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68–481 PDF 2012

THE ECONOMIC IMPORTANCE AND FINANCIAL 

CHALLENGES OF RECAPITALIZING THE NATION’S 

INLAND WATERWAYS TRANSPORTATION SYSTEM 

(112–51) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

WATER RESOURCES AND ENVIRONMENT 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

SEPTEMBER 21, 2011 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=transportation 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JOHN L. MICA, Florida, Chairman 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

TIMOTHY V. JOHNSON, Illinois 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ANDY HARRIS, Maryland 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

JAIME HERRERA BEUTLER, Washington 

FRANK C. GUINTA, New Hampshire 

RANDY HULTGREN, Illinois 

LOU BARLETTA, Pennsylvania 

CHIP CRAVAACK, Minnesota 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

BILLY LONG, Missouri 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

JEFFREY M. LANDRY, Louisiana 

STEVE SOUTHERLAND II, Florida 

JEFF DENHAM, California 

JAMES LANKFORD, Oklahoma 

REID J. RIBBLE, Wisconsin 

CHARLES J. ‘‘CHUCK’’ FLEISCHMANN, 

Tennessee 

NICK J. RAHALL II, West Virginia 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

MAZIE K. HIRONO, Hawaii 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

STEVE COHEN, Tennessee 

LAURA RICHARDSON, California 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

(II) 

SUBCOMMITTEE ON WATER RESOURCES AND ENVIRONMENT

BOB GIBBS, Ohio, Chairman 

DON YOUNG, Alaska 

JOHN J. DUNCAN, JR., Tennessee 

GARY G. MILLER, California 

TIMOTHY V. JOHNSON, Illinois 

BILL SHUSTER, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ANDY HARRIS, Maryland 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

JAIME HERRERA BEUTLER, Washington, 

Vice Chair 

CHIP CRAVAACK, Minnesota 

LARRY BUCSHON, Indiana 

JEFFREY M. LANDRY, Louisiana 

JEFF DENHAM, California 

JAMES LANKFORD, Oklahoma 

REID J. RIBBLE, Wisconsin 

JOHN L. MICA, Florida (Ex Officio) 

TIMOTHY H. BISHOP, New York 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

RUSS CARNAHAN, Missouri 

DONNA F. EDWARDS, Maryland 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

MICHAEL E. CAPUANO, Massachusetts 

GRACE F. NAPOLITANO, California 

JASON ALTMIRE, Pennsylvania 

STEVE COHEN, Tennessee 

LAURA RICHARDSON, California 

MAZIE K. HIRONO, Hawaii 

NICK J. RAHALL II, West Virginia 

(Ex Officio) 

(III) 

(V) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... vi 

TESTIMONY 

Bray, Larry G., Ph.D., Research Professor and Faculty Member, Center for 

Transportation Research, University of Tennessee—Knoxville ....................... 15 

Darcy, Hon. Jo-Ellen, Assistant Secretary of the Army (Civil Works), United 

States Department of the Army .......................................................................... 15 

Ebke, Steve, Chairman, Production and Stewardship Action Team, National 

Corn Growers Association ................................................................................... 15 

Ellis, Steve, Vice President, Taxpayers for Common Sense ................................. 15 

Little, Stephen D., Former Chairman, Inland Waterways Users Board ............ 15 

Toohey, Michael J., President and CEO, Waterways Council, Inc. ..................... 15 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Costello, Hon. Jerry F., of Illinois .......................................................................... 59 

Johnson, Hon. Eddie Bernice, of Texas .................................................................. 61 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Bray, Larry G., Ph.D.: 

Oral testimony .................................................................................................. 63 

Prepared remarks ............................................................................................. 67 

Darcy, Hon. Jo-Ellen ............................................................................................... 79 

Ebke, Steve ............................................................................................................... 82 

Ellis, Steve ............................................................................................................... 87 

Little, Stephen D. .................................................................................................... 93 

Toohey, Michael J. ................................................................................................... 141 

SUBMISSIONS FOR THE RECORD 

Gibbs, Hon. Bob, a Representative in Congress from the State of Ohio, request to submit the following into the record: 

Statement of the American Society of Civil Engineers ................................. 10 

Letter from members of the Inland Waterways Users Board to Hon. 

