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Hearing of the House Transportation and Infrastructure Committee - Recovery Act: 10-Week Progress Report for Transportation and Infrastructure Programs

Hearing of the House Transportation and Infrastructure Committee - Recovery Act: 10-Week Progress Report for Transportation and Infrastructure Programs

Chaired By: Rep. James Oberstar

Witnesses: Transportation Secretary Ray Lahood; Lisa Jackson, Administrator, Environmental Protection Agency; Terrence Salt, Principal Deputy Assistant Secretary Of The Army, Civil Works, U.S. Army Corps Of Engineers; Paul Prouty, Acting Administrator, General Services Administration; Donald Stadtler, Chief Financial Officer, Amtrak; Dennis Alvord, Acting Deputy Assistant Secretary Of Commerce For Economic Development; Calvin Scovell, Inspector General, U.S. Department Of Transportation; Katherine Siggerud, Managing Director, Physical Infrastructure Issues, Government Accountability Office; Melissa Heist, Assistant Inspector General For Audit, Environmental Protection Agency; Allen Biehler, Pennsylvania Secretary Of Transportation; Matthew Millea, President, New York State Environmental Facilities Corporation; J. Barry Barker, Executive Director, Transit Authority Of River City, Louisville, Kentucky; Michael Morris, Executive Director, North Central Texas Council Of Governments

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REP. OBERSTAR: The Committee on Transportation and Infrastructure will come to order. We meet today to carry through on the commitment this committee made when we launched the initiative for stimulus and -- and did so in December of 2007. Our first proposal was for a $15 billion investment in the initiatives under the -- in the programs under the jurisdiction of this committee. That grew over time as -- as -- as people realized that we were in a recession, and it was some time later that the economists said, "Oh, the recession began -- began in December of '07." Well, that's what we said right here in this committee. You know, we had bipartisan support.

But when -- when we launched that proposal, unemployment in the construction trades was 968,000. (Inaudible) -- sand and gravel pits closed all over America and more closing every month, and ready-mix concrete suppliers and asphalt cement suppliers out of -- out of business.

MS. CANDACE MILLER (R-MI): Was nice to be here.

REP. OBERSTAR: It's good to have you here for -- for awhile, Ms. Miller.

REP. JOHN MICA (R-FL): I apologize, Mr. Chairman. (Inaudible) -- not recognized but there was -- there was protests at the bottom of the Hill, protests at the top of the Hill. And I just did something I haven't done in at least seven or eight years. They let us go across the Visitor's -- over the top of the Visitor Center. Historic voyage to get here.

REP. OBERSTAR: Well, there's no protest and only a -- only a welcome here.

REP. MICA: Thank you. I apologize. I tried to get word to go ahead.

REP. OBERSTAR: That's -- well, Ms. -- Ms. Miller --

REP. MICA: She does a great job.

REP. OBERSTAR: -- sat in for you very well, ranking member for a morning. By the time we brought our bill to the floor, unemployment in the construction trades was 970,000. Today, it's 1,900,000.

We began work in earnest on a revised, upgraded, updated version. Our portion that passed the House in January this year was -- was $85 billion. By the time we got through conference that was scaled back to $64 billion.

But through it all, through it all, I insisted on transparency and accountability and -- and deadlines for the state DOTs to meet, for MPOs to meet, for the transit agencies, and for all other beneficiaries of this -- of these funds. There was going to be accountability. We're going to show the American public where their dollars are going and the jobs created, and do this step by step. I've been through three or four of these, and I served on the staff of my predecessor.

We had in 1962/63, the Accelerated Public Works Program. That was $900 million. And it took a lot longer for the projects to play out, to actually be under contract and get them to work than was initially anticipated.

And then after I was elected to -- to the House we had Local Public Works I in '77, and it took less time for those to go out than -- than an accelerated -- (inaudible). Then we had Local Public Works II, and the process was not yet streamlined.

Now we have, learning the lessons of -- of those three previous experiences, applied them in this legislation, require states to come up with only those projects that have been designed, engineered, right-of-way acquired, EIS completed, public review process in place, and down to final design and engineering. All we need is the money.

And the second thing was -- and that's for highway and bridge, and transit, and wastewater treatment facility projects, and then for the other federal agencies -- the FAA and -- and the Corps of Engineers, and so on.

And we had lists of projects, and we had states scrub those lists. And we had the MPOs do the same and -- and we had the transit agencies do the same. We had a hearing in September. We had a hearing in October. We had another hearing in January. And everyone said, kumbaya -- we're all ready to be accountable to put these projects in place.

So the purpose of this hearing is to be the proof of -- of the pudding. Today is the day when the rubber meets the road -- when the -- when the projects are -- begin the accountability process. We're going to have another hearing in another 30 days. So we now have a total of $6.4 billion put out to bid on the highway and transit side in 47 states and the District, 1,380 projects, 263 in which work has already begun, and -- and as of March 31st we'll have some updated figures -- (inaudible) -- I expect with 1,200 workers in the construction trades no longer sitting on the bench but in the workplace -- no longer being paid for not working but being paid a paycheck. They can make their mortgage payments, they can send their kids through school, and they can contribute to this economy in a -- in a -- in a constructive and positive way.

With that, I -- I yield to the distinguished gentleman from Florida, Mr. Mica, our ranking member, and thank him for his participation in this process all along.

REP. MICA: Well, thank you, Mr. Chairman, and I appreciate your calling this hearing and also helping us make certain that we acted responsibly and act responsibly in assessing how federal dollars in a huge stimulus package that was well intended, but we want to make certain the -- the funds are -- are well directed, and I appreciate your good work.

Now, I think I'm going to give everybody a pass on this one because we're only a short time into this -- a matter of weeks. But we still want -- but we still want to -- folks to be held accountable and we're watching very closely how money is being spent.

I'm not going to get up here -- and there's other agencies that have not, I think, been as good a steward as Secretary LaHood and the administration has been on transportation. I've got a $550,000 skateboard park in Rhode Island. I think you've seen about -- seen that one on TV. We've got other money that goes for restoration of a museum motorship. We've got different examples.

So we have to keep our eye on projects that may not be of the best merit.

I won't get into all the transportation things that have been brought to my attention but I do want to mention one, and that's -- and this is -- this is a bridge that served a corporation -- I won't name it -- that is probably making some of the biggest money ever in the United States. So I think we need to look at who gets the money and, again, how the money is spent. So that -- that's the first point I want to make.

The second thing is -- brought to my attention the state of Ohio plans to spend 57 million (dollars) in federal stimulus money on highway projects that won't begin for years, and I don't know if that's totally correct. I do know, however, in talking with my state transportation secretary and others throughout the country -- and I just came from a meeting with Colorado folks and some from California -- that there -- and it's the same problem we faced before, Mr. Oberstar, when we were trying to get the bill done -- is there are many projects that are caught up in process. So I guess we have to spend some money on study and getting those -- those projects to where they can be eligible for this money. But we do have questions that have been raised there.

The other -- the other point that I want to say, and I think GAO has -- has looked at this, is I'm concerned about how grant recipients report job creation, which is one of the requirements under the recovery act, so we have accurate data on how many jobs are being created. The GAO found the existing criteria to measure job creation may be too vague. So maybe in some tightening or tweaking I know the secretary can do some things within his power, and if he needs additional authority or direction or commentary in legislation we'll be glad to -- to work with him.

Those are -- are my concerns. But again, I think we -- we have to give folks a pass at this juncture. I think that the hearing that we'll have in another number of months here that you have scheduled will be very telling because people want jobs and they want employment and they want it now, and they want infrastructure now rather than later. Thank you. I yield back.

REP. OBERSTAR: I thank the gentleman for that. The purpose of the hearing is to have that (very ?) openness, accountability, and transparency in the process. Mr. DeFazio for two minutes.

REP. PETER DEFAZIO (D-OR): Thank you, Mr. Chairman. Mr. Chairman, I just want to focus on one entity in my state because I -- I think they've done something that -- that could be replicated. The -- the TriMet in Portland, which I don't have the privilege of representing but my largest city, took their money and they put it into 30 separate projects. They have -- they have needs. They need buses and they're all for new buses and efficiency, and we love the -- the work that's done at New Flyer and we're for jobs there.

But they wanted -- since we have the second highest unemployment in the nation in Oregon they wanted a more direct local impact, and they were apparently fairly unique in doing this. They identified 30 separate projects. They -- they have a need for a new bus fuel-and- wash facility. They're going to build that. They're going to put bus pads on city streets. They're building a -- a park-and-ride. And, you know, this is going to have a -- a much more of a local impact and create jobs.

And the other really innovative thing they've done is they have a new way of tracking the jobs. They're not going to use the estimates and say, well, we spent this much money -- it must have created this many jobs. They actually are going to track the jobs online. They're going to be linked to the databases of the contractors, and they're actually going to track the jobs weekly that are created by this money, and -- and there's apparently a well-developed system to do this. It's -- it's been used more for labor compliance.

But now they're going to use it to track the job generation and I think that could be a national model. So we could get real hard numbers on how many jobs we're creating, which would help us to get the investments we need in any future legislation in addition to surface transportation authorization. Thank you, Mr. Chairman.

REP. OBERSTAR: I thank you for those comments and now we'll proceed to Secretary LaHood and -- and Administrator Jackson. Thank you very much both for being here. Mr. Secretary, this is your first appearance on the other side of the table. When you first elected to Congress, you started your service in a -- in a very distinguished manner on this committee. Welcome back. Welcome to the other side of the table.

SEC. LAHOOD: Thank you, Mr. Chairman.

REP. OBERSTAR: Congratulations on the great start that you've made --

SEC. LAHOOD: Thank you.


SEC. LAHOOD: Thank you. I sat right where my successor is sitting, about that far down when I first came on the committee. They're about the same number. So there's hope, Aaron.


Not that you'll be where I'm at but there's hope that you'll eventually be up there where the chairman and Mr. Mica --

REP. OBERSTAR: I would advise, Mr. Secretary, that he started off with his first comment in this committee in a very -- very appropriate fashion and I -- so there's a great future for you here.

SEC. LAHOOD: Mr. Chair --

REP. OBERSTAR: He supported member projects.

SEC. LAHOOD: Mr. Chairman and Mr. Mica, and members of the committee, thank you for inviting us today, and I want to say a special word of thanks to a number of members of this committee for your leadership already. I've had probably at least six meetings with Mr. Oberstar and Mr. Mica on a number of issues about the way forward, and I've met with Mr. DeFazio and other members of the committee on issues that are important to all of you. And I thank you all for your leadership in inviting us here today to discuss the progress in implementing the American Recovery and Reinvestment Act of 2009.

I'm enormously proud of the men and women at the department who have worked extraordinarily hard to implement this groundbreaking legislation in record time while fully embracing the letter and spirit of the recovery act's commitment to accountability and transparency. While there is much work remaining, I believe we have already achieved enormous success. Of the roughly $48 billion provided to the department by the recovery act, we have announced nearly $45 billion for roughly 2,800 surface and aviation improvement projects.

As of this week, more than $9 billion of these funds have been obligated in nearly every state and territory. Our (modal ?) agencies have done their part to move these funds out the door as quickly as possible. The Federal Aviation Administration has been very effective in soliciting and reviewing project proposals and awarding discretionary funds so that ready-to-go airport improvement projects could begin.

Within two weeks of passage, the Federal Highway Administration appropriated funds and has been working aggressively to move projects through the approval process. The Federal Transit Administration now has 136 transit agency grant proposals totaling nearly $1.5 billion ready to be obligated, and the Maritime Administration will soon award $100 million in grants to hundreds of small shipyards.

The recovery act also makes historic investments intended to jumpstart new high-speed rail passenger service for the nation. Later this summer, we will begin awarding a portion of the $8 billion in recovery funds to deserving rail corridor projects all over the country, and the department is finalizing criteria for awarding an additional $1.5 billion in discretionary grants for merit-based projects across all modes.

The upshot of all of this is that we are helping to restore a measure of hope to the middle class by putting men and women back to work in good-paying technical and professional jobs. I recently traveled to New Hampshire to visit a highway project funded by the recovery act. There, I met construction workers who were going back to work. Many of them have been laid off previously. These individuals are now back on the payroll, supporting their families, and contributing to the local economy.

This unprecedented effort to invest in our nation's infrastructure demands equally unprecedented levels of accountability and transparency. We want to assure American taxpayer -- American taxpayers that these recovery funds are spent wisely and on projects that add value to communities. The department is providing effective oversight to meet the statutory requirements of the recovery act.

First, our internal executive oversight management team, the TIGER team, has issued new guidance on data and financial reporting requirements to ensure that the money trail is followed closely and accurately, and that progress is shared clearly with the public on our recovery website.

Second, we have developed a systematic and comprehensive approach to risk management which the Office of Management and Budget has since adopted for government wide use. This approach entails a former -- formal assessment of potential risks and put -- puts mechanisms in place to identify, mitigate, and validate risks across all program categories.

And third, we have implemented new layers of accountability based in part on recommendations from the Department of the Inspector General and the Government Accounting Office.

We have made it clear to all staff that there is zero tolerance -- there is a zero tolerance policy for waste, fraud, and abuse as the recovery program unfolds, and we will continue to work with auditors to identify new and innovative ways to participate and respond to any accountability and disclosure challenges that arise.

Let me say that it has been a privilege to participate in the most ambitious effort to improve our nation's infrastructure since President Eisenhower commissioned the Interstate Highway System more than a half a century ago. I'm confident the department will continue to assure that the recovery act works on behalf of all Americans to rebuild our economy and our future. And I look forward to your questions, Mr. Chairman. Thank you.

REP. OBERSTAR: That's a very good start -- a very good report. We -- we have seven minutes remaining on time of this vote. We'll proceed to Ms. Jackson. Administrator Jackson, thank you very much for -- for agreeing to take on this challenge at EPA. You come with a great background and record of experience and service, and with -- with a good spirit as well to move us ahead. So thank you very much for your service and we look forward to hearing your report.

MS. JACKSON: Well, thank you, Chairman Oberstar. Thank you for those kind words, and to you and Ranking Member Mica and members of the committee, I thank you all for the opportunity to appear before you today to discuss EPA's implementation of the American Recovery and Reinvestment Act of 2009. And like my colleague, I would be remiss if I didn't take just a moment to thank you and members of this committee for historic support of clean water projects, which have made such a difference in the lives of so many Americans.

Every member of this committee has seen firsthand in your districts that our nation faces the most pressing economic crisis since the Great Depression. When President Obama took office 100 days ago, he immediately began working with Congress to pass the recovery act to create and save jobs, jumpstart the economy, and build the foundation for long-term economic growth.

Seventy-one days after its passage, the recovery act is creating good jobs for Americans around the country and making the investments that we have ignored for far too long, and EPA will play a key role in that effort.

The EPA has been allotted over $7 billion to put Americans back to work by investing in clean water, by cleaning up and redeveloping the toxic sites that languish in our neighborhoods, by fixing leaking underground storage tanks, and by installing technologies that reduce air pollution from diesel engines. These investments will not only improve human health and the environment, but they will create thousands of green jobs and spur training and innovation throughout the economy.

In Colorado, we awarded grants for diesel emission reductions on local school buses, which grows jobs, saves money for school districts, sparks innovation, and most importantly, protects children when they ride to school in the morning. In Portland, Maine, the recovery act will help put a small family-owned business struggling to pay its 19 employees with no work and no contracts back to work. Grants from the state revolving fund portion of the recovery act will allow them to put their employees to work and boost their local economy.

Another state revolving fund grant in Kermit, West Virginia, is putting people in jobs to improve the town's wastewater treatment facility. Kermit, which is an economically-distressed town, has been trying to get funding for this project for over a decade. Now, at a time when the economic needs are greatest, the people there are at work, improving the town and the environment surrounding it.

These programs will aid our economic recovery and will protect and increase green jobs, sustain our communities, restore and preserve the economic viability of our property, promote innovation, and ensure a safer, healthy environment. To realize all those benefits, time is of the essence. The speed at which we move is critical because the faster we initiate projects in struggling communities the faster we initiate a nationwide economic recovery.

And, Mr. Chairman, EPA has quickly stepped up and responded to the task of getting money obligated to these various projects. The recovery act put new "buy American" requirements on the Clean Water and Drinking Water State Revolving Funds, which are by far EPA's largest recovery act-funded program. In 70 short days, EPA conducted extensive stakeholder public outreach and yesterday issued a (memos ?) to its regions and states on how EPA will interpret this new requirement.

Of the $7.22 billion thus far made available to EPA, we have already distributed over $1.8 billion to all 50 states. Of this figure, the vast majority, over $1.6 billion, has been obligated through the state -- Clean Water and Drinking Water State Revolving Funds, and nearly 100 million (dollars) for the clean diesel program.

In addition, EPA is actively soliciting bids for Superfund projects. While the start time for the projects will vary, EPA expects to quickly have bids completed, shovels in the -- in the ground, and jobs created. And to keep that money moving into the communities, EPA offices have specifically created internal management processes designed to expedite the flow of recovery act funds to qualified grant recipients and contractors. A portion of EPA's recovery act funds will be used to ensure accountability, oversight, and transparency.

The president has also made it clear that though we move with urgency we must also carry out these efforts with full transparency and accountability. EPA has developed quantifiable outputs and performance measures along with reporting requirements to ensure (that its ?) funds are spent as directed and that they meet the economic and environmental goals set forth.

Mr. Chairman, EPA has an extraordinary opportunity. We can help to provide solutions to our economic challenges at the same time we protect human health and the environment in communities across the nation. We do not take that lightly nor do we fail to understand the extraordinary trust and responsibility put in us by you and by the American people to steward these funds effectively and efficiently.

We are eager to work with this committee, our federal, state, and tribal partners, and the public to implement the American Recovery and Investment (sic) Act of 2009 with oversight, accountability, and transparency. Thank you again for inviting me to testify here today and I look forward to answering any questions you may have.

REP. OBERSTAR: We will have questions. I'm sure all members have questions about -- about the progress, but compliments to both of you on moving out smartly, quickly, and -- and with those very focused comments that you just now delivered. Very, very -- your seriousness of purpose is very reassuring to me and should be reassuring to the whole country.

We are -- we have 320 members who have not yet voted. A minute remaining on this vote. We will -- we have two five-minute votes after this, and we'll resume in roughly under 20 minutes. Committee stands in recess.


REP. OBERSTAR: The committee will resume its sitting and thank all participants for their patience. Mr. Secretary and -- and Madame Administrator, thank you again for your presentation, for a very crisp review of the status up to this point. I just want to project on screen this process for ensuring transparency and accountability that -- that I crafted at the outset of the -- of our committee version of stimulus to put in motion the process that we're now -- that OMB has adopted, that the -- the president has embraced, and that the secretary and the administrator are -- are testifying to, and that is a view that the funds would be best used if they went out by formula -- if they went to the -- to the states -- to state DOTs on the -- on the highway and to the MPOs and -- and -- and to the transit agencies according to a formula already in -- existing in law for projects that as I've already said, so I'll say it again -- (we're ?) through all of the phases down to final design and engineering, cleared the public review process, are ready to go to bid but for the money -- that this would be 100 percent federal funds so we wouldn't burden states who already have severe fiscal problems by requiring them to come up with the -- with matching funds, but that we would also require maintenance of effort, certification by each governor that they will continue with the program of projects they've already planned to do for the current fiscal year -- that the -- that the state revolving loan fund agencies would do the same, and the transit agencies would do the same -- that there be a signoff on the program of projects for the current fiscal year under the 80/20 formula and signoff for the stimulus. Did you receive those certifications, Mr. Secretary?

SEC. LAHOOD: For every project that we have approved we -- we have received certifications from the states, their governors, their -- and the state DOT.

REP. OBERSTAR: Thank you. Ms. Jackson, have you -- has EPA received the signoff from the state SRF management entities on the program of projects they planned to do and those that they will do on the stimulus?

MS. JACKSON: That is part of the application, Mr. Chairman, and so as we move through the SRF distribution process we are receiving that information.

REP. OBERSTAR: And this -- have you had -- Mr. Secretary, have you had any resistance of any kind from state DOTs on -- on the reporting, on the transparency, on the accountability?

SEC. LAHOOD: Absolutely not. They -- they get it. They know that these are -- are dollars that are coming their way and that there has to be total transparency and total accountability, and we've heard no complaints.

REP. OBERSTAR: Well, that's good -- good to hear. I had the same reaction. Initially, there was a little pushback -- (inaudible) -- questioning but -- but then the county engineers, the -- the career engineers in the various state DOTs all said, this is an opportunity -- opportunity for us to show that we can deliver -- that we can produce these projects within that 90-day framework.

We had some pushback from some county engineers in my district I met with. They said, "You know, we'll still have frost in the ground if you hold us to that 90 days." I said, "Have you ever heard of dynamite? Blow the goddamned thing up -- (laughter) -- and build it."

"Oh, you're really serious about this." I said, "You're darn right I am. You're working. But there are 2 million construction workers who aren't. Your job, my job, our job together is to put them to work. That's what this is all about."

You have authority, Mr. Secretary, in the legislation for discretionary -- about a billion and a half dollars in discretionary funding, and the question I had is you made reference to in your prepared remarks to projects that are some unique, standing unique -- what did you have in mind? How are those dollars going to be used for such initiatives?

SEC. LAHOOD: We have sent to the White House our memo on what we believe would -- would be some good guidelines for the use of the 1.5 billion (dollars) and they are reviewing that information. My own feeling is is that the Congress, when it passed the economic recovery, in our portion of it put a very good amount of money for roads and bridges, 28 billion (dollars); a very good amount of money for transit, 8 billion (dollars); obviously, the president's initiative on high-speed rail, and a billion for airports. And so I would -- our own inclination is to be thinking in terms of some other opportunities around the country. But I -- I can't be specific because I want the White House to have the chance to review these -- this information.

REP. OBERSTAR: Of course. I understand. So that's the process. That's what you're doing with it is you've -- you've instituted an initiative for their review and then you'll come back and -- and take action.

SEC. LAHOOD: And we'll share that. That -- that'll be put in the record and -- and you'll -- everyone will know what the criteria is, and we'll be off to the races.

REP. OBERSTAR: That's great. The questions that we had early on in this process as well, you know, if you do -- if you do it this way -- if you do it the way the committee proposed and then the way the president embraced we may not get the best quality projects, may not have things that are -- that's not the -- the criteria is jobs. Does this put people to work in a short period of time? Are we taking them off the bench? Are we putting them on the job -- taking them off the unemployment rolls and putting them on the -- the payrolls? And -- and do you have any -- any questions -- have questions been raised to you so far in this process about the, quote, "quality," unquote, of projects submitted? Does that make any difference?

SEC. LAHOOD: Well, look, Mr. Chairman, you know this and the members of the committee do because you represent very -- there's a lot of creative projects. There's a lot of creative people in America. Everyone on this committee represents people who want to get their friends and neighbors back to work. There's no better way to do it than building infrastructure.

There's no quicker way to do it than the way it was laid out in our portion of the economic recovery. We're getting the job done. The states are getting the job done. And you're going to see thousands of people working on -- on some more traditional type projects but some innovative and creative projects, too.

REP. OBERSTAR: Well, there'll be plenty of time for long-term creative thinking when we do the six-year transportation bill, which we will have to discuss with you soon. Mr. Mica?

REP. MICA: Well, thank you again, and I appreciate your coming in and keeping us posted on your progress. First, Mr. LaHood, most of your money is going through formulas to states, particularly on transportation projects. So the states are really picking the projects. You're not picking them. Is that -- that's correct?

SEC. LAHOOD: That is correct -- the governors and their state DOT people.

REP. MICA: Do you think we have enough controls or constraints or guidelines to try to get the best projects? Again, and the chairman and I share the same goal for job creation. I cited a few of them that have raised some eyebrows about picks. Do you think that the guidelines are sufficient and that you have the authority you need to direct the money to get to jobs?

SEC. LAHOOD: Absolutely. We -- we're working -- we work -- we talk to the state DOT folks every day, and the vice president and myself talk to governors on a regular basis and --

REP. MICA: A certain amount, it appears, is going for planning and I'm not against that or for studies as opposed -- and that does also create jobs. We don't have any guidelines, though, as to any percentages that they can expedite, say, on studies as opposed to construction?

SEC. LAHOOD: They have to meet our guidelines for putting people to work and -- and with --

REP. MICA: Well, then you've seen the GAO commentary. Is there something else we need to do to tweak this to make certain that there is clarity in, again, reporting on the job creation requirement that we have?

SEC. LAHOOD: We -- we've worked with the state DOTs and we're working with OMB to really get the best definition of what a job is so that we can really accurately reflect --

REP. MICA: (Inaudible) -- there'll be -- you know, everything's based on experience. And we were -- we're only -- and I said we're only a short time into this. But do -- would you anticipate additional guidelines being sent out on -- on, again, use of this money and reporting back on job creation?

SEC. LAHOOD: Well, we -- we're -- I mean, we're going to be reporting on job creation on a regular basis -- on a quarterly basis.

REP. MICA: But there -- again, the problem was the clarity in definition which GAO identified as a problem. I didn't. I just --

SEC. LAHOOD: No. No. Lookit, it's been difficult.

REP. MICA: Yeah.

SEC. LAHOOD: And -- and we're -- we're very close to really defining what a job is with the use of this money.

REP. MICA: Again, if -- if they have a problem or there's something we need to do legislatively we can assist in any way. So I know you'll let us know.

REP. OBERSTAR: Will the gentleman yield?

REP. MICA: Yes. Yeah.

REP. OBERSTAR: You raise a very interesting point about planning. The question is what is meant by planning.

REP. MICA: Well, planning or study to get us to a project which is -- we had talked so much about shovel ready but like this -- and I don't know. I -- I cited the Ohio instance, and there are others. I'm not sure how many jobs that creates on a study -- (inaudible).

REP. OBERSTAR: I would just like to give the gentleman the experience I had two weeks ago. A young man from my hometown -- he's moved away from Chisholm -- Kevin Zalick (ph). Kevin went on to engineering school. He's a civil engineer. And he and his wife came to Washington. He said, "A month ago I was out of work. I'm now back on the job and I'm using this one week of vacation time that I -- that I'd earned designing roads. That's what our -- that's what our civil engineering firm does." Now, is that planning? He is back on the job --

REP. MICA: Yeah. Well --

REP. OBERSTAR: -- as a result of the stimulus.

REP. MICA: And I think that's part of the -- (inaudible).

