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Public Statements

Hearing of the Transportation, Housing and Urban Development, and Related Agencies Subcommittee of the Senate Appropriations Committee - Fiscal Year 2010 Budget for the Department of Transportation

Statement

By:
Date:
Location: Washington, DC

Chaired by: Senator Patty Murray (D-WA)

Witness: Ray LaHood, Secretary, Department of Transportation

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SEN. MURRAY: Good morning, this Subcommittee will come to order. Senator Bond got the message on what to wear today, as did the Secretary and Senator Collins. I did, too, and I chose not to. (Laughter.) No.

Welcome to all of you, and I welcome Secretary LaHood. Thank you so much for being here today. In April of this year, Secretary LaHood testified before this Committee about the American Recovery and Reinvestment Act, and I'm exited to say that billions of dollars included for transportation projects are now flowing into our communities across the country. In my home state of Washington, over $500 million is beginning to move into projects, from Seattle to Spokane, creating jobs and boosting our economy.

Today, though, we are going to focus on the president's fiscal 2010 budget request for the Department of Transportation, which is critical as we face the challenge of rebuilding our country's transportation infrastructure.

And I am glad to see that the president's budget request reflects a renewed interest in improving the entire transportation system, and it recognizes that it takes many different modes of transportation to create an integrated national system.

The president's budget request includes more than $51 billion for highways and transits, $1 billion to continue the investments in high- speed rail that were started in the Recovery Act, $3.5 billion for airport investments, $1.5 billion for grants to Amtrak, $175 million to protect essential air service for smaller communities across the country, and $15 million for a new initiative within the Department of Homeland Security to improve the security, efficiency and capacity of our nation's ports and waterways.

I also want to acknowledge the work that Secretary LaHood is doing in coordination with Secretary Donovan at the Department of Housing and Urban Development. Their partnership is an important first step towards helping communities make vital connections between work places, family homes and neighborhood schools.

And although I'm glad to see important investments being made in the president's budget, I'm also painfully aware that we have tough questions to answer this year. We cannot face these challenges with ideas alone. We must start talking about concrete real life solutions.

The most pressing problem we face today is the looming bankruptcy of the Highway Trust Fund. The Trust Fund needs an estimated $5 to $7 billion before August of this year or we may see transportation projects come to a standstill. State budgets will be thrown into crisis and thousands of family wage jobs will be put in jeopardy.

In addition, the Highway Trust Fund needs another $8 to $10 billion to support transportation programs through Fiscal Year 2010. As this Subcommittee develops its bill for funding programs of the Department of Transportation, we cannot allow the stability of the Highway Trust Fund to be called into question. The stakes are too high for our states, our community's families and commuters.

Yesterday the Department announced a general framework for extending transportation programs for 18 months, enacting major reforms to those programs and ensuring the short-term solvency of the Highway Trust Fund. By offering this framework, the Department's announcement is a step in the right direction. However, critical details are still missing, and the Department has not yet offered specific ways to replenish the bills of the Highway Trust Fund.

Furthermore, the Department's announcement offers very little insight into how it proposes to use cost-benefit analysis, focus investments in metropolitan areas, and promote this concept of livability. Although the Department is interested in tying together a short-term fix for the Highway Trust Fund with reforms to our transportation programs, I do have some very serious concerns about that approach.

I do not oppose on principle via effort to improve federal transportation programs, but I don't want to allow it to base over those reforms to prevent us from saving the Highway Trust Fund in a timely manner.

The time has come to discuss specific solutions and to the shortfall, and these discussions will require Congress to work closely with the Administration. But this work requires more clarity and better communication than we've been getting so far.

Another area of concern for this Subcommittee is the safety of our air transportation system. Although the air transportation -- although air transportation continues to be one of the safest ways of traveling, the crash of Colgan's Flight 3407 is a reminder that the regulations, inspections and procedures of the Federal Aviation Administration are all in the service of protecting human life.

The FAA recently announced it is requiring of safety inspectors to focus their efforts on determining if regional air carriers are complying with federal requirements for pilot training. That the crash near Buffalo, New York raises important questions about FAA requirements related to pilot fatigue and qualifications, and about the relationship between legacy and regional air carriers.

I know that earlier this week the Department and the FAA required -- or gathered representatives from air carriers and other industry groups to participate in a summit on airline safety. That summit was designed to address many different aspects of aviation safety, and I will be interested to hear what the Secretary has learned from that meeting.

Finally, I want to express my concern about the Administration's proposal for a National Infrastructure Bank. Investing in our infrastructure is critical, but we need to ensure that it is financed responsibly. Whether this bank is requested from funds appropriated by this Committee or included in a proposal for the reauthorization of service transportation programs, I think there's a lot of unanswered questions that need to be addressed.

Again, Secretary LaHood, thank you so much for appearing before us today to provide some additional detail and insight into the president's budget request. And with that, I will turn it over to my partner and Ranking Member, Senator Bond, for his opening remarks.

SEN. BOND: Thank you, Madam Chair, and I agree with the concerns you raised. I welcome our -- an old friend, Secretary LaHood.

I thank him for appearing, again, before our subcommittee, and taking on this very challenging project as we, as we both agree.

I think it is wise as a fellow Midwesterner that he knows in hot weather these suits are much more comfortable, and we don't, we don't demand adherence. That's the beauty of the two-party system. Some wear suits and some -- well, anyhow. (Laughter.)

To be serious, Mr. Secretary, there appears to be a troublesome communication gap between the Administration, Department of Transportation, OMB and the Senate. We're hearing about major policy initiatives after they've been reported without a heads-up from the Office of Governmental Affairs, Policy or Public Affairs.

In fact, the general public had access to the information before many of us did. In most case, however, we're not hearing any, anything subsidy regarding the transportation budget from the Administration. They're going to make -- they're going to do all these wonderful things without raising gas taxes, without raising taxes, with no information from OMB how it might be paid for. And I might add, no policy guidance or direction from the Department.