Jo-Ellen Darcy, Assistant Secretary of the Army (Civil Works), United 

States Department of the Army, January 18, 2011 ................................... 47 

Napolitano, Hon. Grace F., a Representative in Congress from the State 

of California, request to submit letter from Hon. Jo-Ellen Darcy, Assistant 

Secretary of the Army (Civil Works), United States Department of the 

Army, to Hon. James L. Oberstar, Chairman, Committee on Transportation 

and Infrastructure, December 21, 2010 ............................................................. 34 

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(1) 

THE ECONOMIC IMPORTANCE AND 

FINANCIAL CHALLENGES OF 

RECAPITALIZING THE NATION’S INLAND 

WATERWAYS TRANSPORTATION SYSTEM 

WEDNESDAY, SEPTEMBER 21, 2011 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON WATER RESOURCES

AND ENVIRONMENT, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 10:06 a.m. in Room 

2167, Rayburn House Office Building, Hon. Bob Gibbs (Chairman 

of the subcommittee) presiding. 

Mr. GIBBS. Good morning. We will commence with the hearing 

here of the Water Resources and Environment Subcommittee of 

Transportation and Infrastructure. Welcome. 

Today we are going to have a hearing on the economic importance and financial challenges of recapitalization of the Nation’s inland waterways transportation system. Transportation savings are 

a key factor in economic growth. As fuel prices continue to escalate, 

waterway transportation becomes an even more viable alternative 

for shippers. But an inefficient transportation system will make 

U.S. products uncompetitive in world markets. 

The inland water transportation system provides freight mobility 

that otherwise would be costly or even impossible to address. Some 

products are simply too large to move by any mode, other than 

water. Some products are too hazardous for other modes, and those 

modes cannot charge rates high enough to make it feasible to move 

the product. 

One of our witnesses today, Dr. Larry Bray, will testify that completely diverting cargo from water to rail would require hundreds 

of thousands of additional rail cars, and an additional 2,500 locomotives. If the cargo that currently moves by waterway had to 

move by truck, it would require an additional 58 million truckloads 

moving on an already congested highway system, annually. Yet the 

Nation’s infrastructure, especially its water resources infrastructure, is falling apart, faster than we can fix it. 

After Hurricane Katrina, it became obvious that the warning 

signs were there all along, and that many experts had been telling 

us for years that conditions were ripe in the New Orleans area for 

disaster. Today we are getting a similar warning about the Nation’s inland waterway system of transportation. 

2 

We have been investing too slowly for too long. Fifty-seven percent of our inland system is more than 50 years old, and 37 percent 

of the system is more than 70 years old. It is literally falling apart. 

Navigation outages along the system are increasing. For instance, 

the Ohio River outages have increased from 25,000 hours in 2000 

to 80,000 hours today. This trend of increasing outages is expected 

to continue. 

While it affects the reliability of the system, it also foretells the 

likelihood of a major physical failure in one of the structures. At 

the current rate of investment, the inner harbor navigation canal 

lock in New Orleans, the southernmost navigation feature on the 

system, is scheduled to begin reconstruction in 2029. This will 

mean a current lock will be well over 100 years old when it is 

scheduled to be replaced. 

In addition, because of the age, the existing locks and dams are 

not sized for the modern tow of 15 barges. As a result, delays occur 

at some times of the year, as tow boats have to break up their 

loads and move them through locks in two or three separate 

passes. Efficiencies could be found at many locations by expanding 

existing locks to handle the larger tows. 

To add to the problem, the Coast Guard inland water navigation 

program has also no plan to replace the inland and river buoy tender fleet. These cutters mark navigation channels along the inland 

waterways, and play a crucial role in keeping these waterways operating. Almost all have exceeded their service life, and many are 

over 60 years old. Yet no design or construction funding has been 

made available to replace these vessels, and none is proposed for 

the next 5 years. 

Conditions are so bad in so many places, it may be impossible 

to avoid a major shut-down of a few months or a few years somewhere in the system. Finding alternative ways to move cargo would 

be expensive, if not impossible. And if transportation costs are to 

go up, competitiveness of American products in the world market 

goes down. 

