would allow us to continue the work of improving those systems that have not yet reached the end of their lifecycle and replace those that have. Here is an example of one of the large station projects we can undertake. 30th Street station is the third-busiest station in our system. It is a registered historic landmark, but it requires significant exterior work. We estimate that the entire project of replacing and sustaining the facade will cost $32 million. The first phase is approximately $5 million, which would fix the facades that are separating from the exterior. We are also preparing plans and specs for the next generation of equipment, the AEM-7 electric locomotives are the backbone of our Northeast Corridor service. The first one entered service in 1979, and they are approaching the end of their useful life. And our Heritage fleet of diners and baggage cars is far older; many of them date to the 1940s. We need to get 15 new sleepers for our single-level fleet, which generally operates on Chicago and Florida trains that terminate in New York City. The total cost for this will be around $540 million. As you are no doubt aware, H.R. 2095 requires us to work with the FRA to implement Positive Train Control, or PTC, systems on main lines. I am pleased to be able to say that Amtrak is in the forefront of the industry in the introduction and use of PTC. And we have two active systems, the Advanced Civil Speed Enforcement System, which is used in the Northeast, and the Integrated Train Control System, employed on parts of our Michigan line. The cost of extending these systems to fully equip Amtrak-owned rolling stock and rail lines will be in the vicinity of $120 million. However, we are concerned that the Federal Railroad Administration does not have resources to handle nationwide PTC, as required under H.R. 2095. As they are under a continuing resolution that keeps them at the 2008 level of funding, they won't have the opportunity to add resources until they get a budget. This could potentially harm our ability to move swiftly on Positive Train Control implementation. I would like to close with one example that I would like to enter into the record, which comes from our partners in California, Capitol Corridors. They have a situation where they can put in some additional crossovers and upgrade the San Jose terminal, San Jose station, which helps with ADA compliance. And they have matching funds. And for a $10 million investment, you can turn it into a $60 million investment. So I would like to enter that into the record, as well. I would like to close with Amtrak's needs in terms of the Americans with Disabilities Act. The total cost we estimate under the current guidelines is between $250 million to $500 million. If the DOT implements their proposed ruling, that will grow to $1.2 billion to $1.6 billion. If the money could be provided, we could probably get a fairly quick start on some of these projects, since much of the work would be done with outside contractors. In closing, I would like to express my appreciation for the opportunity to testify. Our capital needs are significant. I think Amtrak has shown the ability to get work done on the Northeast and throughout the Nation. Many of the projects I have discussed would quickly confer a range of benefits on the company, the Nation and the traveling public, reliability and safety foremost among them. I would urge you to consider them as you deliberate in the coming days. This concludes my statement. I would be happy to answer any questions you might have. Mr. Oberstar. Thank you, Mr. Crosbie. You have submitted a compelling case for Amtrak. And I would just like to supplement what I said earlier in the hearing, that, without Mr. Mica, we wouldn't have had this Amtrak bill. And now, Mr. Herrmann. Mr. Herrmann. Thank you. Good afternoon, Mr. Chairman and Members of the Committee. My name is Andrew Herrmann. I am a senior manager at Hardesty & Hanover, which is a transportation consulting engineering firm headquartered in New York City. I am a registered professional engineer in 26 States and a member of the board of the American Society of Civil Engineers. I am pleased to appear before you today to testify on behalf of ASCE on the issue of infrastructure investment and economic recovery for the Nation. This Nation faces a severe economic slump in the coming months. Many economists believe we are already in recession. Last week the chairman of the Federal Reserve Board told the House Budget Committee that further economic recovery legislation probably is required. Any economic recovery legislation should contain significant new funding for many of the Nation's aging infrastructure systems, which are the indispensable lifelines of our economy. Such investments are desperately needed. Three years ago, ASCE's "2005 Report Card for America's Infrastructure" gave an overall grade of D to 15 critical infrastructure systems. We then said it would take an estimated $1.6 trillion to upgrade the existing infrastructure. The state of the Nation's economy and its aging infrastructure have been well-documented from the Committee Members and the speakers today and in our written statement. I would like to spend the rest of my time discussing our recommendations to restore our infrastructure and get the economy moving again. ASCE recommends $38.5 billion in immediate new infrastructure spending as part of economic recovery legislation. As part of that immediate investment proposals in surface transportation, recovery legislation should provide $18 billion for necessary reconstruction projects for the Nation's highway systems. There are more than 3,000 highway projects that could be implemented 30 to 90 days after enactment of your bill. Wastewater treatment systems: Congress should authorize $6.5 billion for the repair and construction of publicly owned sewage treatment works. Any new funds should be distributed primarily in the form of grants or negative interest loans for ready-to-go projects based on the local communities' economic situation. Waterways infrastructure: The Corps of Engineers has an enormous amount of infrastructure work that is pending. It requires approximately $7 billion in new funding. Public transit: There are $4.6 billion worth of transit projects ready to begin construction today, according to the American Public Transit Association. Congress has also authorized another $800 million in projects to avoid immediate service cuts throughout the country. We recommend that Congress provide $5.4 billion for transit projects as part of the economic recovery legislation. Aviation: There are $600 million worth of capital improvement projects ready to begin construction almost immediately, according to the Federal Aviation Administration. Drinking water: We recommend that Congress provide $1 billion in new financial investment to the Nation's drinking water treatment systems to begin critically needed upgrades. Dams: We recommend that an economic recovery package contain $50 million for the dams in greatest need of repair. In conclusion, Mr. Chairman, our national infrastructure is in desperate need of repair and modernization. Our Nation's economy is approaching its steepest decline in 70 years. This Committee must reverse years of neglect of our basic public works systems and begin the economic recovery we need by approving major new investments in our infrastructure. Not only will these proposals begin the economic recovery, but they will provide investments that will pay economic dividends for many years. Time is short, and the time to act is now. Mr. Chairman, that completes my statement. I would be pleased to answer any questions. Mr. Oberstar. Thank you for a splendid, well-detailed presentation. I greatly appreciate it. I read that with great interest last night. Mr. Kiernan? Mr. Kiernan. Thank you very much, Chairman Oberstar, Ranking Member Mica, Members of the Committee. Thank you for inviting me. I am Tom Kiernan, president of the National Parks Conservation Association. Since 1919, NPCA has been the leading voice of the American public in regard to their national parks. And on behalf of our 340,000 members throughout the country, we would urge the Committee to include national park transportation infrastructure improvement projects within your economic recovery plan. Our national parks are home to our most iconic and sacred landscapes, monuments and historic sites. Some have referred to our national parks as "the soul of America." With over 270 million visitors to our national parks, they are the number-one tourist destination for all of our international visitors. To be succinct this afternoon, I would like to raise three points with the Committee. First, the National Park Service has 18 transportation projects ready to go now. All they are awaiting is the $270 million dollars necessary to fund these projects. These 18 projects have completed all of their environmental processing and regulations, and the funding could be obligated in less than 180 days. This would be continuing a great partnership between the Park Service and Federal Highway Administration, where they have a first-year obligation rate of 98 percent, which is extraordinary relative to the average Federal obligation rate of 25 percent. These 18 projects would create 7,000 jobs, but perhaps even more importantly, they would dramatically enhance and improve the visitor experience in the national park for both domestic and international travelers to our national parks, thus, over the long run, enhancing the tourist economy of our great country. I will also mention that these $270 million worth of projects are ready to go now but are within a broader set of needs on the road and bridge projects for national parks of approximately $825 million a year over the next 5 years, very much needed by the parks. But these $270 million worth of projects are ready to go now. The second point I would like to make, there have been two other times in the history of this country where this Congress has invested significantly in our national parks. And, Chairman Oberstar, you mentioned earlier FDR in 1933. In the first 100 days of his administration, he launched the Civilian Conservation Corps and WPA that had lasting impact on our nation. Skyline Drive out at Shenandoah National Park was built under that program, as was Glacier's Going to the Sun Road. The second time that this country invested in a significant way in our national parks was Mission 66, a 10-year effort leading up to 1966 and the 50th anniversary of our national parks, where we invested $7 billion, current dollars, but $7 billion of new funding in our national parks to enhance the transportation system. The third and final point I would like to make is that the roads, transportation systems in our national parks are in very poor, perhaps embarrassing condition. We have $5 billion of backlog that the Park Service has identified for transportation projects. And, not surprisingly, 53 percent of the park roads are in poor condition. Two quick examples. First is the Going to the Sun Road, built back under FDR. It is one of the 10 most scenic drives in this country. It attracts 1.5 million visitors each year and is an economic anchor to that region. But, unfortunately, the 75 years since it was built have been tough on it, with the avalanches, rock slides, heavy use. In 2007, the Park Service began a repair effort, but unfortunately that effort has been slowed for lack of funding. There is $20 million of work ready to do on the Going to the Sun Road just waiting for Congress's additional funding. The other example I would cite, Chairman Oberstar, is the trip that you were able to make a couple of years ago to Yosemite National Park, a spectacular park. But that had, back in 2005, $500 million of backlogged infrastructure projects in that park. So, in summary, Chairman Oberstar, Ranking Member Mica, Members of the Committee, we believe you have a tremendous opportunity before you. Americans love their national parks. But, unfortunately, the park roads and transportation systems are in very poor shape. The Park Service has $270 million worth of projects to go now that can jump-start our rural economies throughout the country immediately but that can also, over the long term, catalyze the much stronger and enhanced tourist economy in this country. Investing in our national parks is an investment in today and in our future. Thank you very much. And that concludes my comments. I look forward to any questions. Mr. Oberstar. I appreciate your splendid testimony. And I am impressed that you remember that trip a few years ago in Yosemite. I will return and invite Members of the Committee to come with me, but only if they agree to climb on bicycle from Ahwahnee Lodge to Glacier Point, 3,000 feet in three miles, I think it is. Mr. Kiernan. That is about right. Impressive, Mr. Chairman. Mr. Oberstar. We have Mr. DeFazio on for that one. Yeah, it almost killed me. We were in the Oregon mountains, yeah. Well, it is not going to work. I have a 45-year hip now and new infrastructure internally. Mr. Crosbie, if we are successful with this initiative, how would Amtrak prioritize the funding that already passed the House, the funding that we designated for Amtrak? What would be your first, second, third, fourth, fifth, whatever, priorities? Mr. Crosbie. In terms of the priorities, it would be, very clearly, obviously, our rolling stock, in the areas where we need more availability of that rolling stock; and then our infrastructure. And within infrastructure, bridges are a good example, our movable bridges on the Northeast Corridor; as well as our electrical traction system; and then compliance with the ADA requirements as well. And that is kind of a broad landscape. We have a very detailed 5-year capital program that is prioritized by project. We have over 600 projects annually, and they are rank-ordered. And then with the latest one, the last one I would add is, of course, completing Positive Train Control throughout our system. Mr. Oberstar. I had an experience with Positive Train Control in New Jersey on the Hudson line. The train goes around just a little bit of a curve and then picks up speed, does it regularly. That PTC slowed that train right down, instantly. It was an astonishing experience. Mr. Crosbie. The technology that we have on the Northeast works very well, very well. Mr. Oberstar. I withhold at this point and invite Mr. Mica to---- Mr. Mica. I won't take too long. Thank you, Mr. Chairman. I am going to ask you all the same question to start out with. Give me the total number of dollars that you are ready to go with the projects. I want to know first--I will call off your locality. But right now Congress is ready to move forward and assist you. Ready-to-go projects, Maryland, how much? Mr. Porcari. $94 million ready to go within the next 120 days. Mr. Mica. Okay. Atlanta? Ms. Scott. MARTA, we would be ready to go with $16 million just in MARTA and another $10 million that would be in the broader Atlanta region. Mr. Mica. Okay. We have the Department of Environment for New York. Ms. Enck. This is just for wastewater treatment plants. New York has lots of other needs. But we have 412 projects ready to go. If we were to receive $715 million, which is consistent with $6.5 billion in Clean Water SRF in a stimulus package, we would receive $715 million, create 30,000 prevailing-wage jobs, and then a spinoff economic benefit of $1.2 billion. Mr. Mica. Bill DeCota? That is a--I am sorry; I know him very well. The New York/New Jersey Port Authority? Mr. DeCota. Yes. Well, I am speaking really on behalf of the airport. Mr. Mica. Aviation. Mr. DeCota. Yeah. And what I have seen is that the FAA says, they have given $600 million, which is where that number came from in the economic stimulus bill, as what they believe is ready. From what the airport associations AAAE/ACI and the airports believe, there is at least a billion dollars, which is why we are urging that, if you could, to increase that to a billion dollars. Mr. Mica. No red bunnies in that bill either? Ms. DeCota. No. Actually, the good news is that red bunnies are prohibited under the AIP eligibility. You can't do artwork, and that is artwork. Mr. Mica. Very good. Okay, Amtrak? Mr. Crosbie. $410 million, split $130 million for rolling stock, $164 million for infrastructure, and the Positive Train Control at $120 million. Mr. Mica. Okay. Mr. Crosbie, thank you. And we have, let's see, American Society of Civil Engineers? Mr. Herrmann. As we have documented in our written statement, we have broken down our immediate investment proposals to aid the recovery. And the total was $38.5 billion. And that is immediate. Mr. Mica. $38.5 billion would do--well, is that ready to go? Mr. Herrmann. Yes. Mr. Mica. Okay. All right. Then, finally, we have the Park Service. And what was your total figure? Mr. Kiernan. Our understanding from the Park Service, $270 million ready to go, could be obligated in less than 180 days. Mr. Mica. Good. You have a visitors' center in St. Augustine. We haven't talked about--you talk about ready to go. In fact, I think that is the only piece of legislation in 16 years that I actually have my name on. But I have to get that one done, and I have been working on it for 6 years. They do take a while. Back to Amtrak. I understand that there is--that doesn't include money for State projects. There is $93 million needed; is that correct? Mr. Crosbie. For our State program? That is included. Mr. Mica. It is included. Mr. Crosbie. It is included. Mr. Mica. Is that the $93 million? Mr. Crosbie. That is in the $410 million, as I understand it, yes. Mr. Mica. Okay. Just clarifying. All right. And then, finally, Mr. Chairman, I just signed a letter with you to go to the Treasury to try to again free up some of the financing for transit projects that has been caught up in this financial meltdown. And I agree with you that we should go to the Treasury, who has that authority, I believe now. I do have a letter to--I hope we will follow up, if we need to, to put in law what we are trying to get this administration to do under the supposed authority they have to free up, again, financing and back financing. Hell, we are financing everybody else. We are buying bank stocks. If we can't move transit projects forward and they are now being denied financing and moving forward with projects, we have a problem. So with that, I appreciate your leadership on moving that with the administration. And this letter will request that we get it into law if we have to. Thank you. Mr. Oberstar. Thank you for your participation. We greatly appreciate your partnership in all of these matters. I am going to now use an ancient rule of the Committee that hasn't been used in a long time. And after the first round of questioning, to the second round, we start with more junior members. So we will start with Ms. Edwards. Ms. Edwards. Well, I like ancient rules. Thank you, Mr. Chairman. First, to Secretary Porcari--and thank you all for your testimony--I am curious as to whether the number you gave--I know that was a Maryland amount, for the Ranking Member. Can you clarify AASHTO's recommendation for ready-to-go projects and what that would amount to? Mr. Porcari. Thank you. The AASHTO number is $17.9 billion of projects ready to go. Ms. Edwards. And that is across 47 or so States? Mr. Porcari. It is across all the States, and it is across modal lines as well. Ms. Edwards. Great. Thank you very much. And I am curious from you, as a Marylander, what happens with projects that also have some Federal support, like the rail purple line idea, when you have to cut $1.1 billion of transportation projects given the current economic crisis? What happens to those longer-term projects that actually could improve a lot of our competitiveness in the region? Mr. Porcari. Congresswoman, it is a great point, and you had mentioned this earlier. We are all having to make very difficult choices. And that has meant cancelling