REP. OBERSTAR: So what I -- it's -- I think those who raise these questions need to be a little more precise about what --

REP. MICA: (Got the report ?) back from -- yeah.

REP. OBERSTAR: -- not you, but -- but the report you're citing.

REP. MICA: The report back I got is that some of those that are being designed won't be built for three or four years. So that's the question. All I'm trying to do is make certain that the money gets there and that -- that there is clarity in also reporting back on the jobs that are being created.

REP. OBERSTAR: That's right.

REP. MICA: You know, my heart aches at seeing folks without a job. And our whole objective, your objective, the administration, was to get people to work as soon as possible. So, again, we'll -- we'll work with you on that.

And you have some other areas, I guess, under your -- I think you spoke mostly about highway, but you have Coast Guard, TSA, maybe some FEMA money. How's that going out?

SEC. LAHOOD: We have money for ports and we have money for ferries.

REP. MICA: What percentages of -- I mean, you reported 48 billion (dollars) of DOT.

SEC. LAHOOD: Uh-huh.

REP. MICA: And, again, how much is formula and then how much is at your discretion to these agencies that wouldn't be formula, and how much of that --

SEC. LAHOOD: The 1.5 billion (dollars) is discretionary, the 8 billion (dollars) on high-speed rail. We're going to be working with rail corridors around the country on that money. The 28 billion (dollars) is -- is -- is formula. That's -- that's for roads and bridges.

REP. MICA: Right.

SEC. LAHOOD: The airport money, you know, though we had a billion there almost all that money is out the door.

REP. MICA: Okay.

SEC. LAHOOD: Almost all of it's for runways.

REP. MICA: (Because ?) some the states will get out and some you're -- (inaudible).

SEC. LAHOOD: The transit money we're working directly with transit --

REP. MICA: So what percentage of your money that isn't by formula would you say is out? Ninety percent? Eighty? Do you know? Maybe you could -- or could let us know. Because they're -- you know, we're giving money in big bulk to let states distribute money, and then we have responsibility to get money out, too, Mr. Chairman, from agencies. So if you could let us know on that I'd appreciate it. So and the same thing with -- now, EPA -- your money isn't going out by formula. You're doing grants so -- or -- or are there also formula support? Could you give us an update on that, please?

MS. JACKSON: The vast majority of EPA's money -- $6 billion out of our 7.22 billion (dollars) go through the state SRF programs.

REP. MICA: Okay.

MS. JACKSON: That's a program with 30 years of experience. Every year, states do -- (inaudible) --

REP. MICA: And the bulk of yours is -- and out of that --

REP. OBERSTAR: It goes by an allocation -- gentleman yield -- goes by an allocation to states --

REP. MICA: Right.

REP. OBERSTAR: -- established over time and that's -- that is fixed in policy.

REP. MICA: But my question is all that can go out has gone out to that, and then you have some discretionary money which you -- would it be about a billion then -- (inaudible)?

MS. JACKSON: It's about 1.2 billion (dollars).

REP. MICA: Okay.

MS. JACKSON: And just not -- not to correct you but for the record, about 25 percent of the formula-driven money is out. That's because states have to give us applications for the money. We're turning those around in two- to three-week time periods.

REP. MICA: So 25 percent of the --

MS. JACKSON: Of the formula-driven money. Yes, sir.

REP. MICA: That's the 6 billion (dollars)?


REP. MICA: Okay. And then of the discretionary money that you have to award for grants, it's about 1.2 billion (dollars). And how much of that is out?

MS. JACKSON: Very little of that is on the street right now. The -- about 600 million (dollars) of that is for Superfund, 100 million (dollars) for Brownfields. Those go out -- (inaudible).

REP. MICA: How soon can we get that out?

MS. JACKSON: I believe we're talking months. And that -- as I would explain it and as my staff explained it to me, we are -- we are dealing with a few up-front issues which have slowed us down just a bit. But I feel very confident that we will see the bulk of the money moving -- (inaudible).

REP. MICA: And you'd let us know -- and if there's anything we can do legislatively -- if the -- if part -- if the impediment to getting the money to get the jobs is something we have to adjust we --

MS. JACKSON: Thank you.

REP. MICA: -- can you let the committee know?

MS. JACKSON: I would be happy to.

REP. MICA: But like I'm meeting with the Brownfields folks. I -- I needed to ask you that question to tell them that, you know, the -- the money isn't out yet. So but --

MS. JACKSON: No, and we --

REP. MICA: -- I got to be able to tell them when -- everybody (now ?) wants to know when's -- when is the money and how much will be available. Thank you so much. Thank you, Mr. --

MS. JACKSON: Thank you.

SEC. LAHOOD: Mr. Chairman?

REP. OBERSTAR: Yes, Mr. Secretary?

SEC. LAHOOD: Could I -- I just want to -- just for the record, since this Ohio -- these studies was -- I want you to know that we haven't approved anything. Nothing's been approved on these studies for Ohio. We're looking at it. We're working with (her ?). Their folks would like them to be funded but we want to make sure that people are going to go to work and they meet the criteria. So there has been no funding for any of these studies in Cleveland or Cincinnati with respect that was brought -- I just -- just for the record --

REP. MICA: And I'm not -- I'm not against that. I just -- again, we want to make certain that we are putting people to work in something and, again, we have to have the -- we have to do the planning to do the job, but if the -- if the job and the shovel-ready is in three, four years out -- I don't know that even, Mr. LaHood, to be the case, but our -- our intent is to work with you to make certain that there are no impediments from our standpoint or your standpoint to get money out.

So thank you. And you all have done a good job, just getting on stage. I said at the beginning this -- this is not a time to criticize. It's not a time to go into depth. We will do that later on. But right now, if we can identify any problems or anything we can do to assist you and make this all happen, that's -- that's the point of this. Thank you again.

REP. OBERSTAR: In another 30 days we'll have another shot at it. Mr. DeFazio?

REP. DEFAZIO: Thank you, Mr. Chair. Mr. Secretary, thank you for being here today. I -- I think you were here when I made my brief opening remarks and I'd just like to refer to your staff the -- what the TriMet is doing in terms of the database they're utilizing where we get a very direct measure of at least primary job impact. I mean, obviously, there are -- you know, there are secondary and tertiary effects of -- in the community from those jobs.

But I -- I think it would be useful because I -- I believe, just from my experience, there -- (inaudible) -- a few skeptics about the job-generating capability of transportation infrastructure investments among the president's economic team and we want to have the most convincing, hardest data possible to show to them.

SEC. LAHOOD: We will work with them.

REP. DEFAZIO: That would be great.

SEC. LAHOOD: Thank you.

REP. DEFAZIO: I'd like to ask about the -- the high-speed rail, and I'm -- I'm wondering -- I believe we have 11 national designated corridors, is it?

SEC. LAHOOD: That's right.

REP. DEFAZIO: And are you going to -- I mean, are -- are you thinking of spending the money across those corridors or concentrating on one corridor to try and have a significant result -- (inaudible)?

SEC. LAHOOD: The -- the -- yeah. The illustration that I want to use is it's not dissimilar to when the -- President Eisenhower signed the interstate bill. All the lines weren't on the map. It took three decades to get all the lines on the map thanks to the Congress providing the -- the dollars and the Highway Trust Fund and all of that. So we're at the beginning.


SEC. LAHOOD: So if -- if somebody in the country has a little heartburn that they didn't see their rail line, that doesn't mean it's going to be on there.


SEC. LAHOOD: And what we're going to do is convene a meeting with all the high-speed rail corridor folks that have been dreaming about high-speed rail for one day, one year, 20 years in Washington to find out what they're doing so they can give us a sense as to where they are in the process.


SEC. LAHOOD: Some of the money will go to help a corridor do a study --


SEC. LAHOOD: -- to figure out what the alignment should be. In California, they're way ahead of the curve.


SEC. LAHOOD: They've passed a referendum. They've been working on it for 20 years. There's corridors in New York. We know that the -- the Northeast Corridor is there and probably could use some money to get to a little higher speed.

So all of these corridors are in different phases. We're going to get them all together in a room and say, not one of you is -- not one corridor is going to get the 8 billion (dollars). We want to use it in a way that enhances opportunities so that 20 or 30 years from now we have high-speed rail in America, and perhaps some of it is even connected.

REP. DEFAZIO: That would be great. That's a -- that's a great vision and I -- and I -- I endorse -- I endorse that. Some even connected would be great.

We do happen -- we had one of the first six in the Pacific Northwest, and we've been running it and (sell a train set ?) on it which is leased and operated by Amtrak. And it's a great train but, I mean, we -- you know, it doesn't get to go anywhere near its potential speed. So, and my state is working on some alternate routes to avoid some of the congestion.

So anyway, I'm glad to see you're going to have an open process, bring folks in and -- and see where we can leverage money, make progress. And, I mean, I know it's not your department but I -- I did suggest this to others in the administration. I said from my perspective -- and every time I say this at a town meeting -- I said we could cancel sending a man to Mars and invest that money in a 25- year plan to have high-speed rail interconnected in the United States of America, and I get applause at every town meeting.

We can send a robot back to Mars if we have to look around some more. But I -- I think the high-speed rail system would be of more concrete value. I get a little applause here, not quite --

SEC. LAHOOD: Mr. DeFazio, can I -- just for the record, I want people to know it's 8 billion (dollars) in the recovery money that you all supported. There's another 5 billion (dollars) that the president is going to include over the next five years. So we're talking about 13 billion (dollars). That's 13 billion times we've ever had at the department.

REP. DEFAZIO: Oh, no. It -- it is a tremendous step forward from historic, you know, levels of or levels of neglect, in particular. But -- but in any case, I won't belabor that. Just one other point or question. I -- I haven't seen a recent number on trust fund estimates, and are you anticipating that we will have to make an allocation into the Highway Trust Fund in order to maintain solvency during this -- during this fiscal year before we get to the new authorization?

SEC. LAHOOD: Well, we are watching it very closely, and I think we can probably give you better guidance mid-summer.

REP. DEFAZIO: Okay. All right.

SEC. LAHOOD: But we're -- we're watching it. I mean, lookit, I was here last year when we all supported 8 billion (dollars) out of the general fund into the trust fund, and -- and we're watching it very closely.

REP. DEFAZIO: Well, I think you're doing a great job over here with the recovery programs and we just don't want to have an offset over here losing our regular program funding and -- and planned projects which offsets the jobs we created here so --

SEC. LAHOOD: Good point.

REP. DEFAZIO: -- appreciate that. Thank you.

SEC. LAHOOD: Thank you.

REP. DEFAZIO: Thank you, Mr. Chairman.

REP. THOMAS PETRI (R-WI): Thank you very much, Mr. Chairman. Thank you, Mr. Secretary, for -- for being here. I just wanted to mention a concern that a number of -- I met with our state association of municipalities and mayors perceive themselves as where the rubber hits the road in providing -- providing an awful lot of services. And their concern was that -- was delay in going through from federal to state down to local projects and wondered if any thought had -- had been given at all to trying to move stimulus money through the Community Block Grant (sic) Program directly to cities for just road maintenance and upgrading sewers and some of these sorts of things.

We have a lot of communities that are on a regular schedule of redoing their roads but -- (inaudible) -- is every 110 years, for example. So they could do quite a bit fairly quickly in terms of -- and that doesn't require the delays because it's already -- infrastructure is already there so they don't have to go through the planning process and all the different approval processes.

SEC. LAHOOD: Well, Mr. Petri, we are going to follow the law. The law that was signed by the president that was passed by this Congress does not allow for money to flow the way that you have suggested.

And look -- lookit, the president invited mayors to the White House just as he was signing this bill, and we know that they -- there's some concern and heartburn about the fact that it's more difficult for local elected officials. But they -- our advice is work with your state DOTs and work with the governors. The way that the -- the way that the Congress passed this, the 28 billion (dollars) for roads and bridges, we're working with the state DOT folks because they have a mechanism to get it out the door, or to get the money and have us get it out the door in a way with comports with the 120 days that you all put in your bill.

And on, you know, these other modes, whether it's transit or airports, we're complying with the law. The law does not allow us to do what you've suggested.

REP. OBERSTAR: Would the gentleman yield?

REP. PETRI: Of course.

REP. OBERSTAR: It's an intriguing idea of -- of using the Community Development Block Grant Program. But when -- early on in this process, the U.S. Conference of Mayors and the National League of Cities came in to visit about the stimulus, I asked them what specifically they would -- they would recommend in addition to assuring that funds go out by formula through the MPOs. They said, we get that? That -- they're satisfied. And -- and they jumped for joy, in fact, at their various meetings and had a news conference, which we -- we announced this.

So I -- I'm -- I'm intrigued by the idea of -- of using CDBG, but I think the secretary is right. There's no existing authority. And there were some ideas early on for various aspects of the program, all of which would require new legislative authority, and I said in -- in concert with Mr. Mica that we would not do anything new. We'd use existing law, existing formula that's known, and that is a -- a known process. And we wouldn't raise any additional questions about it. So -- but thank you for the suggestion. Gentleman have further questions? Mr. Boswell?

REP. LEONARD BOSWELL (D-IA): Just briefly -- when you took on that responsibility, Mr. Secretary, we had some conversation around the hallways that we thought was pretty good. We're -- we're pleased.

And I appreciate the enthusiasm, expertise you bring to the challenge. You got a big challenge. We know it. And I have every confidence we're going to work together and move the country forward. I just want to thank you for your efforts.

SEC. LAHOOD: Thank you, Mr. Boswell.

REP. BOSWELL: Yield back.


REP. HENRY BROWN (R-SC): Thank you, Mr. Chairman. Thank you, Secretary, Madame Administrator, for being here today and I appreciate very much the insight. I know that we are -- (inaudible) -- South Carolina perspective we were just kind of concerned about the mix between new construction and -- and maintenance. Do you -- do you all have any -- any kind of a analysis on those numbers?

SEC. LAHOOD: The -- the difference between -- I mean, the dollars we're spending, the mix between maintenance and -- I mean, Mr. Brown, the law is very specific on this. The 28 billion (dollars) for roads and bridges can either go to projects that were stopped because the state ran out of money and didn't have the money to finish it or they can go to projects that have been sitting on a shelf somewhere that are ready to go. The dollars that we're sending out the door are really for those -- those kinds of projects.

REP. BROWN: So -- so basically, you -- you send a fixed amount to each state and then they -- they really have the discretion under those two parameters to determine how those funds will be spent?

SEC. LAHOOD: We -- we use the formula that each state gets. So your state gets X amount of dollars and -- and under this -- under our provisions, they would get that amount and then it's up to the governor and the state transportation people then to send us the projects that they would like to be funded. If they meet the criteria we -- we -- we send the money out the door, and there's no match involved.

REP. BROWN: And -- and if the states don't -- do not spend those funds, when -- what happens to those funds then if they -- when -- when is their --

SEC. LAHOOD: Well, we have --

REP. BROWN: -- when is their deadline for --

SEC. LAHOOD: -- we're just getting the money out the door. I want to tell you this, though, Mr. Brown, and -- and to the entire committee -- every governor -- all 50 governors have accepted the transportation portion of the economic recovery. I want -- I want everyone to know that. Because you know why? Because they know they can spend the money, put people to work in good-paying jobs, and it's not going to take forever to do it.

REP. BROWN: Well -- (inaudible) -- I was hoping that when -- when the bill passed through the legislature that there was -- there was more than -- than 228 million (dollars) -- 28 billion (dollars) involved. I was just hoping it would have been 200 billion (dollars) because I know we've got a backlog of needs in our state, and I'm -- I'm sure around the nation.

In fact, it brings me to my next question is that I've long called for providing significant funding towards expanding our current interstate system. AASHTO has -- has called for at least a 10,000 mile of new interstate corridors. Are any of the highway dollars under the ARRA going towards interstate expansion?

SEC. LAHOOD: Going towards interstates? Again, it's up to the states to decide with our -- with our highway folks. If they have projects that they started and stopped because they ran out of money, or if they have projects that, you know, are interstate projects and they meet the standards by our department, we will certify them. But it's up to the governor and his state folks to find out what our criteria are and then to meet that, and -- and the money will go out.

REP. BROWN: I was real pleased to hear you say that nothing's really been done since Eisenhower and -- and I'm really hoping that as we look at the next reauthorization bill that we would be able to address some of the gaps in the interstate system. And I would hope that you would bring some recommendation to us to -- to help fill those gaps.

SEC. LAHOOD: Yes, sir.

REP. BROWN: Thank you.

SEC. LAHOOD: Thank you.

REP. OBERSTAR: I thank the gentleman for his observation about $200 billion for the Surface Transportation Program. We also contemplated a much larger dollar amount when in December of '07 I initially proposed a stimulus initiative and thought of a much bigger figure. But when I asked AASHTO for a survey of state DOTs and the numbers came in, we had 6,500 projects that fit the criteria that can be under construction within 90 days. We had a -- a smaller universe than $100 billion of funding.

My objective in fashioning the program was to do something that is doable -- not that is dreamable but that is doable. And the funding they -- they came up with -- those 6,500 projects -- seemed to be very much within the realm of the doable. We -- we could have done a $200 billion stimulus program over a period of -- of three years but I -- I think it might have been diluted by -- by the time we got to that point. Ms. Edwards?

REP. DONNA EDWARDS (D-MD): Thank you, Mr. Chairman. I just have one question for Secretary LaHood. I understand the importance of, you know, the local and county officials working with their governors to make sure that they also benefit from the -- from the recovery act. But you can understand that it's quite a challenge, and even in those states like my own where the politics line up.

And so I wonder if there is some way that you look at what states are doing in terms of whether there's an allocation across the state that is fair and -- and, you know, meets with many different needs and touches on -- on multiple communities because you can understand that as a member of Congress we get these questions all the time, you know, from our local counties, our mayors -- we haven't gotten our fair share. What kind of assessment do you make of the states in terms of the fairness of the distribution of the funds?

SEC. LAHOOD: Well, at this point, it's a little difficult. Probably in about 30 days I could give you a better picture because we -- we're just now starting to certify projects and -- and we'll be seeing where the money is being spent.

But lookit, we -- I want you all to know this administration has a sensitivity to this. The president invited the mayors to Washington, and we listened to them and we know that there is a fair amount of heartburn -- that they don't feel that, you know, they aren't really getting their so-called fair share. And they have as many potholes as maybe another part of the state does.

And the truth is there are cities like New York or Chicago or L.A. that would have the capability to do it. But there are a lot of other small cities around the country that don't have the capability or the staff or the expertise to do what needs to be done in order to make sure we're spending the money correctly. The big cities don't have that problem.

They have good people. And I -- I met with the mayor of New York, Chicago, L.A., Atlanta, and they -- they told me all the same thing. "We've got the staff. We can accept the money. We'll check all the boxes." But you get to smaller communities -- communities of 50,000 or less -- they don't have it. And that's why we really had to use the state DOTs to make sure it was done correctly.

But there is a sensitivity towards the mayors, and what I've talked to the mayors about is when you all fashion a new bill the Metropolitan Planning Organizations were a good mechanism to help build the interstate system and infrastructure. But you have to have an opportunity now for suburban areas and rural areas to have some say in how they're going to get their portion of these dollars because, as I said, they have as many potholes and bad roads as -- as others do.

And I hope you'll all think about that. The metropolitan organizations have been fine. They did a good job. But they weren't inclusive enough to -- to include a lot of other areas in the state, like rural areas and like suburban areas. And you have mayors like Mayor Bloomberg, Mayor Daley, the mayor of L.A., the mayor of Atlanta, who are reaching out to a lot of these mayors so they can be a part of the planning for infrastructure because these things are connected.

But for now, we're -- we're -- we're left with the bill that we have and our ability to get the money out quickly and to get people on jobs, and -- but I will try and within the next 30 days to give you a better report on how some other cities are doing in states where they've had to deal with their DOTs and -- and -- and their governors.

REP. EDWARDS: Thank you, Mr. Secretary. I appreciate that because it is really a challenge to explain to the 23 municipalities in my little congressional district and a couple of counties about, you know, where that money is -- id flowing in our state, and I think our state is one of the states that's actually doing a really good job. But it's still a challenge.

Just one last question for Administrator Jackson and it has to do with the green infrastructure project because we've also passed out of this committee a bill that we hope is going to eventually make its way to -- to the president for water quality -- on the Water Quality Investment Act. And the recovery act actually has a framework for green infrastructure that will, you know, if it's done in the right way will be the framework for doing the other green infrastructure.

And so I'm concerned about how that's implemented and I wonder if you could speak to that and speak to the sort of green (washing ?) question because we don't want states using their 20 percent set-aside to say we changed light bulbs because I think there's great value in that, but I don't think that that was the intended -- what we intended in Congress when we passed the recovery act.

MS. JACKSON: Well, thank you, Ms. Edwards, and thanks to the entire committee for the leadership you showed on the Green Project Reserve issue and for your interest in it. Just as a real quick update for those who may not have focused on this very issue, there's 20 percent set aside of that $6 billion in a set-aside to be used for water-efficient, energy-efficient projects, innovative projects, sustainability projects. And we see that as an -- a very important opportunity to show practitioners all across the country that there are ways to make these projects sustainable in the long term where energy costs go down, meaning rates go down, meaning water -- clean water becomes more available to people, not less available, and we're not constantly trying to catch up.

We have committed to holding states through their intended use plans to a very high bar for the 20 percent. We've given -- two weeks after the legislation was signed we came out -- I'm proud of my staff -- they came out with guidance on this Green Project Reserve. They listed -- that guidance included a list of the kinds of projects that are eligible. If you pick one of those projects, you don't have to justify anymore that it qualifies for the GPR.

If you would -- if a state wants to make an argument that they have another project that should qualify, they're going to have to show how that meets the guidance in the Green Project Reserve. We know that people are looking. We see this as an opportunity. Our own inspector general sees this as a very important place where EPA should hold a high bar, and we look forward to doing that.

REP. EDWARDS: Thank you, Mr. Chairman.

REP. OBERSTAR: I thank the gentle woman for those questions, from the observations she made, and -- and for those mayors who are raising questions, one, the MPOs have their formula distribution dollars that are in law -- in existing law and are part of the stimulus program. So the recovery funds are going out to those cities that have MPOs.

Those that do not have to ask the question, is the street project that I want fixed part of the national highway system? If it's not -- if it's not one of the -- not on the 161,000-mile national highway system then it's not eligible for funding, because it has to be part of the national highway system formula.

Mr. Secretary, thank you for your comments about rural roads. I assure you, we will have a robust formula for rural roads. Of the 43,000 fatalities that occur on the nation's highways and have done for the last decade -- that number hasn't come down -- we need to bring that down -- half of those fatalities occur on rural roads and half of the people killed on rural roads are urbanites. And half of those fatalities occur due to drunk driving, or alcohol- and drug- related driving. We have to attack both of those issues.

We have to have a -- a means by which states will be able to review their portfolio of rural roads and establish a six-year goal of bringing them up to a 10-ton road weight level for spring planting and fall harvest as farms become fewer and larger, and the needs to -- to supply the -- the farms and to bring out the harvest increase in load weights. And we -- we have to do a far better job in this next six- year period and that's going to be an accountability issue. It's going to be a performance-driven approach, and we look forward to your participation. Mr. Boozman?

REP. JOHN BOOZMAN (R-AR): Thank you, Mr. Chairman. I appreciate both of you all so much for your willingness to serve in -- in these positions. You almost have to have the wisdom of Solomon, and we pray that you'll have that.

I'd like to ask -- Ms. Jackson, I -- I had a situation where some of your folks came to visit with me about an issue, and then I -- I wanted to follow up later on. And so I asked for the -- I asked my staff to get the phone number so that I could call, you know, one of the individuals that was there, and I was told that we couldn't do that -- that we needed to go through the government affairs people -- that they -- that I didn't have the ability to get on the phone and talk to, you know, the administrator or whatever the particular thing.

Is that -- is that how things are going to be run at EPA in the future? I've never had that situation with any agency before. I've got 675,000 people that I represent and they -- they feel like, you know, I should have the ability to -- to talk to the -- the people that run the programs. So is that -- is that something that is going to be that way in the future or --

REP. OBERSTAR: The gentleman would yield -- I've had that experience over the last eight years. I don't expect that procedure to continue under this administration.

MS. JACKSON: Well, thanks to you both. I -- I do apologize if you've had that experience. Part of EPA's job is to serve Congress and to get you answers for your constituents. The only request I would make is that we coordinate so that we can make sure you are getting answers out of the program. But if there was a concern please let me or my staff know and we will rectify it for you.

REP. BOOZMAN: So like you say then -- then if I call and ask for somebody's phone number so that I can talk directly to them is that something that you're going to do or not do or --

MS. JACKSON: I am happy to make staff available to you. If you want to make sure that the answer that an individual staffer is giving you represents the administration's position or my personal position, then I would only ask that we coordinate it through congressional affairs. But we will make staff available to you directly.

REP. BOOZMAN: So you won't give us the phone number directly?

MS. JACKSON: You are welcome to the phone number. In fact, sir, the phone number for every EPA staffer is on a web -- (inaudible).

REP. BOOZMAN: I know. That's what -- that's what was so ridiculous about the whole thing. And I guess, you know, the question is, and again, you know, I've been on the committee for many years. Mr. Oberstar is a -- is a -- is a good friend and does a tremendous job as chairman. I mean, he had the problem evidently as a Democrat last time. Is this a Republican-Democrat thing this time or --

MS. JACKSON: We -- we are nonpartisan at EPA. You are welcome to service and any number you'd like. I -- I do apologize for how you were treated. It isn't the way we would like to model our business, and we will get you whatever information you need.

REP. BOOZMAN: Good. Thank you very much.

MS. JACKSON: You're welcome.

REP. OBERSTAR: We'll work with you to make sure that doesn't happen.

REP. BOOZMAN: If you'll yield, Mr. Chairman.

You know that I'm fairly easy to get along with and -- but it does seem like that we should have the ability to, you know, access people that are in various things, again, just -- just in follow-up. I mean, we're all busy. If we have to have some sort of --

REP. OBERSTAR: And that's -- that's just simply nonsense. We shouldn't have to go through a KGB organization. We're not going to have that.

REP. BOOZMAN: I agree.

REP. OBERSTAR: And you are easy to get along with, except for that time when I went out to your district and the Chamber of Commerce presented me with a hangman's noose.

REP. BOOZMAN: Well, that was a -- (laughter) -- they did two things. They presented you with a hangman's noose --

REP. OBERSTAR: That was -- that was an award of honor, though, I was told.