So addressing the infrastructure needs of the inland water system is not about economic benefit to a few barge companies, it is 

about keeping American farms and businesses competitive, and 

growing American jobs. Letting the inland water system decline 

further would be an economic disaster to add to the Nation’s already significant fiscal problems. 

Movement of goods is going to increase in the future, and we can 

expect more demands on our inland waterway transportation system. Having an inland water system that is a viable alternative 

will keep costs down among all modes of transport. If you take inland waterways out of the mix, in terms of transportation options, 

costs go up, and American products become less competitive in the 

global market place, and that means lost jobs. That is why I can 

say I am a fiscal conservative, and I support investing in America 

where those expenditures stoke the fires of our economic engines, 

and create jobs throughout our economy. 

Sadly, other than the Inland Waterways Users Board, few realize 

the state of our infrastructure. And while I do not agree with all 

parts of their plan, at least the users board has delivered a recapitalization plan to the Nation that calls for reinvestment in the sysVerDate Aug 31 2005 12:13 Feb 03, 2012 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\WR\9-21-1~1\68481.TXT JEAN
3 

tem. For a tiny percentage of the $1 trillion failed stimulus program of 2009, or the $450 billion job program recently suggested 

by the administration, we could spend the $8 billion necessary to 

recapitalize the inland water system. That is, to finish the products 

under construction and begin to finish the slate of authorized 

projects. 

I think we need to make investments in inland waterway infrastructure, and other investments that will multiply jobs throughout 

the economy. Many of the recent suggestions that come from the 

administration and elsewhere call for expenditures on projects that 

simply create short-term construction jobs with little or no economic benefit coming from the project being built. 

I welcome our witnesses today to our hearing today, and look forward to hearing from each of you. At this time I will now yield to 

my ranking member, Mr. Bishop, for remarks that he may have. 

Mr. BISHOP. Thank you very much, Mr. Chairman, and I thank 

you for holding another hearing to highlight the growing water infrastructure needs and challenges facing this Nation. 

Earlier this summer, this subcommittee held a hearing on the 

adverse impacts that reduced Federal expenditures for maintenance dredging can have on our national and local economies on 

the businesses and industries that depend on the efficient movement of goods and services, and on jobs that are integrally linked 

to our ports and our small boat harbors. 

I recall how, in hearing after hearing, this committee has reviewed the declining condition of our water transportation corridors, our Nation’s network of levees and other flood-damage reduction projects, and our Nation’s wastewater infrastructure. 

Countless witnesses have come before this subcommittee to tell us 

what we should already realize, that our water-related infrastructure is on the brink of failure, an event which can only result in 

adverse impacts to health, safety, prosperity, and quality of life, 

should one of these systems fail. 

Today we will focus on another mode of our water-related infrastructure that is in serious need of repair, our Nation’s inland waterway system. As noted by the Inland Waterways Users Board, 

the estimated cost of repairing and modernizing the assets of the 

inland system is approximately $8 billion. Yet expenditures from 

the Inland Waterways Trust Fund, which was specifically established to pay half the cost of construction and most rehabilitation 

projects on the inland system have been declining over the past few 

years, to a point where there are insufficient revenues in the fund 

to cover the cost of ongoing projects. 

Mr. Chairman, the evidence is clear that our Nation is facing an 

infrastructure crisis. However, rather than take this challenge 

head on, as we have traditionally done in a bipartisan manner, the 

running theme of the current majority is that Federal agencies and 

the American people should simply do more with less. When it 

comes to constructing, operating, and maintaining the critical navigation, flood damage reduction, power supply, and water supply 

programs that our Nation relies upon, the bottom line is that, with 

reduced funding, Federal agencies will be forced to do less with 

less. 

4 

At a time when this Nation is facing critical issues, including historic flooding in almost every region of the country, as well as trying to kick-start our sluggish economy, now is exactly the wrong 

time to withhold vital funding for the Nation’s systems of water infrastructure projects. And yet this is exactly the path being pursued by the Republican majority in the House. 

For example, in the first months of the 112th Congress, the Re- publican majority pushed to cut over $500 million, or approximately 10 percent, in the current fiscal year from an already 

strained Corps budget. Included with this overall cut, H.R. 1 proposed to reduce the Corps’ construction account by over 16.8 percent over the previous fiscal year’s level, and to reduce funding for 

the Corps’ work on the Mississippi River system by an unbelievable 

30 percent. 