the advertisement schedules for a number of construction projects. At the same time, we have tried to keep balance in our transportation program and keep some of the longer-term projects moving ahead. For our three transit new start projects, for example--the red line, the purple line, and the Corridor City Transitway--we have fully funded the design activities, at the cost of other projects, quite frankly, knowing that, given the lead time of these projects, we need to keep them going. We believe that the next generation of those kind of projects need to get through the approval process now so we are ready. We will continue to do that. My colleagues in other States are making similar decisions. I would point out, it is a little bit easier in Maryland because everything is under one roof--transit, port, airport, highway--and we can make those kinds of relative decisions a little bit easier. Ms. Edwards. Thank you very much. And, Dr. Scott, when you raised the question about the default situation, especially with respect to metropolitan transit systems, Majority Leader Hoyer and I and Congresswoman Norton and all of us in the region joined in a letter to Secretary Paulson and Chairman Bernanke, really trying to get some relief and response from the administration on this problem. It would do us no good to make major investments in transit while our systems are defaulting on payments that are really just a technical glitch. And so I am curious as to what else we might do here in Congress in the short term. I mean, I understand that WMATA is potentially having to face paying out $43 million by Friday. And I know that this is a circumstance that impacts transit systems across the country. And I want to know what more can be done and how else we might prevail on the administration to resolve this situation. Ms. Scott. Congresswoman and all of the Members of the Committee, thank you very much for your real focus on this. We believe that Treasury actually has the tool that it needs under TARP to, in fact, wind up moving forward to provide the backstop. Nobody is losing any money. We are making the payments. It is just a matter of pure greed, at this point. And so we would ask for the focus, the laser focus that you are putting on the issue right now, and then very much invite that if your actions at this point do not, that you would in fact pursue a specific legislative remedy if, in fact, the Treasury does not take action. Ms. Edwards. Thank you. And I would appreciate you and others among the associations keeping us informed about what is going on with the systems. Because this is something that, in this current economy, we absolutely can't afford. And then, lastly, you know, I am a biker, so I am going to take the Chairman up on going out and biking in Yosemite, and we will get some others to join. And I really strongly support investments in our national park systems and the roadways leading into them, but also expanding hiking, biking, walking opportunities throughout all of our park systems to relieve them of congestion. And, again, those are job-creation activities. So thank you very much for your testimony. Mr. Kiernan. If I may comment, we look forward to that. And there is the Grand Teton National Park, a new pathway system going in now, and many other parks where some could be installed with the funding from this Congress. Ms. Edwards. Great. No further questions. Thank you. Mr. DeFazio. [Presiding.] Thank you. Mr. Cummings? Mr. Cummings. Thank you very much, Mr. Chairman. Mr. Crosbie, let me ask you this. We recently enacted rail legislation that authorized $60 million for the study of a new alignment on the Northeast Corridor through Baltimore to replace or bypass tunnel infrastructure that is now more than 100 years old. Can you comment on the importance of developing this new alignment to improving the service and safety on the corridor? And I heard you when you talked about your priorities, I think you talked about rolling stock, then you said infrastructure. I didn't hear you say tunnel. So I just want to just see where we are on that. Mr. Crosbie. Sure. Within infrastructure you would include tunnels as well. Mr. Cummings. All right, but I wanted to hear the word. All right. Mr. Crosbie. There we go, "tunnels." It would dramatically--when you ride the service and you experience the trip through those tunnels, which are over 100 years old, and you ride all the way to New York, you get a sense very quickly that if you are going to make an impact on capacity trip time, they have to be dealt with. We have invested in the tunnels in the past, with new lighting and new track. But if you straighten the alignment of the track so it is not winding its way through, and you can get the speed up so the approach to Baltimore station is no different to, say, the approach to one of our other stations along the Northeast, like BWI or something like that, you can make a significant impact. It is probably one of the largest impacts you could make, in terms of the capacity and trip time. Mr. Cummings. So where do we fall in the priority? You were answering the question a little bit earlier. I see Mr. Porcari is looking at you very--I mean, he is interested in this, too. Where do we fall in the priority? Mr. Crosbie. It is certainly on the list, but we have--you know, to be completely forthright, we have so many items that we have deferred, state of good repair, that have an impact in other areas. Our electrical traction is a good example I talked about earlier. I think we need to get the study done, find out what it is going to be required to fix those tunnels. We can be doing that simultaneously to our other backlog of state of good repair. In fiscal year 2008, we estimated $5.2 billion in deferred capital maintenance in our system. So, in terms of a priority, it is important for capacity, it is important for trip time, but I have to tell you there are some other things that we do need to get done. But we can get that study done in the interim. Mr. Cummings. You know, as I listen to you all's testimony with regard to a question asked by the Chairman and you were talking about the projects that are ready to go, I said to myself, even if we cut them in half--and you have only a few, you just represent a few jurisdictions. Obviously, in our country, we could have done better. It sounds like we are behind and we have a lot of work to do on this infrastructure. Secretary Porcari, you know, also looking ahead to the next authorization, can you comment on the types of revenue or innovative financing mechanisms you would like to see authorized to supplement the gas tax revenues coming into the Federal trust fund, particularly if the prevailing economic conditions continue to be difficult in 2009? I think this is the big question, and I was just wondering what your perspective might be. Mr. Porcari. First, Congressman, at the State level, a year ago our legislature made some very tough decisions and significantly raised transportation revenues and broadened the base beyond normal transportation revenues, to include a portion of our sales tax, a larger portion of our corporate income tax and other nontraditional sources. I would point out that, unfortunately, the economic downturn has erased most of that. But the point at the State level is what we all know we need to do at the Federal level, which is to diversify the sources. Some kind of vehicle miles of travel, VMT, based revenue source is one part of the puzzle, I believe. AASHTO has done a very thorough job of identifying the long-term needs. There is, I think, a very good understanding that the traditional reliance on the gas tax and ever-increasing vehicle miles of travel is not a model that will carry us into the future. So a VMT-based one is probably part of the solution. I would also point out that since transportation infrastructure investments serve the larger economy and are the enabler of economic development and in that sense a means to an end, it should not be out of the question that any general fund revenue source should be at least part of the discussion for transportation revenues. We are clearly going to have to diversify those sources pretty substantially to carry us into the future. Mr. Cummings. I see my time is up. And thank you, Mr. Porcari, for doing a great job for our State. Mr. Oberstar. [Presiding.] Ms. Napolitano? Mrs. Napolitano. Thank you, Mr. Chairman. And listening with great interest to Mr. Crosbie, when you were indicating that the cars that you needed to replace would be costing us a fair amount of money. But are they made in the U.S.? This is "buy American." Mr. Crosbie. You are referring to the ones that are in storage or new equipment? Mrs. Napolitano. New equipment. Mr. Crosbie. Well, with new equipment, we would comply with all laws, Buy America laws, in the procurement of that equipment. We would absolutely do that. Mrs. Napolitano. That should help spur some of the manufacturing jobs in the U.S., which are so sorely, desperately needed. And have you considered using any of the photovoltaic solar applications for creating some of the electricity that you would utilize? I am talking about green. Mr. Crosbie. In terms of looking at generating electricity, many, many years ago Amtrak did that; its predecessor did that. We have not considered it yet, but it is certainly something that has recently been on our radar screen, a rethinking and relooking at of generating our own electricity and then, indeed, selling that along the--it would be along the Northeast Corridor. But in terms of recent study, there hasn't been anything done. And I think it would be an area that would be worthwhile to look at. Mrs. Napolitano. Well, Mr. Chair, I hope this puts more emphasis on looking at photovoltaic, Mr. Chair, simply because that is other jobs that could be created right alongside with infusing that capital. Deputy Secretary Enck, you and I and everybody else knows that, for the past 8 years, we have been slowly cutting the budget at every single Federal agency. And the request for the Clean Water State Revolving Fund has been the lowest in 22 years. I can tell you for Title 16 water recycled projects, $7 million for almost $400 million backlog. And I am telling you because I am Chair on that Subcommittee, so I have great disappointment in investing in our infrastructure. But I would like to ask if you feel that the Federal crosscutting rules which require EPA to consult with the U.S. Fish and Wildlife and/or the National Marine Fisheries before funding Clean Water SRF projects are overburdensome and significantly delay projects? And shouldn't we and Congress consider allowing States to notify Federal agencies, giving them a time limit to comment on the clean water packages, or else move forward automatically? Ms. Enck. Well, I think getting that kind of input is generally good, because these are huge expenditures of tax dollars. I think having a time limit makes sense. Our biggest problem is not process. It is just the sheer lack of resources for these investments. And we believe, if the money is not increased, we are going to see a marked decline in water quality. Mrs. Napolitano. But if you had those resources, do you believe that they would be able to move expeditiously? Ms. Enck. Yes, absolutely. And, you know, the responsibility for many of these projects rests with local governments. They have signed legally binding consent orders to be in compliance with the Clean Water Act. Many are not. So if money was available, I think it would move very, very rapidly. Mrs. Napolitano. Well, there has been a suggestion that the two agencies are so chronically understaffed that it can be problematic to get their concurrence on a timely basis. And that is why I am asking that. Ms. Enck. That has not been a problem in New York, but it certainly may be in other areas. Mrs. Napolitano. Well, if we are going to be increasing funding, do you think they will be able to handle the workload? Ms. Enck. I can't speak to that, I am afraid. Mrs. Napolitano. Any guesstimate? Ms. Enck. We just don't have that much experience with that problem in New York, so I don't want to guess. I am sorry. Mrs. Napolitano. Is it difficult for many small, disadvantaged community governments to secure enough of a fee increase from the electric to pay the SRF loan? Ms. Enck. Absolutely. Mrs. Napolitano. Should we consider making funds available through grant programs to small, disadvantaged sewerage treatment plants? Ms. Enck. Yes, we would support that. Mrs. Napolitano. Anybody else want to answer? No? Any comment? Well, one of the things that I am very concerned about is the economic impact that quagga mussels is having on a lot of our ports and water plants, et cetera. Has anybody taken into consideration the cost of dealing with that issue and whether or not we should spend a little more money on the research at this time to be able to cut that cost, so then those funds could be utilized where they are supposed to go? Ms. Enck. On invasive species, I think we definitely do need more research. And we also have opportunities to deal with ballast water and other strategies to reduce the introduction of invasive species that clog water treatment plants, power plants, not only affecting water quality but also economic growth. Mrs. Napolitano. But is there enough personnel to be able to do the examination of the boats coming into the harbor or the boats being used in the recreational lakes? Ms. Enck. I would say I can't speak to the Federal level but, at the State level, there is clearly not enough money to do this, and invasive species is an issue of great concern. We would like to get to the source of the problem of how to keep these invasives out of our waterways. Mrs. Napolitano. Mr. Chair, I thank you for the time. And I think that there are some real technical things that involve further dialogue and maybe a little more concentration to save some of that money for the real projects. Mr. Oberstar. I thank the gentlewoman for those thoughts. There is a lot we have here to consider, as we evaluate and go on further to drafting the language for this stimulus. Ms. Norton? Ms. Norton. Thank you very much, Mr. Chairman. Mr. Crosbie, I am really excited about the high-speed rail, because it first is going to go from New York to D.C. and back. But we have neglected your infrastructure for so long, you have a lot of work to do before we get to high-speed rail. So let me go on to Dr. Scott, following up on the question from Representative Edwards, with whom I have been working on the WMATA matter, and then a short question for Mr. Kiernan. These technical defaults--let me just put it this way. We are your proxy. There are 31 transit systems. And everybody better understand this. These are all metropolitan areas. This would shut down the United States of America virtually, because these are all big-city transit systems which connect into metropolitan areas. Now, you were doing these--and I don't blame you at all. You were getting back some money from the banks for the way in which they did these particular transactions. But the IRS has essentially moved to shut down this type of transaction. Now, WMATA--Ms. Pelosi's staff went to the Treasury yesterday, and I don't like the kind of questions the Treasury was asking, frankly, you know, like, "What does this have to do with the Federal Government?", when, of course the Federal Government's backing of AIG ought to make it clear what this has to do. And if we are interested in bailing out more than the AIGs of this world and in the stability of this region, Treasury better educate itself very quickly. In our case, this Belgian bank, which was, in fact, like all the banks so far as I know, receiving its payment--is that not true? Were not all the banks receiving payments as of now? Ms. Scott. Yes, yes, they have, in fact. And I want to really commend John Catoe publicly, because there have been a number of us that have been working, really---- Ms. Norton. This is the head of our own WMATA, yes. Ms. Scott. --hitting WMATA, that have been working just very closely together on this. Because literally, as we sit and speak, various systems--I am one of them--are receiving letters from some of the investors, from some of the banks that are demanding--we have called it tantamount to ransom notes. Ms. Norton. Well, they are. They are saying, oh, the Federal Government is there, you know, give us our money. And of course I don't blame the Treasury for saying, just a moment, this is a stick-up. On the other hand, the consequences if Treasury does not act is what I want to get into, because the reports back from the meeting yesterday were disquieting. Again, this is reporting, so I can't vouch for this, but from trustworthy sources, that Treasury showed no great urgency, even asked whether it had the authority. And these are people who found the authority to actually invest in banks when I don't think anybody here contemplated that at the time of the bailout. You know, they found authority to invest in all manner of corporate bailouts. So they are not sure they have the authority. And if they need some authority, one of the first things I will do, and I am sure my colleagues will join me, is to ask in this package that they be given the authority. I have no doubt in my mind that they have the authority. But I would like you to lay on the record, so we know what will happen to WMATA. You are getting your letters--WMATA's was postponed simply because WMATA threatened the TRO. They were going to go to court, and so they said, okay, let us count the days and make sure when this really runs out. So they think it is October the 31st. Now, suppose Treasury continues to hang back. All you are asking Treasury to do is take AIG's place as the guarantor. AIG, AAA-rated AIG, was the guarantor. So they say, instead of being, as I understand it, the guarantor for AIG, you, the Treasury of the United States, is the guarantor. You are not asking for any money from the Treasury, is that right? Ms. Scott. No, we are not asking for money from the Treasury. In fact, the majority of these are backed up by securities. Ms. Norton. So, suppose Treasury doesn't find its way by the 31st, D.C. will be the first one to go down, and you all will cascade right after it. What will be the effect while we are trying to get something through the Congress? Ms. Scott. I can't speak directly for WMATA, but I could tell you that, with the hundreds of millions--and I am not trying to make this be harum-scarum, but it is so real--there are hundreds of millions of dollars. One transaction could wind up being the difference of having to make an immediate payout of $100 million, couple hundred million---- Ms. Norton. Do you all have $100 million in capital---- Ms. Scott. There is no way that we could wind up---- Ms. Norton. Because the capital markets are frozen. Nobody can get any money. Ms. Scott. The capital markets are frozen. And the technical defect is that, at the point in time that these guarantees were being made, most of them require--in our case, it is a AA-minus credit rating. Some of them were triple. And so clearly AIG, they don't have it. And you can't hardly--I don't even know if we can even find any other guarantor that, in fact, would have that kind of credit rating with the kind of meltdown that we have had. Ms. Norton. Even though, of course, you are paying--this is why one wonders why Treasury didn't get it immediately. Mr. Kiernan, I searched your testimony for the words "National Mall," because this has been a very high-profile issue throughout the country. Twenty million people come here every year. It is not just my folks who go down there and Representative Edwards's folks. In fact, we are a tiny minority. It is everyone who comes to see their Member of Congress. It is everybody who wants to see our monuments. Interior had$100 million in its appropriation, and its appropriation never got up because of dig, dig, dig. I mean, they were insisting that for them to