The budget submission that we're trying to work with, as I've indicated to you, lacks some very important details. We don't know how to put this baby together, because we don't, we don't know where the numbers are or how it's all going to work. We know the devil is in the details in all (laughs) these things, but these are really big details. What are major policy implications for the nation, and we're running out of time to get the answers we need.

In fact, we will be getting our 302(b) allocations today, which will dictate what this Subcommittee can or cannot fund. And I'll tell you, the prospects do not look good. I don't see how we -- from what I think we're going to get, I don't know how we can do what we have to do. But we need some guidance from you.

The budget has before -- has the same boilerplate language for FHWA, the Federal Motor Carrier Safety Administration, the FMCSA, the National Highway Safety Administration, NHTSA, and the Federal Transit Administration, FTA. The language reads, "The Administration is developing a comprehensive approach for surface transportation reauthorization. Consequently, the Budget contains no policy recommendations for programs subject to reauthorization, including federal aid highways. Instead, the Budget displays baseline funding levels for all surface programs," close quote.

As we've discussed, we've got to find out from OMB what these decisions are, and we hope that you will be able to get those and we will be able to get those shortly, so we can begin work. I know they're many difficult transportation challenges facing the nation, but we can't refuse to deal with them or put off the tough decisions, because we've got a decision that we have to meet for this fall.

I say only half viciously as a footnote the boilerplate budget document should say, "We still don't know how to pay for highways." Getting $36 billion in General Funds is probably not going to happen, and the highway number is likely not to be baseline funding from what we know at this point. I hope that will change.

We've been given some other important information since receiving the budget, and that's not good news. The Trust Fund is going bust, not just for 2010 but for 2009. Three weeks after getting the budget, staff got a briefing that the numbers in the budget for the Highway Trust Fund needed to be updated due to climbing cash balances in the Highway Account of the Highway Trust Fund, which will cause the Fund to run out of money to handle day-to-day reimbursement.

The Highway Trust Fund is now scheduled to fall below $4 billion around July 3, and DOT is determined that at least a $4 billion balance is needed in the Highway Account to manage cash flows. Sometime in the near future we're told, DOT will give the State Department of Transportation eight weeks notice of a change in reimbursement policy, with a balance falling below zero in mid-August. It won't be possible for us to complete our bill and conference by that time, so some solutions have to begin to be debated right now.

Everybody said we wanted to get jobs which were shovel-ready. And I was very disappointed that the Stimulus package, that I felt was clogged and could not move for, did not deal with the rescission in highway funding. That $8 billion rescission, and the shortfall is something that if you want shovel-ready projects. They're nothing like contracts that have already been completed, the environmental work, the preparation to keep people working. We should have been continuing to build highways.

In testimony before our House counterparts on July 4, you testified you're working on solutions to fund $5 to $7 billion that will be paid for with offsets. I'd be interested to see what OMB comes up with since that time, as well as what the Administration believes it will need to do to meet the projected $8 to $10 shortfall for the Highway Trust Fund in 2010.

As I said, we'll be voting on allocations later today: 302b allocation and BA and outlays will, at this point, not sustain your requested level of General Funds at $36 billion with all of the other expected priorities in the bill.

Another problem that I've been talking about and I've asked you about in our April 30th hearing on the American Recovery and Reinvestment Act is the rescissions. As I've mentioned, they'll be a -- September 30, they'll be a looming $8.7 billion if nothing is done. Highway funds we thought were going to ARRA to create job stimulation, but without solving the rescission problem, they'll be massive losses of jobs in the late summer, when we need to be putting those, putting those projects to work, creating and continuing those jobs, and building the highways we badly need.

FHWA has helpfully advised our staff that this is a very complicated rescission to calculate, and FHWA's staff is working hard on it. "Although we know the total amount to be rescinded from each state, we still cannot determine the programmatic distribution, which many of you want to know," close quotes. In otherwise, the Department doesn't know how to make the rescission, so whether they can make the rescissions called for or if there's going to be a fix. This is information I hope we will be able to get from OMB, so we can move forward.

Now, I also understand that funding for high-speed rail at $1 billion over the next five years is the highest priority for the Department and the Administration to supplement $8 million in ARRA funding, already. The high-speed rail guidance that was recently announced does little to spell out how the additional funds will be used, and what the goals for our National Rail Plan, due out in October this year, will try to achieve in terms of a vision.

GAO has reported and is continuing to work on high-speed rail oversight. In testimony before the House of Appropriations Committee, GAO said, quote, "High-speed rail does not offer a quick or simple solution to relieving congestion on our Nation's highways and airwaves. High-speed rail projects are costly, risky, take years to develop and build, and require a substantial upfront public investment, as well as potentially long-term operating subsidies," close quotes.

GAO goes on further to say there are potential long-term benefits of high-speed rail. However, determining which, if any, of the proposed high-speed rail projects should be built, will require decision-makers to be able to determine a project economic viability, meaning whether a total social benefits that offset or, or justify total social cost, and what the relative benefits and costs of the alternatives will be.

I will apologize because the first round of questions, I'm going to have to go to an Energy and Public Works Markup this morning, which is considering a Clean Water Act amendment, a proposal, that will eliminate the navigable waters' limitation on the reach of Core of Engineers and EPA guidelines over waters. As a result, if this is passed, and I have grave concerns about it, it will mean every pond and every puddle in the United States will be subject to federal guidance.

Every time we have a heavy rainstorm, the terrace behind my garage in Missouri floods.

And I have to get a sub pump to pump it out. Now, will I have to get an EIS to pump out that pond that develops? There's a --

SEN. MURRAY: Are there fish in it?

SEN. BOND: Pardon?

SEN. MURRAY: Are there fish in it?

SEN. BOND: No, mosquitoes. (Laughter.) That's why I need to pump it out.

But the problem is, if this goes through, every single puddle that High-speed Rail project crosses, will have to get an EIS. That can add 10 years to a major high-speed rail project. That's just a suggestion that we might want to consider when voting on it.

Anyhow, I digress. My concern is that there is not sufficient funding truly to reduce congestion on our Nation's highways and airports, if there's a current guidance outlined. The money goes to so many different projects. We'll be spreading the money so thin and wide, we'll have nothing to show for it.