Unfortunately, the new majority is not yet done with the Corps. 

The House-passed fiscal year 2012 funding bill for the Corps further reduces the level of funding for the Corps by 11.5 percent, 

when compared to fiscal year 2010 levels, including a remarkable 

cut of 20.5 percent to the Corps’ construction account, and an additional 38.2 percent reduction for the Corps’ work along the Mississippi River. 

Contrast this with the recent jobs proposal of President Obama, 

which calls for an increase in investment for our Nation’s infrastructure, including its wastewater and drinking water infrastructure, as well as commercial ports, levees, and projects on the inland 

waterway system. 

So, as we listen to the testimony of industries that rely on the 

efficient movement of goods and services on our Nation’s infrastructure networks, we must be mindful that these efficiencies can only 

come from a well-funded and adequately maintained infrastructure 

system. In other words, you get what you pay for. 

We must also be mindful of the concerns identified by many regarding the financing prioritization, and sustainability of projects 

along the inland system. It seems to me that the current mechanisms are not working, as is evidenced by the fact that there are 

insufficient funds in the Inland Waterways Trust Fund to move 

projects along in a cost-effective manner. As a result, these projects 

take longer to construct, which often leads to a total cost of the 

project increasing. 

However, I remain skeptical of the logic of shifting even greater 

portions of these costs on to the American taxpayer. To me, when 

paired with the Republican majority’s push to further reduce the 

Corps budget, adding additional responsibility to the general fund 

can only further strain our ability to meet the growing water-related infrastructure needs of our communities. 

For example, if the Corps’ already constrained construction account had to take on several hundred million dollars in costs currently covered by the Inland Waterways Trust Fund, which communities will be told that funds are now no longer available to 

meet their needs, whether it be navigation, flood damage reduction, 

or environmental restoration? 

Mr. Chairman, again I thank you for holding this hearing. I look 

forward to today’s testimony. I yield back the balance of my time. 

Mr. GIBBS. Mr. Duncan, you’ve got an opening statement? 

5 

Mr. DUNCAN. Well, thank you, Mr. Chairman. And I too want to 

thank you for calling this hearing. Part of the title of the hearing 

says the economic importance of our Nation’s inland waterway 

transportation system. And it is unfortunate that most of our people do not know how vital and how important our inland waterway 

system is to the economic well-being of this Nation. 

But I primarily want to welcome one of our key witnesses here 

today. I want to welcome Dr. Larry Bray. Dr. Bray is a professor 

at the University of Tennessee Center for Transportation Research. 

Prior to joining the University of Tennessee, he spent 30 years as 

an economist for the Tennessee Valley Authority. He received the 

commander’s award for public service from the Corps of Engineers, 

one of the highest public service awards that a private citizen can 

receive in this country. And he also served as the chairman of the 

inland waterway transportation committee of the Transportation 

Research Board. So he certainly is an expert in this area. 

The statistics vary a little bit from year to year, but for this 

hearing the staff—I will just mention three or four things the staff 

has given me. One 15-barge tow on a river can carry as much cargo 

as 216 rail cars or 1,050 large trucks. A gallon of fuel can move 

1 ton of cargo 155 miles by truck, 413 miles by train, 576 miles by 

barge. Waterways allow for $9.2 billion in annual transportation 

savings. 

But taking the system as a whole, these structures have been deteriorating faster than we have been replacing or rehabilitating 

them. And because of this, projects since 1986 have taken an average of 20 years to complete, far longer than they ever should have, 

and far longer than almost any other developed nation has taken. 

And that doubles and triples the cost of these projects. And because 

of that, we have seen a decline in the trust fund, the Inland Waterways Trust Fund balance, from $412 million in 2003 to only $57 

million now. A really rapid decline. 

And I and many members of this committee are concerned about 

the fact that this administration has not appointed anyone. They 

have let the terms expire of the entire Inland Waterways Users 

Board, a very important board, and we need to see that board reappointed. 