REP. BOOZMAN: It was. And they also gave you a -- a liberty card where you could do anything you wanted without getting in trouble.

REP. OBERSTAR: (Laughter.) That was wonderful. Ms. Norton?

DEL. ELEANOR HOLMES NORTON (D-DC): Thank you very much. I'm going to say the whole notion of a member of Congress calling an administrator or a Cabinet member and being told that you've got to talk to Congressional Affairs, that is a personal insult to a member of Congress. All I can say is they better not do it this member. I mean, that would -- that is the most outrageous thing I've ever heard. You say it's happened before. I -- I'll yield to the gentleman.

REP. BOOZMAN: Yes, ma'am. This was not a Cabinet member. I mean, this was just a -- just a -- a very hard-working but lower -- lower level member of the EPA.

DEL. NORTON: Well, I would think that it, you know, that if someone calls somebody, maybe they got to talk to somebody before they call back. But I have never heard of such a frontal insult to a member of Congress than sending it to somebody who obviously doesn't know because they are the liaison. So I just wanted to just go on record as agreeing with my good friend on the other side and how astonished I was to hear it.

I want to welcome both of you. I -- I want to tell you, Ray -- sorry, Secretary LaHood, we -- we miss you already, and I'm very pleased with how you are performing. And Lisa Jackson, I don't know you. I hope to get to know you. I'll tell you one thing -- Donna Brazile does, and she -- my former chief of staff has certainly regaled me of how fortunate we are to have you.

I mention this only in passing, Mr. Secretary. I want to ask you in a little greater detail here. We discovered when the stimulus money was about to go out, a section of your statute and ours that has long allowed states to spend some of the money for training. States have not regaled themselves of that, and one thing I would like to ask you to do is to provide this committee with a list of the states -- and I believe this has been since 2000 -- that in the authorization they could have taken -- used a very -- 0.5, I think, percent up to that for training.

As a result of states not doing this, this is what we face with the stimulus money. Well, 17 states have used it. (Inaudible) -- within 30 days could you get to the chairman the states that have used it and the amount that has been used on training from the authorized funds of the Transportation Infrastructure Committee? (They ?) come out every three or four years.

SEC. LAHOOD: I'll get it to you.

DEL. NORTON: Yes, thank you very much. The reason I am concerned is that in light of the failure to take advantage of what was an encouragement, we required in your stimulus package and mine for a specific amount -- not a specific percentage, a specific amount. Unfortunately, these amounts are very small. For the transportation funds, the appropriators allowed as we -- is $20 million could go for training, and my own 6 -- 5.5 billion (dollars) only 3 million (dollars) for training.

What occurs to me is that's going to be real difficult to spread out, especially since this money is going to 50 states, the territories, and the District of Columbia. So somehow or the other, the Department of Transportation, and for that matter, the GSA, is going to how to -- have to figure out how to use a tiny amount of funds to start up training. I intend, Mr. Chairman, to make this a requirement in the new reauthorization funds. This is what we've done to ourselves. If there had been no training, this is what we confront.

We -- we would confront on the one hand the highest unemployment rate among journeymen. Because there's been no consistent training of minorities and women you have a overwhelmingly white male workforce. Then you have these people who've never gotten a foothold -- people of color and women. Now, all you have to do is get some -- some money out on the street and people without jobs begin to say, "Well, where in the world are the jobs for, quote, 'people that look like me,'" the familiar cliche.

The way in which we sought to avoid this without enough money to do so was to begin to train systematically, at least in some -- to some degree, minorities and women to allow them to get a foothold in the construction trade by setting aside some funds for those. Now, you know, $3 million nationwide, $20 million, put them together and that's -- that's not any money.

Have you considered how to best use this money, perhaps for models going forward for reauthorization -- how to -- since you can't possibly, I suppose, spread it out and get much out of it -- how your $20 million will be used given the huge amount -- I'm not even sure what the amount is for highways now -- how to get the biggest bang for the smallest buck out of that appropriation?

SEC. LAHOOD: You know, we really haven't had much discussion about that. But let -- let me get back to you because, you know, I note -- I take your point on this that it is difficult for people of color and -- and others to sometimes get into opportunities whether it's laborers and or other -- other building trades, and so I'll -- I'll get back to you with that.

DEL. NORTON: I'd appreciate it. It seems to me it might make some sense since highways and GSA are both in the construction business --


DEL. NORTON: -- for the two to collaborate so that we can get the biggest buck out of this. I can tell you this, Mr. Secretary, there will be howls. You've got the highest unemployment rate in your sector. These guys have been out there without work for the longest time.

There are going to be howls unless we are able to say more about what we're doing with training when people don't see -- when people see all these journeymen who've been out of work. They're not journeymen. There are, of course, minorities and women who are journeymen. But compared to what there would have been had we been systematically training, using our funds, it -- it's a pittance.

And I -- I bring this to your attention because there is going to be wholesale criticism in the states and particularly in the cities when they see this occurring, and I'd like very much to work with you to have GSA, which comes under my own committee's jurisdiction -- the committee of which I am chair -- work with Transportation. So, for example, we might say where you are putting some funds, we would go someplace else --

SEC. LAHOOD: (Inaudible.)

DEL. NORTON: -- so that the training with as little funds as we had would be at least spread out and we might be making sure we were using contractors who knew what they were doing, and not just throwing some money out there to say, "Go train some minorities and women." There are a few who really do know what they're doing.

SEC. LAHOOD: A very good point.

DEL. NORTON: Ms. Jackson, we've been told that -- that -- this very day that there's going to be some testimony from the -- the IG at EPA about insufficient-trained staff at EPA for doing the job that has to be done under -- with recovery act timely way, and that there's a potential for waste and -- and fraud. I ask this question as a -- as a member of this committee, but also a member of the Oversight and Government Reform Committee where hearings have been held that have shown how difficult it is even when you're not pushing money out very quickly in order to get jobs and saying get it done -- time frames like the one we've set in this committee, and already she alerts us that -- that trained staff to do it aren't there. Why (are there ?) enough staff to do it? What actions are you taking so that it doesn't hit you in the face when somebody comes up -- could be the IG, it could be somebody else -- that says EPA funds are being wasted and the like?

MS. JACKSON: Yes, I am aware that the IG has expressed concerns. In fact, our IG has already indicated that there are -- that is has concerns about management of these funds, primarily because of the amount of money that's coming in, and as you cited, the idea of pushing it on the street. You ask what we're doing to be in front of that issue, and we've done a number of things. I do believe that we have sufficient amount of staff.

I do believe that we need to prioritize --

DEL. NORTON: You -- the staff already on board or were there additional staff?

MS. JACKSON: There is about $81 million to allow for additional oversight as well as administrative work, and so we can augment. And so we are doing some augmentation of staff, but not whole scale.

It -- it is a matter of setting clear standards and then working weekly, and EPA has set up a stimulus steering committee. The IG is a member of that committee weekly to identify issues as they come up and to identify and open lines of communications, (the first ?) amongst our own staff, and to ensure that EPA is communicating adequately -- sometimes very new requirements to states and municipalities. So it is an ongoing --

DEL. NORTON: Well, what about training? She's going to say that you don't have the trained staff to do it now. This is terrible burden to put on you. (Hey ?), get it done, train staff, and make sure they can do everything you're supposed to do over a record period of time. What are you going to do about training? Are you going to have to bring on people to help you -- (inaudible)?

REP. OBERSTAR: Afraid this is going to have to be the last question. We (were ?) having a vote fairly soon and our other members are waiting and we need to get to everybody. So please --

MS. JACKSON: Any new staff will certainly need to be trained. The good news for EPA is that all of the money is moving through programs that we have run for years -- the SRF programs, the Superfund programs, the Brownfield programs, the diesel program, the LUST program. And so -- and EPA staffing numbers were the one thing that were protected during years of some fairly significant budget cuts.

So I do appreciate the IG highlighting the idea that trained contract managers, trained grant specialists need to be there in sufficient numbers, and we're certainly turning our attention to that as well. Right now, I -- I feel certain that between EPA and the partnership -- and it really has to be a partnership with states and municipalities -- the vast majority of that money is going to be safely and transparently managed.

DEL. NORTON: Thank you, Mr. Chairman.

REP. OBERSTAR: (Inaudible.) The gentleman from Pennsylvania.

REP. BILL SHUSTER (R-PA): Thank you, Mr. Chairman, and also I'll be glad to hear you -- your comments on a robust rural plan -- rural program in the -- the upcoming authorization bill, so I applaud that. And contrary to popular belief, my district still has needs for infrastructure and highway building so -- (laughter) -- it's probably the number one misconception I face in my time in Congress.

REP. OBERSTAR: I remember so well after ISTEA and Senator Moynihan was asked by the reporters, "Well, which state got -- came out ahead on this?" And Moynihan drew himself up to his full professorial stature and said, "I believe the -- the state of --

REP. SHUSTER: Altoona.

REP. OBERSTAR: -- Altoona."


REP. SHUSTER: Now you've just increased the pressure on me to perform -- (inaudible).


But I want to thank the secretary and the administrator for being here today and appreciate your service. Also, my -- my -- in PennDOT and the district engineers, the money's flowing out. The contractors are -- are getting back to work, so I -- I congratulate you and thank you for -- for a job well done, and we need to keep -- keep that moving.

And I also want to echo what my other colleague said. I wish it would have been $200 billion or 150 billion (dollars) or something more north of where we -- we ended up. But that being said, again, thanks -- thanks for what you're doing.

A question about high-speed rail. We've identified, I believe, it's nine corridors around the country. One that we left out, which I don't know how it happened, was -- the Northeast Corridor is not identified as a high-speed rail corridor, and hopefully, we can correct that in the -- in upcoming legislation. But that $13 billion, which 5 (billion dollars) on top of the 8 (billion dollars) are -- I guess that was the numbers -- can you tell me a little bit about the strategy about spending on that? Because my concern is that we'll just put dribs and drabs all over the place and not really focus on getting a couple of those corridors completed.

California, I think, is fairly far ahead. The Northeast Corridor, of course, is -- Amtrak's there and -- and we own the track, and I -- and I believe the Midwest, Milwaukee to Chicago, not only are they far advanced but the fact that we've got a secretary of transportation, the chief of staff at the White House, and president all being from Illinois would seen to me, those would be the three (quarters ?) we might want to focus on to spend that money to really get something done instead of -- instead of, as I said, just doing partials here and there. I wonder what your thoughts were on that, Mr. Secretary.

SEC. LAHOOD: Well, first of all, let me just pay my compliments to your governor and his transportation people. The reason that Pennsylvania is doing so well is because they've shown extraordinary leadership, and I've -- I've been over there on a couple of different occasions with the governor, with the mayor of Pennsylvania -- I mean, with the mayor of Philadelphia, and -- and other mayors, and there's -- there -- there's an awful lot of people that are going to be going to work very, very soon in Pennsylvania.

So they're to be congratulated for that. With respect to high- speed rail, I go back to what I said to Mr. DeFazio. This is the beginning. When the interstate system was formed, all the lines weren't on the map. All -- all the high-speed rail lines are not on the map. But the people that have been dreaming for decades about high-speed rail have now seen their dream come true because there's $8 billion in our portion of economic recovery and another 5 billion (dollars) in the president's budget over the next five years. We're going to jumpstart opportunities for high-speed rail very, very quickly, and every corridor is in a different phase of implementation.

And so we are going to -- our department is going to convene a meeting of all the high-speed rail dreamers from around the country representing corridors including the Northeast Corridor, the Midwest Corridor, Southern corridors, Western corridors. We're going to ask them to bring their dreams and plans to Washington and talk to us about it so then we can work with them to figure out what is the best use of the $8 billion to really jumpstart our opportunities.

Two or three decades from now, the dream will be is that America will be the model for high-speed rail. Europe is now, and so is Asia. But we can be, too, the way that we are for the interstate system. That dream really came true because of President Eisenhower and a Congress that wanted to put the dollars into it. That why we're the model for the -- for the interstate system. We will be the model for high-speed rail if we use our money in -- in wise ways and take the -- the kind of expertise that exists in the country today for people who have been doing this on their own -- you know, on their own dime. We're right on the cutting edge of developing a system that I think will be the model for the -- for the world at -- at some point here in the next couple of decades.

So not any one corridor is going to get all the money. Some may get a portion to begin a process of dreaming and others will get a portion so they can really kick start their -- their opportunities.

REP. SHUSTER: That's -- it's good to hear.

SEC. LAHOOD: The Northeast Corridor is a part of high-speed rail. I mean, they -- they've been on the cutting edge of passenger rail.


SEC. LAHOOD: And if you straighten out a few rail lines in between these communities that Amtrak runs, you can get up to a -- a fairly good speed.

REP. SHUSTER: Right. That's good to hear and they sound excited. So I appreciate -- I appreciate that.

SEC. LAHOOD: All right.

REP. SHUSTER: Thank you. I see my time has expired. I just want to -- maybe you could give me, the administrator, in writing -- you don't have to answer because my time has expired -- how is the EPA working to streamline some of these approval processes. I know that the nature of most of -- of the projects out there are on the shelf or in process so many of them have probably gone through the process.

But any time that there's a, I found in the past, you have a -- a project comes up that hasn't gone through the environmental process it's -- sometimes takes years.

So if you could have your staff just sort of give me in writing what are the things you're doing to streamline that process, I'd appreciate it. And thank you.

REP. OBERSTAR: We're doing that in the transportation bill. We made a good start on it in the SAFETEA legislation. Section 6001 of Title 23, U.S. Code has the language referring to project -- permit expediting. I've invited all the state DOTs to comment on that language, tell us what their experience has been in using it. Very few have actually used that authority. We need to -- to step it up further.

Environmental permitting is only one of -- well, it's a big one but it's one of many, many permits that have to be issued in the course of a highway or a transit or -- or other projects. So my goal is in the next transportation bill, in the Federal Highway Administration to establish an Office of Project Expediting to coordinate that initiative with all entities that have a permit to issue, whether it's Fish and Wildlife Service, National Park Service, the National Trust for Historic Preservation, the EPA. All of them have to be in the room at the same time, not this sequential process that drags things out over 20 years. So I assure the gentleman that that -- that issue's going to be addressed and we welcome his input on it.

REP. SHUSTER: And I -- and I appreciate that greatly, and my question is specifically on this stimulus, and we might be able to get some great ideas of, you know, what (your ?) been able to do to -- to generate it in this -- this stimulus package that's going out so quickly. Thanks, Chairman.

REP. OBERSTAR: Well, in the -- in the -- in the stimulus, the public review process as a requirement of law had to be completed before they're eligible to get a project.


REP. OBERSTAR: So they're -- we're not going to learn much. We are going to learn from Section 6001 in Title 23, U.S. Code and -- (inaudible) -- the gentleman take a look at it, come back to me with ideas about what you think we could do better.

REP. SHUSTER: Thank you.

REP. OBERSTAR: The gentleman from Illinois, Mr. Schock.

REP. AARON SCHOCK (R-IL): Thank you, Mr. Chairman. Appreciate your holding this meeting and appreciate our two witnesses here today. I have a couple of questions for our secretary of transportation, Mr. LaHood. Thank you for being here, and as was mentioned, I'm doing my best to follow in your steps but the shoes keep getting bigger.

So two -- two quick questions. You're probably familiar with the Mid- America Intermodal Regional Port (sic), which is headquartered in Quincy, Illinois and was established 15 years ago as a tri-state program between the states of Illinois, Missouri, and Iowa. And the goal of that regional port is to bring international business and trade using the inland waterways of our country for those purposes.

The initial phase of the construction of that port could be completed in the next 18 to 24 months, and I know that in the stimulus bill there's about 1.5 billion (dollars) in discretionary transportation funding which is to be awarded to state and local governments for projects that have a significant impact on the nation and metropolitan area region. And I'm wondering if you can speak to the qualities of -- of projects that you're looking for and whether or not you think that that -- that port there in Quincy might be a good candidate to receive such a grant.

SEC. LAHOOD: Well, we have submitted criteria to the -- to the White House and OMB for their review, and that criteria will be made available very soon. With 28 billion (dollars) for highways and 8 billion (dollars)for transit, 1 billion (dollars) for airports, and 8 billion (dollars) for high-speed rail, and some of these other opportunities we've created or that you all created in the bill, we believe the 1.5 billion (dollars) should really be used to do things that we couldn't ordinarily do in our portion of economic stimulus which would include probably -- I don't want to say specifically -- but I mean, our thinking is that we should really be looking at ports. Ports are an economic engine for certain parts of the -- of the country and so my advice is to have the -- the folks in Quincy read very carefully our criteria and -- but I think ports around the country are going to be well positioned to -- to look at this money as an opportunity.

REP. SCHOCK: Great. Thank you. And then the other question I had was there's been a number of comments from your department and as well as the -- the -- the White House about the importance of creating more livable communities, more sustainable communities. And I want to commend you and your department and the administration as we look at spending a record amount of money on -- on infrastructure that we not just create new infrastructure but, in some cases, smarter infrastructure, allowing people to be able to walk to work and bicycle to work and cut down on some of the congestion.

I'm wondering if there is money set aside in the current stimulus bill that was passed for such projects that communities can apply for where they're -- where they're doing the mixed use kind of buildings in urban centers. As you know, in -- in our hometown in Peoria they're trying to do that with the warehouse district. There's other communities around the country that are doing similar things. Because if not in this stimulus bill, I'd like to try and see that we have funding in our -- in our transportation bill for those sustainable programs.

SEC. LAHOOD: Livable communities is something that I've talked to the chairman about. Portland, Oregon is the model for it, and it's -- it's something that we are really going to work with the chairman and this committee in the next bill, and it -- it -- it's also something that we have met with the secretary of HUD, the EPA administrator, and others. We're going to work collaboratively to create a livable communities opportunity so that if somebody wants to bike to work, walk to work, run to work, and wants to get out of a two-hour congestion and take light rail or transit, these are the kind of opportunities we want to create with livable communities. But the direct answer to your question is there really is nothing in our portion of the stimulus to help us jumpstart that opportunity but I know from talking to the chairman and others on the Senate side this will be a priority for our department, from the administration, working with the committee.

REP. SCHOCK: Okay. Great. Thank you so much for your -- your answers and --

SEC. LAHOOD: Thank you.

REP. SCHOCK: -- thank you, Mr. Chairman.

REP. OBERSTAR: I thank the gentleman for -- for raising that issue. I see we have an ally as we go forward in the livable communities initiative and that more specifically, the answer to your question is the states' -- the state DOTs can use a portion of their enhancements funds, which are provided in the formulaic distribution of -- of the recovery dollars to undertake bicycle projects or -- or bus-bike lanes or other user-friendly initiatives. But it's up to the -- every state is required under current law to have a state bicycling plan, and when that plan has been developed and the projects within the state bicycling plan are eligible under enhancements, under congestion mitigation, air quality improvement, they're eligible for funding under -- under the Surface Transportation Program, under the STIP, under the TIP, and the -- and every other aspect. So it's up to each state DOT to designate a -- a construction-ready project. If they haven't done it, I think the secretary might want to know about that.

Mr. Secretary, I -- and by the way, in the next transportation bill we're going to have a further transformation of the Office of the Federal Highway Administration to have an Office of Livability in which we will coalesce safe routes to schools, bicycling initiatives, transit-oriented development, land use planning, safe streets, smart streets. All those put a -- shine a spotlight on the livability issue so that in the next iteration of transportation we will make it possible for people to go where they want to go, not just where the road leads them. Mr. Diaz-Balart?

REP. MARIO DIAZ-BALART (R-FL): Not at this time, Mr. Chairman. Thank you very much.

REP. OBERSTAR: Thank you. Mr. Secretary, I understand -- I've -- I've heard reports anecdotally from the states -- California, for example, Will Kempton, who is the director of Caltrans, and our state of Minnesota, several others -- I need not go into all the specifics -- that their projects are coming in substantially or significantly under final design engineering cost estimates. Are you getting those reports? And does that mean these dollars are going to stretch further than we anticipated?

SEC. LAHOOD: The dollars are going to stretch further, which will create more opportunities for more jobs. I have just sent a letter about a week ago to the governors -- to every governor in every state saying that if there is money that is not being spent because the project came under it has to be spent on creating jobs to build infrastructure and cannot be used for any other purposes to try and fill a gap in a state budget. It has to be used for the purposes for which it was sent to the state.

REP. OBERSTAR: You are very good at anticipating. Oh, those years in Congress. (Laughter.) Right on the ball. That's -- because that was my next issue. They have to all remember that this is stimulus money. It's 100 percent federal funding and they can't substitute it for something else. Excellent.

In our -- in your next 30-day report, I expect you will have for us the -- not only the job -- the direct job creation numbers but also those in the supply line -- in the supply chain. I've heard from the Association of Equipment Dealers (sic) that there's such an -- such an inventory on hand of equipment that for contractors to carry out the projects with -- that are on the book now with stimulus funds they don't need to buy new equipment.

They've been out of work for so long they have idle equipment on the property. So I assume that as this -- I expect that as this first $15 billion gets into the pipeline and -- and we go into the second iteration of it that there'll be more of -- of that stimulus as well, and so I look forward to your further report.

SEC. LAHOOD: (Inaudible.)

REP. OBERSTAR: Ms. Jackson, from the state of Minnesota I -- I met with Terry Coleman (ph) who is the deputy administrator of the state revolving loan fund. They have been able to -- to leverage the $72 million into a $500 million program. Are you getting reports of other states that are similarly leveraging these dollars? Half of that -- have of your SRF funds are grant. Half is under this regular loan program. Are you seeing such ricochet effects?

MS. JACKSON: We are indeed, Mr. Chairman, and your state is to be commended as are many others who are trying to find the most -- the best way to put as much money on the street. As you know, there's a huge pent-up demand for clean water infrastructure projects and so many states are -- are doing it because not only because of the jobs, which is our first goal here, but because they've been waiting so long to be able to get their hands on money, especially money that doesn't require the match.

REP. OBERSTAR: A -- a final issue. I know that in the -- in the highway and bridge program the "buy America" act's been in place since 1982, is unquestioned, it's unchallenged, and is being used, in fact, in Minnesota, iron ore; in Michigan, iron ore; going into lower lake steel mills, and -- and American steel is being used.

But there was some issue raised by various states under the EPA program about the waiver process for pumps or other equipment that are not readily available or not a made -- not made in the United States. It's a relatively small amount. I understand that you've issued guidance. I've heard from the Minnesota SRF organization. They feel the guidance is -- is fully beneficial to them. Could you elaborate on this?

MS. JACKSON: I'm glad to hear that, first off, Mr. Chairman, and it was the result of hard work by staff. "Buy America" is new for the SRF program --


MS. JACKSON: -- because most of that money moves out in grants to states. So that is something they're not used to dealing with. We worked with states. We work with associations -- the American Waterworks Association, others, to come up, I think, in -- in fairly short order with guidance. It was issued yesterday.

I'm happy to hear anecdotally that it is being well received. It was a critical step in allowing states to move forward. Many times, pumps and some of this equipment in -- used in waterworks is only made in -- on foreign soil and so we have to have an ability to give clear guidance on how that waiver process will work.

REP. OBERSTAR: Well, the deputy director of the Minnesota SRF said, quote, "These are -- these are items that states requested just last week. The sample documents will be helpful to us and our cities as we get the first recovery act projects under contract."

MS. JACKSON: Thank you, Mr. Chair. I think my staff will be gratified to know that their hard work is being well received.

REP. OBERSTAR: Oh. Again, I've said this program is not going to outsource jobs to Bangalore. The highway, the bridge, the transit projects, and the water and sewer projects that are being done, you don't lay the streets in Bangalore. You do them in America, in your own front yard, our workers.

Thank you for the job you're doing. Very proud of your contribution. And there are going to be 2 million workers who will be grateful to you as -- as well that you may never see. But they will have a job and their families will be appreciative. Thank you.

We now have votes underway. But let me call the next panel of Mr. Salt, principal deputy assistant secretary in the Army for Civil Works; Mr. Prouty, acting administrator of GSA; Mr. Stadtler, chief financial officer for Amtrak; and Mr. Alvord, acting deputy assistant secretary of commerce for economic development.

Please take your seats. We will recess for these votes and -- in fact, you don't have to take your seats. You could -- (laughter) -- retire to the restroom if you need to do that, and we'll be back within half an hour.


REP. OBERSTAR: Committee will resume its sitting. We now have Panel II. We'll begin with Mr. Salt. You all been introduced individually before the vote. I apologize for the delay. I didn't know that a new member was going to be sworn in and that he was going to make a -- a speech. There was a time when we swore in new members and that was it and they sat down -- (laughter) -- paid attention.

But, you know, Mr. Diaz-Balart, when we're sworn in we don't get to make speeches, 435 of them. A new member, though, they get to come to the microphone, make a long talk, introduce their family and everybody who helped them get to Congress, and all the rest of it.

I'm getting a little grumpy in my -- I said -- I said to one of my colleagues, "That's a very fine, nice speech. He's thanking everybody but meanwhile I have 10 witnesses who are waiting for their turn to speak." So now it's your turn to speak.

MR. SALT: Thank you, Mr. Chairman.

REP. OBERSTAR: Tell us the good things you're doing to put people -- this -- this new member said, "I want to work to create jobs," and that's fine and that's what we're doing right here in this committee. We're doing it.

MR. SALT: Thank you, sir. Mr. Chairman, Congressman Diaz- Balart, and other distinguished members of the committee, I am Terrence Rock Salt, the principal deputy assistant secretary of the Army for Civil Works. Thank you for the opportunity to testify before the committee today to discuss the Army's implementation of the civil works appropriation within the American Recovery and Reinvestment Act of 2009.

Total recovery act funding for the Army Civil Works program is $4.6 billion. I'm pleased to report that lists were posted yesterday on the Corps of Engineers website that show how recovery act funding for Civil Works will be allocated among programs, projects, and activities.

Economists estimate that the Civil Works recovery act spending will create or maintain more than 57,000 direct construction industry jobs and an additional 64,000 indirect and (induced ?) jobs. The recovery act provides funding to the Corps for the development and restoration of the nation's water and related resources.

There is also funding to support (permitting ?) activities for the protection of the nation's regulated waters and wetlands and for the clean-up of sites contaminated as a result of the nation's early efforts to develop atomic weapons. Also, Congress mandated that work such as wastewater treatment and municipal and industrial water treatment and distribution will be funded at no less than $200 million.