Frankly, what will an additional $1 billion per year in grants do that the previous $8 billion did not? Has the Administration determined how the question of operating assistance will be addressed on these projects? We should not be just paying to build it, and then paying a heavy load continually to operate it. There should be conditions on grants of those communities on who and how they plan to pay for operating high-speed rail in order to spend these tax dollars.

And another major issue that's a real problem in my state, with regard to Mexican Trucks. We have discussed this, and I'm awaiting additional information from the Department of what, if anything, can be done about the Mexican government's retaliation over the terms of NAFTA on tariffs, to the tune of $4.2 billion of U.S. agricultural and manufacturing exports.

As you know, Mr. Secretary, over $1.2 billion in manufactured products and $900 million in agriculture products are impacted by the retaliation. This is something I warned about unsuccessfully every time we've had this debate. It was forced through, signed into law, and the Mexican government took the steps that they were totally authorized to take. And according to pork producers, the retaliation puts over 12,000 ag jobs and 14,000 manufacturing jobs at risk. And we need to know if there are plans to live up to the terms of NAFTA and open the border.

Turning to aviation, I am pleased to see that the Airport Improvement Program is funding at a level that is both realistic and sufficient to fund the Nation's airport construction needs, which is welcomed change from the past Administration, both Republican and Democrat.

Unfortunately, the good news ends there, with increased funding needs for NextGen, a new contract pending for the air traffic controllers, and further issues being exposed in the area of aviation's safety. There are a number of tough budgetary choices and policy challenges facing the Department.

Mr. Secretary, as you can see, we really need some realistic decision-making, especially in regards to highways and rescissions. We're not likely to have the funds we need to meet all the Department of Transportation and Department of Housing and Urban Development's needs. But the more we work together with the various authorizing committees and the Administration in an open-bipartisan manner, the more likely we'll find those solutions.

After all, transportation is something that both parties recognize is good for the Nation, and we want to have good commonsense solution. Our transportation infrastructure, like our highways, roads and bridges are the lifeblood of our economy, the key to future economic growth and economic recovery. We can't afford to pass the buck, because solving these problems is critical to creating jobs, safer travel and economic development.

I thank you, Madam Chair. I apologize for the length of the statement, but I wanted to lay out these concerns. Thank you, again, Mr. Secretary, for being here.

SEN. MURRAY: Thank you very much, Senator Bond.

Senator Collins.

SEN. COLLINS: Thank you very much, Madam Chairman.

First, let me commend you for allowing your good taste to overcome peer pressure to wear a Seersucker suit today. That it is impressive. (Laughter.)

(Cross talk.)

SEN. COLLINS: I did, indeed.

SEN. BOND: That's great.

SEN. COLLINS: But let me say to you and Senator Bond that I am delighted to be a new member of your subcommittee, and I look forward to working with both of you on transportation issues and the other important jurisdiction of this subcommittee.

And Maine, like most states, has a long backlog of deteriorating roads and bridges. And I was delighted a couple of weeks ago to meet with the head of a road construction company from Maine, who told me that as a result of the Stimulus Bill, there are 100 people working, doing repaving, who otherwise would not have jobs. So I believe we're seeing some early, very positive results of the Stimulus package, with regard to infrastructure improvements that are so needed.

Nevertheless, as both the Chairman and the Ranking Member have pointed out, there is an awful lot to be done. I'm eager, Mr. Secretary, to have you come to Maine and to visit the University of Maine, and see the work that's being done on composites to be used to build bridges that will last longer and offer other advantages.

I'm also pleased that the Administration has provided a substantial increase in the essential Air Service funding. This program is critical for smaller rural states, like Maine, to ensure that the rural regions receive commercial airline service. There are many other important issues that we will discuss today. But I want you to know, Mr. Secretary, that the number one transportation issue in my state is that of truck weights. And I look forward to discussing that issue further with you.

Again, Mr. Secretary, I couldn't help but think how different it must be for you to be sitting on that side of the desk, and I think we're very fortunate to have an individual with your background and understanding of Congress, in such an important role in President Obama's Cabinet.

Thank you, Madam Chairman.

SEN. MURRAY: Thank you very much.

And Senator Alexander, opening statement.

SEN. ALEXANDER: Thanks, Madam Chairman.

Welcome, Mr. Secretary. I look forward to working with you. I wanted just to call to your attention, the other day they shut down an eight-mile section of Interstate 40 in Knoxville, the most heavily interstate for 14 months. And they fixed it. And usually it would have taken three to four years. It was called the Smart Fix Program, and it was an example of more efficient use of our highways.

And we'll have a chance to discuss more, but one of the thoughts I've had for a few years is why don't we have a federal rating for highway use efficiency? I mean, we rate cars, you know, by fuel efficiency.

And one of your predecessors told me that 40 or 50 percent of our traffic jams are caused by the inefficient use of highways, by, you know, trying to fix them at 4:00 in the afternoon or wrecks that don't get pulled off the road.

I think if you had -- Senator Bond and I have both been governors, I think if you had a list of states, one to 50, rated based upon their highway efficiency use, and Tennessee were 50th, somebody could get elected governor just based on that, and you might see some changes in it. So it's just a thought I have.

I look forward to talking with you, and I appreciate the chance to make a comment.

SEN. MURRAY: Thank you very much.

Secretary, with that, we will turn over to you for your opening remarks.

SEC. LAHOOD: Madam Chair and members of the Subcommittee, thank you for the opportunity to discuss the Administration's fiscal year 2010 budget request for the U.S. Department of Transportation. The president seeks the total of $73.2 billion in budgetary resources. This funding levels supports the President's ambitious agenda for revitalizing and enhancing our national transportation infrastructure.

It's essential that we continue to invest in these assets to keep our highways and rails in good repair, keep our freight and maritime shipping reigns open, and keep all modes of transportation operating as efficiently and safely as possible. Safety always has been, and must continue to be our chief concern. That's why over one quarter of the Department's total budget request supports transportation safety.