I have told this story in here a couple of times before, but it is 

worth retelling again. Many years ago—and I had the privilege of— 

you know, we have a 6-year limit on chairmanships, but I had the 

privilege of chairing this subcommittee for 6 years, and I learned 

a lot about it. But even before I chaired it, I received a call from 

a businessman in Knoxville one day who was concerned about the 

Chickamauga Lock. Dr. Bray will mention the Chickamauga Lock 

and Dam in his testimony. 

But he wanted to have lunch with me. And so that call came on 

a Thursday. I said, ‘‘Well, I’m flying back to Washington on a plane 

at 1:50 on Monday’’. I don’t know why I remember the time, but 

I do. But I said, ‘‘I will meet you at a restaurant near the airport 

for lunch.’’ And I thought it was going to be this man, I wouldn’t 

have been surprised if he brought one or two others with him. I 

walked into that restaurant. There was almost 100 people at that 

restaurant. And I didn’t get to eat any lunch, because, one after another—they were from all these businesses in east Tennessee. 

6 

And the Chickamauga Lock is not in my district. But it is—it affects all that transportation that comes up the river from the Chattanooga area and other—many other places. And the Tennessee 

River, of course, runs right through the center of my home town 

in Knoxville. But, boy, that meeting really brought home to me the 

importance of these inland waterway locks and dams. 

And we’ve got to do a lot of work. And so I appreciate your calling this hearing, and I appreciate your inviting Dr. Bray here to 

testify. Thank you very much. 

Mr. GIBBS. I recognize Mr. Rahall, the ranking member of the 

full T&I committee. 

Mr. RAHALL. Thank you, Mr. Chairman. And thank you for having today’s hearings, which highlights the importance of robust investment in our Nation’s infrastructure to the health and sustainability of our economy and our overall quality of life. 

I share the concerns expressed by several of the witnesses here 

this morning on the need to renew the Federal commitment to 

modernize our Nation’s inland waterway system. The inland waterway system is critical for the efficient and economically viable 

movement of bulk commodities such as coal mined in my home 

State of West Virginia to the market. 

For example, in 2008, 74 million tons of bulk commodities such 

as coal, petroleum, aggregates, and chemicals were moved through 

the State of West Virginia, the majority of which was shipped along 

its river systems. Of this amount, over 57 million tons of coal 

moved along the river system in 2008, with an estimated value of 

over $2.1 million. 

Unscheduled delays and inefficiencies in moving cargo along the 

inland system only serve to increase the cost of goods and services 

that either move on the inland system, or increase the cost to industry and companies that rely on these goods and services. Unfortunately, these increased costs are often passed along to American 

families at the grocery store, or in other means. In my view, wise 

investments in ensuring the efficiency and reliability of our inland 

system can only benefit the bottom line of many American families. 

Similarly, prudent investments in our Nation’s infrastructure in 

general make these wise economic sense. The Nation’s system of 

roads, bridges, and water-related infrastructure, including the inland waterway system, are needs that even Americans of vastly different political leanings agree deserve greater Federal investment, 

not less. After all, the jobs created by such investment are not Republican jobs or Democratic jobs. They are American jobs, and benefit the Nation as a whole. 

Over the past year, I have often expressed concern about the impacts of the proposed cuts to vital transportation and infrastructure 

spending programs advocated by the Republican leadership. In my 

view, these cuts are penny wise and pound foolish, in terms of impacts to American families and our overall quality of life. 

This is true as well for the cuts proposed by our Republican colleagues to the budget of the U.S. Army Corps of Engineers, which 

has weathered a drastic cut of almost 20 percent in the current fiscal year, and is expected to reduce even further for the upcoming 

fiscal year. These dramatic cuts to the Nation’s premier water resources agency will have consequences, forcing the Corps to walk 

7 

away from or delay the construction or maintenance of vital navigation, flood control, and environmental restoration projects that 

benefit the Nation, as a whole. 

On the inland waterway system, these cuts will result in fewer 

critical construction and rehab projects being funded at their capability, drawing out construction schedules and inevitably increasing 

the total cost of project delivery. This is unsustainable and, in my 

view, the wrong way to go. I look forward to continued debate on 

the issue here today. 

In conclusion, I take this opportunity to especially welcome Mr. 