The Army's allocations follow the recovery act's general principle to manage and expend funds to achieve the act's stated purposes including commending -- commencing expenditures and activities to create jobs as quickly as possible consistent with prudent management. Furthermore, the Civil Works projects were selected on merit-based principles consistent with the president's direction provided in his executive memorandum of March 20th, 2009, entitled "Ensuring Responsible Spending of Recovery Act Funds."

Specifically, the Civil Works allocations are to programs, projects, or activities that will be obligated and executed quickly, that result in high immediate employment, have -- that have little schedule risk, that will be executed by contract or direct hire of temporary labor, and will complete a project phase, a project, or an element of a project that will provide a useful service that does not require additional funding.

Also, as stipulated in the recovery act, no funds will be used for any program, project, or activity that at the time of the obligation has not received energy and water development funds. In other words, no new starts can receive recovery act funds.

Funding has been allocated to 178 construction projects, 892 operations and maintenance projects, 45 Mississippi River and tributaries projects, 67 studies and designs in the investigations account, and nine projects in the Formerly Utilized Sites Remedial Action Program.

At $4.6 billion, the American Recovery and Reinvestment Act provides the resources for the Civil Works program to pursue investments that will yield good returns for the nation now and into the future.

Mr. Chairman and members of the committee, I'm very proud of the contributions of our Civil Works program that it is making to the nation's economic recovery and to the long-term improvement of its infrastructure. Thank you again for this opportunity to testify on the implementation of the recovery act programs of Army Corps of Engineers.

REP. OBERSTAR: Thank you, Mr. Salt. It's a rather pro forma statement, frankly. We'll come back to that later. Mr. Prouty?

MR. PROUTY: Good afternoon, Mr. Chairman, Mr. Diaz-Balart, and members of the committee. Thank you for inviting me to appear before you today to discuss GSA's contribution to our nation's economic recovery through the green modernization and construction of our buildings.

The funds Congress has provided us through the American Recovery and Reinvestment Act are a sound investment in several respects. First, the timely obligation of these recovery funds will stimulate job growth in the construction and real estate sectors. Second, the money will help us reduce energy consumption and improve the environmental performance of our inventory. Third, the funds in large part will be reinvested in existing infrastructure which will help reduce our backlog of repair and alteration needs, thus increasing the assets' value, prolonging their useful life, and further conserving our country's resources.

Finally, these funds will be invested in government-owned assets for the long-term requirements of our federal customers. Today, I will describe what we've done to carry out the public building services portion of the recovery act. We have established a nimble organizational structure and identified leadership to manage program execution.

We have developed an aggressive schedule for project delivery and we are establishing standard scopes of work to facilitate rapid project award. We know this is not business as usual. We are moving forward quickly but always with careful consideration of our procurement responsibilities and accountability to the American taxpayer.

In order to successfully implement our portion of the recovery act, GSA formed a nationally-managed, regionally-executed Program Management Office at the national level. The -- at the national level, the PMO will -- will be centralized in a small, cohesive PBS office, staffed with experts and supported by high-performing employees as well as industry hires and appropriate contracted resources to ensure successful program implementation.

It will directly report to the commissioner's office of the Public Building Service. In addition to the Public Building Service's permanent leadership structure and organization, we have identified regional recovery executives in each of GSA's 11 regions. As part of the PMO, we have identified three zonal recovery executives to support regional execution. The zonal executives will monitor program delivery and be able to shift resources to projects or a particular region as needed.

Finally, we have named Mr. Bill Guerin, who is here with me today, as the PMO executive to lead this effort. GSA has moved quickly. On March 31st, we delivered a list of 254 projects to Congress. It includes projects in all 50 states, the District of Columbia, and two U.S. territories.

These projects fall into three categories -- the first, new federal construction, where we will invest $1 billion in 17 projects; two, full and partial high-performance green building modernizations, where we will invest $3.2 billion in 43 projects; and three, limited- scope high-performance green building projects where we will invest $807 million in more than 194 projects.

This totals over $5.5 billion. The PMO will execute recovery activities on an aggressive schedule using streamlined business processes and innovative approaches. It will also ensure that projects are delivered on time and on budget. The zonal recovery executives will monitor execution and serve as an early warning system for projects that are not meeting anticipated targets.

We are ramping up our project activity and have awarded $92 million toward project work to date. This includes work on projects in New York City; Roanoke, Virginia; Billings, Montana; Bakersfield, California; Blaine, Washington; and Philadelphia, Pennsylvania.

We currently have numerous solicitations on the street and expect to award at least another $100 million in recovery projects by early June. GSA's goal is to obligate $1 billion by August 1st and an additional $1 billion by the end of the calendar year. We have set target dates for project awards in each quarter to ensure we obligate $5 billion by the end of fiscal year 2010.

Our project list was selected from an initial list of GSA pipeline projects that could be awarded within two years. The list we developed included detailed information on cost, schedule, energy benefits, and the impact of the repair and alterations backlog for each project. Our repair and alterations backlog was over $7 billion just for the minimum repairs. The dollar amount of projects we could have funded was much greater, nearly $30 billion.

We applied criteria to select those projects that would both put people back to work quickly and transform federal buildings into high- performance green buildings. The development of our project list relied on selection criteria that included incorporation of high- performance features with an emphasis on energy conservation and renewable energy generation, an early construction start date, a high return on investment, and other factors such as historic significance.

Many of the projects in the new federal -- federal construction and building modernization categories have previously received partial funding. These are projects which we can start construction quickly while also identifying the ways that existing designs can be improved.

We have developed standard scopes of work and we are using regional and national contracts to support recording and tracking, contract management, building tune-up and commissioning, lighting, and roofing. We are sharing these with other agencies engaged in recovery work.

We are pursuing measures to convert our existing inventory and turn our newly-constructed and green and modernized buildings into high-performance green buildings. These range from single-system improvements to integrated improvements in new and modernized buildings. Single-system improvements include features like replacing overhead lighting systems controlled by one switch with intelligent lighting systems that allow for daylight and occupant control; replacing leaking roofs with efficient roofs or roofs with photovoltaic membranes integrated in the roofing or (planted ?) roofs; large integrated improvements include features like improving buildings' exterior with more efficient windows, better roof insulation, and more efficient lighting, resulting in less need for heating and -- and cooling.

An example of the innovative features we will be incorporating into some of our projects on our recovery act list is the Edith Green/Wendell Wyatt Federal Building in Portland, Oregon. GSA will install a new high-performance enclosure over the entire building, each facade designed to react to the way the side of the building faces, which will dramatically enhance energy performance and blast resistance.

On the west facade, vegetative fins will provide shade, reducing the load on the new high-efficiency heating, ventilation, and air- conditioning system that will be installed. The east and south walls will have a double glass. The north is designed to let in maximum light. We expect the building to attain a LEED Gold rating.

Finally, pre-apprenticeship and apprenticeship programs will be an integral part of our recovery act projects. These programs will be established as contractual requirements in construction contracts for selected projects on our recovery act list. We are working with the Department of Labor as required in the recovery act.

The programs will be -- will be modeled after a successful GSA program in the national capital region where at least 840 people involved in 15 projects have been trained and employed since the program's inception in 2002.

Today, I have described the unprecedented and exciting opportunity that lies before us to contribute to our nation's economic recovery by investing in green technologies and reinvesting in our public buildings. Greening our buildings will be an ongoing process. We have the structure, the executive leadership, and much of the staffing in place to accomplish this very aggressive project delivery schedule. We look forward to working with you and members of this committee as we deliver this important work.

Joining me today are Tony Costa, the acting commissioner of the Public Buildings Service; Bill Guerin, the recovery executive; and Kevin Kampschroer, the acting director of the Office of Federal High- Performance Green Buildings.

This concludes my prepared statement. I'll be pleased to answer any questions that you or any other members may have. Thank you.

REP. OBERSTAR: Thank you, Mr. Prouty. We'll have some questions.

Mr. Stadtler?

MR. STADTLER: Good afternoon, Chairman Oberstar, members of the committee. My name is D.J. Stadtler and I'm here today to testify in my capacity as chief financial officer of Amtrak. In that role, I am the officer responsible for the disbursement of stimulus funding for Amtrak's procurement operations and for our compliance with both the provisions in this act and the provisions of our grant agreement with FRA.

Our CEO, Mr. Boardman, regrets that he's unable to attend today. He's in the midst of a long-scheduled series of meetings with employees on the West Coast. He asked me personally to express his regrets as well as appreciation for the support we have received from you, Mr. Chairman, your staff, and the entire committee. This has been a remarkable and exciting year for Amtrak.

If there's one message that I want to deliver today it's that Amtrak sees the stimulus bill not only as a responsibility to create jobs and stimulate the economy and also to address our infrastructure needs that have for years been deferred, but we also see it as an opportunity for us to change the way we do business. You'll hear me continually today use the words "transparency" and "credibility." We're taking strong steps to become more transparent and more credible and more accountable with this committee, our other congressional stakeholders, the Department of Transportation, the states, our vendors, and the passengers we serve. This holds true for our approach on stimulus funding and also on moving forward into the future.

The 1.3 billion (dollars) provided by stimulus allows us to undertake some very important projects. On the Northeast Corridor, for example, beginning this construction season we'll be replacing over 80,000 concrete ties. We'll be replacing the 102-year-old Niantic Bridge and several other fixed bridges.

Additionally, on Monday we'll be breaking ground at the restoration of the Wilmington Station. We also have had opportunities to make major improvements to our maintenance facilities across the system including Delaware and Illinois, Indiana.

Off the Northeast Corridor we've got investments that are funding significant improvements in stations focused on accessibility and ADA compliance. For example, in Chicago Union Station, we currently have switch heaters that are bowls of kerosene that stay lit all winter long. When there's a strong wind, that kerosene blows out and we manually have to have someone go and relight the fire so the switch can move. We'll be able to address that through these funds.

On May 18th, we're breaking ground in Florida to renovate the Sanford Station. We're also returning over 100 pieces of equipment to service long-distance cars, locomotives, and corridor cars.

As I discussed earlier, this is a major opportunity for Amtrak, and we are focused on using it as a stepping stone to change the way we do business. We know we must be transparent, compliant, and effective in awarding and managing these projects.

We're using all available means to get information on contract opportunities out to the public. For example, within 30 days of enactment we had a complete list of all of our projects with detailed project summaries on our website for the public to view. As contracting opportunities become available we post them online immediately and allow bids to come in.

We even have a page on our website that highlights opportunities for small, disadvantaged, and veteran-owned businesses and provides a list of frequently asked questions for those types of businesses to learn how they can bid and get contract work.

On that note, we're building relationships with a wide range of new vendors not only for stimulus but, again, for our annual capital investment program. We're reaching out to potential contractors, minority-owned disadvantaged business entities, women-owned businesses, and small businesses both to be our prime contractors and also to be subcontractors.

In April, we held numerous business forums attended by top Amtrak officials aimed at not only letting contractors know what kind of work we need but also giving them an opportunity to network with each other. We want to build our reputation for fairness, credibility, and integrity, becoming closer to the federal model of full and open competition. These forums drew over 300 vendors.

I'd like to close by expressing, again, my appreciation for the support we've had from the committee, from you, Mr. Chairman, from your staff, and from the Department of Transportation. We look forward to working with you in the coming months. I'm happy to answer any questions you may have.

REP. OBERSTAR: Thank you very much, Mr. Stadtler, although I must add a footnote to your comments. It's disappointing Mr. Boardman felt necessary to recuse himself from this hearing because of some perceived conflict. I -- I didn't have time to take that up with other authorities such as the Office of Management and Budget or the White House but you're a perfectly adequate presence. But he is the acting president of Amtrak and he should have been here in person. Mr. Alvord?

MR. ALVORD: Thank you, Chairman, Ranking Member Diaz-Balart, and members of the committee. Thank you for this opportunity to testify on behalf of the Economic Development Administration. Since 1965, EDA has provided grants for planning or infrastructure to distressed communities aimed at creating jobs and generating private investment. EDA has worked tirelessly in both robust economic times and in times of economic decline.

However, with the nation facing economic conditions unseen since the Great Depression, EDA's assistance to local communities may be needed now more than ever. On February 17th, 2009, President Obama signed into law the American Recovery and Reinvestment Act. The act's primary purpose is to stimulate economic recovery by making investments that preserve and create jobs, spur technological advances, and improve infrastructure that will provide long-term economic benefits.

In many ways, the act is an extension of EDA's existing mission, which is to lead the federal economic development agenda by promoting innovation and competitiveness and prepare American regions for growth and success in the worldwide economy. EDA has adapted our existing grant programs to meet the act's goals and requirements and to comply with its intent.

Of the 150 million (dollars) provided to EDA in the act, the bureau intends to fund at least 135 million (dollars) in public works grants to support brick and mortar infrastructure improvements. As we do in our regular programs, EDA will focus on projects with the potential to stimulate job creation, promote regional economic development, and encourage innovation and entrepreneurship such as investments in science and technology parks, industrial parks, and business incubators.

EDA's long-standing policy and practice is that the selection, oversight, and administration of grant awards rests in its six regional offices. This regional system allows EDA's field-based staff, who are most familiar with the current economic conditions in their states, to advise the six regional directors on what projects to prioritize and award under the act. Having staff on the ground who are living and working in many of the communities most severely impacted by the current crisis will help EDA make investments quickly but not hastily, and help us to maintain the bureau's reputation for superior customer service.

Since March, EDA's six regional offices have developed extensive pipelines of potential recovery act projects. Our goal is to fully obligate EDA's recovery act spending by September 30, 2009, a full year in advance of the funding expiration.

Indications are that we are well on our way to achieving this goal. Most EDA regional office project pipelines meet or exceed anticipated allocations. One region has a pipeline more than double its anticipated available recovery act spending. The prospective grant investments that have already had some review range in size from less than 200,000 (dollars) to over 4 million (dollars) and include a strong mix of construction-ready infrastructure improvements such as access roads, rail spurs, and port improvements as well as cutting- edge investments in business incubators, research parks, and green buildings.

EDA's long history of aiding communities impacted by economic downturns, its record of success, and its strong customer service have allowed the bureau to hit the ground running to implement the recovery act. To date, the bureau has implemented all of its established milestones, is on track to complete all future milestones on or ahead of -- of schedule.

Within three weeks of the act's passage, EDA published a recovery act funding synopsis as well as a Federal Funding Opportunity notice. EDA continues to coordinate with the department's budget office and officials at the Office of Management and Budget to ensure our agency program plan is implemented efficiently.

Prior to the act's passage, EDA already had well-established and highly-effective application evaluation procedures, award processes, as well as reporting and reconciliation practices in place. To ensure that the act's funding is properly managed, EDA is working closely with the department's recovery act coordinator and the other department bureaus funded under the recovery act to guarantee compliance of all of the act's specific requirements and OMB guidance.

EDA has also offered assistance to other bureaus looking to set up new grant and infrastructure programs.

Additionally, EDA has established a recovery act task force consisting of representatives of the EDA's regional offices and Office of Chief Counsel to focus on risk identification and mitigation across the administration of recovery act funds. We are also taking part in training that is being offered by the department's Office of Inspector General to identify and avoid waste, fraud, and abuse.

Chairman Oberstar, thank you for your long-standing support for EDA, and thank you, Ranking Member, and the members of the committee for your time today and for inviting me to give an overview on implementation of the recovery act at EDA. EDA is pleased to be a part of the important effort to bring about economic recovery. I look forward to answering any questions you may have and working with the committee to ensure the success of the act.

REP. OBERSTAR: Well, thank you very much, Mr. Alvord. Yes, indeed, the EDA has been a favorite government agency of mine. As some of you may know, I was on the staff of my predecessor when we crafted the Public Works and Economic Development Act of 1965. I have one of the green pens that Lyndon Johnson used to sign that bill into law, and actually there was a photograph of the occasion of Lyndon Johnson handing me the pen.

In the next stroke, however, he grabbed the lapels of my suit, drew me up to his nose, and said, "Now, I want you to get busy with John -- John Blotnick and Ed Muskie together to pass a clean water bill, hear?" I heard him. (Laughter.) And then -- (inaudible) -- he never -- he never missed a moment. He never missed a moment.

And he got EDA off and running well, but that moment was preceded by Accelerated Public Works of 1963/64 where -- where we made a first effort at a stimulus and where there were lessons learned in -- in the delivery and lessons learned at the local level of projects ready to get underway. And over -- over time, we had LP -- Local Public Works, LP-1 and LP-2, in the 70s, and each one of those we learned lessons of how to allocate these funds. Best is to do it by formula. Best is to make entities demonstrate that they're through all the phases -- design, engineering, land acquisition, public hearing process -- and ready to go to construction. And EDA has that delivery mechanism.

You're -- unfortunately the amount that -- that we had in our committee bill when it passed the House was substantially more than came through conference. Have -- have you -- can you give us an idea of when you expect to see the regions award grants and -- obligate the funds and then award grants to economic development districts?

MR. ALVORD: Yes, Mr. Chairman. I think EDA has made great progress in the intervening period since the passage of the act. Our regions have been working very hard to identify projects that have been through the initial stages of a development and are ready to get started right away. And I anticipate that we will be starting to award grants as early as next week and -- and the pace will pick up throughout the course of the month.

REP. OBERSTAR: How long -- what is the time lapse? We know pretty well from the previous panel, although there -- there'll be more detail given in subsequent hearings. But I -- I know that there is first a release from OMB that -- and obligation by the -- or obligation of the funds by the agencies, and then delegation to each state their formulaic distribution entitlement.

And once states' -- state DOTs receive their funds they notify contractors -- contractor community ahead of time (already ?) that we can anticipate this specific dollar amount because that's our formula distribution. Contractors are ready. The sand and gravel pit operators are ready. The ready-mix producers were ready.

And the bids went out or the IFBs went out and the bids came in and they were awarded. All that happened within a matter of two to three weeks, some even less than that time. So what is your time frame that you anticipate with working through the EDDs to -- economic development districts or getting projects under contract?

MR. ALVORD: We -- we are certainly trying to do everything that we can to incentivize the distribution of this funding to projects that are as far along in that development process as -- as we possibly can. So we -- we have essentially cherry-picked those investments from our pipeline that are in a -- in a very good position to get underway as quickly as possible.

We are very close to being able to send out the allocation to our six regional offices so they'll each know the funding amounts that they have available. That funding will then go immediately to the projects that are ready to be awarded in their pipeline and they will continue to develop additional projects beyond them.

Once the -- once the initial round of awards are made, which -- which I -- I fully anticipate will occur next week and -- and throughout the month, then we do move into that bidding process and there -- there will be a few weeks' delay as those bids are let and the projects get underway. But again, most of these projects are projects that have been on the books, they've been studied and considered over a good amount of time, and we fully expect that we'll be able to get many of them underway within a few weeks.

REP. OBERSTAR: What is that -- I want to understand -- I want it on the record the mechanics of the process from the time the -- the district is notified of their grant award the -- the time then -- how long does it take them to get a -- the IFB out and a bid in or bids in, and make the contract award?

MR. ALVORD: That process is -- is somewhat driven by -- by the local capacity to -- to absorb the funding. In most cases, they have 30 days from the date that we make the award to accept the award and arrange for an initial communication with EDA on how they intend to proceed. After that point, it can be a matter of --

REP. OBERSTAR: Do they understand they don't need to take 30 days?

MR. ALVORD: They do, and most do not. Most will turn that paperwork around within a week --

REP. OBERSTAR: All right.

MR. ALVORD: -- or a week to two weeks and --

REP. OBERSTAR: Good. Well, make sure they understand that.

MR. ALVORD: -- and -- and we are certainly emphasizing in everything we do with regards to the -- the stimulus act the -- the need to move these projects timely and act with a sense of urgency in everything that we're doing. We're impressing this both internally in our internal communications among staff but also externally to our stakeholders as well.

REP. OBERSTAR: So when they -- when they receive the bids and award a contract then what's the -- is there a time period for -- for any -- any possible challenge to -- to the award?

MR. ALVORD: No, Chairman. There should -- there should -- we don't anticipate any challenges to these awards. We think they'll move very quickly into the bidding phase, and once we receive those bids we'll be able to move into the construction phases readily on the heels of that.

REP. OBERSTAR: Within a couple of weeks?

MR. ALVORD: A couple of weeks would be an aggressive schedule. It's certainly something that we could push for. I think it -- certainly within a couple of months we could anticipate an engagement of activity.

REP. OBERSTAR: So your fate and that of the secretary of commerce and that of the president and vice president and the -- sort of reputation of the Congress for being able to deliver depends on -- on that portion -- on that local initiative, being able to award the contract, get the contractor to start work, put people on the job site. They have to understand they've got -- there -- there is no time for fiddling and diddling.

MR. ALVORD: Absolutely. And we'll do everything we can to impress upon them the need to act expeditiously.


MR. SALT: Yes, sir.

REP. OBERSTAR: Why did it take so long for the Corps of Engineers -- for your department to get these funds approved through -- through the Office of Management and Budget? What was causing the delay?

MR. SALT: Sir, I think, as you pointed out, there was a statute that directed us to do projects that were very quickly creating jobs. It also had language about benefits -- long-term, economic, and environmental benefits. Subsequently, the president put out a guidance that they be merit-based, and as we worked through that list I think -- I'm new here and I was surprised that it took as long as it did.

But as we worked through those issues, it took us until yesterday until we were able to get the list out. And all I can say is on many of our projects there were -- on some of our projects there were policy issues that -- that were developed that caused us to reexamine our --

REP. OBERSTAR: Well, I understand the -- I understand the issue about new starts. That was a matter that we -- that -- that was raised in the legislative process, not to -- not to do new starts.

And I -- I vigorously objected to that because that included projects that -- that -- that had gone through the district, the division engineer -- that had a chief's report six, seven years ago and hadn't -- we had moved it through our committee.

Some of those we've moved through the House and -- and two Congresses have moved the water bill through the House. Never got through the Senate. We never went to conference on any of it. They aren't new starts.

They just are -- are projects that have been delayed for seven years. Well, all right. That's -- that's not your problem. It's one that -- that we had internally up here and on a bipartisan basis we were very upset about that distinction. But -- but apart from the new start issue, I -- I just don't understand what was the -- what was delay at OMB in allocating those funds? Were they trying to make decisions about what our short-term or long-term or better or -- or less good investments?

MR. SALT: No, sir. The -- the -- the policy finally settled on that we would use long-standing executive branch policy, which is not budget policy. We did not apply our budget criteria. We -- we just apply in terms of which projects met the merit-based standards that the -- that the president directed us to do, and so there was some reshuffling of the list as we sorted through that, and -- and then just the -- I'm the wrong person to ask in terms of the -- (inaudible).

REP. OBERSTAR: I guess it's Mr. Orszag that we have to ask. But merit-based? All of these had chief's reports. All of these have been through the process. That's merit enough.

MR. SALT: I agree, sir. They're all good projects.

REP. OBERSTAR: All right. Well, I -- I assume I'd have to raise this question because the Great Lakes states have -- have -- and the port authorities have raised it -- the -- the -- a second lock at Sault Ste. Marie was authorized in the water bill of '07. President vetoed the bill. Congress overrode that veto.

That water bill included -- including restoring the Everglades, building levies in -- in New Orleans, Mississippi, east Texas, in the Alabama gulf area, Mississippi gulf area, locks on the Mississippi River to expedite navigation, move our agricultural products to market -- five 600-foot locks to be extended 1,200 feet.

Not one of those is included in this stimulus. Nothing. Not a start. The Sault lock for eight -- for the eight Great Lakes states to move our iron ore to lower lake steel mills, coal from the Powder River Basin to lower lake power plants, limestone and -- and aggregate and sand and gravel up bound and down bound, and agricultural export commodities that are -- that often have to delay because we don't have enough lock capacity. Why wasn't the Sault lock included in this?

MR. SALT: Essentially, sir, it didn't -- it was a good project, as you -- as you mentioned, but it didn't compete as well as the other projects that met the -- the timeline windows.

REP. OBERSTAR: Well, I don't know who made that decision about it doesn't compete as well. Going to have to answer to me. I'm not happy with that. I don't know who's making the judgment about competition. Mr. -- I'll -- I'll delay here. I'll -- I'll withhold. I -- (inaudible) -- questions I want to get to. Mr. Diaz-Balart?

REP. DIAZ-BALART: Thank you very much -- much, Mr. Chairman. Let me -- let me -- before, Mr. Chairman, I -- I address the panel I want to -- I want to thank you once again. I've -- I've told you this in private and I've said it in public, but I think these hearings that you are doing are probably one of the most important hearings that we're going to be doing.

We've all seen what can happen when -- the TARP being, I think, the worst example -- when -- when Congress sometimes passes legislation without enough oversight and -- and then we see the horror stories. I was concerned. And -- and I had this conversation with you and I, frankly, felt a lot better after speaking to you that when we passed -- when Congress passed the stimulus package that -- that there was not a lot of thought into where the money was going, et cetera.

And one of the things that you have been doing, and you've been aggressive in doing, is making sure that there is oversight. Some would say that -- that -- and not your doing, sir -- that this was kind of -- unfortunately, you have been forced to kind of deal with -- with, you know, that -- what is it, the -- the cart before the horse.

However, I want to thank you again because I think, again, your insistence on making sure that -- that Congress has oversight is crucial, crucial. So once again, sir, I want to thank you. I want to thank you for that, for your leadership there as always. And -- and this is a committee that I'm very proud to sit on (among ?) the reasons is because you consistently show that -- that you are looking for the interests of the United States of America above anything else, and -- and that is crucial.

I also want to welcome a friend of mine who is here today. I've worked with -- with Mr. Salt on a million issues for longer than we care to admit, I guess. And Mr. Chairman, those of us who have dealt with him, you're -- you're going to be -- I think you're going to find him to be refreshing. He's a straight shooter. You know, he has a wealth of experience. And it's good to have you there, my friend, and --

MR. SALT: Thank you, sir.

REP. DIAZ-BALART: You know, as always you have your -- your work cut out for you. But you're ready. You've been dealing with all these controversial issues for many, many years. So really good to have you there and that there could be no better person for that job and -- and I'm -- I'm thrilled that you're there.

MR. SALT: Thank you, sir.

REP. DIAZ-BALART: Very briefly, as -- as -- as, Mr. Prouty, you said a little while ago, you had -- you were given some -- some -- some criteria creating jobs and also, obviously, making sure that -- that -- that we also deal with trying to improve, making sure that we can get green buildings, et cetera. And I guess it's -- it's -- and some might say there's a bit of a conflicting -- those are kind of conflicting.