I want to highlight the president's fund request for some of our critical modes, first high-speed and intercity passenger rail. As you know, President Obama and Congress have made a historic $8 billion investment to jumpstart new rail corridors around the nation.

The president's budget proposes to fund a five-year $5 billion high-speed rail State grant program. This represents a major commitment by the government to offer the traveling public a safe and sustainable alternative to driving and flying.

The Budget also includes $1.5 billion in grants to support Amtrak. When combined with the $1.3 billion provided in funding through the Recovery Act, the Amtrak is poised, at last, to address its long-standing capital needs.

With respect to aviation, the president's budget requests nearly $16 billion for Federal Aviation Administration. This level, this level will enable us to fund the FAA's highest priorities, including $865 million to keep NextGen air transportation moving forward. With these resources, FAA will also be able to fund additional air traffic control positions, and invest in nearly 3,500 airport infrastructure projects at 15,000 airports.

The maritime industry also plays a vital role in our economy, with nearly half of all U.S. foreign trade by value traveling by water. The president's budget seeks $346 million for the Maritime Administration. This includes $15 million for a new presidential initiative to enable MARAD to work with the Department of Homeland Security on modernizing our intermodal freight and infrastructure links the tide ports, highways, and rail networks into a seamless transportation network.

I'm confident that the president's transportation budget for 2010 will help our Nation continue to develop our most vital transportation assets for the 21st Century.

Nevertheless, one of the most significant challenges our Department faces going forward is the ability to identify sufficient resources to meet our goals and provide the American people with the transportation system they need and deserve. I'm grateful to Congress for providing more than $48 billion in transportation funding through the American Recovery and Reinvestment Act. I'm proud of our TIGER Team effort in implementing the provisions in the Recovery Act. By working across organizational boundaries, the Team has been successful in meeting the Congressional deadlines. Every deadline has been met that was put in the law.

The historical investment is making it possible for thousands of transportation projects around the country to get underway. As a direct result, we're helping to save or create good-paying jobs that so many families and communities need right now. And we're rebuilding, retooling, and revitalizing our airports, roads, bridges, ports, transit systems, and more.

But we all must also recognize that the two primary funding sources the Department has long relied on, fuel tax and airline ticket taxes, are no longer sufficient. As you know, last year the Highway Account of the Highway Trust Fund required an $8 billion cash transfer from the General Fund in order to remain solvent. The current reduction in economic activity has made the problem of sustainability even more serious. We remain at risk for yet another cash shortfall in the Trust Fund as soon as mid to late August.

The Administration has inherited a system that can no longer pay for itself. Clearly, we cannot continue on this path. Therefore, we're proposing an immediate 18-month Highway Reauthorization that will replenish the Highway Trust Fund. Critical reforms are needed as a part of this process to help us better invest better -- to make better investment decisions, including focusing on smarter investments in metropolitan areas, promoting the concept of livability to more closely link home and work.

I urge Congress to pass this measure before the August recess, so that states do not risk losing the vital transportation funding they need and expect. I assure you we're working on a long-term solution. We're pledged to work with you and every member of Congress on a full reauthorization that best meets the needs of the country, and I'm confident we'll find the necessary solutions.

Thank you for the opportunity. I look forward to your questions.

SEN. MURRAY: Thank you very much, Mr. Secretary.

Well, let me just say that, as you know, most of the spending that comes out of the Highway Trust Fund over the coming year is going to be used to reimburse our states for projects that they actually developed a year or so ago. So basically most of the -- today's spending from the Trust Fund was committed a long time ago. We need to fix the Highway Trust Fund to make good on those commitments that are now already out there. Our homes states have been spending their own funds on these eligible transportation projects with the assurance that they're going to be reimbursed. So if we don't make good on our promise, then we're going to throw our states into a financial crisis right when many of them are already facing really distressful times during this economic recession.

Now I just heard you testify that it's necessary to include reforms to the transportation program as part of the legislation to fix highway trust funds before the August break, which I think we've got five weeks left of session to do that.

Those reforms are important. They effect future decisions about transportation projects and not just the reimbursements that are going to occur over the coming months. So let me ask you why is it necessary to reform the transportation programs in order to save the highway trust fund over the short term?

SEC. LAHOOD: Well look our feeling is that we at least need to have a discussion about this. Our number one priority is to work with OMB and the Congress to find the money to plug the highway trust fund for the next 18 months. During our discussions, we should at least talk about the way forward and begin discussions about some reforms whether we all can agree on what those are and whether they can be enacted, but our number one priority will be to work with all of you to plug that highway trust fund to find the money to do it, and to pay for it.

But we'd like for part of our discussion to be about reforms because we know that over the next 18 months as we work with Congress, we're going to be talking about reforming the transportation program. And so I want to be clear on this. We're going to work with all of you to find the money to plug the trust fund to pay for it. And during our discussions we'd like to talk about reform.

SEN. MURRAY: Okay. My concern is, and you're raising some interesting points about transportation and supporting livable communities, it sounds good, but those are major reforms to our transportation system that you're asking us to define in a few short weeks of Congress and pass by August in order to get the highway trust fund fixed. So I mean, do you think Congress can enact major reforms in the five weeks we have before --

SEC. LAHOOD: On the day that the president was sworn in, on January 20th through February 14th, the Congress passed a $780 billion economic recovery plan. The answer is I believe that we can have discussions, whether we can get to the point where you know we can include these as a part of our fix for the highway trust fund, we'll have to see. But my point is Madame Chair let's throw it out there and see if we can have a discussions, that's all.

SEN. MURRAY: Yeah, I think discussions about how we reform our transportation system are important, but as a realist, I know that we've been sent a judicial nominee, we have appropriations markups to get out, the president wants us to do healthcare reform and we basically have five weeks session. So I'm really concerned that the highway trust fund being put into the mix of some major policy discussions won't see the light of day and what we'll end up with is our states who are waiting for this money will get caught in that and that's what I'm asking you to --

SEC. LAHOOD: Our number one priority is to fix the highway trust fund, to pay for it, to find the money, and along the way here if we can have the discussions about these other things, I think we should.