Michael Toohey, the president and CEO of the Waterways Council 

here this morning. Mike has been in my office a number of times, 

sharing his expertise and that of his council on these and other vitally important infrastructure issues. And I look forward to the testimony of the rest of the witnesses, as well. Thank you. 

Mr. GIBBS. Representative Napolitano, you have an opening 

statement? 

Mrs. NAPOLITANO. Yes, Mr. Chair, I do. And thank you very 

much for holding this hearing. I do support the jobs, and I support 

our country getting on a sound financial track. I am also a firm believer that when someone makes an investment in a program or 

project, they should have a say in how the funds for the project are 

spent. 

The inland waterways program historically has supported commerce and development in our country. From the Columbia River 

in the West to the Mississippi and the Missouri Rivers in the Midwest to the Atlantic Intracoastal Waterway in the East, the waterway system has supported moving commodities. 

Today we find ourselves in a different financial and political environment. First off, financially we cannot afford subsidies in excess of 90 percent for the inland waterways program. Secondly, we 

all want more transparency in how our dollars are being spent, and 

who is benefitting from the taxpayer support. Thirdly, we have an 

infrastructure system that is aging and falling apart. Replacement 

costs for locks, dams, levees, and other river channel features have 

escalated to a level where user fees cannot meet the replacement 

cost. And lastly, the logic of maintaining a subsidized waterway for 

a small group of users does not make economic or logic sense. 

We must discuss how to maintain our inland waterway system, 

and how to identify and prioritize those projects that can be supported, and those who do not warrant continued investment. For 

those that are not economically justified, the user industry cannot 

or will not support. We need to help them transition to other forms 

of meeting the transportation needs. 

In 1986 the Water Resources Development Act established the 

Inland Waterways Users Board, a Federal advisory committee to 

provide the commercial users a voice in the investment decisionmaking of how their fuel tax cost share was applied. The users 

board made the argument, ‘‘User pay, user say.’’ The board, in its 

present form, is composed exclusively of members from the barge 

and commodity industry, and does not include—and does include 

input from other groups. 

Today we will hear how the waterway users have to—the users 

want to have the taxpayer pick up more of the cost associated with 

8 

the construction, maintenance, and operation of the inland waterways system. And, interestingly, they also want more say on how 

the money is spent and prioritized. 

Something seems wrong in this picture. If we indeed are to support their proposal, then it seems logical under the User Pay User 

Say approach that the current composition of the users board has 

outlived its purpose, and should either be eliminated or the participation on the board should be significantly shifted to include other 

user groups in the decisionmaking process, groups like citizen taxpayers, conservationists—oh, excuse me, tribes, recreations, et 

cetera. 

If you’re asking the taxpayer to pick up more of the cost, you 

have to be willing to allow the taxpayer to be more involved in the 

decisions on how the money—the taxpayer money—is to be spent. 

I am for balance and fair representation, it is just on whose back 

the balancing takes place that I get concerned about. And I really 

do want some fairness here. 

I yield back the balance of my time. 

Mr. GIBBS. Thank you. Representative Johnson, do you have an 

opening statement? 

Ms. JOHNSON. Thank you very much. I would like to thank you, 

Chairman Gibbs, and Ranking Member Bishop, for holding this 

hearing today regarding the economic importance of financial challenges of recapitalizing our Nation’s inland waterways transportation system. 

Considering that the Nation’s inland waterways transportation 

system is comprised of 25,000 miles of navigable water with nearly 

half of that managed by the Corps of Engineers, and the nearly 630 

tons of annual cargo is moved on the fuel tax inland waterway system, it is important that Congress and our committee review what 

improvements can be made and what challenges lie ahead. 

Like most of the United States transportation infrastructure, the 

navigational infrastructure of inland waterways system is aging, 

and in need of modernization. Today 54 percent of the inland waterway system structures are more than 54 years old, 36 percent 

are over 70 years old. In addition to the outdated structures of harbors, locks, and dams, there are only—there are also the operational challenges of maintaining channel depths, flood control, 

water management, and water supply that have fallen woefully behind the times. And my area is a good example. 

The Inland Waterways Trust Fund which supports these structures and operations is funded by 20¢ per gallon of fuel tax on commercial operators, and is in serious need of modernization. 