But any idea how many jobs will be created by the projects and the GSA's performance green buildings and -- and are they -- are they going to be sustainable jobs and -- and how is GSA counting the job creation of the, you know, the green jobs?

MR. PROUTY: As you recall, last time we were -- we were here we used a number of 28,500 per billion dollars, which is a number we're still using. But the good news is in each one of these contracts they've got to count the jobs and they have to report the jobs, and it's got to be on So we think they are -- they are real jobs.

We -- we know that we're just going to count the -- the frontline jobs and obviously there's a lot more beneath that. But we'll -- maybe not in the next 30 days but soon thereafter we're going to start getting you real numbers.

REP. DIAZ-BALART: Great. Great. So you'll -- you'll -- you'll be on top of that and you'll -- you'll give us information as you --

MR. PROUTY: That's why we're doing this program. You can -- (inaudible).

REP. DIAZ-BALART: Good. Appreciate that. Now, the -- the -- the act also requires that no less than $4.5 billion be available for -- for measures necessary to convert GSA facilities to high- performance green buildings, which is a very high standard as we spoke --

MR. PROUTY: Right.

REP. DIAZ-BALART: -- last time. Of the -- of the -- of the projects listed in the GSA spending plan, how many of them do you expect will actually meet this very high standard following the investment of -- of -- of those funds?

MR. PROUTY: When you -- when you talk about that -- the high standard, obviously all of them have different levels of components, of green components, energy-efficient components. But all of them will meet the criteria. I mean, that's -- that's what we're doing with the $4.5 billion is creating green facilities and green jobs. So they're all going to meet it.

REP. DIAZ-BALART: Really? That -- I'd like to see that. That's great. I mean, that -- that would be good. And obviously, GSA's receiving what, $5.5 billion --

MR. PROUTY: Right.

REP. DIAZ-BALART: -- which is quite a -- quite a substantial increase.

MR. PROUTY: Uh-huh.

REP. DIAZ-BALART: And my understanding it's tripling your -- your workload which is, again, you know, quite a -- quite a significant jump. So how can GSA ensure that these projects are overseen and managed appropriately and that -- so that GSA will not have to come before Congress later for additional funds because of cost overruns or whatever?

MR. PROUTY: I think there's two phases there.

One, we talked about the Program Management Office that's going to -- we've set up a -- a unique organization with skilled people to make sure that they look at this program. But obviously, as we talked last time as well, we're going to have to recruit new people. Most of them are temporary jobs. Some of them are going to be retirees who come back. Some are going to be people that we hire temporarily. Some may be permanent jobs.

But obviously, we're going to have to bring in more people to do this work. It is a massive amount of work. Having said that, we believe that we're going to be able to do it. We've got all these projects scoped. They're scheduled. They're estimated. And we're going to be back here every 30 days to report that we're meeting it.

REP. DIAZ-BALART: Great. And, again, Mr. Chairman, I repeat what I said at the beginning, which is why these hearings are so important, because it's a -- it's a substantial amount of money that has been put out there, a lot of times with not a lot of guidance -- other times with some guidance that might even be conflicting. But -- but again, I want to thank you, sir, for -- for your assistance and your aggressiveness in oversight, which is essential. And again, I -- I end with -- with welcoming my -- my good friend, Rock Salt, who is a -- you know, he's a Floridian so things will be fine.

REP. OBERSTAR: (Laughter.) I appreciate your very generous words and -- and recognizing the purpose of these hearings, and I made that commitment at the outset that whatever else is in that -- is in the recovery act that's beyond our committee jurisdiction we can't control. But this we can, and -- and we are going to every 30 days for the first 90 days have this report, and then every 60 days thereafter to -- and oftener if -- if needed. We want to see what's working and what's not, and it has to be subjected to the light of day.

And this is also setting the -- the standard for the next surface transportation authorization where there's going to be accountability for the states and the MPOs and the transit agencies on performance, and -- and we're -- and we're going to shift to a performance-based program so we're going to have them report on performance. And that's our responsibility.

I -- let me come back before I go to Mr. Lipinski -- Mr. Salt, you got such a warm endorsement and high praise. Mr. Diaz-Balart doesn't just throw those kind words around lightly. So I want you to go back to whoever -- to whomever you're working with and tell them -- tell them whatever criteria they used they were wrong. In the legislation -- the Water Resources Development Act of 2007 in which -- which the president vetoed and which Congress overrode, and in the history of the Congress there were 1,174 vetoes. Only 106 have been overridden. Our override of that veto was 107.

Mr. Mica, by the way, led on -- on the Republican side and Ms. Johnson on our side because I was in the hospital having my neck operated on. (Laughter.) And I think everybody on this committee voted for the override because it was a good thing -- because that package was good. That was six years worth of work that we all agreed upon, and in the language in that bill it says specifically, "The secretary is directed to carry out the Sault Locks project as expeditiously as practicable without regard to normal policy considerations."

Some -- in the -- in the fall and spring shipping seasons when it is desperately needed to have a second lock because of icing, and the coal has to get to the lower lake power plants, we need an additional lock, and we directed this language. Thirty-four million people depend on it. Forty million tons of shipping go through the Sault Lock in those -- in those cold weather months.

I want you to take that message back. And I want to know who else is involved in this faulty reasoning, and -- and we're going to fix that. Now, Mr. Lipinski?

REP. DANIEL LIPINSKI (D-IL): Thank you, Mr. Chairman. I want to commend you on holding this oversight hearing. It's not always the most sexy hearing to -- to conduct but probably (in many case ?) the most important hearings for us to -- to conduct.

I wanted to -- not a lot that I -- that I can add to what the chairman was just speaking about specifically about that project that -- on -- on the lock, which certainly everything suggested it should have received the funding here. I -- I was concerned about the -- that fact that the Chicago district -- which isn't just Chicago but covers northeastern Illinois, over 8 million people -- only received $28.125 million for projects, and I know there's a lot of projects in the area, you know, right in my district that certainly are -- are shovel ready.

So I -- I look forward, Mr. Salt, to -- to hearing more. I know you've -- you've gone into this already with Chairman Oberstar, but hearing more, if there's anything you want to add now but also in the future about the methodology that the Army Corps used for -- for project selection because it was just very surprising to me that the Chicago district would only -- only be chosen for -- for that much out of the $4.6 billion. I don't know if there's anything you want to add now or -- or just move on to the next question.

MR. SALT: Well, I would -- the quick answer is that for O and M projects we had no way to rank them and so we essentially listed them in the order that they were -- that they ready to go. For our construction projects, we prioritized life and safety projects. We-- we gave a high priority to environmental projects with a high environmental return and then we took -- we took all the projects that were in the -- the window and we -- we ranked them by their -- by their economic benefits and that's -- that's the list we end up. Now, I mean, that's the short answer for -- for how we did it.

REP. LIPINSKI: Well, maybe we can -- and maybe you could follow up after this in the future on some of those projects that it would seem to me, I believe, would have fit into that. But we -- we can explore that later on.

MR. SALT: Yes, sir.

REP. LIPINSKI: Mr. Prouty, I just wanted to ask a -- a question about the -- a provision in the Energy Independence and Security Act of 2007, which we passed back in December of 2007. There's a provision in there, Section 323, that began as the introduction of the BRIGHT Energy Savings Act, which I introduced. It was then incorporated into the -- this committee's outstanding contribution to that comprehensive bill.

This provision requires that the GSA -- whenever a new bulb is being -- being put in, is being installed, a new light bulb, that it be a energy-efficient light bulb. This was supposed to be in effect one year from the date of enactment of that bill, which would have been December 17th of -- of 2008.

So I just wanted to -- to follow up. I wanted -- first, just interested in the -- in the progress that GSA has made towards implementing these requirements. I mean, basically, can you say how many light bulbs have been changed to energy-efficient light bulbs?

MR. PROUTY: I can't -- I can't say by light bulb but I can say that we've -- we've modified our contracts to make sure that any that they change are more efficient lights. The facility standards have been changed. We think we're getting the return on that investment and we know the payback when it involves the fixtures is five years. And also we have over 100 lighting retrofit projects on the recovery list as well.

REP. LIPINSKI: Okay. So the recovery act, to what extent is that helping you to accelerate these upgrades?

MR. PROUTY: I can't tell you specifically but there are a lot of lighting projects, and we're making great headway and we think because of -- of all that we're doing in lighting that we're saving over 1.4 million (dollars) per year. So I think it's significant.

REP. LIPINSKI: Okay. So you're -- you're saying that the $1.4 million a year you believe that you're saving?

MR. PROUTY: That's our estimate, yes.

REP. LIPINSKI: Okay. So has that be -- has that already begun or when will that savings --

MR. PROUTY: It has -- it has begun. It's changing as we've changed our facility plans and it very well could increase, depending on what the -- what we have -- what the opportunity for savings with the different fixtures and bulbs that we're using. But it's a very aggressive plan.

REP. LIPINSKI: It would -- it would seem -- my -- from what I was able to learn from the GSA was a estimate of about 3 million light bulbs it would -- that would be changed from the incandescent bulbs -- where there were incandescent bulbs already put in CFLs or other energy-efficient light bulbs. So I'm hopeful that the -- there are estimates of how much each -- changing each light bulb would save, anywhere from 35 (dollars), $40 up to $72 per -- per light bulb. So I'm hopeful that the savings will be even greater than that, and I was just wondering if you had any ideas about going forward -- if you expect greater savings than 1.4 million (dollars) a year.

MR. PROUTY: I'm now going to turn to an expert. Just a second. Kevin Kampschroer is our -- our green (guy ?). He said the 1.4 (million dollars) is changing light bulb. We think that 30 percent of the lighting energy -- energy saved from retrofits. So yes, the number is going to be significantly greater and that will be one of the -- the many things that we'll be reporting as we monitor this program.

REP. LIPINSKI: Okay. So you will be -- we'll be monitoring that so I would appreciate being kept up to date on that.

MR. PROUTY: We'll do it. Thank you.

REP. LIPINSKI: Thank you.

REP. OBERSTAR: The gentleman from Arkansas, Mr. Boozman.

REP. BOOZMAN: Thank you, Mr. Chairman. I think that, you know, in listening to your discussion, Mr. Oberstar, and the others I think sometimes some of these things sound a little self-serving and yet that, you know, you get so caught up in these projects and you're so aware, you know, of -- of your district and things. And I think we really can be a good sounding voice.

We have a situation where the Arkansas River, you know, and the McClellan-Kerr Waterway have gotten money in the past through Operations and Maintenance to increase the -- the depth of the channel, and -- and really just for a few million dollars we would essentially have that whole thing done. We have a tremendous problem with capacity -- you know, not -- not -- we've got overcapacity on our inland waterways and yet you have to do these little things, you know, so that you can have more capacity in the sense you can float the barge 40 percent down more, you know, and -- and haul a lot more product.

You run into kind of the catch-22 situation in this in the sense that money's being spent but it's spent through Operations and Maintenance and so it's considered a new start to finish it out. So I think those are things, you know, that we just have to look at and -- and, again, you know, are just things that -- that I think we can help you with.

One of the questions that I'd like to ask is -- is that with us putting so many contracts on the street at the same time, are we concerned about inflation? Do we -- have we kind of factored in that a little bit or --

MR. SALT: Sir, the good news is that we -- it's part of our process, and I didn't mention this -- we capped our project at 50 million (dollars) so that we would spread out and have our projects spread out over the whole country, and so there isn't a concentration in any one place.


MR. SALT: Notwithstanding that, this is an increased contract load and so we're planning to use the -- the additional funds that we're allowed to provide temporary contracting specialists to allow for -- to get the contracts out and to quickly process the work, as we've been talking about.

I think as we heard on the first panel, generally, there's a good bidding climate and so that's going to cause, I think, at least some of the agencies are getting bids lower than their estimates. I think just -- you know, my college economics tells me that as the -- as the demand for those services goes up that there will be a cost that goes with that. But right now, we are -- we are doing -- we believe because it's spread out, because we have smaller projects, we believe that will be good for small businesses. We believe it'll provide the stimulative job-creation effects that -- that the law expects.

REP. BOOZMAN: Now, that -- that makes a lot of sense. The -- the second part of my question was going to be about the -- you know, would we see more competitive contracts because of the downturn. But -- but you answered that. I love your name, Rock Salt.

MR. SALT: Thank you.

REP. BOOZMAN: That's a -- like you said, that's -- that's great.

MR. SALT: My dad -- my dad's almost 90 and he told me the other day that -- he says, "You know, Rock, that name worked out pretty good for you."


REP. BOOZMAN: Very good. I yield back on that, Mr. Chairman.

REP. OBERSTAR: Thank you. He comes very highly recommended as a rock by Mr. Diaz-Balart and -- and his work on the Everglades. That's nice to hear. Now the chair of the Transportation, Public Buildings, Grounds, Economic Development, and a whole host of other things -- the gentle woman from the District, Ms. Norton.

DEL. NORTON: Thank you very much, Mr. Chairman. But -- but above all, thank you for the way in which you are tracking these funds and making good on your promise that this fund -- these -- this money had to -- had to be used or -- or lost. Mr. Chairman, could I just ask as a point of personal privilege in the name of climate change and energy conservation the staff turn down this air conditioning? Even for men in long-sleeved shirts and suits, surely we are not setting the proper example. I'm freezing up here. I -- I keep going back in there so I can get a little warm and come back out here.

REP. OBERSTAR: I don't know that we can control our particular room because it's a -- it's (a single ?). But I -- I recall for the gentle woman, in 1977 when we had energy issues on the House floor and then the Senate took the same measure up, and it was Senator Jennings Randolph who, with a thermometer in hand, said on the floor of the United State Senate, "Look at this thermometer. It is 68 degrees in this chamber. We could save money by -- by lowering the -- by raising the temperature and lowering our energy cost." And the next day they came back, and the -- and Jennings Randolph pulled out his thermometer. It was 72 degrees. "Very comfortable," he said. And a reporter asked the building superintendent, the manager of the power plant, "How'd you do that?" He said, "Well, we can't. We can't control it. We just opened the vents and let out -- let in the outside air."


DEL. NORTON: Oh, whatever it takes, Mr. Chairman. (Laughter.) I noticed that, you know, they -- they, you know, cool it out here where the members are but back there where the staff is, it's comfortable. I'm not -- I'm not sure what that means.

I do agree with you, Mr. Chairman, regarding how we must use the stimulus exercise, shall we call it. I regard it as a dress rehearsal for this huge, we hope huge, reauthorization on which the committee is now working, and much that -- much that we have learned -- have learned here -- having to go fast, having to monitor more -- the chairman has indicated is going to be regular order.

Mr. Prouty, I don't know if you heard my discussion on training. This committee did insist upon some -- some funds. The appropriators were a whole lot more stingy than we thought. You have only $3 million. Transportation had $20 million. I intend to make it clear that such funds in the future are mandated and that states can't just decide to use all the money for the existing workforce and not train new people.

Have you made any progress yet in figuring out how to use such a small amount of money in training, given how -- how many places they could conceivably be put and obviously can't be put because of the amount involved?

MR. PROUTY: We really haven't made a great deal of progress. We've -- we've talked about what that money could be used for, and it could be used for recruiting and some classroom training for basic skills, (math ?) skills, pre-apprentice work, and program management. And we're tying that together with --

DEL. NORTON: See, some of those words don't sit well, like program management. It seems to me that this money has to be used and in -- and in the GSA section it's -- it made it clear -- on-the-job training, pre-apprentice programs of one kind or the other. It's very difficult to -- to do. I mean, I suggested to the secretary, the transportation secretary, that given how small the amounts were, even his amount -- given the amount of his total package -- and our tiny amount, only $3 million, since we're both in the construction business that we partner so that we don't go into the same jurisdictions -- pile on, as it were, some places since we don't have enough money to get to 50 states, territories, and the District of Columbia. Could I ask that your staff sit down with my staff to begin to talk about the use of this money, which is already rationed in its amount, and therefore puts very special burden to be used wisely on -- on GSA?

MR. PROUTY: We'll do that.

DEL. NORTON: Thank you. Could I ask you, Mr. Prouty, how many contracts GSA has awarded thus far and how many are in the pipeline?

MR. PROUTY: We've awarded six projects for $92 million. That's six out of roughly 250. So we're -- after one month we're moving along, but we've got plenty to do.

DEL. NORTON: How many in the pipeline, Mr. Prouty?

MR. PROUTY: When you say in the -- in the pipeline we expect --

DEL. NORTON: I guess they're all in the pipeline somewhere.

The point is --

MR. PROUTY: Yeah, they are. We -- we expect -- I don't know the exact number of projects but we expect another 100 million (dollars) to be awarded before June, and then we're working towards the billion goal. So I'm -- I'm not sure. I don't have the specific --

DEL. NORTON: Yeah. Well, let's -- (inaudible) -- discuss that billion dollars. The current goal, as you say in your testimony, is a billion dollars by August 1st and a billion by the end of the calendar year. So you see, with a little rough math here (4.5 ?), that's $2 billion by the end of the calendar year -- at least $2.5 billion.

In your testimony, you indicate how much money will be used for various categories. The only way to understand what appears to be pretty slow going -- since all the money, of course, has to be obligated by 2010, even the DHS money, and we've not even broken ground yet -- the only way to understand how you're doing this, since you've only accounted for $2 billion in your testimony, is to look further in your testimony and see how the -- the -- the projects are broken down. There's construction category. There's a modernization category. There's a green buildings category. Are you breaking those down? No timelines are associated, at least in your testimony, with those.

And I -- and you also say in your testimony -- I'm looking at Page 2 -- that you'll (admit ?) the fact that there was a backlog of only seven of -- of over 7 billion (dollars) and you got 5.5 billion (dollars). We went for the whole enchilada. One wonders if you could have handled the whole enchilada.

And you say on Page 3 of your testimony that the new federal construction and building modernization categories have -- many of the new federal construction and building modernization categories have previously received partial funding. In light of -- of -- of that circumstance, and I've only $2 billion I can account for by the end of this calendar year and the need to get some jobs out there, which is the whole point of the stimulus package, I -- I must ask you to account for the other $2.5 billion.

MR. PROUTY: As you know, since we submitted the list to this committee, we -- those 250 projects represent the roughly $5 billion. So all those projects are on a list. They're all being scoped, designed. They all have -- will have schedules and --

DEL. NORTON: Well, see -- now, wait a minute. We were told there was a backlog. You mean -- now, we can understand there may be some design work going on on projects like the border projects. But after all, it was months ago that we even -- we even authorized those. So I hope there's not a lot of design work, sir, going on here. Then we really are at the beginning.

MR. PROUTY: Now, there's -- there is some design, some review of design. But there's -- there's a lot of that work that can be pushed out, and when we were going through these projects in dealing with the regions as they're rolling them out, we'll get better information as -- as we meet 30 days from now, or we can meet --

DEL. NORTON: Yeah. We were very -- very -- very pleased with your list of projects -- with the range of the projects. We don't -- we also know that GSA was very underfunded over the past several years. You have met with our staff and, very frankly, we -- we assumed that there'd be more than half of this funds out by the end of this calendar year and it does seem to me you're going to be in a terrible speed-up because 2010 the game is over, and the point is to get it out and to get to this so-called backlog, which everybody said was shovel ready. Remember those famous words. So -- so I'm not sure I -- I see either enough staff, enough consultants, enough term -- term-hired staff. What is necessary to get more of this work out on the streets so we put more people to work?

MR. PROUTY: Well, we are doing -- we are recruiting. So some of it has to do with staff.

DEL. NORTON: Well, I'm telling you there's a lot of folks out here on the street, Mr. Prouty.

MR. PROUTY: (Inaudible.)

DEL. NORTON: I can't believe recruiting has been a problem. How long does it take to process a person for a term position to come on and -- and get the work done?

MR. PROUTY: Well, it depends on the authority, and I'm not really sure exactly what the time is. But some of those authorities allow us to bring back retirees, which is just a matter of identifying who they are, and we're in the process of doing that.

DEL. NORTON: When you get to within two weeks -- 14 days -- the -- we'd like to know how many retirees are being brought back, how many term employees have been hired, how many are contemplating to be hired. And I want -- I'd like for you to account for the other $2 billion -- $2.5 billion. You got $2 billion that you're going to be out on the street by the end of this year. That -- that leaves $2.5 billion.

For example, how -- how in the world are you going to use the stimulus funds that must be spent on DHS in Ward 8 of -- of this city? That -- that money has got to be spent or else I'm not going to be able to get any more money right away for DHS, and yet you have not broken ground yet. What activities are being -- will -- the -- it's $4 billion just for this one project. Are you going to be able to spend $4 billion with DHS? Or is it 2011? Is it 2010 or 2011?

MR. PROUTY: Okay. So it's 2011. So it's in the second -- (inaudible).

DEL. NORTON: You all need to speed up on this one. And this puts you under real, real pressure because you've been working -- GSA has been working as fast as it could. It got its master plan approved. What we did was to go to the Senate, frankly, and indicate that this was a classic FDR project. The entire Constitution Avenue, Independence Avenue got built during the 1970s -- sorry, 30s. (And if ?) you go look down on the cornerstones, it's because FDR was doing precisely what this president is doing -- making jobs. And he built the entire federal presence downtown.

This is -- this is essentially the kind of pressure you're under on DHS, and for me, that becomes a personal matter because I am the one that has had to beat everybody about the head and shoulders to get what money we've gotten there out. So if it looks like we have not obligated the 400-and-some million dollars -- what's the figure?

MR. PROUTY: Four-hundred-and-fifty million.

DEL. NORTON: Four-hundred-and-fifty million dollars by the end of the period, there goes the appropriation. I will not be able to get another thin dime out of the appropriators. So I'm very, very motivated on that, and I can only ask you to be motivated.

I want to see the timeline within two weeks for spending the $4.5 billion for St. Elizabeth's. Want to know how you are -- given what doesn't look like a very fast space, how -- pace, how are you going to handle swing space? There are some full building modernizations going on where you're going to have to move people out, get the work done, into some swing spaces. Do you have the swing space? Will you be using any advanced acquisition program for swing space? How are you going to get -- just handle that one problem which accompanies what you're going to be able to do?

MR. PROUTY: We will need swing space --

REP. OBERSTAR: You'll have to give your answer and then we'll -- I have to go next to Mr. Buchanan and we'll have another round of questions, if the gentle woman needs it. But we need to move on. So make your response. There's a lot that you're going to have to answer for.

MR. PROUTY: Sure. We -- we do need swing space. We've identified what it is. We've started the projects and we will use the advanced program in order to do that. We're confident that we're going to be able to get the swing space that we need.

DEL. NORTON: Thank you, Mr. Chairman.

REP. OBERSTAR: We will follow up on this. Mr. Buchanan?

REP. VERN BUCHANAN (R-FL): Thank you, Mr. Chairman, and thanks again for all you're doing -- your leadership. Mr. Salt, this relates to Florida's stimulus and jobs. It's pertaining to southwest Florida, Port Manatee. It's a major economic engine for our region. It's the closest deep-water port the -- in U.S. to Panama Canal, which is -- we've got a lot of room for expansion. But yet, we've been chronic delayed I think it's going on seven, 10 years -- (inaudible) -- a GRR for dredging at the port that will allow Manatee take advantage of a larger ship traffic.

This project will create a lot of jobs in our area. They built a berth based on good faith. Ten million bucks the port spent I don't know how many years ago -- quite a few years ago, and we had a good faith commitment back then to the Corps. And I just didn't know -- I'd like to get your thoughts on where we're at, what's going on, or if you can give me your insight on that.

MR. SALT: First, I would say from a previous life the port was one of my favorites.

I don't know if I'm allowed to say that but --

REP. BUCHANAN: I appreciate it. So --

MR. SALT: We met with the port authority, the port officials in the last couple of weeks to talk about the issues that you raised, and I think -- all -- what I'll tell you is we're working the issues. There is questions about the adequacy of the disposal site, the -- sort of the political and public opposition to Gulf -- Gulf disposal, ocean disposal. And as we work through the analysis of all those, I agree, it's taken -- it's taken a long -- too long.

We had a good meeting with the port officials, and last I heard we were working on a satisfactory arrangement that would allow the port to proceed with the -- the state funds that they have, finding a way to do that. But I will get -- I will specifically get back on that because I haven't been (back-briefed ?) on the specifics of that since our meeting.

REP. BUCHANAN: Yeah. If you'd look -- that berth, there's hundreds of millions of dollars, I think, they could be generating revenue for a lot of years. (We built that ?) but yet, we've got this technicality -- maybe it's more than that, obviously -- but it's just gone on for a long time and it's keeping us from a lot of jobs and opportunities.

Assistant Secretary Woodley (ph), I met with him I think a couple of years ago. It sounded like we had it done -- it was going to be done. Here we are sitting two years later again. So I'd appreciate for you to get back with me. Let's get a time frame and figure out a way to get this done because it's creating -- it'd be -- we've got a lot of opportunity for expansion. We think it can be a megaport, and we've got the area there where we can expand, and it'd create a lot of jobs.

And I know this is about stimulus and -- and job creation so I'm very interested not just in the country and getting these jobs -- getting these projects out there, but this is something that's been sitting there forever, and we've got -- we've got to figure a way to push through this to get this resolved. But I appreciate you getting back.

MR. SALT: I agree, sir. Thank you.

REP. OBERSTAR: I thank the gentleman for those observations, and we'll expect that information, Mr. Salt. Now, I have here a list of the operations and maintenance projects that I -- it's sort of a rough count, 892 -- it's a printout we just received last night or this morning -- 892 O and M projects. There are 178 construction projects, 45 Mississippi River and tributaries projects, 67 investigations, and nine formerly-utilized remedial action projects -- a total of 1,191. Is that -- is that the (universe ?) of projects that the Corps is going to be undertaking?

MR. SALT: That's the -- that's the list that -- that we will be sending the funds out for on Friday. I think as funds are available we will continue to make sure we spend all of -- expend all the funds that Congress has provided so that we can meet the purposes of the -- of the bill.

REP. OBERSTAR: And I will not pretend to have read every one of these but I -- because we didn't really have the -- the time in which to -- to do that. But just a cursory review indicates that there was some back and forth between the Corps and EPA -- I'm -- I'm sorry, OMB -- between the Corps and OMB. And although we've already discussed -- I don't want to beat to death the new starts issue. That's not your problem. You're new on the scene. That's an OMB problem. I have a problem with them.