SEN. MURRAY: Conversations are great, passing legislation is hard. I just want to make sure we're all committed to getting the highway trust fund fixed by --

SEC. LAHOOD: You have my commitment to do that.

SEN. MURRAY: Okay. Thank you, I appreciate it.

I do, and the conversation's important but I am concerned about some of the lack of details from your announcement, you're offering a general framework for us, but we can't wait very long for a proposal so can you explain to me how we would fix the highway trust fund, whether the fix would be paid for and how we'd pay for it, is that part --

SEC. LAHOOD: The fix will be paid for and our office, our staff is working with OMB to --

SEN. MURRAY: Can you tell us when we'll see a proposal?

SEC. LAHOOD: Very soon.

SEN. MURRAY: Okay. Because the August recess is fast upon us, so I'm very concerned about that. So as soon as we --

SEC. LAHOOD: I take your point.

SEN. MURRAY: Okay. Very good.

Let me ask you about the Colgan Air crash. The department has taken a number of actions to improve aviation safety and I know you've pulled together some meetings with representatives to talk about safety improvements. I know we've been promised that we're going to see some drafting on new rules on flight time, pilot flight time that are based on scientific research, and the department is talking about relying on voluntary actions from the airlines. Do you think that voluntary actions will get us to where we need to be?

SEC. LAHOOD: Well let me first say that we have probably the most qualified FAA administrator that we could find in the country. Randy Babbitt is superb, experienced 25-year pilot commercial pilot, businessman, former president of the Airline Pilots Union. Nobody knows these issues better than the FAA administrator. And the meeting that we held at the FAA a few days ago had an overflow crowd. We had people that wanted to come and we just didn't have room. These folks came up with very, very good suggestions and Randy made it very clear and I made it very clear to them that we want to work with the airlines, we want to work with the pilots unions, we want to work with everybody, but we're not going to sit around on our hands and wait for something to happen.

If things don't happen quickly, we're going to take action either by suggesting legislation to Congress or by rule making.

SEN. MURRAY: Okay.

SEC. LAHOOD: We're not going to wait until January until the NTSB makes its report, we're going to give them a little time here to think about some of the things that were suggested and recommended, but I guarantee that we're going to take action. Safety is our number one priority in all of our modes.

SEN. MURRAY: Okay. Very good. And just real quickly my last few seconds, Mexican trucks, we have been working on this subcommittee long and hard on this, Senator Bond mentioned it in his opening remarks, the punitive tariffs are impacting everybody right now. Can you give me a quick update on where the administration's progress is in developing a plan?

SEC. LAHOOD: We are making the final tweaks to the proposal. It involves a lot of different agencies. It involves agriculture, transportation, the State Department, there's a lot of players here and so we're putting the final tweaks on it and we hope to begin to meet with you folks and your staff to explain what we've tried to do collectively to address the issues that many Senators expressed to us about their concerns about safety and the Mexican truck program.

SEN. MURRAY: Okay. Well we hope to be able to mark up our bill fairly soon after the July recess. So hopefully we can get it before then so we can get this resolved. Thank you.

Senator Bond.

SEN. BOND: Thank you Madame Chair and Mr. Secretary I second the questions that the Chair asked and I won't go into them here but you and I have had discussion about the funding on Mexican trucks. I would point out that this committee has in the past put all kinds of safety requirements and safety standards and guidelines and inspections on the Mexican trucks from what we have understood they have met every single one of those tests. And now it would seem to me that the negotiations would have to be without partner to the south on what we can do since we have violated the terms of agreement on NAFTA. And it's wonderful that all the agencies are talking to each other, but the problem is we have to resolve the dispute with Mexico. Is the government of Mexico involved in the discussions?

SEC. LAHOOD: You know Senator, I came up here and met with 28 either Senators or House members, I met with 28 members of Congress to try and discern what it takes to get Senators and House members to the notion that we can develop a very safe program. And look it, I heard lots of good suggestions and recommendations and lots of ways to measure safety. We've included those in our proposal and very soon you'll be seeing that.

Frankly we have not shared with the Mexican government. It's an internal document based on conversations and recommendations that we got from members of Congress who frankly didn't like the program.

But we have not shared it with the Mexican government if that's what you're asking me.

SEN. BOND: Well we have for three years put more to every good idea that we've got we put on it and to my knowledge, they've done it. Now some, if people don't like the program, they're going to have to explain it to the 25,000 American workers who are going to lose their jobs.

But moving on to the highway trust fund, if there is a fix, do you agree with the current highway transit split 80/20 and I would ask you submit the budget as assumes a $36 billion general fund appropriation for highways, are those funds going to be used for Title XXIII eligible activities only like trust fund dollars?

SEC. LAHOOD: Well look at the fix is going to be for highways and transit, is that what you're asking?

SEN. BOND: Yeah, I mean is there a separate, are you going to keep the same splits or are you going to --

SEC. LAHOOD: Yes, sir.

SEN. BOND: -- take different funds --

SEC. LAHOOD: No, no. No, no. We're going to fix both and the formulas we're not going to change those.

SEN. BOND: ARRA provides 10 percent for operating assistance on transit. Is it going to be the policy of the administration to support operating assistance in the future?

SEC. LAHOOD: Well Senator the supplemental bill that I think is pending now in the Senate includes a provision that allows for 10 percent to be used for operating and if you all pass that and the president signs it, it'll be the law.

SEN. BOND: Going forward, are you recommending because if we start subsidizing operating assistance, we're going to have to have a whole lot larger budget allocation than we have, that's the thing I'm worried about.

SEC. LAHOOD: Well look at Senator, I mean we're going to follow the law and in the supplemental, there's a provision that allows for money to be used for operating. And when I testified before Congress before, I said I'm open minded about this.

Look it, it makes no sense to send money out to these transit districts to buy buses if there's nobody there to drive them or there's nobody there to operate the transit district. So you all at least the House has spoken on this and eventually I think you all will, and if the president signs it it'll be the law and we'll follow the law.