get out, Congress had to approve this digging stuff. Now, the reason I ask you about the National Mall and was surprised to find it not in your testimony is, in the case of the National Mall, which is our front yard for the Nation, it has a private sector--one of our developers, he has already raised a million dollars; he just got started a few months ago. It is a centennial challenge project. So here you have some money coming in, the need for the private sector ready for matching funds. Don't you think the National Mall would be--I know for a fact, just happen to know for a fact, that they have many ready-to-go projects. Don't you think that the National Mall, of all places, would be a worthy place to put Federal funds in this package at a time when Americans will be looking for some evidence that this package accomplished something? Would the rundown National Mall, not worthy of the name any longer, be a suitable place for some of these national park funds to go? Mr. Kiernan. I absolutely agree with your point. The Mall has very significant, profound needs. It is within the $5 billion of total backlog needs in the national parks. The projects, the needs there may be ready to go. In putting together our testimony for this hearing, we didn't see it on that list, but it may be ready to go, or might very soon be ready to go. But I absolutely agree, the Mall is one of many places in our national park system that we as a country should be investing in. Has economic benefits but, more importantly, benefits for the United States as a society and as a culture. Ms. Norton. Well, Mr. Kiernan, thank you. I will check on that, but I can tell you, the place is so decrepit that the Park Service is kept from doing the necessary things, like keeping the benches and the rest up, simply because it doesn't have the funds to do it. But I will check on that. Thank you very much for this testimony. Mr. Oberstar. I thank the gentlelady for raising that issue. It is a very important one, not only for the District but for all of America who come here. Mr. Boswell? Mr. Boswell. Thank you, Mr. Chairman. Mr. DeCota, I am curious, you made a comment about the global financial crisis had an impact on the airport industry to raise capital to fund projects. Would you elaborate on that a little bit? Mr. DeCota. Yeah. As in almost any industry, even though airports are financially secure, well-run enterprises, it starts with the weakness in the airline industry and the decline in traffic. And so, many of the major bond-rating agencies have come out and said that airport financial health has been threatened. And you start there. And then you start with the fact that it has been very difficult for airports to get in the market for what are called private activity bonds. Private activity bonds were bonds that were intended, you know, to be sold for infrastructure that is used by private companies. In our case, private activity bonds were things like runways and taxiways that are clearly public common infrastructure. And if they are marketable--and it is very difficult to market them. For instance, Metropolitan Washington Airports Authorityhas $250 million of them, that they are sitting on a shelf, they would like to issue to sell in order to be able to do investment of the kind that would create economic recovery, and they really can't get to market. And if they do get to market, it is probably 150 basis points, 1.5 percent more than what they were just a short time ago. Which is why we were calling for this limited fix, which was to reclassify these from private activity bonds subject to the alternative minimum tax and call them, really, public activity bonds, which they are. And the House did agree to that; there was a housing stimulus bill that was passed which allowed that to be done for housing. Mr. Boswell. Thank you. Also, in your airport operation, would you comment on the impact of not having a multiyear FAA reauthorization? We worked very hard on that in the House, but we haven't gotten if through the whole system yet. And I assume that has some impact on how you can make your plans. Mr. DeCota. It has an enormous impact. And we do want to thank the House, because the House not only passed it, the House passed the $7 PFC increase. That represents $100 million a month that is not coming into airports right now for airport infrastructure. Almost $1.2 billion a year if that had happened. It also included far higher levels of PFC funding. I believe it was $3.8 billion in 2008, $3.9 billion in 2009. If you look at what the interim appropriations have been, they are below that level. Basically, we have lost another billion dollars. So when you have airports with capital needs that are demonstrated, just ones that would be Airport Improvement Program-eligible, of $50 billion, and then you take the total capital needs of airports, you know, that little bit that I talked about that would be ready to be funded out of the AIP just pales by comparison of the size. And all airports really want to do is be able to get into the bond markets, use local user fees in order to be able to fund capital investment, and then supplement that with some Federal funding under the AIP program, similar to the kinds of numbers that were approved by the House in the last economic stimulus bill. Mr. Boswell. We will hope we get that done this coming session. And lastly--I have a little bit of time. I make no apology that I advocate for general aviation. I am curious, with what you have told us about your operation, what impact has that had on your customers. Have you been able to grow, or have you been able to keep? What is your situation? Mr. DeCota. Well, New York, in our case, you know, we handled 110 million passengers last year. We thought we would handle 111.5 million this year. Plus, there is a lot of---- Mr. Boswell. I wanted you to address more toward the general aviation. Mr. DeCota. Okay. Well, in the case of general aviation, we have about 200,000 aircraft movements every year out of 1.4 million plane movements all within 25 miles of the Statute of Liberty. I am being told by the local fixed-base operators who handle that activity that that activity is down severely. I was told by one yesterday at Teterboro Airport that the activity September versus September---- Mr. Boswell. Well, if that is down, that has economic impact on you too. Mr. DeCota. Huge economic impact. The business and private leisure aircraft--we have done some economic analysis studies, and it has enormous impact in terms of not only the jobs it creates, but also the businesses that were using that kind of activity and their ability to conduct travel in order to be able to conduct that business. Mr. Boswell. Thank you. Thank you very much. I yield back, Mr. Chairman. Mr. Oberstar. Thank you. Before proceeding with Mr. DeFazio, I just wanted to ask him if he has any specific question for Ms. Enck, who has a travel commitment and has to make it to the airport. If you do, you could ask that first, and then we can excuse her. I only have an observation, Ms. Enck, that your stout defense of State Revolving Loan Fund and your advocacy of what is needed in New York and elsewhere around the country--we passed that legislation in the House; it did not pass the Senate. We had to cut that back $6 billion because of a requirement by the Office of Management and Budget that we offset the increase in investment for projects that would be subject to some supposititious future loss of revenue to the Treasury, because there would be tax-exempt bonds issued by municipalities. You know, that is similar to the issue with Mr. DeCota and the airport AMT minimum tax on private activity bonds. But this administration has really let us down. The President opposed the State Revolving Loan Fund. The Republicans in the Senate refused to act on it. They held it up so it could not come forward. And that is why we are in the fix that we are with the needs. Ms. Enck. We very much are, and we appreciate the House's leadership, your leadership. We just absolutely have to get back to this next session or the end of this year. The State of New York and, I am sure, other States are willing to roll up our sleeves and help in any way we can. Mr. Oberstar. Thank you. We hold you excused. Ms. Enck. Thank you. Mr. Oberstar. And now, Mr. DeFazio, such time as you may consume. Mr. DeFazio. Thank you, Mr. Chairman. Dr. Scott, well, first, I think we have pretty well explored the issue of these lender predators attempting to take advantage of our transit districts. I only hope that we can begin to, sort of, publicly either solve this problem very quickly or hold them up to public ridicule and perhaps expose them to hordes of angry commuters being deprived of their transit because these people think they have a right to claim a technical default. I think a lot of people don't know how serious this is, potentially, particularly the Bush administration. Somehow we own AIG, and AIG was the guarantor, but AIG doesn't have good enough credit to just pass through the money, and there is a technical default. It doesn't seem to me that Henry Paulson, Hank, as some people around here like to call him, would have to do too much to resolve this issue, like maybe pick up the phone. But, in any case, hopefully we can get their attention. If you are listening, Hank. So, on the other issue that you said is kind of counterintuitive, and I just want--again, this is not fully understood, I believe, by many. Transit usage is up pretty dramatically, in good part because of high gas prices and people's personal circumstances. It is a desirable thing. And, unfortunately, that has led to a decrease in service. Now, could you explain? I mean, this seems like very counterintuitive to most people; ``Wait a minute, if more people are riding it, why do they have to cut service?'' Ms. Scott. Well, I have often, after 30 years in this industry, I often smile and say very few people really understand that the better we do, it means that there is going to wind end up being a payment. But for the most part--in fact, there isn't any system totally any place in North America where the users are paying for all of the service. So there is always---- Mr. DeFazio. I don't even think in Europe. I don't know of any transit system anywhere. Ms. Scott. Just limited. I mean, just a limited something here or there. But there is always investment that is required. So whether or not we call it farebox recovery, cost recovery, there is no right or wrong around it. But you can look somewhere about 30 percent, on average, is what the cost recovery is for a typical trip by the individuals who are actually using the trip. So true, to the extent that a transit system does not put any additional service out and is only utilizing its existing capacity, surely having additional ridership is bringing in additional revenue. But the problem is always that that is not fully paying for itself. Plus, we have people that are literally coming out of the doors and a need to add significantly increased service. And that increased service comes at a cost. Mr. DeFazio. Thank you. The Chairman and I and others made that point on the floor when we passed an authorization to increase funding on an emergency basis for transit. I had hoped to fund that by moving forward some money in the Transit account of one trust fund, which is in better shape than the Highway account. We weren't able to do that. But hopefully now we will be able to do it in a stimulus package to see that we don't get this perverse effect that people are hurting, therefore they want to use transit, save money, and that is causing the transit agencies to have to cut back on routes. It just doesn't make sense. Ms. Scott. I tell you, it is the biggest oxymoron for us to be in at the very time when people are really--and what we are finding with some of the market research that we are doing is that there is no question that there are many, many people who are making the rush to transit because of the fuel prices. But there are almost just as many who are making the rush to transit and have been because people are really connecting these dots in terms of environmental sustainability, changes in terms of personal travel behavior. And more and more what we are finding is that more people would, but they say one of their biggest issues is the lack of availability of reasonable convenient travel options. Mr. DeFazio. Great. Thank you. Thank you, Mr. Chairman. Mr. Oberstar. Thank you. Ms. Richardson? Ms. Richardson. Yes, thank you, Mr. Chairman. I was looking at your testimony, Mr. DeCota, and as I was looking at the investment that you were asking, from an aviation perspective, what would you describe would be the most critical projects that would need to be done of airports across the country? And I saw your reference to, for example, modernizing the air traffic control system. But I am looking for specific infrastructure benefits that you would say would help this country? Mr. DeCota. There are two major needs that I foresee in this country. One is aeronautical improvements. There simply isn't enough runway pavement. Runways are in states where they need to be rehabilitated at a regular pace. At our own airports, we have one runway rehabilitation project. And safety and security projects continue to loom large at every airport in the country since September 11th. The level of expenditure on safety and security projects has become enormous, to respond to things like putting bollards on the frontage of airport terminals, to put sophisticated perimeter- intrusion-detection devices around terminals, baggage screening improvements at airports to make sure they have the latest state-of-the-art equipment. I mean, the list of airport infrastructure improvements goes beyond just the traditional capacity ones that you think of, in getting people and cargo out of land vehicles and into air vehicles, like the runways. And it goes to much more sophisticated things like that. But the list is fairly enormous, as I said. The FAA estimates there is about $50 billion between the years 2009 and 2013 that are just projects that are eligible for Federal aid. And there is a huge category of projects that are not eligible for Federal aid that have to be improved: cargo buildings, parking lots, terminal buildings that are exclusive-use facilities and things like that. Ms. Richardson. I recently flew from Washington, D.C., to LaGuardia. And once they got everyone on the plane, we kind of pulled out and they told us--they kind of pulled us off to the side, and we sat there for probably at least an hour and a half. And what I was surprised at is that most of the people who were flying there said that that is a regular occurrence. Mr. DeCota. Yeah, the problem in New York is airspace. It is the failure of the FAA to keep pace with the air traffic control improvements. It is the failure to implement the acronyms, things like RNAV, RNP, ADSB, et cetera, the technologies that evolve you from land-based radar to satellite-based communication. And, unfortunately, this administration has followed this wrong-headed view in New York that the way that you solve the problem is you reduce your flight choice. So you either have a choice now to put up with the inefficiency of the air traffic control system or you have a choice they are going to take away slots in New York and auction them off. And one of the points we made in our testimony was that the economic stimulus package really is the last opportunity for Congress to make it very clear that auctions of flights are illegal and that what we should be doing is expanding capacity, because you should not be suffering and enduring that. I, unfortunately, have the three most delayed airports in the country, and it all traces back to the FAA's inability to handle the air traffic. Ms. Richardson. Mr. Chairman, much of the discussion and the information we received talked a lot about funding for ready-to-go projects. But this particular example, I am hoping, as we roll out whatever conditions are going to be included in the stimulus, that there also is some sort of check-off that needs to be that these projects, in addition to being ready to go, they also should meet a need of our constituency as well. Meaning, there are more projects than we could ever imagine that we would want to do at this point, and we are not going to be able to do. So if we are going to fund, for example, funding for airports, we need to make sure that, if they get funding, it is something that is going to translate back to the end users and how they will benefit, and not just another project that needs to get done. So I don't know if we are going to have various factors or a certain amount of points for each area, but I would hope that there would be some indicators to really push that the results will benefit the end users. Mr. Oberstar. If the Senate had acted on our aviation bill that was passed a year ago, the airports of this country would be a good deal further along than they are today in responding to the air-side infrastructure needs, the hard side, as I call it, of aviation. Secondly, the air traffic control modernization really would not fit into this economic recovery proposal that we are discussing today and that we will be submitting to the House in November. The modernization program is covered, I think quite substantially, in our aviation authorization bill. But there are air-side improvements, such as the realignment of runways at O'Hare, the first of which is to be completed within a month, I think it is. And they will have a dedication ceremony. And when the other two are completed, O'Hare will have the capacity for 1.4 million, maybe 1.5 million operations a year. That is substantially above their 900,000-plus operations a year today. As Mr. DeCota said, in the New York airspace, that, along with the Southern California TRACON, are the two busiest facilities in the world. They handle more operations than all of Europe combined. And yet, as Mr. DeCota said, the administration proposes to deal with the problem by congestion pricing, by making it more expensive to use the existing limited airspace, use the existing undercapacity air traffic control system. That defies any kind of sense of understanding of what aviation is all about and how it works. I am exasperated with them. I can't wait for them to leave town. [Laughter.] So we will deal with this in due course. Ms. Richardson. Thank you, sir. I yield back. Mr. Oberstar. Let's see, I think I have a few questions, very few, briefly. Ms. Scott, where will the clean fuel buses be built for Clayton County that you referenced? Ms. Scott. The clean fuel buses would be New Flyer--likely would be New Flyer vehicles. Mr. Oberstar. In America? Ms. Scott. Yes. Mr. Oberstar. In Minnesota? Ms. Scott. Yes, in Minnesota. Mr. Oberstar. Where will the express coaches be built for the Georgia Regional Transportation Authority? Ms. Scott. I am not sure of which piggyback they have. They will either be New Flyer or NABI out of Alabama. Mr. Oberstar. Alabama. And in Eugene, Oregon, the hybrid electric bus? Ms. Scott. I think that is the Gillig, and that is California. That is Hayward, California. Mr. Oberstar. Gillig. So there we are. When we invest in one part of the country, another part of the country benefits. Ms. Scott. Absolutely. Absolutely. Mr. Oberstar. That is the---- Ms. Scott. And the other thing that happens with buses, because, you know, folks will say, well, my goodness, you have buses and you have all the other smaller transit vehicles and all that can come off of a production line within 4 to 6 months. But it is a supply chain. And so we have subsystems and components and HVAC systems and seating systems and aluminum, steel. So there is all of this that is taking place that is the supply chain that ultimately results in that big vehicle, if you will, that winds up coming off final assembly from someplace. Mr. Oberstar. And, on average, transit busses are about 14 years of