I appreciate all that are here today who are committed to working toward that goal. The future of our inland waterway transportation system is too important for our economic future to be sunk 

by partisanship. As former chair of this subcommittee, I am hopeful that we can approach this issue in a bipartisan and responsible 

manner. 

Thank you, and I yield back. 

Mr. GIBBS. And I think we have one more opening statement. 

Mr. Landry, do you have an opening statement? 

Mr. LANDRY. Thank you, Mr. Chairman, Ranking Member 

Bishop, for calling this hearing today. 

9 

Navigation, be it inland, coastwise, or international, is very important to me. One of my first acts as a congressman was to send 

a Dear Colleague letter to my new colleagues, alerting them to a 

Wall Street Journal article highlighting the need to increase investment in our inland waterway system. 

My district is uniquely situated at a crossroads between our inland navigational system and our international customers. Put another way, waterborne cargo rarely originates or terminates in my 

district. However, more than 500 million tons of cargo is moved on 

the Mississippi River and the Gulf Coast Intracoastal Waterway, 

which also follows through my district, and adds millions more to 

the—million more tons to this total. 

As such, I am greatly concerned with moving our Nation’s inland 

waterways and our ocean ports forward together, because the system doesn’t work if we concentrate only on the dredging needs of 

our ports, or only on the infrastructure needs of our inland navigational system. I realize that this system is broken. The harbor 

maintenance trust fund has significant problems with this operation, and our inland waterways are constrained by infrastructure 

designed for Mark Twain steamboats, rather than the modern vessels that operate it today. 

But to address these problems, we need to have a willing partner. When the Corps of Engineers was first created, it was created 

with two important tasks: navigation and flood control. We need to 

get back to those priorities. 

To address—Assistant Secretary Darcy says in her written testimony that the Army’s commitment to inland waterways navigation 

is evident by the fact that, under the stimulus bill, the Corps allocated $420 million to ongoing inland waterway capital projects. 

But I find it interesting that the administration’s fiscal year 2012 

budget only allocates 12 percent of the construction dollars to navigation projects as another—you know, when you compare the 12 

percent in the fiscal year 2012 budget to her comments, it seems 

as though we could allocate more money towards navigation and 

less to environmental projects. Again, it is a balance between what 

our priorities are. 

I would suggest that we need an entire re-evaluation of the 

Corps’ priorities, with more emphasis on the projects which grow 

our economy, increase our job creation, and help our constituents’ 

products compete on an international market. 

I look forward to your testimony to see how we can move in such 

a direction, keeping in mind that the way we allocate our resources 

in the Federal Government to make the American people more productive and to create jobs is by dividing—is by deciding which are 

our priorities, which are our needs, and which are our wants, and 

make sure that we fund our needs, and then if we have anything 

left over, we can fund our wants. 

Thank you, Mr. Chairman. 

Mr. GIBBS. I thank you. At this time I ask unanimous consent 

that the following written statement be included in the record from 

the American Society of Civil Engineers. 

[No response.] 

Mr. GIBBS. So ordered. 

[The information follows:] 

10 


Insert offset folio 9 here 68481.009
11 


Insert offset folio 10 here 68481.010
12 


Insert offset folio 11 here 68481.011
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Insert offset folio 12 here 68481.012
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Insert offset folio 13 here 68481.013
15 

Mr. GIBBS. At this time I want to introduce our witnesses. We’ve 

got a distinguished panel, I’m looking forward to hearing from all 

of you. 

We have Assistant Secretary of the Army, Ms. Jo-Ellen Darcy. 

We also have Mr. Stephen Little, former chairman of the Inland 

Waterways Users Board; Mike Toohey, president and CEO of Waterways Council; Dr. Larry Bray, Center of Transportation Research, University of Tennessee at Knoxville; Mr. Steve Ebke, 

chairman of the Production and Stewardship Action Team of the 

National Corn Growers Association; and Mr. Steve Ellis, vice president, Taxpayers for Common Sense. 

At this time, Secretary Darcy, the floor is yours. Welcome. 