SEN. BOND: Well I have some other questions about the burdens for example on the high speed rail strategy. We some need some guidance on there. Without some guidance from the department, I'm concerned we could end up in an unfortunate situation where states in each rail corridor go down their own way creating operating inefficiencies, greater operating maintenance costs, and are there steps you can take to assure that there is a process for developing common specifications, for example for rail locomotives, latest technology, and what can the department do in the short term to encourage American companies to invest in locomotive manufacturing and renew domestic manufacturing capability?

SEC. LAHOOD: Well we did put guidance out yesterday for all those that are high speed rail interest and we think it's very good guidance, we think it really gives people an opportunity to see what we're looking for. And we have set a deadline for September to receive applications. We'll review those and then we'll, you know, we'll determine you know how the money is going to be spent.

This money is going to be spent correctly and according to the guidance that we have given to people, and we developed the guidance after traveling around the country and holding I think 11 or 12 regional meetings and then inviting all the high speed rail enthusiasts to come to Washington and meet with the vice president and myself. We've had a lots of meetings on this. We think we're headed in the right direction. But I want to assure you that the $8 billion will be spent correctly to really jump start our opportunities to have high speed rail.

SEN. BOND: Well we want to make sure that there's guidance there to assure that it's spent wisely.

Mr. Secretary, I know top priority is to settle the dispute between air traffic controllers and the FAA. I'm concerned about what the dollar cost of it because there's nothing in the budget for it. And I just got some figures that 74 of the top 100 controllers earn more than the vice president of the United States and the speaker of the House. Now maybe they're worth more than that, but of the top 1,000 contributors, 411 earn more than $198,000 which is more than a cabinet secretary you make, majority and minority leaders of Congress. And I just wonder if you're going to be able to meet the needs if those salaries continue to go up.

SEC. LAHOOD: Well just by way of background for the committee, we have engaged Jane Garvey(ph) to lead the negotiations, two mediators have been hired, there are very, very close on many, many issues, well they've closed out many issues and they're very close on several others and obviously the final issues will be salaries and vacation and those kinds of things. And we're working with Jane and her team, you know, on what it's going to cost to really you know get into an agreement with the controllers. But we're closer than we've ever been and this process has worked very well.

SEN. BOND: Thank you Mr. Secretary, Madame Chair, if you'll excuse me, I have votes to go take.

SEN. MURRAY: All right. Senator Collins. Thank you Senator.

SEN. COLLINS: Thank you Madame Chair. Mr. Secretary, I want to associate myself with the question that Senator Murray brought up about the safety of regional carriers. In my state, even the largest airports in Bangor and Portland are primarily served by regional commuter airlines. In fact, in Bangor it's almost 80 percent of the passengers are being carried on commuter airlines. Even in Portland our largest airport, it's more than 71 percent. Do you anticipate the administration presenting a plan to ensure the safety of commuter airlines?

SEC. LAHOOD: Yes, and very soon. Again after our meeting Randy Babbitt will be traveling around the country and visiting with people who could not come to Washington. He's going to do that very quickly. I had a conference call for over an hour with the family members of those that perished in the flight in Buffalo. They offered me some very good suggestions and recommendations. So very quickly when Randy gets back from this little regional tour that he's going to be on, and after we assess whether the airlines are going to be able to and the pilots are going to be able to comply with some of the things that were recommended, we will have a good report with good recommendations about whether we think there should be legislation or rule making or some of these things are going to be done voluntarily.

We have to assure the flying public that when they get on a commuter airline, it's safe and that the pilots that are flying them are well trained and well rested. That's just, it's the bottom line and we're committed to doing that.

SEN. COLLINS: Great. Thank you. I appreciate that commitment. I mentioned in my opening statement that the biggest transportation issue in the state of Maine has to do with truck weights and I want to give you a little more background on that issue.

Right now, trucks weighing up to 100,000 pounds are permitted in the interstate highways in New Hampshire, Massachusetts, New York, as well as the Canadian provinces of Quebec and New Brunswick, but when they are traveling through Maine, there are only allowed on the interstate 95 from the New Hampshire border until they get to Augusta, Maine.

Now interstate 95 continues another 200 miles in Maine up into Aroostook County to Holton and the result is that the heaviest trucks are forced to leave the interstate and travel through small villages, through downtown Bangor. In the last couple of years, there have been two fatalities in Bangor involving heavy trucks that have been trying to navigate through busy or on rural roads and neighborhoods. This just doesn't make sense.

The state police has implored us to fight for an increase in the weight limit because they believe that it will reduce the number of accidents. The state legislature has passed a resolution of the governor, the entire delegation as bicameral, bipartisan, everyone's for it.

And unfortunately we've had a great deal of difficulty in trying to correct this disparity. As you can imagine, this is also a big economic issue, there's more wear and tear on secondary roads in our state because of the heavy trucks. It's a commerce issue when trucks traveling from Canada down through Maine have to carry lower loads. It's an energy issue as well because we're putting more trucks on the road.

I realize that this requires a legislative fix, but I would ask today that the department work with Maine officials on both sides of the aisle, state and federal, to help us develop a plan to remedy what is a serious safety and commerce issue. So I'm asking you today if you will help us address this important issue.

SEC. LAHOOD: I certainly will and we're looking at this in the department. When I was in New Hampshire and Vermont recently to announce some road projects and I was with Senator Sanders in Vermont and Senator Shaheen in New Hampshire, people raised this issue with me and both the Senators also raised it with me. And I know it's a very, very critical issue and we will work with the Congress on the way forward to try and find the right fix for it.

SEN. COLLINS: Thank you very much Mr. Secretary. Thank you.

SEN. MURRAY: Thank you very much. Senator Specter.

SEN. SPECTER: Thank you Madame Chairwoman. Mr. Secretary, thank you for taking on this important task job. Thank you for your trips to Pennsylvania including Cumberland County last week. There is considerable public interest as you know on using the stimulus funding and getting it into action. And that issue becomes more sharply focused as you see the public opinion polls expressing concerns about the deficit and the national debt. And I think the public concerns would be allayed to some extent, although it's a mounting problem from what I sense in my state and nationally, would be allayed to some extent if the funds were allocated and people could see some results from them.