age. They are well over their use of life. They are running over a million and a half miles apiece. And they need to be replaced, don't they? Ms. Scott. Absolutely. And if we don't replace them on time, then that leads to unreliability and certainly safety. And no one will run something that is unsafe. But it certainly leads to a degradation, in terms of reliability of service. Mr. Oberstar. And, Secretary Porcari, you referenced several dozen Maryland projects that could start now. You also referenced the deferral of investment due to a condition in the bond market. How does the bond market affect the ability of State departments of transportation to use GARVEE bonds or other instruments? And what is the adverse effect, and how does that tie in to what we are proposing here? Mr. Porcari. It is a very good question, Mr. Chairman, because all States, to varying extent, use debt as part of their capital program. Using Maryland as an example, it is only 7 percent of our total capital program, so we are primarily on a PAYGO basis. But that 7 percent is a very important part of our program. The inability to take either our consolidated transportation bonds or, this specific example, one proposed debt issuance of $425 million in GARVEE bonds to the market has a direct impact on specific projects. The GARVEE bond issuance is for a single largest highway project that we have under way in the State right now. It will be a toll facility that is congestion priced by time of day. So revenue bonds are a part of the financing strategy. We simply couldn't build these projects without them. The inability to go to the bond market for these projects has exacerbated the downturn in revenues that we have for the PAYGO part of the program and for other States as well. That is why we all have so many projects on the shelf. That is why the January 2008 number, which undoubtedly is higher now nationwide, for AASHTO is 3,071 projects at almost $18 billion. Mr. Oberstar. State Departments of Transportation are victims in a way, also, of the financial meltdown in the marketplace that Congress attempted to address, is that. Mr. Porcari. Yes, we very clearly are. We hope to be back in that market when it stabilizes. We don't know when that will be. Mr. Oberstar. Which is why it is important for us to have 100 percent Federal funding in a rescue recovery proposal here for these highway and transit projects. Mr. Porcari. That is right, Mr. Chairman. Many States simply don't have the ability to make the 20 percent match in the short term. What we are promising in return is, if it turns out to be that the projects have to be obligated within the 120 days, for example, we will live within that or we will turn the funds back. Mr. Oberstar. Mr. DeCota, the Airports Council International has produced an issue paper on the alternative minimum tax on airport bonds saying that the majority of bonds are classified as private activity bonds, interest payments on which are subject to the AMT. And that means investors are asking for an interest rate premium to compensate for the additional tax liability. But then the paper goes on to say, well, we don't have an estimated budget cost, it will be minimal. If we were to attempt to address this, and I don't think we can do it in this legislation, but we could next year when we take up the already passed aviation bill, you would have to get your associates at the Airports Council International to sharpen their pencil and give us some very specific numbers about the loss of revenue that you have already heard me describe Office of Management and Budget, that they will come up with. And those gnomes over there will find a way to make that number very high. So if you want us to help you, you have to help us by sharpening your pencil and give us specific dollar amounts of interest on bonds subject to taxation on bond holders. Mr. Porcari. We will absolutely do that. Obviously, the cost is differential. And when this was originally an issue before the credit crisis, the differential for AMT versus non- AMT, so maybe 10 to 30 basis points, it was very small. So if you eliminated it, it would save airports money, it wouldn't have cost the Treasury much. With the differential now so high, we are talking about over a $500 million bond over the life of a bond, you are talking about an interest rate savings that could be $125 million. That, again, would be $125 million invested back into an airport and create the kind of stimulus you talked about. But we would absolutely, because we would appreciate all the support we can get. Mr. Oberstar. And remember, even if Treasury is not getting that revenue now, the Office of Management and Budget will say, oh, but they would lose this if we had it in effect. But take that seriously. Mr. Kiernan, in the current SAFETEA legislation, over the 5 years we authorized $1,050,000,000 for national parks roads and $930,600,000 for forest roads, U.S. Forest Service roads. I wanted to substantially increase that, and I ran into opposition in the course of that legislation. But I know, from having traveled several park facilities and our forests, national forests, that those roads are in terrible shape. If we expect our fellow citizens to come enjoy the national parks of this country, then we need to upgrade those facilities. Do you have a list from the National Park Service of what they would be able to put under construction within 120 days? Mr. Kiernan. We do have the list that they would be able to put under construction within 180 days, and that was the $270 million worth of projects. But they do also have an assessment released in December of 2007 that lays out the full needs for the parks for road building; it is a total of $644 million each year for each of the next 5 years. So you have both what is the large ongoing need and what could be obligated right quick, the $270 million. Mr. Oberstar. And the National Park Service could prioritize that list for funding should we get this package enacted? Mr. Kiernan. I believe so. And we can provide to you and the Committee, for the record, that list right quick. Mr. Oberstar. That would be very beneficial, very useful. Mr. Herrmann, thank you, as always, for the Society for Civil Engineers, for your work on the major construction needs of this country and your report cards that have been issued from time to time, and for specifically your reference to the inland waterways of this country. Again, I said it earlier, but I was dismayed not only that the President vetoed the bill that Mr. Mica and I had agreed upon, that was a total bipartisan bill that was 6 years delayed, that after he overrode the veto, didn't put a single one of those projects in his budget for the current fiscal year. It is appalling to me. And the needs are there, and those projects are already, 6 years in some cases, designed, engineered and ready to go to construction. We should fund those, and I appreciate your reference. Ms. Napolitano. Mrs. Napolitano. Mr. Chairman, just one last question that I know is of great interest to you. And I believe it was Mr. Crosbie that brought up the issue of possitive train control, big issue since we had that derailment that caused the loss of 25 lives in southern California. And I know that I have been talking to some of the SAFETEA people in California, Public Utility--the PUC, and also some of the train people, and to me there is a foot dragging because the system is already available, and yet we are going to wait until 2012? And I just don't understand, Mr. Chair, what is it that is going to have to happen for not only the railroads, are they waiting for a bailout from the Federal Government to give them the money to implement it? I am concerned because this is not just California, but anywhere where you have a lot of train traffic. In my area, as you well know, I have just in one area 40 trains a day, and to increase tenfold within a few years because of the increase in goods trafficked from both ports. So I have a grave concern, and I just want to bring it up. If anybody has any idea of any answers to this issue. Mr. Oberstar. The answer is that we passed the Amtrak bill in the context of and in partnership with the Rail Safety bill that our Committee also reported--and you helped us move that legislation along, and Ms. Norton did. The Amtrak bill passed the House 311-104. And then eventually the conference report we passed by voice vote. But we wrapped around it, in concert with the Senate, the Rail Safety bill that our Committee did. And it is the Rail Safety bill that mandates the implementation of positive train control in the most critical corridors where there is passenger rail service. And funding under this economic recovery plan could also be used to install PTC in those critical corridors. That is something we can follow up on, once we get this enacted, we can follow up on. Mrs. Napolitano. Well, I understand Mr. Crosbie is concerned that the administration doesn't have the resources to handle the implementation as required by our bill. Mr. Oberstar. Thank you. Again, I thank this panel for your contributions, patience, being here for a very long time. And it is always good to see many friends of long standing here. Our next panel consists of Mr. Terrence O'Sullivan, Laborers' International Union of North America. Doug Black, Chief Executive Officer of Oldcastle Materials. Dr. William Buechner, Vice President of Economics and Research at the ARTBA. Mr. Brian Burgett, President and CEO of Kokosing Construction Company, Fredericktown, Ohio, or AGC. Mr. Terry Dillon, President of National Utility Contractors Association. Peter Drakos, President of Coastal Connect, Stanford, Connecticut. Thomas Leyden, managing director SunPower Corporation Systems for the Solar Energy Industries Association. A very distinguished panel indeed, and we're grateful to have you here. TESTIMONY OF TERRENCE O'SULLIVAN, GENERAL PRESIDENT, LABORERS' INTERNATIONAL UNION OF NORTH AMERICA; DOUG BLACK, CHIEF EXECUTIVE OFFICER, OLDCASTLE MATERIALS; DR. WILLIAM BUECHNER, VICE PRESIDENT OF ECONOMICS AND RESEARCH AT THE AMERICAN ROAD AND TRANSPORTATION BUILDERS ASSOCIATION; BRIAN BURGETT, PRESIDENT AND CEO, KOKOSING CONSTRUCTION COMPANY, ON BEHALF OF THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA; TERRY DILLON, PRESIDENT, NATIONAL UTILITY CONTRACTORS ASSOCIATION, CHIEF OPERATIONS OFFICER, ATLAS EXCAVATING, INC.; PETER DRAKOS, PRESIDENT, COASTAL CONNECT, STANFORD, CONNECTICUT; AND THOMAS LEYDEN, MANAGING DIRECTOR, SUNPOWER CORPORATION SYSTEMS ON BEHALF OF THE SOLAR ENERGY INDUSTRIES ASSOCIATION Mr. Oberstar. Mr. O'Sullivan, thank you for being here. Thank you for your contribution, for your union's constant presence on the Hill with the very distinguished legislative representative who sits right behind you, and for helping us at every stage of the way. For ISTEA, for TEA-21, for SAFETEA, you have been there strident, straightforward, helping us get the votes in the House and the Senate to pass those bills, and you are here again to help us pass this one. Thank you. Mr. O'Sullivan. Thank you, Mr. Chairman. And thank you for all that you do for working men and women in this country and for all Americans. Thank you, Chairman Oberstar, Ranking Member Mica, and distinguished Members of the Committee. On behalf of the Laborers' Union of North America and the proud men and women who dedicate their lives to building America, I want to express out gratitude for the opportunity to be here today. As I speak to you today, the construction industry is in the midst of the worst, most sustained downturn in 40 years. Unemployment for construction workers has nearly doubled since last year to 9.9 percent. We are just shy of one million construction workers out of work, the highest level in recent memory. This industry, a key driver of our economy, is in crisis. This year, our Nation has put in place two economic stimulus plans to get the economy moving again. Each of those plans spend hundreds of billions of dollars as a shot in the arm for consumers or for Wall Street in the hopes of a needed kickstart. But these efforts were like using a can of Red Bull and a candy bar to fix this problem. They provided no lasting impact, left no sustainable jobs behind, and did not provide tangible assets to taxpayers. These measures alone fail to recognize that America's most important asset, with all due respect, is not Wall Street, it is Main Street and working people. From the bailout of Wall Street to tax rebate checks, each emphasized consumer spending or credit availability, not stimulus based on creating jobs or sparking sustainable economic growth. Building our economy by building America, the basics we all depend on every day, offers an historic opportunity to address urgent economic issues, to take care of America for a change, and invest in lasting stimulus. I congratulate this Committee on its continual bipartisan focus on this issue, and in particular, for moving forward at this point in time. Mr. Chairman, it is time to put some meat on the bones of economic stimulus by increasing income security, not just credit availability, and leaving behind real and lasting capital assets for our Nation and the future generations who will pay for fixing our economy. More than ever, workers need paychecks, not stimulus checks. Just this year, nearly half of our 684,000 net job loss has been in the construction industry. In September of 2007, the unemployment rate for construction workers was at 5.8 percent; in September of this year it was 9.9 percent. Joblessness for construction workers is now higher than in any other industry sector. Construction jobs are too good to keep losing. They keep provide family supporting pay, averaging more than $40,000 a year, a third more than average earnings. They benefit working class people, who are the hardest hit by the current economic crisis, those struggling with job losses, with foreclosures, with devastated retirement savings, and with the very ability to simply make ends meet. The work these men and women could be doing is critical to our country, making our transportation systems, our energy systems, and education systems more productive and more competitive in the global economy. There are numerous Build America projects which are ready to go today and could create good jobs right now. For example, in the public sector alone, we can start tomorrow with the green initiative, retrofitting public buildings to increase energy efficiency, providing a shield against future oil costs and supply instabilities, and in so doing, would put 800,000 construction workers back to work. In States coast to coast, ready-to-go transportation projects ranging from routine maintenance to badly needed capacity upgrades have been put on hold due to a lack of resources. In fact, there are ready-to-go transportation projects in every State in America which we estimate, based on available data, would support hundreds of thousands of good jobs within 90 days. Getting these projects going will do more than address immediate pain. It will help to build America so America works again in every sense of the word. Today, 26 percent of our Nation's bridges are in need of repair or replacement. Roadways in poor conditions or overcapacity cost a typical motorist $1,000 a year in wasted gas, not to mention our dependence on foreign oil. And across America, our children are crowded into 220 temporary classrooms while modernization and upgrades of permanent structures could quickly begin. There are ready-to-go water resource projects under the jurisdiction of the U.S. Army Corps of Engineers, ranging from flood control to water supply projects, which would create thousands of jobs and begin to address the 3,650 dams and levees that, 3 years after Hurricane Katrina, remain unsafe. Mr. Chairman, Members of the Committee, America's workforce wants to build America now more than ever. We must help them to do it. LiUNA members and millions of working Americans alike are asking, if we can spend trillions to bail out Wall Street and give tax breaks to the wealthy, can we seize this moment and finally tackle these enormous issues and take care of America and its Main Streets for a change? This is a no- brainer. We can help rescue our economy, rescue working America, and leave behind real assets that will benefit our entire Nation for decades to come. As a first step, we urge Congress to enact stimulus with significant investment in building America in the area of $100 billion, or a third of the $300 billion total effort. With the leadership this Committee is demonstrating, we can turn lemons into lemonade, and from this wrenching economic crisis, create jobs and a lasting legacy that benefits every American every day. Mr. Chairman, and Members of this Committee, thank you for the opportunity to offer this testimony. We are eager to continue to work with you in the future to build America so America works again. Mr. Oberstar. That is music to my ears. Thank you. And I see Mr. Kaniewski smiling, so you obviously delivered the testimony according to his approval. Mr. Black, thank you for being here with us, and for your splendid work and your company and your association. And I also want to say that your representative on the Hill, John Hay, does a splendid job representing the industry. Mr. Black. Thank you very much. Chairman Oberstar, Congressman Mica, and Members of the Committee, thank you for holding this important hearing to address investing in our Nation's infrastructure as a way of stimulating our economy. My name is Doug Black, and I am Chief Executive Officer of Oldcastle Materials, Inc. Oldcastle is the leading, vertically integrated supplier of asphalt, aggregates, ready-mix concrete and paving services in the United States. We are the largest asphalt provider, we are the third largest aggregate producer, and we are the fifth largest ready-mix concrete producer in this country. Our federation of companies across the country employs 20,000 people in 1,300 locations, and we do business in 44 States. As the Committee knows well, Americans rely overwhelmingly on the Nation's roadways for mobility in the movement of goods and services. Despite their importance, however, our roads and highways are deteriorating at an alarming rate, and have been doing so for several years. The system is aging, and large portions of it are in poor condition. Against this backdrop, we face three significant challenges in the near term that cause significant continued decline in road construction and highway maintenance. First, the uncertainty of our Federal funding availability is causing many of our State and local government customers, as you have heard today, to suspend, postpone or cancel construction or maintenance projects. Second, the highway revenue streams at State, local and Federal level that are based on largely fixed user fees simply cannot support the growing need for highway construction and maintenance in the country. And third, over the past 5 years particularly, the cost of highway construction and materials has gone up at over twice the rate of growth of the funding that support this. Simply put, the funding program that paved one mile 2 years ago will only pave three-quarters of a mile today. All three of these factors have combined and have led to a consistent and dangerous decline in highway paving and maintenance. The tonnage of hot mix asphalt produced in the United States has declined from a high in 2004 of 550 million tons to 470 million tons in 2007. That decline has continued in 2008, and under the current programs will decline further in 2009. Let me give you a specific example of what is happening in the field. One of our companies in Pennsylvania was recently awarded a $1.2 million highway resurfacing project. PennDOT subsequently cancelled the project this past June, stating, "The termination of this contract is based on future funding projections indicating that sufficient funds will not be available to complete this contract." We have seen