But I don't see any consistent pattern or criteria by which these decisions are made. So I'd like you to submit to the committee your list of criteria by which the Corps selected the projects for inclusion in its recovery act. We insisted on transparency, accountability, and openness. This is part of transparency.

If one of those factors -- well, it's something I've heard, that the project be budgetable, whatever in Heaven's name that means, by OMB what criteria did the Office of Management and Budget direct the Corps to use? That's a very specific question. If the factor is that it be budgetable. That is an arcane -- in 43 years I've not heard that term.

MR. SALT: Sir, I would -- I would say categorically we did not -- that was not a criteria. That was not a criteria imposed upon or even suggested to us by OMB, at least at the levels that I was dealing with OMB, and that was not a criteria that we used.

REP. OBERSTAR: Well, whatever it was, I've heard this and -- and I -- I don't -- I have no idea what it means. I take your -- your word, but I want the -- I want the list of criteria.

MR. SALT: Yes, sir. And I -- I believe one version of that list was posted or will be -- will soon be posted on the -- on the Web that you mentioned with the transparency. But we certainly will provide that information to -- to you.

REP. OBERSTAR: Send it by e-mail. We'll get it fast. Mr. Stadtler, I had understood that the Niantic -- very early on, we asked -- we asked Amtrak for a list of projects. We went through this quite some length, about what amount of investment you could use within the time frame that we anticipated, and we got a list and we -- we had $5 billion worth. Unfortunately, that got cut in the -- in the conference to the dollar amount that we're now talking about.

But one of those was the 102-year-old Niantic River Bridge, and -- and another one in Pennsylvania, a frequency converter -- not a bridge, but a -- but a -- called the 80-year-old Lamokin -- Lamokin frequency converter. Are those still on your project list?

MR. STADTLER: Yes, sir. They're both on the list. We expect them both to be awarded this summer. I believe the Niantic Bridge is -- is either late June or July on the schedule, and I'll have to get back on the converter.

REP. OBERSTAR: What is the converter? What does it do?

MR. STADTLER: What it does, it gives us backup power. It deals with the power.

REP. OBERSTAR: And it's an 80-year-old device that needs to be upgraded?

MR. STADTLER: That's correct.

REP. OBERSTAR: So that's characteristic of much of -- the infrastructure that Amtrak has to deal with, isn't it?

MR. STADTLER: That's absolutely correct, sir.

REP. OBERSTAR: Yes. You describe a -- a disbursement program that will bring in regional project managers to deal with, quote, "more difficult and complex projects." What do you mean by more difficult and complex projects?

MR. STADTLER: What those folks are going to do is they'll basically be an -- (inaudible) --

REP. OBERSTAR: First of all, what is a more difficult and complex project?

MR. STADTLER: Well, for example, a bridge would be a more complex project.

REP. OBERSTAR: All right.

MR. STADTLER: Some of the things that -- easy is not the right word, but that we are better equipped to do more rapidly are things like the vehicle overhaul and things that we have off the shelf that we have been ready to do but have just been deferring for -- because of funding reasons.

Some of the new items that we're doing, like some of the bridges that we just had not been ready to do, we need more expertise. We were concerned that we're all local here. We felt that it would be a good idea to -- to have these regional program managers that we could rely on to have that expertise right there where the projects are taking place, and -- and they would, again, serve as kind of an extension of our procurement folks to get the projects moving more rapidly. There are many things that we've deferred, sir, if I may, that we were concerned about getting done by February 2011, and we think having this extra staff will help us meet that deadline.

REP. OBERSTAR: You'll submit a list of additional personnel you'll require to -- to do this work?

MR. STADTLER: Certainly.


MR. STADTLER: In fact, we're putting that out for a bid.

REP. OBERSTAR: And in the early -- (inaudible) -- by early I mean three weeks ago or so, four weeks ago -- early after the signing into law we got information from -- we received information from Amtrak that something in the range of 80 to 90 rail passenger cars would be refurbished at the Indianapolis facility. Is that -- is that still on track?

MR. STADTLER: Yes, that's correct.

REP. OBERSTAR: Do you know how many cars you anticipate doing?

MR. STADTLER: I have the exact number. Hold on one moment. Eighty-one.

REP. OBERSTAR: Eighty-one. Okay. My -- my recollection was a little higher than -- than that number. That's 81. That -- that -- that's right. No, that -- that's correct. That's the number I recall receiving.

MR. STADTLER: And then there are 15 locomotives as well, above and beyond that.

REP. OBERSTAR: And locomotives on top of that, yes.

MR. STADTLER: Correct.

REP. OBERSTAR: All right. Mr. Diaz-Balart, do you have any further questions or comments?

REP. DIAZ-BALART: Thank you, Mr. Chairman. I -- just a couple about Amtrak. How does Amtrak intend to spend the $450 million money for security? Does that funding go through the Department of Transportation as -- as the annual capital and operating grants do or will it flow through the Department of Homeland Security? Any idea?

MR. STADTLER: That money actually is flowing through the Department of Transportation and it has already been awarded. We -- we signed the grant within the 30 days.

What we'll be spending it on is security and (life-safety ?) projects. Some of those projects range from improving lighting in stations where the parking lighting is poor and we're enhancing our (positive ?) train control projects on the Northeast Corridor and in Michigan. We're installing closed-circuit TV on yards where we have a history of vandalism. It's a wide range of projects.

REP. DIAZ-BALART: Great. And how -- generally speaking, how much of the Amtrak capital grant funds -- again, obviously, we're talking about this recovery funds -- this bill's funds -- will be -- will -- will stay in house versus, you know, for -- for Shacowan (ph) and other construction work by -- outside?

MR. STADTLER: I'd have to respond to that for the record, but -- but the majority of it will be going outside to --

REP. DIAZ-BALART: Most of it will be going outside?

MR. STADTLER: That's correct.

REP. DIAZ-BALART: (Inaudible.)

MR. STADTLER: But we can get the exact number.

REP. DIAZ-BALART: And, lastly, Mr. Chairman, on that, is -- is you mentioned in -- in your statement that there's an estimate of 4,600 new jobs that will be created as a result of the 1.3 billion (dollars) appropriated. How many of these jobs do you think will -- will be new Amtrak permanent employees as opposed to, you know, private-sector jobs?

MR. STADTLER: Sir, just to clarify, the 4,600 jobs is just in the first year. We'll probably double that amount when -- when the February 2011 time is met. We think that, again, the majority of those jobs will be outside jobs. We don't have an exact number yet. As the projects get more fleshed out we'll -- we'll have a closer number. As my colleagues are doing, we'll be reporting every 30 days, we -- to the FRA on exact numbers, internal and external.

REP. DIAZ-BALART: Great. Thank you. Thank you, Mr. Chairman.

REP. OBERSTAR: Very good. Thank you. Mr. Salt, reflecting on your -- your response to my earlier question about the 1,191 projects, does that capture the entire 4.6 billion (dollars) allocated to the Corps under the recovery act?

MR. SALT: No, sir. The Corps did not allocate or did not request the designation for 200 million (dollars). They are holding that to deal with any variances that come in the bidding. Once the -- we start to get a better read what the -- the question that was asked before about the -- our estimates versus the actual bids, we will go ahead and --

REP. OBERSTAR: So you -- you have a reserve in case projects come in above cost -- (inaudible) --

MR. SALT: Above estimates. That's right.

REP. OBERSTAR: -- estimate so that you can meet those --

MR. SALT: So we'll be able to (meet ?) that list. And as -- if it -- if the bids turn out lower -- if the actual bids come in lower then obviously we would have that increment of funds that we could then --

REP. OBERSTAR: Use on the (second lock ?) of Sault Ste. Marie.

MR. SALT: -- use on other projects. Correct. Well, use on --

REP. OBERSTAR: That was not --

MR. SALT: -- use on other projects.

REP. OBERSTAR: That wasn't fair. You -- (laughter) -- that was not fair. Now, the -- the use-it-or-lose-it principle that we insisted on in the -- in the highway and transit program and with the FAA, it doesn't quite apply in the same way because it's not one state using Corps projects and if they don't use it it goes to another state. But if a project for some reason or another falls out, doesn't meet your criteria, contract can't be awarded, what are you going to do with those funds?

MR. SALT: We go to the list, sir. I mean, we --

REP. OBERSTAR: You have another list?

MR. SALT: Well, we have the -- we have --

REP. OBERSTAR: You have -- you have a long list?

MR. SALT: We have a long list and we -- at the risk of getting -- (inaudible) -- sitting here with a moral dilemma of -- sir, the person who -- who directed that the Sault Ste. Marie project be out was me, and it wasn't OMB. And it was because of the -- my reading of the law, of projects with long-term economic benefits.

And -- and -- and I read that and -- and the projects that are on the list were the projects that had better economic benefits as we went through the list. And it wasn't an OMB direction. It was -- it was my honest attempt to try and develop a list that best met the -- the needs of the -- or the direction of the Congress, and --

REP. OBERSTAR: That's a very honest answer.

MR. SALT: But I --

REP. OBERSTAR: That's what Mr. Diaz-Balart said we'd get from you.

MR. SALT: And -- and so I -- you didn't ask who it was, and I'm sitting here as we're -- as this conversation is going on, and it -- and it -- and I will just say that we -- I, working with the Corps, attempted to carry out the guidance as -- as best we understood it. I was new enough to not even know whose -- whose districts they were in or anything. We just tried to -- we just tried to carry out the -- the guidance as best we understood it.

REP. OBERSTAR: It's not in my district either, and that's not the purpose of it. The point is that you and I need to have a further conversation about this. But the -- the evaluation factors for that second lock at Sault Ste. Marie have -- were based on old data that don't reflect new developments in either the upper lakes or the lower lakes, and the changes in -- in -- in economics, changes in goods movement justify this second lock just as we passed a bill in the -- in the House this week to authorize a second icebreaker for the Great Lakes.

The Coast Guard has had one icebreaker and -- and a handful of little midgets that are supposed to keep the lanes open. Well, the -- the little harbor tugs can't keep the lanes open for the shipping to move the -- the coal that we need in lower lake ports nor the iron ore that the steel mills need to -- to make steel, or the sand and gravel that is needed for the highway programs.

And when the Mackinaw was needed in Lake Superior it was on duty in Lake Erie or Ontario. We need an icebreaker in the upper lake and the lower lakes as well, and we need a second lock at Sault Ste. Marie. And this thing has been going on since the Reagan administration, when they wanted to require all states to contribute something to it, and then they wanted to charge interest to -- to -- repayment of the -- of the cost of that lock.

Well, the Tennessee-Tombigbee Waterway was a billion dollars and there was no cost share on it. The Atlantic Intracoastal Waterway, 2,500 miles, has no cost share -- all federal funds. The Gulf Intracoastal Waterway, 1,600 miles from Texas through to Florida, has no local cost share.

We are not a third-world country on the Great Lakes. We're not a colony. The goods produced there represent 40 million people, represent 25 percent of the industrial capacity of the United States, 40 percent of the -- of the agricultural exports of this country. That is a vital artery and we need to have action on it, just as the Mississippi needs action on those five locks that need to be extended from 600 to 1,200 feet. So while I've got you here I want you to pay attention.

MR. SALT: Sir, I'm listening very carefully.

REP. OBERSTAR: I -- I see that and I appreciate it. This panel is dismissed and thank you very much for your contributions. We'll see you in 30 days.

Our next panel consists of the inspector general of the Department of Transportation, Honorable Calvin Scovel, a frequent presenter before our committee; Katherine Siggerud, managing director, physical infrastructure issues at GAO; and Melissa Heist, assistant inspector general for U.S. EPA.

Inspector General Scovel, you've been such a frequent witness before this committee you almost have your own assigned seat. Thank you for your diligence in carrying out the duties of your office. You've been a great asset to this committee and a great asset to the public -- the flying public, the highway-traveling public, the rail- using public, the maritime public. You've been a -- you've -- you've made exceptional contributions. We're grateful for your service. Thank you very much for being with us.

MR. SCOVEL: Chairman Oberstar, thank you very much for your comments. I would be remiss if didn't cite the -- the sterling efforts of my staff to support the -- the important mission of both the secretary of transportation and of this Congress. They deserve all credit, sir.

If I may, Chairman Oberstar, Ranking Member Diaz-Balart, and members of the committee, I welcome the opportunity to testify today on the challenges facing DOT's implementation of the recovery act and our related audit and investigative initiatives.

We are working with DOT officials in support of their related efforts, and we have assembled a team of auditors, investigators, and attorneys to review the department's implementation of the recovery program. We are also working with nine other IG offices as part of the Recovery Accountability and Transparency Board created by ARRA.

The recovery act designates an unprecedented $48 billion for DOT programs, adding new challenges on top of long-standing ones we've previously highlighted. These include overseeing numerous grantees and projects across the country as funding is infused into the economy. In addition to significantly increasing funding for existing DOT programs, the act directed the department to create new programs and establish tight time frames for distributing and expending funds and for reporting results, such as the number of jobs created.

Both the president and Congress have emphasized the need for accountability, efficiency, and transparency. Your commitment to vigilant oversight is evidenced by this hearing. We also recognize the department's proactive efforts to ensure effective implementation, including the work of Secretary LaHood's DOT-wide TIGER team.

My statement today focuses on the challenges facing DOT and our strategy to advance the effective and efficient use of these funds. First, DOT must continue to address the significant oversight challenges posed by the recovery act. Last month, we issued a comprehensive report that identified actions DOT should take now to address known challenges and support recovery act requirements.

These challenges fall into three areas: overseeing grantees receiving funding, implementing new programs and reporting requirements in an effective manner, and combating fraud, waste, and abuse.

Specific actions noted in our report include acquiring sufficient staff with relevant expertise; ensuring that grantees use appropriate contract types; addressing internal control weaknesses such as identifying any unused funds for use on other eligible projects; developing plans and criteria for more than $9 billion in new programs; and finally, taking timely action to suspend or debar contractors who defraud the government.

Next, I want to focus on what our office is doing to promote accountability in the recovery program. Our audits and investigations will continue to examine areas that present the greatest risks, and we are committed to promptly notifying DOT and Congress of actions needed to prevent fraud, waste, and abuse and achieve program goals.

In anticipation of the act's passage, we initiated a risk-based three-part strategy. We completed phase one last month by issuing our comprehensive report on DOT's oversight challenges. We also identified ongoing audits that started before the recovery act but have relevance to programs funded under it.

These include audits on award fee implementation, suspension and debarment practices, and Amtrak's capital program. We are fast tracking the most time-sensitive results of our work so that we provide timely and relevant information to DOT and the Congress.

Phase two of our strategy is now underway. We're conducting a series of structured reviews, or scans, of the DOT agencies that received recovery funding. Specifically, we're examining vulnerabilities in program management and planning that could impede DOT's ability to effectively oversee projects and meet new statutory and OMB requirements.

We will be reporting the results of phase two through a series of advisories to the department and Congress as events warrant. We will conclude phase two this summer with a capstone report on the results of the scans.

Phase three is a longer-term initiative in which we'll drill down on high-risk areas that emerge as a result of our agency scans. Also, our investigators are being proactive in supporting DOT and its grantees. They are reaching out to officials in all modes of transportation to conduct fraud awareness and prevention briefings and training at all levels of government so those involved in carrying out the recovery program know how to recognize, prevent, and report suspected fraud.

For example, to date, we have made personal contact with FHWA officials in all 50 states and the District of Columbia, FTA officials in 24 states, FAA officials in 20 states and D.C., and state and local officials in 45 states and D.C.

I assure you that we are strongly committed to meeting our increased audit and investigative workload. To that end, we appreciate the additional funding provided to us, and we intend to make the most of it.

This funding will enable us to maintain staff, travel budget, information technology, and other resources that we need. We are also conducting external outreach, including to our congressional clients, to solicit their input in updating our strategic plan to address new cross-cutting challenges posed by this program.

In conclusion, it's critical that we do everything possible to maximize this opportunity, to make needed investments in our nation's infrastructure, while protecting taxpayer dollars. We are committed to doing just that. That concludes my statement, Mr. Chairman. I'd be happy to answer any questions you or other members of the committee might have.

REP. OBERSTAR: Thank you very much for that splendid presentation. And just one question before I go to the next witness, and that is those initiatives that you described being put in place in all of the states that you mentioned and so on, do you anticipate that this will have a preventive effect on fraud, abuse, misuse?

MR. SCOVEL: We anticipate that it will, and that's the entire motivation for -- for our efforts so far. I'd like to give credit to Secretary LaHood as well. He and I co-hosted a webcast to all department staff back in March with the goal being fraud prevention and awareness. My staff has made consistent outreach efforts across the board throughout the department to state and local grantees and to contractors as well.

At FHWA's invitation, we will be hosting a series of Web instruction pieces throughout the month of May so that, we hope, in the end we will have reached every single FHWA employee.

REP. OBERSTAR: Well, that's good to hear, and Secretary LaHood certainly is the right man, the right place, the right time.

MR. SCOVEL: Thank you.

REP. OBERSTAR: Ms. Siggerud, welcome to our committee. Been here many times before. Glad to have you back.

MS. SIGGERUD: It's a pleasure to be here. Mr. Chairman, Mr. Diaz-Balart, I am pleased to be here today to discuss GAO's work on the American Recovery and Reinvestment Act of 2009.

As you know, the act directs GAO to conduct bimonthly reviews on the use of funds by selected states and localities. We just completed our first review last week where we examined 16 states and the District of Columbia. We expect to track these states over the next few years to provide an ongoing analysis of their use of recovery act funds.

My statement today is based on this recently completed work and provides an overview of, first, selected states' use of recovery act funds, primarily for highway programs; second, their actions to ensure accountability; and third, their plans to evaluate the act's impact.

I do want to note that we have been working closely with the Department of Transportation over the past three months, and the cooperation has been excellent. For example, biweekly the department's TIGER steward -- excuse me, TIGER -- TIGER stewardship team meets with us and with the department's inspector general to share information.

Regarding my first topic, states' use of funds, as of April 24th, DOT reported that nationally about $8 billion in recovery act highway funding have been obligated, meaning that DOT and the states had executed agreements on these projects. For the 17 locations that we reviewed, approximately 3.8 billion (dollars) in highway funding have been obligated, with the percentage of funds obligated ranging from 1 to 65 percent in our states.

States plan to meet statutory deadlines for obligating highway funds. The plans are facilitated by states using their existing statewide planning processes, as required by the act, and a few states had already executed contracts. For example, as of April 1st, Mississippi had signed contracts for 10 projects totaling $77 million. This is part of the state's goal to link every state resident to a four-lane highway within 30 miles or 30 minutes.

States also report that they targeted transportation projects that can be started and completely expeditiously. Several states have focused on repair and rehabilitation projects because these projects require less environmental review or design work and therefore can be started quickly.

Some states also reported selecting projects that create jobs and that are in economically-distressed areas. For example, North Carolina plans to award $466 million for 70 highway and bridge projects in economically-distressed areas. We plan to review states' considerations of these areas in our future work.

Another issue is states' certification that they will maintain their level of effort. Fourteen of the 17 locations that we reviewed submitted these certifications with explanations or conditions attached.

Last week, DOT informed states that the recovery act does not authorize such caveats. In our future bimonthly reviews, we expect to report on FHWA's oversight in this area and why states indicated -- indicated that they may not be able to maintain their levels of effort.

Regarding my second topic -- the tracking of funds to foster accountability -- officials from all 17 locations told us they had established or are establishing methods and processes to separately identify, track, and report on the use of recovery act funds they receive.

However, state officials reported a range of concerns on the federal requirements to identify and track recovery act funds going to localities and others. These concerns include their inability to track these funds, accountability for funds which do not pass through the state, and a desire for additional federal guidance.

OMB and FHWA continue to develop guidance and communication strategies for tracking funds use. We will continue to review those efforts. Regarding my third topic -- assessing the impact of the recovery act -- states vary in how they plan to carry this out. Some states will use existing federal program guidance or performance measures to evaluate impact, particularly for ongoing programs such as FHWA's Surface Transportation Programs. Other states have not yet determined how they will assess impact.

A number of states want clearer definitions of jobs created and retained under the act as well as methodologies that can be used for the estimation of each. OMB has issued guidance but it did not provide methodologies. OMB plans to update this guidance in the next 30 to 60 days. Given the questions raised, we recommended in our first bimonthly report that OMB continue its efforts to identify appropriate methodologies.

Finally, I want to mention three other recovery act reviews that we are undertaking that may be of interest to this committee. First, as a part of our ongoing work to report on agencies' implementation of the Energy Independence and Security Act of 2007, we plan to assess the impact of recovery act funding on GSA's ability to meet high- performance federal building requirements.

Second, we plan to look at the $1.5 billion Supplementary Discretionary Grant Program. This is a new program and we expect to assess how DOT developed this grant-selection criteria which the act requires (be published ?) in less than a month. Finally, we plan to review the high-speed rail program established by the act. This new program provides about $8 billion for high-speed and inner-city passenger rail projects. We expect to focus on how DOT's efforts will increase the chances of viable high-speed rail projects, consistent with recommendations in our recent report.

In carrying out these and other reviews, we will work with this committee to understand your interests. Mr. Chairman, this concludes my prepared statement. I am happy to answer questions at the appropriate time.

REP. OBERSTAR: Thank you very much for your thoughtful comments. And now, Ms. Heist?

MS. HEIST: Good afternoon, Mr. Chairman and Mr. Boozman. I am Melissa Heist, the assistant inspector general for audit at the EPA Office of Inspector General. I am pleased to be here today to discuss challenges EPA faces in implementing the recovery act and the OIG's oversight plans.

Under the recovery act, EPA received over $7.2 billion, roughly equal to its fiscal year 2009 appropriation. Six billion (dollars) of this is for the Clean Water and Drinking Water State Revolving Funds. To date, EPA has awarded grants totaling nearly $1.8 billion.

EPA will face some significant challenges as it awards and manages recovery act funding. One, for the SRF program, EPA and its grantees will be challenged to spend the SRF recovery act funding in a timely manner. The Congressional Budget Office has noted historically appropriations for the SRF program are spent slowly, with about half the funds spent over the first three years. If this trend continues, it will delay much-needed water improvements.

Two, since most recovery act funds will be awarded through assistance agreement audits -- assistance agreements or contracts, EPA will be challenged to have sufficiently-trained staff to award and monitor stimulus-funded projects in addition to their normal workloads. This could hamper management and oversight of these funds and increase the potential for fraud, waste, and abuse, as well as cost overruns and project delays.

Three, EPA will be challenged to have information needed to identify fraud, waste, and abuse at the level where most funds are expended, below the subrecipient level. This is because OMB is currently only requiring states to report information down to the subrecipient level.

We have developed an initial oversight plan to assess whether EPA is using funds in accordance with applicable requirements and meeting accountability objectives. As we identify risks, we are providing flash reports to agency managers and meeting -- meeting with them.

We have been meeting with them to increase our understanding of how stimulus funds will be used and to provide technical assistance based on our past experience. We are also reviewing prior audits and program areas covered by the recovery act to determine whether corrective actions have been taken.

Lastly, we will be reviewing EPA's management of recovery act programs, how funds are being used, and the accuracy of information being reported. From an investigative perspective, we are undertaking a proactive approach to preventing fraud, waste, and abuse by educating EPA and state employees, contractors, and grant recipients on identifying fraud indicators and reporting suspicious activities to us.

We are conducting outreach with law enforcement at all levels in an effort to get -- gather information on potential fraudulent activity. This outreach includes contacting the top state revolving fund recipients. We're developing teams of investigators, auditors, and evaluators to analyze fraud indicators and identify high-risk recipients.

Finally, we will be reviewing concerns raised by the public. We have started to issue reports on our oversight activities. Earlier this month, we issued a report to alert EPA managers of open recommendations from prior audit reports that could impact EPA's recovery act activities. We recommended that EPA expedite corrective actions and let us know shortly how it plans to address them.

In another report, we provided OMB with comments on its updated recovery act guidance. We are currently auditing EPA's use of contractors' past performance evaluations and responsibility determinations in awarding recovery act funds. We have initiated work to assess concerns expressed by public interest groups about how funding set aside under the recovery act for green projects will be used, and shortly we will start an audit focused on looking at states' processes to award state revolving funds.

In conclusion, the purpose of the recovery act as it applies to EPA is to preserve and create jobs, promote economic recovery, and invest in infrastructure and other environmental protection activities that will provide long-term economic benefits.

The OIG's role is to assess whether EPA is meeting its responsibilities and to hold EPA accountable for the funds it expends. We have already initiated a number of activities designed to prevent fraud, waste, and abuse of recovery act funds and help ensure the act attains its stated purposes. We will revise and update our oversight plans as necessary to ensure that fraud, waste, abuse, and mismanagement is identified and addressed. Thank you for the opportunity to testify before you today, and I would be pleased to answer any questions you may have.

REP. BETSY MARKEY (D-CO): Thank you very much, panel. This first question will go to General Scovel. The Office of the (sic) Inspector General received -- has -- has the Office of the (sic) Inspector General received any reports of fraud under the recovery act programs yet? And what -- if so, what investigative actions is your office taking to prevent these -- waste, fraud, and abuse in the recovery act projects?

MR. SCOVEL: Thank you, Ms. Markey. I'm not aware yet that we have received any specific reports related to -- to fraud tied to recovery act programs. I can say that when I checked on Monday with our hotline center I was told that we had received as of Monday eight calls to date related, we think, to recovery act matters.

One of those calls asked the question -- and it originated in a Midwestern city where apparently the caller thought airport improvement work was being done under FAA's AIP program, and the caller asked why a contractor who had been convicted in the past was -- was allowed to receive an FAA contract to perform this AIP work. That's the -- the kind of question that we've gotten so far. We intend to follow up on every single one of those, but I'm not aware of any other specific fraud-related questions to my office.

REP. MARKEY: Okay. Thank you. I'll direct this next question to Ms. Heist. Ms. Heist, you note -- note in your testimony that historically the state revolving fund programs are spent slowly with only about half of the funds spent over the first three years. What steps has Office of the (sic) Inspector General taken to help ensure EPA comply with the statutory requirements under the recovery act?

MS. HEIST: Okay. One of the things that we're doing is we initiated an audit specifically looking at the states' intended use plans, and, of course, the SRF funds go through the state. And one of the things that we'll be looking at is the selection criteria that were used and did they look to make sure that the states that -- or the localities that received funds actually had shovel-ready projects. So that's one of the things that we'll be doing.