Let me thank you for your prompt action in releasing the $950,000 from the Federal Highway Administration to the Federal Railway Administration. That is very, very helpful on Maglev. Pursuing Maglev, there has been appropriations of $45 million for the eastern part of the state which could be awarded to Maglev. That appropriation was made some time last spring, the spring of 2008 and there has been concern about matching funds from Pennsylvania on the 20 percent. But I would ask you to take a look at that to see if some of it could be advanced to the extent we can get those matching funds. Because I think Governor Rendell would be anxious to move ahead and the work on the robotic arms that construction could begin. So if you would take a look at that --

SEC. LAHOOD: Yes, sir.

SEN. SPECTER: I would appreciate it.

SEC. LAHOOD: I'll do it.

SEN. SPECTER: There is a different Maglev of low speed from the University of California which is south of Pittsburg and there is $1.5 billion in the stimulus package which could be allocated and that project is looking for $200 million to move ahead. And that would come in the category and I know how much you have on your plate and how many items you have, but if that money could be forthcoming, people could see where it is going. The trip we made to Cumberland County was very helpful because you see a bridge being constructed.

Secretary Napolitano was at the Philadelphia Airport on baggage handling for explosive. They could see $26 million. So there again it would be very, very helpful.

One of the key rail projects in Pennsylvania is a Schuylkill Valley metro which would run from Center City Philadelphia to Reading and would take an enormous amount of pressure on Schuylkill Expressway and that's a virtually parking lot. And we have scaled that back from some $2 billion using existing lines to a much, much lesser figure but it's still a problem of getting it lined up with the local match. There is $24 million which would lapse on September 30th and I would ask you to take a personal look at that, not to reprogram it because that program is alive. It's been a long time in coming but something that would be enormously important and even when we're trying to take people off the highways and OPEC oil and pollution and all the rest of it. Because I'm determined to see that happen. And so is Senator Casey and so is the Pennsylvania delegation.

SEC. LAHOOD: I'll get back, I'll look into it and get back to you.

SEN. SPECTER: Okay. I'd appreciate that.

There's another rail line, Scranton to Hoboken which would enable some tentative plans for a Wall Street West to be constructed in Northeastern Pennsylvania to take the pressure off of Wall Street in Manhattan. And the concerns which have been expressed in having all of those very important records and matters in one concentrated spot in light of what happened to the Trade Center. Not looking to make any predictions or say anything which would cause something to happen but it's a target area. And there is now a 30-day public comment period on the environmental review and when that finishes, it would be very helpful if there was a response from the Department of Transportation on the next step moving forward.

I've given you quite a laundry list here Mr. Secretary but you've got some of the really critical projects as they effect transit. Let me ask you now and give you a chance to respond a little bit as to what you see with the $8 billion on high speed rail. That is an item which would be very beneficial on the Philadelphia to Pittsburgh run. Where do you see the allocation of funds coming on that?

SEC. LAHOOD: We put the guidance out yesterday and I think it's up on our website so everybody can see it. We know that all the rail enthusiasts have already read it and some are putting together their applications right now for funding. I believe that by September we will receive applications. I think they'll probably come, some will come from a state, some will come from regions, multi-state regions. I know that Governor Rendell is very interested in this program. He's attended every meeting that we've ever had on high speed rail whether it's here in Washington or in Pennsylvania and I think he and his team will be very aggressive in putting together a proposal that will, you know, comply with the guidance that we put out yesterday.

But you know this idea that $8 billion may not be enough I think is nonsense. It's $8 billion times more than we've ever had at the department. And it also is the first time in the history of the country that anyone's paid attention to high speed rail to this extent.

And I guarantee you this, when President Eisenhower signed the interstate highway bill, all the lines weren't on the map and all the money was not in the bank. We're starting and this is a very good start. And with your help over the next five years with another $5 billion, we're going to help people in America realize their dreams and also answer the question for people who travel abroad to Spain, Europe or Asia and come back having ridden on a 250 mile per hour train why don't we have it in America. Because it's never been a priority.

It's a priority for the president. It's a priority for the Congress who put $8 billion in the bill and we're going to make it happen.

SEN. SPECTER: Good. Senator Kerry and I had put in the bill sometime ago for $15 billion and there's a lot of interest in the Congress and we will back you up.

My final comment is another thanks on my list here, we got $8.5 million for a transit station for Southeastern Pennsylvania transit authority in Croydon (ph), Pennsylvania. And we had a groundbreaking on that facility and that again was very helpful because it shows the people that the monies allocated to the stimulus package are being spent for useful purpose. And the more of that, the better to give some public confidence that when they're looking at a deficit or looking at a debt, and that there's a real purpose behind it and they're getting something for their money.

So again my thanks on that arm.

SEC. LAHOOD: Thank you, sir.

SEN. MURRAY: Thank you so much Senator Specter.

SEN. SPECTER: Thank you.

SEN. MURRAY: Mr. Secretary, I wanted to ask you about the E-ram program, an essential part of FAA's air traffic control system. It's the program that replaces outdated software that is used to manage our air traffic at high altitudes and until recently that program spent and operated on budget and ahead of schedule but this year the aggressive schedule that the FAA set for the program slipped a bit.

Now the FAA is saying this program is still going really well and it can be used to control traffic this year but I want you to know I hear a very different story from the air traffic controllers who are in those facilities and testing that software. They tell me that E- ram is not operational and the schedule is unrealistic. Can you explain to me the different levels? Are you hearing that from air traffic controllers as well?

SEC. LAHOOD: Well anytime that I travel around the country I do visit air traffic control towers and I get an earful from the folks that work there. I have not heard about this but I will tell you this, Randy Babbitt's number one priority -- well look at safety as his number one priority and that's the reason we have the safety summit and you know prior to the Buffalo crash, we would always say our number one priority is NextGen, getting these tracons (ph) to a level where you know we have very capable people working as controllers in these tracons (ph). We want to give them the best equipment possible.

And so I will look into that issue. As I've said, I've been all over the country and I've not heard about it, but I'll check it out and I'll start asking the question when I go visit.