many jobs such as these being postponed or canceled right across the country. During 2007, we employed 22,500 employees. This year, our employment is down 10 percent to 20,000 employees. In 2007, our asphalt production declined by 13 percent, our aggregate production declined by 7 percent, and our ready-mix concrete production declined by 13 percent. These declines in both production and employment continue in 2008, and we project them to continue into 2009. We have seen an increase of over $500 million in our liquid asphalt, fuel, and energy related costs; this is a 40 percent increase over 2007. Subsequently, we have been forced to raise prices, and this has resulted in our State and local government customers doing less work against their relatively fixed budgets. As the customers complete fewer and fewer jobs, we are forced to lay off our employees, sell our equipment, cancel or defer our investments in new plant and equipment, and close our production facilities. In essence, critical road maintenance is put off until the next year, our employees lose their jobs, and we cut back our spending significantly in the local economies in which we do business. The bottom line is that our industry is shrinking at a time when our Nation's infrastructure needs are growing. I can't think of a better, more robust way to add jobs, good, high-paying American jobs, than to invest in infrastructure, particularly in road and highway construction and maintenance. The most effective investment would be 100 percent Federal funds without requiring a State match. Many of the States where we operate today have significant budget issues, as we have heard today, and this could make it very difficult for them to match funds. Now, some have suggested that investment in infrastructure cannot be used as a short-term stimulus because it takes too long to get started and to complete jobs. I strongly and respectfully disagree with this assessment. Let me give you an example. Last year, our company in Utah completed a highway resurfacing project. This was a $3.5 million job, which included milling the old pavement, recycling this pavement, and putting down a new paved roadway on 4.4 miles of roadway in Utah. This job was completed, from the advertising of the job to the completion, in 75 days. Ironically, this was less time than it took to mail out the economic stimulus tax rebate checks and get them in people's mailboxes. And as a result, we now have 4.4 miles of highway in Utah that has a smooth, durable, and safer surface. These aren't long-term projects, these are short-term projects that produce long-term, real value in our economy. Oldcastle Materials is prepared to put people to work and help generate economic activity in those places where the money is spent. We have significant capacity available for more work. Our work supports American jobs, the people we employ are local, they live and do their work locally. The companies that we do business with--our customers, vendors, suppliers and service providers--are local businesses hired by our local companies. The economic impact of infrastructure investment is significant, it is local, and it can be achieved short term. In summary, our surface transportation system is in dire need of significant investment. The decline in road and highway investment has created, as you have heard, an $18 billion backlog of work, much of which is already identified and can be completed very quickly, efficiently and effectively. Oldcastle Materials and our industry peers have significant capacity, and we can gear up and get this work done very quickly. Infrastructure investment will support local jobs, good- paying American local jobs, and stimulate local economies while preserving our infrastructure and strengthening our country for the long term. Thank you for allowing me to present Oldcastle Materials' view on the importance of investment in transportation infrastructure, and I welcome any questions that you might have. Mr. Oberstar. Thank you very much for your testimony, for the substantial detail which accompanies it. Dr. Buechner, acknowledge your long service on the Joint Economic Committee. Mr. Buechner. I will mention that, but thank you very much. Mr. Chairman, and Members of the Committee, thank you very much on behalf of ARTBA, the American Road and Transportation Builders Association, for inviting us to testify. I am ARTBA's chief economist. I have a Ph.D in economics like Dr. Irons this morning. I hope I learned how not to be a pointy-head economist from my 21 years of service on the Congressional Joint Economic Committee's core economic staff, and certainly during my 12 years at ARTBA, where, as you know, Mr. Chairman, we have our feet firmly planted in the ground. We have submitted a prepared statement, but what I want to do now is summarize some of the major reasons why transportation infrastructure investment should be included in any economic recovery and job creation legislation being considered by Congress. As Mr. O'Sullivan testified, the U.S. construction industry and construction workers are the Main Street sector of the U.S. economy that have so far borne the worst impact of the current economic crisis. The unemployment rate among construction workers is 9.9 percent. There are almost one million unemployed construction workers. For our branch of the industry, transportation construction, ARTBA conducts a survey of transportation construction contractors every quarter. In the survey we just completed for the third quarter, we found that 60 percent of our members reported they had fewer employees on their payrolls than they did in the same quarter of 2007; only 12 percent reported higher employment. And that is the largest gap for this measure in the history of our industry condition survey. In September, which is the peak construction month for highway projects, there were 30,000 fewer workers on highway contractor payrolls this year than there were 3 years ago. Our industry has the capacity to take on additional work immediately, as Mr. Black testified. Our market conditions survey found that only 3 percent of our contractors are operating at full capacity, while 36 percent are operating at 75 percent of capacity or less. This is up from 27 percent in the second quarter, and is the highest in the history of our survey. Thousands of appropriate transportation construction projects are ready to go. Our industry calls them "no plan projects." They include highway projects like milling, resurfacing, and overlays, safety striping, guard rail installation, sound wall installation, it goes on and on. Bridge investments can play a big role. The backlog of needed work is enormous. Bridge deck repairs, sealing, resurfacing, preservation work can all be put into motion quickly. So could accelerated bridge inspection and scraping and painting projects. AASHTO has identified 3,000 projects ready to go--the other witnesses have testified about a lot more. We just came back from our annual convention in Chicago where our local county engineers said that they also have lots of projects that they could get underway. So there are thousands of projects out there; I mean, it is quite doable. The U.S. Department of Transportation calculates that every billion dollars of Federal investment in highways generates almost 35,000 new jobs. The good news is that many of these jobs come online even before onsite construction starts. There are two triggers. One is when you pass the legislation, and at that point, material and equipment suppliers start building inventory and hiring workers to meet the demand. Then, when the contracts are awarded, weeks before construction begins contractors begin staffing up, conducting training, purchasing and leasing equipment, reactivating and expanding quarries and asphalt and cement plants. And all of these activities create up-front jobs. To get the maximum quick-start job creation, H.R. 7110 does a couple of things that are helpful, including 100 percent Federal funding and a time certain for using the money. We recommend that there also be some kind of maintenance of effort provision so that there is no substitution of Federal funds for local funds. We think investment should be allowed on off- system projects. Also, there should be some requirement that the funds be used on new projects, on actual new construction, not to pay off Garvey bonds or accelerated construction, which does not create new jobs. And finally, it is also critically important that Congress enact long-term legislation reauthorizing the Federal Surface Transportation and Airport programs as soon as possible next year. The economic recovery legislation can create jobs in 2009, but without increasing the revenue stream to the Highway Trust Fund after 2009, the maximum highway funding for 2010 would be about $22.7 billion, which would be a disastrous 45 percent year-on-year cut in Federal highway funding. That would threaten some 700,000 jobs supported by highway construction activity in 2010. So in conclusion, Mr. Chairman, we urge Congress to include significant transportation investment in the economic recovery and job creation legislation. Similarly, we urge Congress to enact new multi-year surface transportation authorization legislation in a timely manner next year to prevent a disastrous downturn in transportation construction employment in 2010. Thank you very much. Mr. Oberstar. Thank you very much, Dr. Buechner. That and the other documentation in your written testimony is very, very compelling and informative. Now, on behalf of AGC, Association of General Contractors, Brian Burgett, thank you very much. Mr. Burgett. Thank you, Mr. Chairman, Ranking Member Mica, and distinguished Committee Members for holding today's important hearing. My name is Brian Burgett. I am President and CEO of Kokosing Construction Company located in Fredericktown, Ohio. And I am here today representing the Associated General Contractors of America, AGC. While Kokosing Construction Company and AGC's 33,000 members are engaged in all aspects of public infrastructure construction, I will focus my remarks on the economic opportunities derived from water resources investment. I encourage the Committee, however, to give all due consideration to including the broad-based infrastructure component in an economic recovery package. My company has already seen a significant downturn in the various construction markets in which we operate. The sharpest decline has been in the commercial and retail sector, where five major projects valued at over $50 million were recently canceled. There has also been a major decline in highway construction, utility and sewer line work, as well as water treatment plants. Our aggregates business has declined by 30 percent over the past year. Kokosing's experience appears to reflect what economists are telling us about construction markets in general. AGC's chief economist is projecting a decline of as much as 9 percent in nonresidential construction activity in 2009, which is in line with the 10 percent decline projected by McGraw-Hill Construction economists. Kokosing employs approximately 3,000 workers, and the consequence of this construction decline is an anticipated reduction of our workforce by 15 to 20 percent in the coming year. Again, my company's experience reflects what AGC is seeing in the overall market. Heavy and civil engineering construction employment peaked in June 2007, and has steadily decreased over the past 16 months. There was more than a 5 percent decrease in employment over that period. This decline has also forced our company to shelve plans for expansion at two of our aggregate facilities. Kokosing is also reducing our annual investment in equipment. Each year, we typically replace 10 percent of our equipment fleet, and in a growing market, we would also be purchasing additional equipment. The cost of this investment over the past few years has averaged $35 million per year. We have already canceled some planned purchases for next year and are putting many others on hold until we see what funding is going to be available for new work. I have no doubt that other contractors are making similar decisions. Both the U.S. Army Corps of Engineers and Bureau of Reclamation have construction backlogs for which additional funding would create immediate construction employment opportunities. Our company has worked extensively on Corps of Engineers civil works projects in the Great Lakes and Ohio River division. We understand that there are several projects in this division ready to go to bid within 30 days if funding were provided. Other larger projects would be ready to go to construction within 6 to 8 months. Overall, the Corps tells us that there is a backlog of 360 multiple-purpose flood control, hydropower, recreation, water supply and navigation projects ready to go. These include high- risk dam safety projects, upgrading and rehabilitating hydroelectric plants, inland waterway system improvements, dredging the Nation's deep draft commercial ports, and upgrading critical coastal protection projects. Additional funds to accelerate project execution under continuing contracts should also be considered. Contractors are already mobilized and performing work on these projects, but the amount of money is limited to allow these to go at the pace that they could. With additional funding, contractors could hire more workers immediately and complete these projects more quickly. AGC estimates that $5 billion invested in water resource projects will create over 140,000 new jobs. Of this total, almost 40,000 would be new construction jobs, and over 100,000 additional new jobs in industry supplying construction materials as well as goods and services needed by construction workers and their families. Additional public infrastructure projects will allow our industry to maintain our workforce and necessitate hiring more workers. It will allow us to purchase equipment and preserve manufacturing jobs. If manufacturing is going well, this stimulates more construction in the industrial sector, and the ripple through the economic goes on. Other economic benefits will come from this investment as well. The Nation's Marine Transportation System contributes to 30 percent of the Nation's gross domestic product. Failure to maintain channels creates a drag on the economy and may slow economic growth. The stimulus funds would be used to improve our coastal ports and our inland waterways, helping them to operate more efficiently. Mr. Chairman, construction has always been an engine of economic stimulus and can play that role once again. Increases in infrastructure investment can be quickly put to work and will have a direct, immediate and dramatic impact on the economy. In addition, the projects that are being built will have a long-term economic benefit. Thank you for this opportunity to comment. And I look forward to your questions. Mr. Oberstar. And I thank you for your wide-ranging observations and comments. The one that strikes me is the next to last item of inland waterway channel and harbor dredging. It does have a direct effect on the cost of materials and the cost of projects in the Great Lakes. The lower lake harbors have been down as much as 48 inches in Cleveland, 44 inches in Ashtabula, 46 inches at Burns Harbor, and that means that the iron ore carrying vessels that leave from northeastern Minnesota and upper peninsula of Michigan are going out 7,500 tons light. Instead of 60,000 tons that they could be carrying, they are carrying in the range of 50,000 or 47,000 tons. That means they're making three extra voyages per shipping season per vessel. That raises the transportation cost of delivering pellets to Lower Lakes steelman's rails, that raises the cost of steel, raises the cost of aggregates for the same purpose, raises the cost of coal from Powder River Basin by rail to the lake head in Duluth, Superior, and to lower lake power plants. That means that we are working extra vessels every season, extra transportation costs. It has a direct relationship. Corps of Engineers for 15 years hasn't dredged the channels on the Great Lakes. We move the water resources bill, the emergency dredging provision in there that I included, and that would mean the Laborers Union would be working, it means that the Dredging Contractors Association would be working, it means that materials come at lower cost to lower lake ports. And the administration said I don't think so; we are not going to fund any one of those. Mr. Burgett. You hit a good point there. The Sault Ste. Marie locks, which is directly impacted by the area you are talking about, they have got work ready to go, cofferdam work. They need a new lock there, and that directly impacts those shipping costs you are talking about. They are ready to go, they just need money. Mr. Oberstar. Well, we have it in the appropriation bill. We have got $19 million to start construction on that second lock at Sault Ste. Marie, which I have advocated for 20 years. And one after another, the administration came along and said, oh, no, all you States on the Great Lakes, you pay for it. Now, wait a minute, we built the Tennessee Tom-Bigby Waterway, a billion dollars, no cost sharing; 1,200 miles Gulf Intercoastal Waterway, no cost sharing, from Texas, Louisiana, Mississippi, Alabama, Florida. We are not a third world country on the Great Lakes. We are not going to have--that was a way to kill it, and it did for 20 years. From now on, I'm Chairman, we are not going to do that. Mr. Dillon--excuse me for the obiter dictum here, but I couldn't resist. Mr. Dillon. Maybe you should run for President. That's what I think. Chairman Oberstar, all Members of the Committee, my name is Terry Dillon. I am the owner of Atlas Excavating in West Lafayette, Indiana. We have 150 employees who work on sewer and water construction projects throughout the region. I appreciate the opportunity to participate in this hearing on behalf of the National Utility Contractors Association, NUCA. NUCA commends your past efforts to make infrastructure part of economic stimulus legislation, and we encourage you to include $10 billion for environmental infrastructure projects as part of the Committee's economic recovery proposal. We have heard a lot today about transportation needs, but let's not forget about what is under ground and out of sight. Underground contractors across America are drastically reducing the size of their companies, selling off heavy equipment, assets, and laying off a great workforce. Contractors in Florida have cut 50 to 70 percent of their employees. Last year's NUCA President, James King of Atlanta, who testified before this very Committee, had 120 employees this time last year, and he is now down to 40. A contractor friend of mine in Las Vegas had 500 employees last year and is now down to 160. And my own company has gone from 320 employees down to 150. It is bad out there, and it is very real. Fewer contracts are going out for bid, which only increases the number of bidders competing for limited projects. Consider the following example in your own State of Minnesota. Just recently, a publicly financed project drew over 50 contractors to bid on a project that was worth approximately $150,000. In the end, it went for approximately $80,000. That's not even enough money to cover the hard construction costs. The bottom line is is that right now contractors are virtually bidding on any job in any State in any amount just to stay alive. In Indiana, what was once an average of three to 10 bidders per job has grown to 15 to 25, with many new bidders coming from out of State. Investing in water infrastructure as part of the economic recovery legislation would assist this struggling market, put people to work almost immediately, and enhance local economies all at the same time. And here's why: Clean water infrastructure projects create quality, high-paying jobs in both the short and long term. And remember, these are jobs that are provided right here in