REP. MARKEY: Okay. Thank you. And then I do have -- have one question for Ms. Siggerud. In your testimony, you mention that in GAO's first bimonthly report GAO recommended that OMB evaluate current information and data collection requirements. How well has OMB coordinated with DOT to develop guidance to assist states and other entities in complying with the reporting requirements of the recovery act?

MS. SIGGERUD: Our sense is that the -- the cooperation and the -- the collaboration between OMB and all the executive branch agencies has been relatively constructive. The department has actually been out in front of OMB in a few areas where the department had expertise in terms of providing guidance to states in implementing these programs.

We do feel, however, that as we go forward and as states need to be able to track jobs as well as spending below the state level that OMB needs to keep a close eye on exactly what these reporting requirements are and make sure that they come to a cohesive whole rather than being overlapping or -- or possibly overburdensome.

REP. MARKEY: Okay. Thank you. Thank you very much. I'd like to yield to the ranking member. Thank you.

REP. BOOZMAN: Thank you, Madame Chair. Inspector General Scovel, do you feel like that you're positioned appropriately to properly implement the fiscal controls that you're being asked to do? I guess what I'm saying is do you have the tools in the toolbox to, you know, perform the -- this -- this is a huge job and a little different. Can you comment on that or --

MR. SCOVEL: Certainly, Mr. Boozman. I'd like to acknowledge, gratefully, the special appropriation of the Congress of $20 million to my office so that we could carry out our oversight responsibilities for DOT with regard to recovery act matters. We intend to hire up. We certainly need more staff. We have specific skills that we're looking for.

We've already requested authority from OPM to rehire retired federal annuitants and we intend to exercise that authority as well. We'll be hiring auditors and investigators as well as some -- much smaller number of special support people. We think that within a couple of months, sir, we will be very well positioned.


MR. SCOVEL: And our audit and investigation plans right now are predicated both on our hiring up and looking forward to -- so that we can ensure that we give adequate coverage across the entire department's recovery act efforts.

REP. BOOZMAN: Good. I think that -- that all of us are committed on both sides to helping you in any way that we need to in that regard.

Ms. Siggerud, Section 1201 of the recovery act requires that -- separate job-creation reporting requirements for DOT. Do you agree that -- that Section 1201 requires DOT grant recipients to report the number of direct on-project jobs created or sustained or is it rather just an estimate of job creation?

MS. SIGGERUD: We have not looked at this issue in detail, Mr. Boozman. My understanding is that states are to report to the department direct and indirect job creation. I do not believe there is yet any specific direction as -- as to the methodology for doing that.

REP. BOOZMAN: Okay. Thank you. Ms. Heist, at previous hearings, we -- we've had witnesses tell us that one of the main reasons that we have some of the infrastructure problems that we have is that communities have not maintained their infrastructure. I guess the question is, you know, what are we going to do to ensure that the money that we give communities with asset management and -- as far as, you know, not having good asset management plans? Are we --

MS. HEIST: Right.

REP. BOOZMAN: -- are we following up on that and make sure that we're not rewarding bad behavior of the past?

MS. HEIST: Our office hasn't specifically looked at that recently, and we will look at that when we're looking at the intended use plans that the states have put together. But that is an area that is particularly important. I understand why we do have some of the problems that we have today. So we will need to take a look at that.

REP. BOOZMAN: Good. I -- I would appreciate it, and I -- I think -- again, I think we all would agree that that's something that we really do need to -- to look at and, like you say, make sure that we're not rewarding bad behavior.

MS. HEIST: Right.

REP. BOOZMAN: Thank you, Madame Chair. Thanks to the panel. I enjoyed your testimony.

REP. MARKEY: Yes. I'd also like to thank the panel for being here with us today. You're dismissed. And at this time we'd like to seat panel number four. Okay. We have the Honorable Allen Biehler, secretary of transportation, state of Pennsylvania, representing the American Association of State Highway and Transportation Officials; Mr. Matthew Millea, acting president, New York State Environmental Facilities Corporation -- he's representing the Association of State and Interstate Water Pollution Control Administrators; Mr. J. Barry Barker, executive director, Transit Authority of River City in Louisville, Kentucky, representing the American Public Transportation Association; and Mr. Michael Morris, director of transportation, North Central Texas Council of Governments, representing the Association of Metropolitan Planning Organizations.

Thank you all for being here. Yeah, we -- we are voting right now, so we're going to need to recess for a few minutes so that we can vote, and we will reconvene shortly. Thank you.


REP. EDWARDS: Good afternoon. Thank you for your patience. We've introduced the first panel so we will hear from the Honorable Allen D. Biehler, secretary of transportation in the state of Pennsylvania; Mr. Matthew Millea, president of the New York State Environmental Facilities Corporation; Mr. J. Barry Barker, executive director of the Transit Authority of River City in Louisville, Kentucky; and Mr. Michael Morris, executive director of North Central Texas Council of Governments.

And thank you very much for your patience. Mr. Biehler?

MR. BIEHLER: Madame Chairman, thank you very much. (Off mike.) Oops. (My actually ?) turning on the mike, yes. But let me start by saying, first, thank you, on behalf of -- of all of us and -- and in this case especially AASHTO for securing over $46 billion in transportation funding as part of the recovery package. This -- this funding will create or sustain thousands of jobs and fund transportation improvements in communities all over America.

I want to emphasize five points for your consideration. One is that because state departments are geared -- have already geared up in advance -- (inaudible) -- in fact, geared up in advance of the -- of the legislation, we're seeing the following things: one, our funds are being obligated swiftly; projects already under construction; people going back to work in good-paying jobs; bids coming in under estimates; and, we believe, funds well spent to extend the life of existing highways and create new transportation assets.

The $27.5 billion in flexible economic recovery funding was provided for highways. States are required to obligate 50 percent of the funding they receive by June 30. According to the Federal Highway Administration's report, as of April 27th about $8 billion has already been obligated. We are well on our way.

Also, FHWA has approved projects in all 50 states as well as the District of Columbia. Our expectation is that all 50 states and the District of Columbia in fact will meet easily the 50 percent obligation date.

We appreciate the fact that, in Pennsylvania specifically, Pennsylvania has been allocated $1 billion in stimulus highway funding, and I just want to note the cooperation that has taken place between the Pennsylvania Department of Transportation and the 23 metropolitan and rural planning organizations that met quickly to help select projects to be funded through the economic recovery program.

In -- in anticipation of the funding legislation, in fact, PennDOT began discussing even candidate projects as early as January with the metropolitan and rural planning organizations. Once the -- the law was enacted on February the 17th, these agencies began to work as quickly as they could and, frankly, by March the 9th, all 23 organizations working with the Pennsylvania Department of Transportation had taken official action and created a final list of specific projects that each of the regions approved.

The aggregate list in Pennsylvania contains roughly 242 projects totaling $1.026 billion. To give you a sense of the kind of projects we have, about 40 percent of those projects are bridge rehabilitations, repairs, and replacements, another 40 percent are highway repaving projects, and the remaining 20 percent are a mix of safety projects, congestion management, and enhancement projects.

Just to kind of bring you up to date, in Pennsylvania, as of yesterday, Pennsylvania had received federal obligation authority for 122 projects valued at 359 million (dollars). Again, our target is ultimately to -- to -- to obligate all $1.026 billion. We've also opened bids on 62 projects totaling $129 million, and I'm happy to tell you that -- that construction work has already begun on some of our projects.

Let me just quickly highlight a few other states and what they're doing to put their economic recovery dollars to work. Florida is using $56 million to widen six miles of a major connector between Interstate 10 and Interstate 95, which is one the hurricane evacuation routes. In Oklahoma, work is already underway on a $45 million job to rebuild 18 miles of Interstate 40, a major truck route which carries 39,000 vehicles a day. Tennessee is using highway funds to replace 10 deteriorating county bridges.

With the flexibility provided in the recovery act, a number of states are investing highway funds in other projects, such as bicycle/pedestrian projects, transit, freight rail, and port projects. In Ohio, 22 freight rail projects will be funded with $78 million in the highway fund portion.

Highway funds are also being (flexed ?) to transit for buses and bus shelters in Florida -- (inaudible) -- transit vehicles in Indiana, ferry terminal upgrades in New York, and more than 40 percent out of the Oregon highway funds will go to rail, port, transit, bicycle, and pedestrian projects.

Across the country, states are seeing project bids coming in significantly below estimates, and those estimates -- or those projects have come in ranged somewhere between 5 and -- and 25 percent below estimates.

In Kansas, I think the first project that they opened back in April came in at 27 percent under -- under the original estimate, and by April, the Oklahoma Department of Transportation awarded contracts on 45 projects, costing $230 million. These bids came in 20 percent below.

Pennsylvania, we've -- our estimate currently is about 17 percent below. So it's significant, and then, frankly, if this trend continues, it means that we're going to be able to stretch our money even farther to deliver both jobs as -- as well as -- as good projects.

Secretary LaHood estimated on April 20th that the $7.5 billion in state requests for highway, road, and bridge, airport projects approved to date will produce 39,000 jobs. In regards to reporting requirements, states are complying, and many have created their own websites to provide the accountability and transparency desired. We appreciate the efforts of the T and I staff working with AASHTO to make the reporting as efficient as possible. And let me just also thank the committee for their special efforts with -- with, as I said before, of securing these dollars. It's clearly going to help address part of a long backlog of needs that -- that -- in my conversations with my counterparts that every single state has in -- in one shape or another.

Let me just close by saying that, obviously, as we -- as we enjoy the -- the opportunity to deliver the stimulus projects, I would be remiss if I didn't at least mention that -- obviously, that we face some other issues in -- in -- and probably in -- in a short period of time.

Certainly, the $8.7 billion rescission called for in SAFETEA-LU is one issue, and without a new infusion of resources in the trust fund, insufficient resources will -- likely to -- to produce at least -- will not allow us to maintain our current program into the next year, and I know you're going to -- you'll -- you'll work to deal -- help -- help us work together to deal with that.

And then finally, let me -- let me just say special kudos to the Federal Highway Administration. They -- they were working with -- alongside of all of us as far back as December, encouraging us all to be positioned well, and I think that's been one of the keys to our success, and it's -- it's -- it's really been a pleasure to work with that agency. Thank you very much.

REP. EDWARDS: Thank you, Mr. Secretary. Mr. Millea?

MR. MILLEA: Madame Chair, thank you. On behalf of Governor David Paterson, thank you for inviting New York to participate in today's hearing on the implementation of the American Recovery and Reinvestment Act.

The Environmental Facilities Corporation has administered the Clean Water SRF in New York State since 1990, providing almost $10 billion of financial assistance to over 1,300 clean water projects. Our needs, however, remain great. Following the enactment of ARRA, Governor Paterson received $6.5 billion in requests for ready-to-go sewer and wastewater treatment projects via his economic recovery website, bringing our immediate demand for financing in excess of $11 billion for close to 2,000 projects.

With regard to ARRA implementation, I would like to take this opportunity to express our thanks to EPA Administrator Lisa Jackson and her staff, who have worked tirelessly over the past two months to help the state succeed in providing these resources to ready-to-go water quality projects. They have all worked very hard to help the states move forward quickly on this important mission, and moving quickly we are.

I'm very pleased to report to you today that New York State has already applied for and received conditional grant approval from EPA for its ARRA funding. We were thrilled to have Administrator Jackson travel to Albany on April 3rd to present Governor Paterson with our grant approval for $432 million for the Clean Water SRF program.

We have also worked very hard to develop what we believe is a transparent and effective plan to fund ready-to-go job-creating projects while also promoting the act's focus on building energy- efficient, water-efficient, and environmentally-innovative projects.

As you know, ARRA requires the states to reserve 20 percent of their capitalization grant for green innovations projects, which, for New York State, is approximately $86.5 million. We will use $51.5 million of our green reserve as additional principal forgiveness for traditional Clean Water SRF projects.

This money will help the clients that receive ARRA assistance to take that extra step and include the most up-to-date water and energy efficiency technologies in their projects. I am also pleased to report that New York State is adding $14 million of its own money to this effort from the proceeds of recent carbon credit auctions in order to further incentivize the deployment of energy efficiency measures at these facilities.

EFC will dedicate the remaining $35 million of the green reserve to a new green innovations grant program.

On April 13th, Governor Paterson announced a call for projects for this new program, which will provide 90 percent grant funding for non-traditional SRF projects such as the deployment of low-impact development strategies including the use of green infrastructure, green roofs, urban forestry, energy efficiency measures, wastewater treatment facilities, and water conservation strategies. Applications are due on May 29th and we expect a tremendous response.

With regard to the additional subsidization authorized in ARRA, EFC opted to provide projects with 50 percent principal forgiveness and 50 percent low-cost financing. Communities may increase their grant funding by including the energy efficiency measures or other green innovations I just mentioned.

A $10 million treatment plant upgrade may include an additional 750,000 (dollars) in energy efficiency improvements or $250,000 for the construction of a green roof, for example. We would fund this $1 million cost increase via our green reserve, thus providing our client with $6 million in principal forgiveness and $5 million in traditional low-cost financing.

We wholeheartedly welcome the return of federal grant funding for clean water projects, and we applaud this committee and the House's efforts to continue this approach in the recently passed SRF reauthorization bill.

We have also increased benefits for rural hardship communities. Qualified hardship communities currently receive an interest subsidy of as much as 100 percent in order to help make projects more affordable to the end user. We intend to provide our eligible hardship clients 0 percent loans and up to 80 percent principal forgiveness based upon our hardship analysis.

I'm pleased to report to you today that once our implementation strategy was clear we worked quickly to advance ready-to-go projects. On April 14th, EFC's board of directors approved our first 10 ARRA- eligible projects, requiring $170 million in financial assistance.

When complete, these projects will help to remove nitrogen from Long Island Sound, protect the Ramapo River Watershed in New York and New Jersey, improve the social and economic viability of two rural communities in upstate New York, and promote the use of green infrastructure to mitigate storm water runoff in the city of Syracuse. Our board of directors will meet again on May 14th and June 30th to approve additional ARRA projects.

While there are many challenges to implementing ARRA, our greatest challenge to date has without a doubt been the "buy American" provisions. But as you heard earlier today, we are very pleased to have seen the draft guidance or the actual final guidance provided by EPA in the last 24 hours.

It's extremely encouraging to see that. I think there's a lot of great things in that guidance. They've answered a tremendous amount of questions, and we look forward to working with EPA to execute the commitments made in that guidance. And I think it's given us a lot of comfort that we can move forward on these projects more quickly now.

And just in closing, I would like to express our gratitude from New York's perspective, as FRF -- SRF administrators, but also from CIFA and ASWIPCA for the work of this committee on SRF reauthorization. That has been a tremendous effort. We thank you for continuing to move forward on it.

These funds are desperately needed, not just through ARRA but also in the years ahead, as we've now identified so many more projects that require assistance. ARRA is a great start, but we need the assistance that will come through reauthorization in the years ahead.

So in closing, thank you again for the opportunity to appear before you. This is a significant and historic time in the SRF program. We are grateful for the funds in the American Recovery and Reinvestment Act, and while there remains much work to do I look forward to submitting further reports to this committee as we continue to make progress in implementing this important program. Thank you.

REP. EDWARDS: Thank you, Mr. Millea. Mr. Barker?

MR. BARKER: Thank you. Representative Edwards and Boozman, I thank you for the opportunity to testify today. I'm speaking today on behalf of both the Transit Authority of River City, TARC, in Louisville, Kentucky, and the American Public Transportation Association, APTA. I have been TARC's executive director for 15 years and serve on APTA's executive committee as the vice chair for governmental affairs.

Thank you for the opportunity presented by the passage of the American Recovery and Reinvestment Act to demonstrate what public transportation can contribute to turning the economy around and to improving the quality of life in America. APTA is releasing a report prepared by the Economic Development Research Group which shows that every $1 billion of federal investment in public transportation yields 30,000 jobs. Taking the 8.4 billion (dollars) in the recovery act, that amounts to about 252,000 jobs. Two-thirds of those jobs replace lost blue-collar jobs with green jobs -- green jobs getting people to and from jobs.

Under the recovery act, TARC will receive 17.6 million (dollars). Thanks to FTA's pre-award authority provisions, we are moving quickly on six projects. We have already opened bids on two projects.

We received seven bids on what will be a LEED silver-certified maintenance annex, and we've received eight bids on our emergency power generation facility, all under budget. We open bids on Monday on the remaining two construction projects that deal with roofing and facility rehabilitation. The four construction projects will produce 227 jobs.

At each of the pre-bid meetings, we asked the Louisville Urban League to highlight their construction pipeline program, making contractors aware of trained potential employees, the majority of which are minorities and women.

Eighty of the 227 jobs are related to green construction techniques. These 80 jobs are related to our LEED-certified maintenance facility. That's a $5.5 million project -- a 14,000- square-foot building which we had ready to go and, in fact, postponed it because of the need to buy -- we -- we prioritized the need to buy buses over building that facility. So we've been able to come back around and do just that.

It will train -- it will train operators and mechanics, the future of public transportation. It gives us space to maintain electronic components and it provides us with a dedicated space to clean buses. It will have a bioswale for storm water retention, a vegetative roof, solar panels to provide an alternate way to light the buses during cleaning, which, interestingly, was an idea by one of our maintenance employees. So we won't be needing to run the bus during the cleaning cycle. We can actually power it off the solar panels.

The building is estimated to utilize 20 percent less energy than a conventional building. We're adding 10 hybrid buses to our hybrid fleet. We will be using options provided by our sister agency, the Nashville MTA, to buy GILLIG Hybrids manufactured in Hayward, California, but using components from across the country. The engines and the drive trains will be manufactured just up the road from us in Indiana.

These examples mirror activity occurring across the country. Last fall, APTA identified 787 ready-to-go projects, which include examples discussed with this committee.

The Virginia Rail Express, VRE, has added four locomotives to its original order of five to be manufactured by the -- by MotivePower in Boise, Idaho. Muncie, Indiana is ordering its first three Hybrid buses from GILLIG. The Chicago Transit Authority has already started vital track reconstruction on their Blue Line and is ordering 58 articulated buses from New Flyer in St. Cloud, Minnesota.

I think I can speak for all the transit agencies throughout the country when I say this current Congress is generating fresh energy and renewed commitment to public transportation throughout the nation. APTA has for decades promoted the role of public transportation in improving our economy, reducing energy dependence, and caring for the environment.

Today, with the support of this esteemed Congress, our message is taking hold in historic proportions, and we are optimistic that your support will be a key factor in improving public transportation and the quality of life in communities throughout America. Thank you.

REP. EDWARDS: Thank you, Mr. Barker. Mr. Morris, I believe I misspoke earlier. You're the director of transportation of the North Central Texas Council of Governments. Thank you for your testimony.

MR. MORRIS: (Off mike.) Thank you very much, Madame Chair Edwards, for the invitation, and Ranking Member Boozman, thank you very much for inviting us today. My name is Michael Morris. I'm the director of transportation at the North Central Texas Council of Governments. We're the metropolitan planning organization for Dallas- Fort Worth.

Today I represent the Association of Metropolitan Planning Organizations. There's almost 400 of us from across the country. Chairman Oberstar was in our region last week with Congressman Edwards, and it was very nice to see the chairman take the time to bring the message of economic recovery to the country.

Ranking Member Mica comes to our region every year with Congressman Dr. Burgess in our transportation summit. So please pass on to Congressman Mica our thanks (of ?) coming to our transportation summit every year.

And, obviously, Eddie Bernice Johnson is a strong congressman in our region and strong member of this committee and, obviously, a strong advocate of transportation in our region. And please thank all of them for their service.

It's an honor to be part of this panel. Three of us also serve on the Transportation Research Board Executive Committee (as ?) part of the National Academy of Sciences.

First, from the perspective of the Association of Metropolitan Planning Organizations -- and yes, Madame Chair, we MPOs have the responsibility to get cities and counties involved in the process, and look forward to working with you in the -- in the new legislation to make sure metropolitan planning organizations live up to their responsibility. With regard to the appropriate size of their region, to give you some perspective the state of Maryland can fit inside the Dallas-Fort Worth Metropolitan Planning Organization, both in land area and in population, as we aggressively move out to 12 counties around the Dallas-Fort Worth region.

I, too, want to thank you very much for your act itself and the ability of moving forward on funding, and desperate funding for transportation. I hope you would keep track of four elements of job growth. First, the direct jobs that are created from transportation expenditure. I ask you to keep track of the indirect jobs that are then created as those construction workers need other goods and services. I ask you to keep track of those projects that have capacity improvements in them, because as you change the capacity of the system, you increase the productivity and just-in-time delivery as well as the productivity of the person on a -- on a rail or -- or transit investment, and that has direct job-creation benefits to the economy.

And we ask you to keep -- keep track of a fourth element -- those of us who are leveraging other funds in addition to your economic recovery funds to actually develop other partnerships and other leverages in funding, because your dollars alone are not the only dollars that are going into a lot of our transportation projects, and the magnitude of the job creation is even larger when there's a partnership and leveraging with other programs that we may have with the federal, state, or local amounts.

I think you should celebrate your out-of-the-box program, and I think you should take advantage of this momentum as you go into the new transportation bill. I, too, want to thank the federal agencies -- Federal Highways and Federal Transit in Washington -- in early and constant communication about this particular program, and I want to, again, thank you for the direct inclusion of metropolitan planning organizations in the selection process.

Let's review the work of the MPOs in the first 100 days. Projects are proceeding that have been on hold for years. They're occurring at a time -- at their lowest project cost.

Now, I know this isn't a coincidence. You would have never created an economic recovery program if, in fact, we had full employment and were in inflationary times. But you happened to develop, as the secretary indicated earlier, a very nice time frame with regard to getting projects to construction because there is more competition, the project costs are coming in less, and it permits us to build more projects, and obviously more employ -- employed persons will result.

We're advancing multimodal transportation projects, not just on the passenger rail but on the goods movement side. There's very close coordination with the states. This is a partnership with the states that you have outlined and we have implemented. You are helping metropolitan planning organizations of all sizes. We're getting reports that some metropolitan planning organizations are seeing a doubling in their transportation revenue.

The selection process is nearly complete with regard to the metropolitan planning organizations. For the larger metropolitan planning organizations, that selection has been completed and has accompanied the state reports to you -- the 1511 reports -- in -- in their selection process.

Transparency is obviously critical, and, in fact, I think transparency is here to stay. The more transparent all of us in transportation and government are, the more -- the more the public will understand what it is we're trying to accomplish, and they will have a greater opportunity to support transportation revenue increases as they have to come in the future.

And when there is not transparency, there's -- there's concern, and with transparency brings those particular improvements. You have a grassroots approach, and we think that's how you develop successful projects anyway.

We encourage the secretary and maybe even the chairs of this organization to communicate to divisions and regions now as these projects are moving forward through the -- what is called a bureaucratic process -- that these projects don't get held up in some nuance with regard to a division or a region as the hard part has been done and now these projects are going to -- to letting.

With regard to Dallas-Fort Worth, let me finish with -- we took great advantage of the second and third elements of the job growth, the capacity, and the partnership and leverage. Our region received in suballocated amounts and state amounts roughly $400 million, and we're moving forward on $3 billion worth of transportation projects in Dallas-Fort Worth through that partnership and leverage, matching rail projects and roadway projects from other funding sources to get these projects implemented. I want to thank the Texas Department of Transportation, who has held weekly conference calls for the last three months, getting everyone on board. We're seeing costs in -- in the Dallas-Fort Worth region coming in 20 to 30 percent below engineers' estimates, and, again, the timing couldn't be better.

We are now entering that letting process to complete this implementation and encourage the passion that this committee has is communicated to all people along the line on the importance of getting these projects done.

Several institutional approaches were used to expedite construction. One of our large projects, TxDOT has issued a design- build contract. We have another large rail project where the rail transit agency will be implementing the project. We have another project where the local toll authority will be administering the construction contract, and, of course, TxDOT will use their regular construction methods.

Our region wants to have a legacy with regard to what it is we're doing. We want people to remember. We understand the sensitivity and pressure on you, using general funds to implement this program. And these are large projects -- huge aviation accessibility to major airports, huge safety projects, huge sustainability projects with passenger rail.

I personally signed a 1511 certification in order to expedite the transit projects in our particular region at the request of the regional -- Federal Transit Administration regional administrator. Let me end with don't stop here. Maintain this focus on outcome. Keep changing the -- the corporate culture in this town, that we have to move from process to outcome.

We need to eliminate stovepipes. We need to give states flexibility to solve the -- the people's business. We need sustainable communities. We need sustainable projects. You need to focus on a national transportation system and keep us internationally competitive, and that's what's going to continue and grow this particular economy.

And as the secretary indicated earlier, we do need to fix this rescission issue or this is going to look a little weird, advancing projects very quickly in the spring and having to hold up projects in the summer. And the MPOs and the people on this table stand ready to support you in any way necessary to make sure those rescissions don't -- don't -- aren't fulfilled.

The MPOs have worked overtime, literally, to meet your schedule, and we stand ready to continue the momentum that you've created. And, again, thank you very much for the invitation to be here today.

REP. EDWARDS: Thank you, Mr. Morris, and I think we'll proceed with -- with questions. I want to say to all of you, first of all, thank you very much for your patience today. It's been a -- a long day but a really important one, and I think the American people expect us, given the expenditures that have been made, that we really pay attention to where the -- the funds are going, whether the projects are moving forward, whether there are jobs being -- being created.

And so your -- your patience is appreciated by the taxpayers as well.

Secretary Biehler, in your testimony you mentioned that you expect Pennsylvania to have received contract bids for all your highway -- highway stimulus projects by the end of August, and that's long before the requirement that all funds be obligated within a year.

What suggestions and pointers do you have, and especially in your role at AASHTO, what can you give -- what suggestions can you give other states that are struggling to move as quickly as your home state?

MR. BIEHLER: First of all, I think the states, in fact, are -- are moving pretty darn quickly just in general. It depends on the kind of project you have. In the case of Pennsylvania, we concentrated on fix-it-first projects typically. So 800 million (dollars) out of our billion (dollars) are -- are highway and bridge fix-it-first projects that we knew that we had already cleared through the environmental process or had just, you know, very minor permitting issues left to deal with.

Our watchword was that also if a project -- the project had to have a design done or it's okay if it -- if it was a design-build project. With design-build, obviously, you put it out before the design is finished but you at least have to specify enough detail so there's -- so there's a clear and understood project that the bidders are bidding on.