SEN. MURRAY: Okay. I'd appreciate that and if we could follow up with you on that --

SEC. LAHOOD: Right.

SEN. MURRAY: -- with some of the concerns we hear that --

SEC. LAHOOD: Sure.

SEN. MURRAY: -- be great. The FAA has also been highlighting ADSB as the centerpiece of its modernization efforts, that's the program that will allow the agency to replace its radars with satellite based technology. Now the FAA has mandated that the airlines equip their airplanes with ADSB technology by 2020. I don't believe that mandate will be a success unless the airlines themselves see the benefit of investing in the ADSB and that means the FAA has to be able to change its regular operations to make use of that technology. Can you talk to me a little bit about what the department's doing to make the case for equipping claims with the ADSB?

SEC. LAHOOD: Well, I have personally had discussions with the airline industry and I know that again this is a priority for Randy, he understands this probably as well as anybody because of his pilot experience and we've had some discussions with our friends at the White House about this in terms of what it's going to cost to implement a program a like this.

And so there's lots of discussion about this and we realize that it's a very costly program. I mean, I just read recently where United just ordered you know a whole bunch of airplanes from Boeing and they're going to obviously be equipped with the kind of equipment that is going to be necessary to connect with what we're going to be putting in as our new NextGen equipment and so we're going to work with the airlines on this and we're going to, they want us to be helpful because this is a very costly thing for them. And they're not exactly making a lot of money right now as you know.

SEN. MURRAY: Very tough time.

SEC. LAHOOD: Right.

SEN. MURRAY: Okay. I wanted to ask you separate from the highway trust fund that we talked about earlier, I want to ask about the livable communities initiative. And I really do want to acknowledge your work in reaching out to Secretary Donovan from HUD and Administrator Jackson from EPA. I know that earlier this week all three of you unveiled a set of six principles for the administration's livability initiative and as part of that, you said that it needs to be easier for local and regional governments to coordinate housing and transportation planning. The authorizing committees I know are working on drafting bills for the next surface transportation authorization. If we want this new legislation to be informed by the livability initiative, we've got to move very fast beyond the general principles and see some of the specific changes.

And I wanted to ask you when you thought we could hear from you about some of the barriers in federal law to integrated housing and transportation planning?

SEC. LAHOOD: I think very soon. Our staffs have been meeting and I think we're putting together propels right now and I think very soon, I mean I think you know within the next 30 days or so we can have what we're really you know putting on paper in terms of our opportunities to work with HUD and to work with EPA and to figure out what barriers exist and what changes really need to be made in any kind of legislation.

SEN. MURRAY: Okay. I'm very much looking forward to seeing what you have in terms of --

SEC. LAHOOD: Great.

SEN. MURRAY: -- specific proposals on that.

SEC. LAHOOD: I appreciate your support on this, too.

SEN. MURRAY: Okay. And I want to ask you about water transportation. Our ports and waterways provide a great opportunity for both freight and passengers to keep traffic off our roads. It's something we know well out in the Pacific Northwest with the Colombia River system and Puget Sound. So I'm really pleased that the administration is showing an increased interest in the maritime sector.

One indication of this is the president's proposal for a new joint initiative with the Department of Homeland Security to increase security capacity and efficiency of our nation's ports. It's a proposal that will develop the nation's intermodal freight infrastructure by linking our coastal and inland ports to highways and rail networks.

Can you talk to me a little bit about that this morning and tell me what you see and envision?

SEC. LAHOOD: Well we need to make sure that the ports are secured. Congress has given us some directives on this and in order to comply with what we believe are opportunities to secure ports and to make sure that things that move in and out of ports are what they should be and that they don't cause you know a threat to people that live in those areas, we are combining our efforts with Homeland Security and we've put money in the president's proposed budget to deal with that.

I mean I will also tell you that this administration and we at the department have taken a great deal of interest in ports. The $1.5 billion in discretionary money, if you look at the guidance that we've put out, we expect to see some opportunities to enhance ports around the country to do exactly what you were saying initially in your statement here.

And we also are going to highlight the idea of the maritime -- excuse me the marine highway which we think again can relieve congestion certainly all along, particularly along the area where you live and the state you represent all along that coastline where there are ports all along there.

So it's not only making sure that they're secure, that they're safe, that what comes in and out of there is checked properly, but also to highlight the importance of their expansion and using the marine highway as another alternative to relieve congestion on land.

SEN. MURRAY: Well as part of that, we are very acutely aware of, my state and several other states, about the ability of our ferry system to get people off the roads. And I wanted to know if you thought that the next authorization, if you'll support me in helping make our ferry system better supported within the authorization.

SEC. LAHOOD: Absolutely. And the money that was in the economic recovery for that program is well over subscribed. So there's a lot of interest in this, there's no question about it.

SEN. MURRAY: That is not surprising to me and I think --

SEC. LAHOOD: Right.

SEN. MURRAY: -- that's make our case.

SEC. LAHOOD: Right.

SEN. MURRAY: That there's a capacity out there that if we invest --

SEC. LAHOOD: Exactly.

SEN. MURRAY: -- really help us out.

Mr. Secretary you've been very kind to answer a number of questions this morning. We have a number of other Senators who were not able to be here today who want to submit questions to you including Senator Byrd who is unable to be here but he asked that we submit questions --

SEC. LAHOOD: Certainly.

SEN. MURRAY: -- behalf so I will do that for. And the record for this hearing will be open for another week so that Senators can submit questions for the record. And again Mr. Secretary thank you --

SEC. LAHOOD: Thank you.

SEN. MURRAY: -- so much.

SEC. LAHOOD: Thanks for all your support.

SEN. MURRAY: Hearing is --

SEC. LAHOOD: For all our issues, too. We really appreciate it.

SEN. MURRAY: -- out to my state to see some of this --

SEC. LAHOOD: Yep.

SEN. MURRAY: -- on the ground or --

SEC. LAHOOD: We'll be there. Thanks for your leadership.

SEN. MURRAY: Thank you. This committee will stand recessed subject to the call of the chair.

END.


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