America. These are not jobs that can be shipped overseas. So what kind of jobs are we talking about? Well, when a bid on a project is awarded, people are hired, materials and equipment are bought. We buy pipe, pumps and supplies from Michigan, Ohio, Texas, California, they are shipped by truck or rail to our projects. They run powerlines and telephone lines to pump stations. We buy automobiles, trucks, engines, and other equipment are manufactured and purchased for our work. Water infrastructure projects provide employment opportunities for contractors, subcontractors, engineers, suppliers and manufacturers, as well as countless construction laborers. But the economic benefits that come from these projects don't stop with the construction industry, especially in times of economic difficulty. Increased economic activity ripples through local communities in housing, dining, entertainment, clothes, food for the kids, they all benefit at the local level. Whenever legislation intended to stimulate the economy is debated, it is regularly said that the infrastructure projects included must be targeted, timely, and temporary. Although the average infrastructure project takes years to complete, currently, there are scores of water infrastructure projects that are ready to go. Surveys conducted by the National Association of Clean Water Agencies, Council of Infrastructure Financing Authorities and the Association of State and Interstate Water Pollution Control Administrators have indicated there are billions of dollars in clean water projects around this country that can put shovels to dirt within a few months. Details of these surveys are included in my written statement, Mr. Oberstar. My State of Indiana alone has close to $1 billion of ready- to-go projects. In Indianapolis, they have an $800 million septic tank elimination program going on, $100 million in the city of Columbus, $15 million in Fort Wayne, $15 million in South Bend, $20 million in Evansville, and $30 million in my own city of Lafayette. These are ready-to-go projects. And let's look again in your State, Mr. Chairman. The Minnesota Utility Contractors Association indicates that the State of Minnesota alone has $406 million in clean water projects that, if funded, could move to construction within 4 months. Clearly, investing in our underground infrastructure can provide a sharp economic kick start. We can put people to work right now and begin the road to recovery if Congress steps up to the plate. Tax incentives have their place in the road to economic recovery, but they are no silver bullet. NUCA and our friends at the Associated Equipment Distributors recently conducted a survey to gauge whether capital investment provisions in earlier stimulus legislation were persuading utility contractors to buy new equipment. Overwhelmingly, responses indicated that contractors are not buying new equipment because the lack of work could not justify new purchases. However, a large majority, 70 plus percent, indicated that they would be more likely to hire additional employees, add positions and buy new equipment if Congress enacted legislation that would increase Federal investment in water infrastructure. For your reference, Mr. Chairman, a copy of the full survey report is attached to my written statement. The message here is simple, it is one that NUCA has advocated for years: Tax incentives only work when there is enough work out there to provide an incentive to buy. A truly effective economic recovery proposal must couple significant investment in infrastructure with tax incentives to encourage equipment purchases needed to do the work. In conclusion, Mr. Chairman, a $10 billion clean water infrastructure provision would go a long way to put people to work in the short term while investing in the infrastructure that will enhance economic recovery efforts and address what is becoming an environmental crisis all at the same time. Mr. Chairman, I truly believe that we are the gatekeepers of our Nation's greatest asset, and that is its infrastructure. It is what sets our country apart from all of the other countries in the world. We need to maintain it, we need to repair it, and we need to replace it. It is our duty. And the stimulus package would certainly begin the road to recovery. Mr. Oberstar. Thank you very much, Mr. Dillon. And I certainly concur with those concluding remarks, although I must observe that we are no longer the leader in the world in infrastructure investment. I have spoken many times about China, about India, about Japan, and now the European Union. I have participated in the meeting of the 27 transportation ministers; I actually delivered the keynote address for their meeting in May. They have a $1.3 trillion infrastructure investment program to build the high-speed railways, 14,000 miles in addition to what they already have to deepen their harbors, and to build a canal all the way across Europe to link the north Atlantic to the Black Sea. It is a third completed already. They're not waiting for us; we have to catch up with them. Mr. Drakos. Mr. Drakos. Thank you, Mr. Chairman, Ranking Member Mica, Subcommittee Chair Cummings, and Members of the Committee. I am Peter Drakos, President of Coastal Connect, a company which I will mention in a moment. I am pleased to be here to offer a domestic maritime perspective on behalf of the Coastwise Coalition. In my formal statement, I address more fully the following key points: First, the Coalition's strong support for prompt enactment of an exemption from the Harbor Maintenance Tax that we hope will be included in the next recovery or stimulus legislation. Second, the importance of a strong and steadily funded Title XI program. And third, the value of integrating some domestic maritime transportation activities with surface transportation policy and funding. America's marine highway is an area of infrastructure investment that can stimulate economic activity and job creation. It can help develop energy efficient, environmentally friendly, and sustainable new capacity for the national transportation system and the economy it supports. We are grateful for the strong support that Chairman Oberstar, Ranking Member Mica, and Subcommittee Chair Cummings have shown in short sea shipping. The Coalition is in the process of reviewing various policy ideas. In advance of concluding on an agenda, I have been asked to mention a few of those. We hope to return next year with detailed recommendations. Today, container vessels, as well as trailer, truck and ferry rail services, are operating on noncontiguous andcontiguous trade routes. Given all growth projections, those companies, and new ones like Coastal Connect, will be called upon to carry more freight and serve new markets in the coming years. Here are a few examples of new services that are planned. My company, Coastal Connect, will carry domestic trailers between New Jersey and Rhode Island. We will mitigate the chronic congestion on the I-95 corridor, and thereby hopefully improve the safety conditions of our highways. The ships will be the first of its kind to be built in the United States to run on compressed natural gas. By year end, we will solicit bids to construct four ships, with an option to build four more. If we can obtain the financing, our contract will mean hundreds of shipyard and related jobs, and with delivery of our ships, we will expand opportunities for U.S. seafarers and portside workers. In California, the Eco Transport Company plans an environmentally beneficial tug and barge service between Oakland, Stockton and Sacramento. At full operation, they will remove over one million truck trips from the road annually. If they can obtain the financing, the company next year will spend nearly $50 million on vessel and port infrastructure and equipment to develop its service. On the Great Lakes, three new freight ferry services are under development to link Cleveland, Erie and Oswego to ports in Ontario. The Federal Government can stimulate and help sustain new marine surface transportation services and jobs by encouraging investment in vessel and terminal construction and eliminating disincentives. First, if there is one thing that Congress can do, it is to exempt not-bulk domestic and Great Lakes cargo from the Harbor Maintenance Tax. U.S. Flag operator, Horizon Lines, has testified to this Committee that the tax is a major obstacle to the success of new, short sea services such as they are planning. We appreciate that you, Ranking Member Mica and Subcommittee Chair Cummings, have sponsored legislation and will urge the Ways and Means Committee to act on an exemption, and strongly support the exemption as shown by the opening comments this morning of Ranking Member Mica and Subcommittee Chair Cummings. My full statement describes how the HMT is a disincentive. Said simply, when you are trying to provide customers with a solution to an existing problem, it doesn't help to have a tax and other requirements burden the new approach. Second, Congress can stimulate investments in vessels and port facilities that are the infrastructure for marine highways. It is important that Title XI funding be provided on a regular and substantial basis to enable carriers and shipyards to make effective plans. Each Federal dollar appropriated for the Loan Guarantee Program supports 20 times as much in construction. Sixty million dollars leverages $1.2 million. A recent order for 13 new tugboats was expected to stimulate over 200 jobs in the Seattle area. Consider this if you will: Since World War II, 41 of the 43 container ships and 29 of the 33 Ro-Ro vessels built in U.S. shipyards for private sector purchasers relied on the Title XI program in order to obtain financing. The importance of a Federal loan guarantee program cannot be overstated. In addition to the HMT relief and Title XI funding, and increased funding for the maintenance and improvement of the Federal navigation system, the Committee could consider a range of approaches; those could include incentives for users of marine highways because of the environmental and energy benefits and adjustments to surface transportation policy that enables greater integration of the modes. To conclude, surface transportation development would create new jobs and enable the maritime sector to develop new capabilities that will serve this country well. I thank you for the opportunity to be here today. Mr. Oberstar. Thank you very much. I was delighted with your testimony about short sea shipping, not only because Mr. Cummings and I authored it and created it, crafted it and put it into the energy conservation bill, but because it is a very good commonsense answer to our congestion problems. Now, Mr. Leyden. Mr. Leyden. Thank you, Mr. Chairman. I know you saved the best for last, right? Mr. Oberstar. There is no last here. Mr. Leyden. And I have mostly good news, so this should be fun. I am Tom Leyden. I am the managing director of SunPower Corporation. SunPower is a manufacturer of high-efficiency products and systems. We are the leading company in the U.S. in all four sectors of the solar industry. And I have a power point that I would like to share with you. SunPower was incorporated in 1985. And I don't know if you remember, Mr. Chairman, but I testified before you about 6 years ago. At that point, we had about 35 employees and $30 million in sales. Well, today, this year, we expect to have $1.4 billion in sales, and over 4,000 employees. Mr. Oberstar. That is impressive. My heavens. Mr. Leyden. We have a global footprint. I run the east coast office out of New Jersey. These are the four sectors of the photovoltaic industry that we are involved in, as are other companies in the business. But I wanted to start the slide slow with this graph, which very dramatically shows what is happening in the solar industry. And it is really all about price. So that blue line is the declining price of photovoltaic module over time. And the yellow line is the growth of the solar industry. So you see, as prices decline, the markets got bigger and bigger, and around 2000 the industry took off. And that is because at that price point, we started competing with grid- connected power. And, frankly, we aren't quite there yet. What happened was there are governments around the world that have provided incentives that bridge the gap between our cost and what utility power was. But there were enough programs around-- Japan, Germany and the U.S.--that the industry took off and is growing still at a rate of about 35, 45 percent per year. And this illustrates exactly that point, which is prices of electricity continue to go up through conventional fuels, and the prices of solar continue to come down. And at some point the lines are going to meet, and that is what we call grid parity. That is within sight, at this point. And so what has happened is that incentive programs have been put in place to bridge that gap, and so we actually sell energy for less than the utility does. That is how we build our business. And I just wanted to throw this slide in. There is kind of a new paradigm developing, which is solar at today's price and solar at projected cost of production over the next 15, 20 years can build new capacity cheaper than building new power plants through conventional means. And that is nuclear, coal, gas, any means of creating electricity. And Lazard has done a study to kind of identify that. So the good news of late is the investment tax credit that we struggled to get extended for so many times was extended in the bailout bill. That was an incredible event for the solar industry. It provides an 8-year extension of the ITC. That 8 years will basically get us to grid parity. And that 8 years of building capacity will create about 440,000 new jobs in the U.S. and investment of about $168 billion. Mr. Oberstar. And that picture is of the DOE headquarters roof, isn't it? Mr. Leyden. It is. I know you worked on that for a couple of years, and there it is. Mr. Oberstar. Thirty years. Mr. Leyden. Okay, 30 years. Mr. Oberstar. We got it passed--well, before there was a Department of Energy building, that is, and got the legislation enacted to convert Federal civilian office space to solar roof, signed by President Carter, funded by President Carter, de- funded by President Reagan. Thirty years later, I am Chairman. We are going to do this. Mr. Leyden. Thank you for your perseverance. We installed that. My company installed that last summer. Hopefully future projects will not take that much time. So I am going to run through a series of slides that just illustrates the kind of projects that we have done on Federal facilities, Postal Service facilities in Sacramento and Oakland. And these are roof-top-mounted, these are ground- mounted systems, they are parking lot systems. There are a lot of ways to deploy solar. Just keep flipping through these slides, just so you have an idea: a Marine base; a GSA in Boston; Coast Guard in Boston; Postal Service in San Francisco; GSA in Los Angeles; Fort Dix in New Jersey; Navy base in Coronado; and a postal facility in San Francisco; and then, finally, a very dramatic photo of the 14-megawatt project we built at Nellis Air Force Base last year. Now, we built this system, which is the largest in U.S.--it was largest in the world at one point--in 6 months from contract time. So it just shows you how quickly you can deliver solar power once we have a contract. So what can the Federal Government do? Generally speaking, we have lots of assets in the Federal Government that we can put to use creating clean energy. Roof tops--there are 170 million square feet of Federal building roof tops that we have identified that we could put solar on. And if you did, that is about 1,000 megawatts of power, which is about enough power for 250,000 homes, just to give you some sense of how much power that is. BLM lands, just taking 1 percent of the land that is available could build 70,000 megawatts of solar power. It is huge. Brownfields and greenfields, roadways and train stations--there are lots of Federal facilities that could be generating solar power. And what does solar do for the Government? It creates jobs, green-collar jobs. Everyone has been talking about that of late. Again, the ITC created 440,000 jobs on its own. An aggressive Federal action can create many thousands more. It is the kind of jobs that help Main Street. It puts plumbers to work, electricians, roofers, steelworkers, engineers, architects, and so forth back to work. It revitalizes the manufacturing and high-tech sectors. And it saves taxpayer money. These investments actually will save the Government money and pay for themselves over time. The Government spends $5.8 billion annually on electricity costs. And what I am going to propose is that we unleash the private sector to save billions of dollars of energy for the Government. It also has the benefit of creating security. It displaces natural gas electricity production. We need to conserve the gas that we have in the U.S. It is a hedge against future price spikes. That is a very powerful factor in developing these systems. Carbon displacement--obviously climate crisis is the largest threat facing our Nation and the world. Solar can play a big role in reducing that. It is a carbon-free source. So what can the Federal Government do? The first thing, the easiest thing is give Federal agencies the authority to enter into 25-year power purchase agreements. Right now they are limited to 10 years. And by doing that, we could bring in private capital that would contract with those agencies to provide solar electricity for less than they are paying now for their energy. That is big. Direct appropriations, of course you could also use building projects on brownfields in Federal buildings, installing on roadways and so forth. And then create what is called--you are familiar with the energy saving performance contracts. I would suggest you set a specific type of mechanism called solar savings performance contracts, similar to the PPA but a little bit different. What are other things? You could work with State and local agencies to create solar jobs and solar installation programs; loan guarantees for local government, you know, for libraries, ports and other civic buildings. And then there is a fund, Green Schools Program. Apparently, it has been authorized but not appropriated. It is about a $3 billion program. So those are the easy things. I think we have made a lot of progress in the industry. I think we could do a lot in the Federal sector, given some support. And the industry is open to some very creative ideas on how to do that the best way we can. So thank you, Mr. Chairman and Members of the Committee. Mr. Oberstar. Thank you very much. And thanks to all of the members of the panel. Now we will revert to seniority questioning, and we will start with Ms. Norton. Ms. Norton. Thank you very much, Mr. Chairman. All of you I think have been entirely convincing that this is the time to do desperately needed work. Unfortunately I can't question all of you. I have questions for Mr. O'Sullivan on Mr. Leyden, in particular. Mr. O'Sullivan, in this region, I have worked very closely with the laborers. Indeed, in this region, we put points in the requests for proposals--this was long before this crisis--for certified apprenticeship programs, so that you not only have to tell us how many projects you have done, da da da da, but, as you know, apprenticeship programs, certified programs. And, increasingly, the programs that we are finding are important, the pre-apprenticeship programs, save employers or contractors money, because they are people who know how to do the work. To hear the testimony of all of you is to wonder how anything gets built today, given the sustained losses you have received. I would like to ask--one of you talked about how contractors take just any work they can get now. I would like to ask you about people to do the work. Now, we know that this work is not as attractive as it