But in our particular case, as I say, we looked for things that were -- that were clearly ready, in our opinion. Some other states had projects that were good ones that were going to take a little bit more time, and so they have (select ?) some things to use the full range of the act's authority to allow obligations up through and to March of next year.

So it's simply dependent on the mix. In our particular case also, perhaps a -- and -- and I'm sure the other states are doing this but what we did is dedicated a special group of our -- of our construction team that let these projects out and dedicated them specifically to this work.

We plan on -- in fact, Pennsylvania this year had a base program -- has a base program of nearly $2 billion worth of program. This adds another 50 percent. So we're, in fact, letting $3 billion this year, and, in fact, in a five-month period, about two out of that three month -- or 2 (billion dollars) out of the 3 billion (dollars) will be let.

So we have just simply pulled out all stops, but I -- for us, the key has been make sure the project really was shovel ready, had nothing to do with the fact that we have a very mean governor who said, "If you don't get it done by August, Biehler, you're fired." So that was just another little -- little tidbit there.

But our governor, seriously, really tried to push us to say, "Look, obviously, we want to be responsive." The governor also, as many of us know, we're on trial in terms of performance, getting ready for reauthorization. That was another fact. But -- but in our case, especially our governor was concerned about getting as much of our unemployed citizens to work as soon as we could possibly get them.

REP. EDWARDS: I mean, we can try to add meanness to the governing criteria -- (laughter) -- but I wonder if you could explain also to the committee how much time it normally takes from the time you obligate a project and -- to putting shovels into the ground, and have you or other states taken this opportunity to try to shorten that process?

MR. BIEHLER: Yeah, we sure have, again, because they're shovel- ready kinds of projects. Normally, we're well over 100 days between those two time frames, and we have -- we have -- we have shortened our bid -- our bid period. We've shortened the period after we've received bids to review and -- and qualify the bids and -- and award the contract, and then finally, we've also shortened the period of time between award and notice to proceed.

We also are accompanying our awards with -- with encouragement to the -- to the -- to the contractors, don't wait if you -- if -- if we're telling you you got the -- the job (by ?) -- because we're awarding the contract -- you've got the job we're saying, don't wait for a notice to proceed. If that means you can start ordering materials, that will -- it'll quicken the actual time between notice to proceed and actual having people on the job. We're encouraging all those things.

So we've cut a significant amount of time. What was 130 days, we're trying to get it down to -- to under 60 or 70 days.

REP. EDWARDS: And do you have any sense of what other states are doing or does AASHTO have a plan? It would be great to have some sense of how that's going because, you know, the rap is that this -- you know, it's a process that takes time, and I think what we're seeing demonstrated is that, in fact, you know, when the rubber meets the road and the money is there and the requirements are there, folks can move a little bit faster than they had anticipated.

MR. BIEHLER: And I -- I think that's a -- that's a good observation. In the case of the various states, they've -- they've -- they've used whatever their current bidding procedures are to -- to modify wherever they can. So the stories are probably different from various states, and we'd be happy to -- to kind of reach out to our members to identify some of the best practices, if that's useful to the committee.

REP. EDWARDS: Lastly, though, in your testimony you also mentioned that the Federal Highway Administration noted a substantial variation in how the states certify maintenance of effort with regard to state transportation funding required in Section 1201 of the recovery act. Can you describe your state's experience in certifying maintenance of effort?

MR. BIEHLER: Yes. In fact, we also are one of the -- the states that received a letter just last week from the secretary pointing out that we may want to, in fact, modify our maintenance of effort certification because there -- there was -- there was at least, I think, the determination in our case we used language that could be considered qualifying the maintenance of effort, which is -- which is not allowed.

As a result, we're going back to review our document and we'll be modifying it on or before the deadline of May 22nd to make sure that it's in compliance. But we use the typical -- (inaudible) -- practice. Our basic document that we depend on for maintenance of effort determination is our four-year transportation improvement program.

So over that period of time, we make our calculations as to what level of state effort was going to be placed -- you know, what -- what funding we expected to -- to commit to over that -- over that period of time specified in the act, and that was the basis of our calculation. But we will, in fact, as I mentioned, be probably submitting a slightly modified statement in concert with the secretary's recent communication to -- to make sure that we're as clear as we can possibly be.

REP. EDWARDS: Thank you. I'll yield to Mr. Boozman, and I may have additional questions.

REP. BOOZMAN: Thank you, Madame Chair. Mr. Morris, does your association have a general consensus that state DOTs are issuing proper guidance about deadlines, project eligibility, and reporting requirements?

MR. MORRIS: I would say generally, Congressman. I can't speak for each of the 400 MPOs but I have not been hearing anything from MPOs with regard to the communication, either originally out of federal highways or with their state colleagues over the last three months.

REP. BOOZMAN: You mentioned in your -- in your testimony talking about tight deadlines and how that with the projects some of your partners had rearranged priorities and this and that. Can you elaborate on that?

MR. MORRIS: Well, metropolitan planning organizations are very close to local elected officials, and local elected officials are no different than yourselves. Why does it take so long for transportation products to be built? They have very little tolerance and very little sensitivity to that particular question.

So they're -- we're always out there eagerly looking for how do we streamline project delivery. And when I say streamline, I am in no way trying to indicate bypassing or not being environmentally sensitive with regard to that particular process.

So in our particular region, one example is, we call it a federated approach, where TxDOT does a lot of the construction but we have transportation authorities that build it. We don't have a centralized approach because I think a centralized approach can often hurt the procurement process. So DFW airport builds projects, and all these things occur parallel.

Now, we're all implementing them off of a common plan but that doesn't mean you have to have a common institutional structure to deliver those particular projects. In the case of one of our big projects, it's actually an interchange. It's part of a toll road.

None of the toll road sections are being built as part of the interchange, but we said to the toll authority, if we were to give you this economic recovery money does that give you then enough momentum to make that toll road then a -- a viable project, and the answer was yes. So that's an example of partnership and leveraging. And we said, well, TxDOT is going to be busy building these two large projects over here -- why don't you go ahead and -- and take on the letting of that particular project.

So even though TxDOT had environmentally cleared the project and had designed the project, those two organizations are working together and the tollway authority will actually let the project and, in fact, it will be let this summer. Even though it's a project we picked it'll be very much ahead of schedule, and TxDOT is -- is working hard, busy on these -- these other projects as part of their particular process.

We often work in partnership for -- for matches would be a -- a third example. You often -- in our industry, the classic example is you're waiting on 10 percent local costs to pay for right of way, and the local community doesn't have the 10 percent. So we've created a public-sector credit union bank where the MPO has revenues, and we say to that community, look, you're holding up a $40 million project and your cost of the 10 percent of the right of way is $500,000 -- why don't we loan you the $500,000 from the public-sector credit union bank, you pay us back, and by the way, if there's any cost overages the MPO has to pay for it -- we can save millions of dollars and lower inflation costs by actually working out a partnership program financially with you.

And I think one of the things you're going to hear in the future is what we call a metropolitan mobility authority, and that is this notion that innovative finance within the region across partners may be one of your fastest ways you can build projects. If the state DOT says, look, we can get to that but, you know, our cash flow doesn't permit us to do something -- could we have a particular amount of money, or the transit authority or so on and so forth.

The best example I can give you is, you know, we had an upfront toll road that created an upfront payment. We're using that upfront payment, well, first of all, to build a passenger rail line without new start money, but we're actually going to use toll road funds to move a freight railroad track to extend a runway at the air cargo Alliance Airport to be paid back by FAA over time.

Now, in the current stovepipe approach that -- that we all have been learned and implement, there is no way you could use roadway funds to move a freight railroad track to extend a runway to be paid back with FAA funds.

So I think the theme of your question is -- and, hopefully, as you build momentum towards this storm that you've created of excitement with regard to this -- not just financially getting transportation projects built and getting people back to work but the notion that we can do this in a new, accountable way and -- and throw the old time frames away and -- and focus on the people's business -- if you can maintain that enthusiasm into the next transportation bill, I think you'll be shocked at the innovation that is out there in states, transit agencies, and MPOs to do things completely different than they've ever been done in the past.

REP. BOOZMAN: Thank you. Do any of the rest of you want to comment? You know, we had the -- the big commission that basically said that the average road -- road time of construction was, I think, 10 to 13 years -- you know, something like that. And we've -- can you comment specifically about, you know, what's different now than the commission's finding of the 10 to 13 years to get these projects, you know, done? Now, I know we're moving forward at this point. You know, we've got money obligated. But, again, what -- what are we doing different now that's going to cause us not to see the delays that we -- that -- that, you know, we historically have? Yes, sir?

MR. BIEHLER: In the case of Pennsylvania, I can tell you that one of the things that Pennsylvania is doing as we approach projects that are either roadway widenings or relocations or new -- new facilities, we don't have a lot of them, I'll tell you, because we've been spending so much money on -- on repairs to our system -- (inaudible) -- new ones.

One of the things we've been asking ourselves is is there a design that perhaps you don't have to design a road at 65 miles an hour -- perhaps you don't need median widths that are 30 feet wide in every case -- perhaps you don't need shoulder widths that are significant.

And the question is, if -- if you look at different scales and look at full flexible design sort of opportunities, can you avoid some of those issues that just go on forever and ever and ever, whether it's -- whether it's running into historic property, which are so critical -- whether it's, you know, running into natural environmental issues -- whether you're simply having such a deleterious effect on a community that the community is just -- you know, just wants -- you know, is very upset, and just -- and those things really add time.

So one of the things we're doing, using the term "smart transportation," -- our friends in Missouri have used the term "practical design" -- to look at things a little differently. Still end up with a decent mobility improvement, but look at the fit and design scale to see if, in fact, you can -- you can produce a project that has less of those obstacles.

You get into that, you get into right of way relocation or right of way acquisition and utility relocation that goes along with that, just -- wow, it's just one layer on top of another, top of another, and in addition, the final issue is the cost. The cost differences can be so significant as to -- to not allow you to do that.

We -- there was one project, I'll just tell you, that five years ago it had a price tag of -- it was an eight-mile piece of freeway with three interchanges. That price tag was $465 million. We had already spent $80 million and -- and in one of the TIP updates I determined there was not a chance in the world, even over the next 20 years, could I deliver this project.

So I kind of went hat in hand to the community and -- and the legislators in the area and said, "Let's -- let's have a difficult discussion." And I said, "I can't do this project." And some of those folks had worked tirelessly to try to urge it through.

The bottom line was we went back and redesigned the project. It's now, instead of a four-lane freeway, 80 percent of it is a two- lane arterial, 20 percent is a four-lane facility with a series of at- grade intersections instead of interchanges. We had the groundbreaking in November and a whole lot of folks were -- were saying -- singing praises.

But, you know, to go through that kind of a change was our only way, in this case, of delivering something within a reasonable time frame.

MR. BARKER: One of the things that -- that I've seen occur, both with the folks that work with me at TARC and with the folks at FTA is that there's an excitement because they can get stuff done, and the whole notion of that it needs to move, needs to be shovel ready, needs to get out there, it's about jobs, it's about getting stuff done, it's a whole different conversation than having, well, yeah, I know we need to fix that facility but we've got to put this money in capital cost of maintenance so we can keep service on the street.

We now have the resources to move out and do some stuff, and -- and, frankly, the folks who work for me don't have many excuses anymore -- come on, this is the project you've wanted to do for years -- get it done.

You know, and what we're seeing at FTA is -- is that same sort of enthusiasm about getting stuff through the pipeline, through the process, getting it approved, getting -- getting the resources out there because, frankly, this is what people got into public transportation for was to provide quality services, not to keep looking at deteriorating buildings because we can't put money into them because we've got to have service on the street. We're now out there being able to -- to do what we got excited about doing.

REP. EDWARDS: Thank you, Mr. Boozman. Mr. Millea, in your testimony you explained that on April 14th -- really, just two weeks ago -- your board of directors approved 10 recovery act-eligible projects requiring $170 million in financial assistance.

Do you have some sense right now that these projects have been approved, what do you do next to actually implement them, what's the timeline for carrying out the implementation, and how quickly will construction begin on the 10 projects, and what jobs do you expect? Because, you know, this -- this is about jobs --

MR. MILLEA: Correct.

REP. EDWARDS: -- and so it's kind of -- you know, you've got them approved. Where do you go next and then when do you create the jobs?

MR. MILLEA: Sure. The -- really up until yesterday the biggest obstacle we were facing, I think, nationwide for all of the SRF administrators was the "buy American" provisions, and now that we have some clarity on "buy American" and we have some guidance on how to approach waivers for "buy American," I think we'll see all of those projects move forward very quickly, some of which were already in construction.

One -- one project in Middletown, in Congressman Hinchey's district, had already proceeded to construction and we needed the clarity to see if it really could be an ARRA-eligible project, and I believe it can be. A project on Long Island, I believe, will be shovel ready within several weeks. Two of our -- the two rural communities I mentioned are bid ready, and we were just waiting, again, for clarity on "buy American."

So that was -- that was really a logjam for all of us, I think -- EPA and the SRF administrators -- and now that that's been broken we can move very quickly with those 10 projects to get them -- maybe not all of them. I think one of the larger projects in Westchester is going through some serious design issues with nitrogen removal for Long Island Sound -- very important project. Won't be weeks but it could be months.

But the remainder of the -- the other nine projects will be weeks and not months.

REP. EDWARDS: I -- I think it will be helpful for us to hear, you know, now that you have the guidance on the "buy America" (sic) provisions and you're able to move forward whether that guidance is really what you -- what you expect and -- and -- and need to go forward. I think we'll be interested in hearing, you know, in another 30 days down the line that, you know, really, the logjam has been broken.

And I don't know, Secretary Biehler, whether this is a problem that other states have had as well in their implementation.

MR. BIEHLER: Yeah. Not -- not that I'm aware of.

MR. MILLEA: The "buy American" for -- if I could just add that the "buy American" was brand new for the -- for the water space, in particular, and EPA. So it's something that I think our -- our transportation friends were -- were very familiar with. It's something that's built -- been built into their processes over -- over generations, and for us in the water space, as just a financing entity, we don't even run the projects.

It's something that's very new to us. But we certainly understand the chairman's point he made earlier today on why this is important to the committee and Congress, and we're committed to moving forward with it and I -- I look forward to -- to -- to either myself or another state reporting back in 30 days that -- that what's been committed to in the guidance is being executed in a timely manner and we can move forward.

REP. EDWARDS: Thank you. And, lastly, Mr. Millea, you note also in your testimony how the New York State Environmental Facilities Corporation is asking all recovery act-funded clients to award their construction contracts no later than January 1st, 2010, approximately a month and a half prior to what's required by law.

Given that appropriations for state revolving fund programs are historically spent slowly, how's your state working to meet the requirements in the act and what lessons can you give to other states who struggle to meet this use-it-or-lose-it deadline?

MR. MILLEA: I -- I think the grant funding is really the incentive. You know, with the grant funding, which we have not had since 1987 really, will come some requirements, and those communities that can achieve compliance with those requirements will benefit from that grant funding.

And it's a very easy message to deliver. We don't want to hear complaints. We don't want to hear people say, "I can't do it." We have such a large queue of eligible projects that if they're not ready this month they may be ready in six months, and if one of our top-tier projects that are ready to go right now for whatever reason falls off, I'm very confident that we will have projects that will be ready to go if that time comes in January 1st that we don't have a compliant project.

So we're keeping people ready to go even if we do run out of funding. And that's based upon potential reallocation. That's based upon a potential failure of one of those 10 and -- and future projects that we approve, and also based upon our hope that the president's appropriation is accepted by Congress and that we have a very healthy appropriation next year through the reauthorization and that those projects that are -- are queued up can get funding in the 2010 IUP. So we're -- we're telling everybody not to lose hope and -- and to stay ready.

REP. EDWARDS: Well, and several of you have mentioned the -- you know, the work that we've yet to do on reauthorization, and we'll take that into consideration not for the purposes of this -- this hearing, however.

Mr. Barker, you mentioned in your testimony that both equipment purchases -- the 10 hybrid electrical buses and direct construction projects -- that you've made under the -- under -- with the recovery act funding, and I wonder from your experience has one type of project moved more quickly in creating jobs than another and if you could describe a few of the awards and the challenges associated with both types.

MR. BARKER: Well, I think -- I think the construction jobs are -- it is clearer to see the result of -- of those on a local level because, frankly, that's where the -- that's where the bids are coming from. We were astounded by the -- by the response. We had -- at our first pre-bid on one of the construction projects we had standing room only. We had 51 people representing 47 firms that ended up in seven bids, and they were all under budget. Folks are hungry to do that.

We -- we are pursuing a timetable where we will have groundbreaking on each of those the first week in June, which is what we hope to have. The -- the result from -- from the buses and -- and purchasing buses is perhaps a little more diffuse, a little -- a little bit more subtle. But GILLIG, the corporation that we're buying those buses from, has already hired an additional 30 folks, and they've already started to place some preliminary orders around the country for the various components for those buses.

As I mentioned, the engines and the drive trains are made in Indiana. The seats are made in Michigan. There are other components in Ohio and -- and keep going. In fact, what APTA has put together is -- is a diagram of a bus that illustrates the various components, from window seats, engines, frame, the whole bit, that then shows where those components are coming from.

I mean, it's -- it's very well distributed across the country. So that -- the impact of -- of bus purchases is going to be tremendous in virtually every corner of the country.

REP. EDWARDS: So when you point out the 227 jobs created for your state, you may not even be including the jobs that are -- you know, say, if you purchase the buses, the jobs that are created down -- downstream or upstream.

MR. BARKER: That -- those 227 are related to the four construction projects. That does not include the buses and doesn't include some 29 jobs that are being saved because we're able to utilize the money as a capital cost of maintenance, keeping -- we're -- we're able -- we're spending about 1.2 million (dollars) on the capital cost of maintenance, which has a direct impact on operations, keeps service on the street, and keeps -- keeps 29 bus operators and mechanics working, doing what they do best.

REP. EDWARDS: I -- when I read in your testimony that you're planning to apply for $2 million from the $100 million Transit Investment Greenhouse Gas Energy Reduction Program (sic) to put solar panels on your bus barn roof, very exciting project, I will say.

MR. BARKER: Yeah, it is.

REP. EDWARDS: Do you think other transit agencies are aware of this kind of program to reduce energy consumption and greenhouse gas emissions and the efficiency that that's creating for you?

MR. BARKER: Well, the FTA has had two websites -- two webinars related to that program, and up in the corner of the screen there's a little counter about the number of people who are online during those. And that's been up 100, 150, 175. So folks are aware of this.

But this project's exciting because what we're doing is replacing a 30-year-old roof, which is the equivalent -- it's the equivalent of six football fields. And every time I fly back into Louisville, if I sit on the right side of the plane I can see our -- this expanse of tar that's doing nothing, and I can't wait to see solar panels on it, regenerating electricity.

We're estimating it's going to save us tens of thousands of dollars on an annual basis. We've already talked with Louisville Gas and Electric, and any spare electric that we may generate they'd be happy to buy.

REP. EDWARDS: Well, that's pretty exciting. We may have to figure out a way to visit that bus barn.

MR. BARKER: Please come on down. (Laughter.)

REP. EDWARDS: Thank you very much. Just a couple of questions for you, Mr. Morris. In your testimony, you mentioned how you support complete transparency and public involvement. You spoke about that in -- in our oversight. You also note how reporting from a single state agency has worked well.

To what extent has the North Central Texas Council of Government coordinated with the state of Texas also to ensure accurate reporting, and how much is your MPO tracking projects funded with recovery act dollars?

MR. MORRIS: Well, I think it's really important to point out that whenever something new comes along, those -- those institutions that have good working relationships will shine and those that don't have good institutional relationships you're going to see some sort of problem. MPOs and the Texas DOT have been strong partners for 25 years. So when a new initiative comes along, we talk on our conference call. What -- what we're staring at is a family of four who the two parents have just been told that they lost their jobs or are ready to lose their jobs, and you have this -- and -- and by the way, I think you see it with this panel today. Our job is to help you perform a nation's business of getting these people back to work, and it's a very transparent process.

TxDOT gets on the phone every Monday. Okay, where are we? They started off to be, you know, a heavily sort of a roadway maintenance notion. We -- we talked about the secondary, tertiary, and benefits of greater job growth with larger capacity. Oh, we're nervous.

If we do a lot of those they won't meet congressional intent. Well, let's not do any of those that -- that hurt congressional intent. Let's sort of see if we can get -- and it just is a weekly, okay, how did you make out, and there's a new -- okay, who doesn't know how to do what -- okay, this MPO will help that MPO or this person will help that.

And -- and I have to give TxDOT a lot of credit. We've been on the phone every Monday for -- since, you know, January. What do we do? A common format reporting. We have a single signatory to a 1511 on all of our transportation projects because of Federal Transit Administration's interest, a regional administrator to advance some rail transit projects where maybe the state was heavily looking at the roadway side.

They asked me to sign a 1511 to -- to permit the rail projects to proceed quicker. The state has no problem with that. If more people want to sign to ensure compliance, that's great.

But, you know, as -- as commented earlier, Federal Highways did a great job of early communication to the states and MPOs, and the states, I think, have worked very hard, because you see this family of four, say, "Okay, let's get -- let's get after the people's business here. How do we all work together?"

And, you know, we're doing it, you know, with -- with salaried employees that are working weekends. It's not -- it's not an additional cost. I'm sure that TxDOT DOTs -- I'm sure the DOT employees across this state have worked nights and weekends to meet your requirements. I don't think we perceive a huge administrative costs in order to meet your compliance.

You know, there's -- there's papers that have been written to keep track of employee employment as a performance measure in our profession for some time. There's ways to dust that off and there's tools that are available to -- to look at what I think are secondary benefits of job growth that should be included as part of the process.

REP. EDWARDS: And so your experience, though, is that in terms of both the state and the reporting requirements for the MPOs that at any point in time you should be able to tell the -- tell the Department of Transportation or even this committee, here's where we are in terms of these projects, the money that's gone out, the jobs that have been created or saved, and -- because you're tracking those things -- (inaudible).

MR. MORRIS: Absolutely. And that'll -- that'll meet your -- your requirements of these direct employees and they're -- and -- and you're having them -- you're having contractors on the transit and roadway site keep track of who they actually hire and so on and so forth.

But I do suggest to you that there are jobs -- there are larger jobs being created because for every construction worker that is hired there's two or three jobs, as you know, of other workers. They need shoes. They need clothes. There are secondary effects. They eat lunch. They need health insurance.

And, you know, you have tools. You have input-output models in this country and RIMS II multipliers, and you have whole big buildings here that keep track of input-output models and transactions.

And I suggest to you to have conversations so as you get into the reporting to this nation and to this president with regard to what really happened, and you have economists that have been nervous about the role of transportation, we're advocates of transportation so we want full implementation of our impacts so we can quell the critics who claim infrastructure should or should not have been included in this.

We suggest to you that there's lots more job -- job creation. So yes, we're more than happy to keep track of the rudimentary statistics but we suggest to you, Madame Chair, there's actually secondary and tertiary benefits that are occurring from either capacity improvements or the manufacturing of buses and even water -- water projects that are here on this panel that I think we should -- once we get these projects moving I think we should stop and take a breath and actually work on the mechanics of the employment estimation and have its own peer review on how we -- we're calculating that so you have the benefits of the direct jobs, but the indirect jobs that I believe are being created through the -- through this -- the leadership that this committee has taken.

REP. EDWARDS: Well, thank you, and I know you know from our chairman you're going to get little argument from -- from this committee about the value of investment in infrastructure to -- for job creation. Just like to ask you -- lastly, you heard Secretary LaHood's testimony earlier, I presume, about how their -- you know, what their thinking is on the high-speed rail funding, and do you have any comments about that or do you have some sense of how the MPOs might serve as players in those programs?

MR. MORRIS: Yeah. I believe, again, the MPOs and the states need to play a larger role. I -- I think in some states state DOTs are very connected. In some states like mine the state DOT isn't highly connected. MPOs are playing (a lot of the ?) particular role. We're encouraging the state to take a stronger role.

We're going to have an event in east Texas in two weeks where we're bringing representatives from congressional delegations in Arkansas, Louisiana, and Texas, from Little Rock to Tulsa to Dallas- Fort Worth to San Antonio and Austin, and develop basically a grassroots transparent exercise to advance high-speed rail on Amtrak corridors that are already in the national plan -- we have one that goes to our region -- and continue to explore abilities of advancing that particular program.

But, you know, it'll be catch-as-catch-can. Sometimes states are involved. Sometimes MPOs are involved. Sometimes railroad commissions are -- are involved in that. You got to get the private sector -- Class I railroads. Talk about a grassroots effort -- you're going to see, I think, lots of grassroots efforts in this country get excited about the opportunity that's there, both 8 (billion dollars) plus the 5 (billion dollars) initiative.

And -- and I think it's important to, again, engage those -- you have citizens in east Texas that -- that their biggest hope is to create high-speed rail investments to go to large metropolitan regions, to go on planes, to travel to see their family. There are elements of the transportation system -- logistics of that transportation system -- that are coming out now only because of the revenue that -- that -- that have come about, and MPOs are now -- are now meeting with rural districts to work on the integration of these high-speed rail investments.

REP. EDWARDS: And, of course, you heard from -- from Secretary LaHood earlier that this is about the beginning of a system --

MR. MORRIS: Absolutely.

REP. EDWARDS: -- and so I think we're all looking forward to that. Mr. Barker, you had a comment?


REP. EDWARDS: And then I'll yield to Mr. Boozman.

MR. BARKER: Yes. APTA has a -- has formed a task force looking at high-speed rail principles for just the points that Michael has made, in terms of facilitating the development of that whole system.

I think it's going to be a very exciting time to -- that -- that $8 billion for high-speed rail was a tremendous start payment to -- to looking at how folks travel in this country differently, and it's going -- and the -- and the reality at the end is this is going to benefit public transportation because -- because as that high-speed train pulls in, those folks have got to have a distribution network and they've got to have a way to get to the train. So it's -- it's going to be exciting times, I think.

REP. EDWARDS: Mr. Boozman?

REP. BOOZMAN: Thank you, Madame Chair. I really don't have any more questions. We appreciate you all being here. Your testimony, both your written testimony and then today, has been very, very helpful. Thank you.

REP. EDWARDS: Thank you. And, again, thank you for your -- your patience and your insight, and we look forward to continuing to hear from you.

The committee is adjourned.

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