was, say, a generation ago and certainly in the heyday, post-World War II, let's say, when we were rebuilding America. Because a lot of these young guys would go off into some dot-com something, so they are not with their fathers were. And this is still very high-paying work. In fact, we have seen in this region--and I really commend the laborers, in particular, because the laborers have been instrumental in helping to train people who really are desperate for work like ex-offenders who wouldn't have been trained, let's say, a generation ago. But this is heavy work. This is work that has people getting up in the morning early and being out there in the cold, much colder than it is today in Washington. The last stimulus, which is the way we have been doing them since 1990, was not my favorite, and I hope we don't do it in this one, you know, this give people some money. That doesn't make any jobs for anybody. In fact, the Saudis are spending that last stimulus as I speak, because the gas prices were going up and people put it right there or they paid down their credit cards. That is why we didn't get anything from it. But I want to talk about shortages of personnel in construction. Is the industry ready, if there is a stimulus of some kind that affects the industry that all of you have testified about, willing and able to train people sufficiently so that we can get we could get workers in this country who would do the work, laborers and others? I would like to hear your discussion of the construction personnel shortage in the United States and how we were dealing with that even in the heyday that has passed us by now. Mr. O'Sullivan. Well, representative, from the laborers' perspective, when we have almost a million construction workers out of work, I think we all in the industry face--we are facing workforce shortages. Now there is a shortage of work, with construction workers across this country looking for opportunities. With the residential market being decimated, and it has been reported here the commercial and light commercial sector being affected, and now even the heavy and highway sector being affected because of the lack of funding at the State level, there is right now in our organization more workers than there is work. So I am confident that we could---- Ms. Norton. And you think this is in the other trades, as well? Mr. O'Sullivan. I believe--I don't speak for them--I believe they are experiencing the same thing. Because the industry as a whole--again, 2 years ago, 3 years ago, we were looking for more members, more workers. And now our members are come back looking for job opportunities that unfortunately aren't there today. On the subject of training, I know in the building trades and within our organization, we have training facilities across this country. We pride ourselves on providing a skilled and capable and safe workforce. And I think we have work, the laborers have worked unbelievably with you, Representative Norton, and appreciate your efforts on our apprenticeship programs and our apprenticeship efforts in creating job opportunities with local projects, with the local workforce. So I think the challenges are there. The challenges for us today are putting people to work. And, as I said, we have more members and more workers than we have work opportunities. And this economic stimulus bill with infrastructure spending is a jobs bill, as you said. I know the people that I represent and I believe construction workers throughout this country aren't looking for a stimulus check; they are looking for a paycheck. And that is what this Committee stands for, and that is what this economic stimulus bill needs to make sure that it happens, that we put people to work, that we take the million that are out of work today and put them back to work tomorrow. Ms. Norton. I saw some heads bobbing. Does that mean all of you believe you can meet the labor force demands of a stimulus package of maybe close to $100 million with workers in this country? Mr. Dillon. Sure. I mean, I think at this time you need to be a lot more worried about the jobs we are losing. There are a lot of people out of work. And the construction industry, everything is tailing off across the Nation. And I will bet, when we get through this winter, you are going to go to see some devastating numbers in unemployment if you don't do anything. However, I will say that the construction industry has begun to enhance its image in the educated world. So, particularly in the State of Indiana, between Purdue University, Indiana State, IUPUI, we are starting to attract highly educated managers out of school who actually want to put shovels to dirt. They don't want to be office guys. They want to actually build things. And I think that is encouraging, as an owner of a company, to see that we have had a mindset change. And part of that is that they have found out that we pay very well. Ms. Norton. Yeah, I got news, people. Mr. Leyden, I have a question for you about the workforce, whether the workforce would use the same workforce that we have been using in other highway and construction. But I am a big solar proponent right here in sunny, windy D.C. I recognize we use solar throughout the United States and that the technology allows that. I even want solar in my hybrid. The sooner you can get to that, the better. But I was heartened to hear your testimony, because, frankly, I have been disheartened by the comparison between the almost self-starting innovation that occurred in technology-- where these guys funded themselves, and, whoops, you know, they finally had a bubble--and alternative energy, which is even more desperately needed, in my view, seemed to start up with the venture capitalists, for example, much more slowly. And today we read that the venture capitalists are looking for safe bets. You know, whatever happened to their entrepreneurial spirit? I was heartened about what you said had been the growth in the last few years. But I am wondering whether this industry-- solar, wind and the like--need a big actor like the Federal Government in order to really take off. Is that what it would take to make wind and solar, which a lot of people pooh-pooh now because they don't see it coming online fast enough, really viable as an industry, a big industry in our country? Does the Federal Government need to get in there big-time and then others will follow in reduction of costs, et cetera? I wish you would talk about that, because I am very concerned about what seems to me to be a fairly slow start, especially if you compare it to places like Europe. Mr. Leyden. It is a slow start. We have grown in the U.S. through the leadership of just a few States, California being the primary State; New Jersey, believe it or not, the second largest market in the country. A few other States have had programs. It has really been on the State level that we have had leadership. We have had virtually no leadership on the Federal level. We produce less than 1 percent of the electricity in the U.S., so we have a long, long way to go. And it is really exciting to a lot of people right now that we are getting close to grid parity, at which point the industry takes off. So my viewpoint is, why are we going to wait that 5, 7, 8 years? Why not be supporting that now and gaining the momentum and being a leader in the world in this technology? Ms. Norton. Will the Federal Government in this stimulus package help bring down the cost? Mr. Leyden. Absolutely. Through Federal leadership, we can reduce costs, we can build infrastructure. I am talking about industry infrastructure--sales jobs, installation jobs, service jobs, manufacturing jobs. Ms. Norton. Would you use the same workforce that your colleagues on the panel speak of using in their own work? Mr. Leyden. Yeah. We typically have people that are roofer types and electrician types. Ms. Norton. How much training does it need to convert from that to solar, for example? Mr. Leyden. Training that we can handle. I mean, our belief is, if the markets are there, we will create the workforce and train the workforce. Mr. Oberstar. I have to interrupt at this point. Mrs. Napolitano has a flight to catch. And Mr. Cummings has graciously conceded his time for Mrs. Napolitano to question. And we will come back to the gentlewoman from the District in a moment. Mrs. Napolitano. It is very much appreciated, and thank you for allowing me to jump in. A couple of things. And, Mr. Leyden, I am very, very, very, very interested in greening, because IBEW and NEC, national electric contractors, are starting to green business. That is jobs. That is good- paying labor jobs. Mr. Leyden. Yes. Mrs. Napolitano. And I would suggest, Mr. Chair, that maybe we need to start looking at promoting and assisting business or hospitals, schools, all those entities that pay a lot in electricity, to be able to cut that and help them establish, whether through a zero interest loan program or something, to be able to help them address their current costs, which are high. But given that we have drought, global warming, less precipitation, climate change, there is not enough water in the rivers and dams to create the electricity. So it behooves us to start looking at being able to promote that, to then move on and be able to help business and nonprofits, I would say. Mr. Leyden. That is a very good point. All public service entities could use mechanisms in order to adopt this technology, which ultimately saves them. We have schools in New Jersey that are saving over $500,000 a year in their energy costs because they put solar in. And that money goes right back into the school system. So, you know, why ship it out? Use it internally. Mrs. Napolitano. I am very interested in your 25- versus 10-year purchase agreement. That is something that possibly we may be able to tweak a little bit and see how that would work out. And I really thank you. I would love to have your card, because I would love to continue picking your brain. There is a physicist that has managed to put a Prius hybrid, his wife's, to produce 125 miles per gallon. Now, at the Denver Research Center, they already have it at 100. He has gone to 125. And he is also with NEC and IBEW. Mr. Leyden. Great. Mrs. Napolitano. So I am very, very happy. And I am very happy to see NUCA here, one of my contractors, Chaze Haba. Joe Valverde, out in our area, is a long-time NUCA person that has done a lot of work in construction for our highways. So we want to continue producing jobs that are going to put people back to work. But, Mr. O'Sullivan, I realize that laborers--and I would be remiss if I didn't mention my neighbor, that has always talked to me about international labor. And I understand you do have a clip. And with your indulgence, Mr. Chair, it is a very short clip. And if we could turn the lights down, would you mind telling us about buy/build America? Mr. O'Sullivan. Sure, Representative. "Build America So America Works," I like to think of it as an extension of the Chairman's great work and this Committee's great work on priorities and the necessity for transportation infrastructure. We are doing television ads, ads in newspapers, bus wraps, billboards all around the country in an effort to raise the profile and the need for transportation infrastructure spending in this country. We are trying to get a million signatures, we are well on our way to that, a petition to build America that we want to certainly deliver to this Committee--this is preaching to the choir--but to the next President and the next Congress about, as we prioritize the needs of this country, transportation infrastructure needs to be near the top. And the Chairman and this Committee are doing just that, so it is an extension of the great work that this Committee is doing. You know, right now, transportation infrastructure gets notoriety when a bridge collapses, unfortunately. And people complain about sitting in traffic every day, and crumbling roads and potholes and the rest. We need to heighten that and make sure that the general public and elected officials at the local, State and at the national level understand the priorities and the needs for transportation infrastructure in this country and the fact that the money that we spend will put people to work, so we get a double bang for our buck. We upgrade and improve our infrastructure and we put people to work in good-paying jobs in the construction industry. Mrs. Napolitano. We have a clip. Thank you. [Video shown.] Mrs. Napolitano. Thank you so very much. That was great. And I have to tell you, I was on city council in 1986, and I passed a resolution to "buy America." So, with that, I thank you. And thank you for your indulgence, Mr. Cummings and Mr. Chair. Mr. Oberstar. Thank you. Now the Chair will recognize Mr. Cummings. Mr. Cummings. Thank you very much, Mr. Chairman. Gentlemen, first of all, I want to thank you for your testimony. Our Chairman is always looking for practical solutions that make sense. And you all have come up with some good solutions to the problems that we face, not only in our economy but in dealing with the problems that we have here in our country with regard to structure and infrastructure. But on the sun power, Mr. Leyden, I was very impressed with what you had to say. Are there a lot of other companies doing the same thing that you are doing? Mr. Leyden. There are, yes. The industry has been growing very rapidly. We are a leader, but there are others, yes. Mr. Cummings. And did you say that you had, how many employees 6 years ago? Mr. Leyden. Thirty-five. Mr. Cummings. And you have how many today? Mr. Leyden. Four thousand. Mr. Cummings. That is amazing. That is amazing. Mr. Leyden. And we are growing. Mr. Cummings. And as I listened to Ms. Norton's questions, I couldn't help but think about--I was telling my staff that I really would love to see some folks from companies like yours to visit some of our historically black colleges and universities---- Mr. Leyden. Would love to. Mr. Cummings. --that have engineering schools. Because what happens so often is that historically black colleges and universities are behind the curve sometimes. And I want to be in front of the curve. And green is very, very important today. And then when I hear those kind of statistics, Mr. Chairman, that is just very encouraging, when you can go from 35 employees to 4,000 in 6 years. I don't know how many folks can say that. And I guess my question goes to, with the economy being what it is right now, how do you see that affecting you? Do you see it as your company being able to sustain itself? And I am not trying to get you to talk against yourself, but are you in a better, do you think, in a better position to sustain yourself because of what you do with regard to green? Or do you think you still have problems up the way? Mr. Leyden. We have high demand for our product, but this crisis has definitely created problems for us. I mean, we finance our projects, so where our investors would need 7 percent return before, they now need 8.5, 9 percent return in order to justify their investment under these conditions. So that makes it very hard for us to produce low-cost electricity if we are paying more for the financing component. So we will face that. I mean, my company is a publicly traded company, and we have a large cash reserve, so that is going to help us. We may have to do some creative things to, kind of, get us through this financial crisis until the markets loosen up a little bit. Mr. Cummings. Now, Mr. Drakos, I want to thank you. I had an opportunity to read your testimony, excellent testimony. I really appreciate it. Mr. Drakos. Thank you. Mr. Cummings. And I also appreciate what you all have done in the area of short sea shipping. And I thank the Chairman for your leadership. I am trying to figure out, I mean, this thing seems so practical and it makes so much sense, and I don't know of anybody who has seems to be against it. I don't know of anybody. Am I missing something? Mr. Drakos. I don't believe so. And thank you for that comment, Mr. Cummings. We have run into no opposition concerning short sea shipping. One hurdle that has to be overcome is we need to build ships to handle and get this industry further off the ground than it is. So, you know, we do, as I mentioned in my testimony, we did need Title XI financing, because it is a rather high barrier to get in. So to build the ships and to get the industry moving, Title XI is a very important component. But to answer your question in the short run, no, I am not aware of anybody that is opposing it. As someone used the comment earlier, it is a no-brainer. So what we need to do--it adds capacity to our transportation system. Bottom line, that is what it does. And I think when it is fully integrated with rail and truck, we will have an effective national transportation system. Mr. Cummings. Let me ask you this. I know you can't necessarily do a crystal ball act, but if we were to pass this, say, within the next month or 2, what do you see happening over, say, the next 2 or 3 years? Mr. Drakos. On the specific items that I put in my paper, and that is the exemption from HMT and additional Title XI financing, I think what you will see is more of the freight user, of the people who are looking to move freight, they will understand and be drawn to the option of a short sea shipping venture. At the moment, it is not there. The HMT is a disincentive. And as of right now, we need to get the industry fully integrated into the transportation system. So, in terms of a crystal ball, I think what you are going to see is cargo moving toward it, and I also think that you will see more operators, such as Coastal Connect, that are going out and going to build ships or reposition existing tonnage into a short sea shipping service. So, in 2 or 3 years, Mr. Cummings, I believe hopefully by then we will have seen the mental shift to America's marine highway as a viable option. Mr. Cummings. Mr. Chairman, again, I thank you for this hearing. I see my time is up. Thank you all very much. Mr. Oberstar. I appreciate your questions and your support, which culminated in our legislation as part of the energy bill, Chairman Cummings, on short sea shipping, something I have been working on for a good many years. But a further answer to the very pointed question you raised, who is in opposition? No one is in opposition. There has just been no willingness to provide the financing over the last 12 years. Previous 12 years to this Congress, the Title XI loan guarantee program was allowed to deteriorate. The Title XI construction differential subsidy program was allowed to deteriorate to a point of zero availability of funds. And, to be sure, these two initiatives, the Title XI loan guaranty, construction differential subsidy, and operating differential subsidies, were for another era of maritime shipping in America when we had 5,500 U.S. flag vessels at the end of World War II. By the time I came to Congress in 1975, we were down to 800 such vessels. Today we have 37. Because other countries have subsidized their shipbuilding, the operation, the maintenance of their maritime fleet, and this country abandoned it, the U.S. flag fleet. The short sea shipping initiative is an opportunity for us to regain an American flag presence in our territorial waters, in the Great Lakes international waters, and in the Gulf of Mexico. And, certainly, the port of Baltimore would be a great beneficiary from this initiative, not only for RORO, for truck, trailer roll-on/roll-off, but also vessel. A vessel has already been built to accommodate 110 rail cars, freight rail cars. They have three levels in the vessel of track where the train just pushes the rolling stock on to the vessel in three layers, in three decks. And then the ship leaves from the Yucatan Peninsula and goes to Mobile, Alabama. Now, we can do that in the Great Lakes. We can do that port to port in the United States, in the coast waters trade, and avoid the congestion on land that rail and truck traffic encounters. That is the great promise. But we need to invest money through the Title XI Loan Guarantee Program. What will that do? You remember very well, Mr. Chairman, the great Baltimore shipyard construction that had 25,000 workers at its peak, along with the Bethlehem Steel Plant. There isn't a single ship construction worker operating now. But that industry could come back if we reinvest through the Title XI Loan Guarantee Program. And so you have steel for shipbuilding, shipyard workers, a service to transportation in this country, reducing air pollution, reducing energy inputs, and creating enormous economic productivity. That is how our infrastructure intermodally works. So we are going to move ahead about this. Ms. Norton? Ms. Norton. Mr. Chairman, I have one more question; it is really for the entire panel. I am looking to make sure, just as I did in my earlier question about the workforce, I am looking to make sure that there are not obstacles that somebody is going to jump up and cite as we move forward. So this is for any and all of you. And it is really based on what I have seen in my own work with GSA and economic development. And I must say, I saw a reference to it in Dr. Buechner's testimony about the really enormous rise in construction costs over the last 4 or 5 or so years, with what I believe is material price escalation that we see in this town, in the transportation budgets, for example, in particular. Now, if we do a package, a substantial package, will the cost go down in the same way that you speak of people looking for jobs in construction industry? Will the costs that we have seen over the last 4 or 5 years stand in the way of quickly getting the materials to, in fact, go in the ground? What is your view of the escalation in material price costs on an economic rescue package for the real economy? Mr. Buechner. Since 2003, cost of highway construction has gone up by almost 65 to 70 percent. So the dollar just does not buy as much construction today as it did. But the need for the money is there. Ms. Norton. Would a lot of it be eaten up in these costs, rather than in labor, you know, and putting people to work? Well, somebody else may want to answer that that would have to deal with it. Mr. Burgett. I think a significant portion of the cost inflation that we have seen has been due to the cost of crude oil. Everything gets moved with diesel fuel and trucks and stuff like this. Fuel is used in our asphalt plants. Every ton of asphalt takes two gallons of fuel. Our prices of asphalt have gone up. All those things, in the last few months, we have seen drastic decreases. Prices of liquid AC bought in bulk have dropped from $700 to $425 a ton. Of course, diesel fuel has dropped out on the highway from a little over $4.50 to almost $3. And the prices of steel have dropped at least 15 percent. So we are seeing drastic drops. I mean, they affect PVC pipes and sewer projects. That is all made with your petroleum. So, basically, I think the biggest culprit that we have seen in the inflation costs have been the cost of oil. And we all know--I don't know what it did today, but last I looked it was about $64 a barrel. That is a huge drop from that $144. That has, right now, been the dog wagging the tail. So those are down. If you can tell us what the price of oil is going to do, we can give you a good indicator of what your buying power will be. Mr. Dillon. In the sewer industry, I would agree with what Mr. Burgett has said. I mean, a lot of the product is shipped over the road. It is all based off of fuel. Pipe is made from oil. And that is pretty much what the cost for our industry--it is coming down also. But I will say one thing to the Chairman's little off- point, is that a lot of this stuff is pretty sexy, all these things you are talking about, between wind and solar and all that stuff. You still have to drink clean water, and it is really nice to use a bathroom and take a shower in the morning. So let's not forget about the underground. Ms. Norton. Well, we want those to run on solar too. Mr. Black. I would concur with Mr. Burgett and Mr. Dillon. You know, we are seeing dramatic drops in fuel and energy. And that will make the dollar go further next year, in terms of construction cost. You also have to remember that our plants on average are running at about 50 percent of capacity. So we have immense capacity to do more work. But as you ramp that up, that also lowers cost. So, the stimulus package I think would do us very well from a lot of standpoints. And I think the dollars are well-timed, actually, with the drop in energy, to buy a lot more paving next year and in the next 6 months or 3 months than it did in the last 6 months. Mr. Dillon. I would like to put on the table how devastating that fuel is. My company this winter was doing a large sewer project out through the middle of farm fields where we had to run generators to keep the job dewatered. And by the time I got the job completed, my fuel to run the generators ran $600,000 over-budget. And that comes right off my bottom line. That is a lot of money. Mr. Leyden. The solar industry has suffered from a shortage of solar modules over the last few years because the demand has been so great. So demand is great; that is good. And the industry now is catching up to that with more production. And so we feel we can absorb--any stimulus that you create can be absorbed by the industry. We are affected by copper, steel and glass prices, as well, but it is a less important component of our costs. Ms. Norton. Well, I hate to see that we had to get into a recession in order to reduce the cost of oil. But I think I can say with some confidence, given the testimony we have heard from economists and those before you, that we haven't even begun to hit bottom yet. And as a result of what we have seen, Mr. Chairman, with the crowding of Amtrak, buses and trains, maybe the American people have learned their lesson and won't quickly go back to raise the cost of oil by hopping back into their SUVs any longer. In any case, thank you very much for, really, a very important hearing, Mr. Chairman, which I think sends a message in and of itself: Whatever we do, that we are looking at the real economy where the average American spends money, is out of a job, and now perhaps sees that we were as concerned with them as we were with the top of the economy. It is one economy; you either rescue it all, or it doesn't get rescued. Thank you again, Mr. Chairman. Mr. Oberstar. Well, thank you, Ms. Norton, for your contributions and for your engagement, as always, your intensity to the subject matter at hand in true professorial fashion. We are grateful for your Chairmanship of the very important Economic Development, Public Buildings and FEMA Subcommittee. You do a superb job. Mr. Dillon, we haven't forgotten about underground utility contractors, by no means. My predecessor in this Committee and in my district, John Blatnik, who was Chair for 4 years of the then-Public Works Committee, humorously one time suggested that we require all sewer and water pipes to be built two feet above ground so people would bump into them and notice them. Mr. Dillon. I agree, I concur. Mr. Oberstar. Because he said, when we get these projects built, they are buried in the ground and people forget about them, and they come and say, well, John, what have you done for us lately? They don't remember the water and sewer and the other things that are below the ground. Well, that was tongue-in-cheek, of course, on his part, but our water and sewer and sewage treatment facilities are aging. We have water systems in the Northeast and New England that are 100, 150 years old. Some are still wooden water pipes that are deteriorating. In the District of Columbia, in Ms. Norton's district, almost every week there is a report of a water main burst someplace that stops traffic and causes delays. And that is because cities don't have the money to go in and repair and replace, as they need to do, as they know they must do. When we do the I&I, the in-sewer review by television cameras of the quality of the piping, cities know where they have to replace, where they have to fix, where they have to build new, completely take it out and totally replace it, but they don't have the money to do it. And for 12 years, the State Revolving Loan fund has been expired. And it has been funded year to year by an ever- decreasing appropriation. That means fewer laborer jobs. That means less aggregate. That means less construction, less pipe, less steel. Everything is hurt when there is a failure to invest. And we moved that bill, as I said at the outset, we moved it $14 billion. But we started with $20 billion. But we had to scale it back because of the objections from the Office of Management and Budget. Well, the Senate hasn't acted on it. The bill passed this Committee, it passed the House overwhelmingly; the Senate hasn't acted. Next year we are going to come back, we are going to come back with a bigger bill. We will have a new Office of Management and Budget, or at least a new director. I don't care about the minions over there; we will just roll over them. Whatever we have to do, we are going to pass something big. We need to do it. The country is desperate. President O'Sullivan, I like your "paychecks, not stimulus checks." I remember in 1975 when President Ford proposed a tax credit to stimulate the economy. And the day after he made the proposal, I got a call from--it was a $50 tax credit--from a gentleman who lives in my hometown, not far from our house actually. He said, Jim, I went down to Lampert Lumber Yard to ask what I could get for 50 bucks, and they said, well, we could sell you a screen window. He said, I don't need a screen window. Why don't you take that money and put it into roads? Well, that is not what they wanted to do at that time, and the money went out in those little $50 checks. A few years passed, and we had the Carter administration. They, too, wanted to do a stimulus package with a tax credit. And that was $100. Same fellow called. He said, Jim, Lampert Lumber Yard is gone because you didn't buy anything from them, so now it is down to only one lumber yard in Chisholm, it is King Lumber. And I asked them, what could I do with 100 bucks? And they said, well, it could buy you a little screen door or maybe some two-by-fours. He said, I don't need the two-by-fours and I don't need the screen door. Why don't you go and fix those potholes in our road? Well, we are at the same place. And I don't know what has happened to those stimulus checks. Maybe they paid down some credit card debt. Maybe they did some other good in some way. Only three or four people that I know of have come to me and said, gee, that was nice, I put it in the bank, but you should have invested in our roadways, you should have invested in our bridges, you should have helped us build water and sewer lines. And your members are on the bench now. After TEA-21 we had 3 million new construction jobs in 2 years. And we had funding in that legislation for training, Mr. Kaniefski will well recall, for training of construction workers. And Mr. Mica and I were talking, just before he had to leave and go back to Florida, about providing similar language in the upcoming transportation bill to train perhaps new workers. Although right now, with 850,000, nearly 900,000 out of work, we don't have to do an immediate training program. But we might if we are going to expand that workforce. Mr. Black, I have heard from your representative in Washington, Mr. Hay, about members of your association closing and those who are on the edge. How many sand and gravel aggregate producers have closed in this last, say, 6 months, and how many are on the bubble right now? Mr. Black. Mr. Chairman, I don't have any specific data on that. Perhaps Dr. Buechner has some data on this specifically. But I can tell you, our own plants, I can tell you we have closed about 10 percent of our plants. And we are pretty representative of the industry, and so I would say that is probably the amount that has closed across the industry. And so that adds up to quite a few small, single-plant players. Mr. Oberstar. Is the existing capacity capable of responding to a stimulus initiative of the kind we are talking about here? Mr. Black. Absolutely, sir. The capacity of our plants-- again, we have closed 10 percent, but the remaining plants are running at a fraction of their capability. So, I think industry wide, the industry is probably at 60, 70 percent capacity. We are at 50 percent capacity. And like Mr. O'Sullivan said, there are plenty of workers to hire. Mr. Oberstar. And if you ramp up, will you hire new people, or will you produce with existing workforce? Mr. Black. No, we would ramp up. We lost 2,500 employees this year. We will probably lose another 2,500 next year. These are all employees we would love to hire back. And we will call them back, and we will put them to work, and hire new ones. Mr. Oberstar. Dr. Buechner, I remember so well my predecessor telling me about the early days of the Federal Highway Trust Fund and the interstate highway program and how five men, some of whose portraits are in the next room, sat around the table to plot this out. And they rejected the proposal by Eisenhower's Secretary of Treasury to finance the interstate highway system with a bonding proposal. They said that we would not only have to pay back the capital, the principal of the bonds, we have to pay interest on the bonds, and we have to pay fees to bond traders. And instead, they proposed the highway trust fund, the three cents. And I had asked our Committee staff to get for me the price of gasoline in 1956. You had already researched it. That three cents represented 10 percent of the cost of fuel. But they didn't turn around and say, "Oh, my God, we can't tax anything." Like Russell Long said, "Don't tax you, don't tax me, tax that fellow behind the tree." They didn't run. They said, "This is an investment in America. This is an investment in the future of this country. It is for the good of all of our fellow citizens, for our economy." And they found, by February the following year--Eisenhower signed the bill in June of 1956, construction started on the interstate in September. By February of 1957, they needed another penny. That additional cent passed the House on a voice vote. You can't pass the prayer on a voice vote today. But there was a consensus then, and we need that spirit today, of looking over the horizon and seeing what is good for America. And I am going to travel this country. We are going to drive that issue home. We are going to need all the help of all of you at this table and all of the others who have testified today to drive that message home to America, that we have to reinvest in this country. As the commission said, the Transportation Policy Study Commission, there is no free lunch. The last time manna came down from heaven was 3,500 years ago, and God isn't doing it anymore. We have to provide the funding. And our gross domestic product in 1956 was $345 billion. Today it is $13 trillion. We had one car per household in 1956. Today we have a little over two cars per household. Per household income was $4,800. It is $48,000 today. We drive two to three times farther in our vehicles today than we did in 1956. We will have to move to a vehicle-mile-traveled-plus- weight formula to finance the future in addition to the Highway Trust Fund gas tax user fee system. We will find the revenues for it. I am going to move us in that direction. This Committee will move together. We will do these things. But we have to start right now. And you have laid out the ideas for it. Now, AGC has suggested a maintenance of effort, which in principle I like the idea. The Senate, in their version of the rescue plan or job stimulus program, did have a supplement-not- supplant provision. But that raised some questions legally as to what DOT would do and what States would do. And then operationally it raised some questions that, in fact, we are already finding that U.S. DOT is telling States, "Look, if this issue resurfaces, then we are going to have to pull back on funding. You may not be able to finance projects out of your TIP," your transportation investment plan. And while we want, in fact, the concept of supplement, not replace, State funding, we are going to have to word that in such a way that the DOT can't mess it up and use it as a drag on the economy or drag on the program rather than a stimulus to the program. So if your staff have some ideas about how we can fashion that language, we would welcome your input. And I have already talked about the underground utilities. In fact, my predecessor, John Blatnik, spoke at the very first meeting of your organization in 1972 in New Jersey. Mr. Dillon. That is great. He liked drinking water too, especially clean. Mr. Oberstar. And you have already very aptly cited the deterioration of the Nation's waters. Mr. Drakos already talked about loan guarantees for short sea shipping. Mr. Leyden, we have under the jurisdiction of this Committee 367 million square feet of Federal civilian office space. The electricity bill is $500 million a year. We could cut that 40, 50 percent, maybe more, with photovoltaics alone. We have directed, in the energy bill legislation from this Committee, the GSA to survey every Federal civilian office building in this country for its photovoltaic capacity, whether roof or wall or in other fashion, compact fluorescent substitute for incandescent lights, and other energy-saving initiatives that we spelled out, and I will not go into detail, in that legislation. And those surveys are under way. Mr. Leyden. Good. Mr. Oberstar. But in 1977, I was my second term. I had, just quite by accident, an opportunity to chair a hearing of the Public Building Subcommittee on a study by the sheet metal workers' union and a group of economists to convert Federal civilian office space to a photovoltaic uses and source of energy. And the price of electricity from photovoltaics was $1.25 per kilowatt hour and seven cents on the investor-owns. They estimated that with a $175-million-a-year investment over 3 years, convert the buildings, you create a market for the private sector to produce, Government to consume, and it would create 130,000 sheet metal worker laborer and electrical worker jobs. I thought it was a good idea, so I had the staff draft the bill, and I testified at our own Committee hearings on behalf of it. Senator Humphrey picked it up over there, he got it passed. Carter signed it, put the $175 million in his last budget, lost the election, and Reagan abolished the alternative energy program. It set us back 30 years. Mr. Leyden. That is when I started my solar business. Mr. Oberstar. But then, in the private sector, you and others continue to produce quality--look, if it is good enough for the space program, it is good enough for us on Earth. If it is good enough for the Forest Service to use in remote sensing stations, or the Park Service, it ought to be good enough for our Federal office buildings. And we can do these things, and we are going to make a difference in America. We started with the Department of Energy, and we are going to continue and save taxpayer dollars and save adverse inputs into the environment. Well, thank you for your patience in listening to my soliloquy. But I love what you are doing. You have made a great contribution to our hearings. We are going to now fashion these recommendations into a larger legislative initiative. We will have it ready for the House to consider on November 17, when we reconvene after the election. Now, call your Members of Congress, Senators, tell them to support us. I know we will have good bipartisan support for this legislation. Thank you very much. Thanks to all of our witnesses today. The Committee is adjourned. [Whereupon, at 4:25 p.m., the Committee was adjourned.] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]