TESTIMONY OF HON. JO-ELLEN DARCY, ASSISTANT SECRETARY OF THE ARMY (CIVIL WORKS), UNITED STATES DEPARTMENT OF THE ARMY; STEPHEN D. LITTLE, FORMER 

CHAIRMAN, INLAND WATERWAYS USERS BOARD; LARRY G. 

BRAY, PH.D., RESEARCH PROFESSOR AND FACULTY MEMBER, CENTER FOR TRANSPORTATION RESEARCH, UNIVERSITY OF TENNESSEE—KNOXVILLE; MICHAEL J. TOOHEY, 

PRESIDENT AND CEO, WATERWAYS COUNCIL, INC.; STEVE 

EBKE, CHAIRMAN, PRODUCTION AND STEWARDSHIP ACTION 

TEAM, NATIONAL CORN GROWERS ASSOCIATION; AND 

STEVE ELLIS, VICE PRESIDENT, TAXPAYERS FOR COMMON 

SENSE 

Ms. DARCY. Thank you, Mr. Chairman and distinguished members of the subcommittee. I thank you for the opportunity to testify 

on the economic importance and the financial challenges of recapitalizing the Nation’s inland waterways. 

The Army Corps of Engineers is committed to facilitating commercial navigation by providing support for safe, reliable, highly 

cost effective and environmentally sustainable inland waterborne 

transportation systems. To this end, the Corps constructs and rehabilitates the locks, dams, channels, and other project features that 

enable vessels to transport commercial cargo along about 12,000 

miles of inland waterways, including 238 lock chambers and 192 

sites. 

The Corps also operates and maintains these 12,000 miles of developed waterways using methods such as maintenance dredging of 

navigation channels and some harbors, and regulating water levels 

in some cases. 

Inland navigation contributes to our Nation’s economy, and is a 

factor in some State and local government economic development 

and job creation efforts. Inland waterways directly serve 38 States 

in the Nation’s heartland, the Atlantic seaboard, the Gulf Coast, 

and the Pacific Northwest. Shippers in these States use the inland 

waterways to move more than 600 million tons of cargo annually. 

Some of the inland waterways, such as the Mississippi and Ohio 

rivers and the Illinois Waterway, support high levels of commercial 

traffic. 

In accordance with the Water Resources Development Act of 

1986, capital investment on 27 fuel-taxed waterways is financed 50 

percent from the General Fund of the Treasury and 50 percent 

16 

from revenues paid by the inland waterways users into the Inland 

Waterways Trust Fund. 

A balance of funding built up in the Inland Waterways Trust 

Fund in the years after its authorization in 1978. However, due to 

significant capital investment in the inland waterways in recent 

years, reaching a high of $175 million in outlays from the Inland 

Waterways Trust Fund in fiscal year 2006 and $171 million in fiscal year 2008, coupled with declining fuel tax receipts, the balance 

in the Inland Waterways Trust Fund was at risk of being depleted 

by fiscal year 2009. 

Generally, since fiscal year 2010, construction and rehabilitation 

work has been constrained by the level of anticipated incoming fuel 

tax revenues of approximately $75 million to $85 million annually. 

As these revenues fund the user-financed 50 percent share of capital costs, this has limited the total annual construction program 

for cost-shared projects to $150 million to $170 million a year. 

A notable exception to the 50–50 cost sharing was provided by 

Congress under the American Recovery and Reinvestment Act of 

2009, whereby there was no Inland Waterways Trust Fund matching requirement. The Army’s commitment to inland waterways 

navigation is evidenced by the fact that under this ARRA bill, despite the lack of cost sharing, the Army allocated $420.5 million to 

ongoing inland waterways capital projects. 

In addition to construction, the Army spends almost $600 million 

a year on maintaining the inland waterways infrastructure. Under 

the ARRA bill, the Army allocated an additional $394 million to operation and maintenance of inland waterway projects. 

The President’s recent plan for economic growth and deficit reduction, which he sent to the Congress earlier this week shows how 

we can reduce the deficit, pay down our debt, and pay for the 

American Jobs Act in the process. The plan includes a proposal for 

a new user financing structure for the inland waterways to supplement the existing diesel fuel tax. A new user fee would generate 

about $1.1 billion of additional revenue into the Inland Waterways 

Trust Fund over the next 10 years to supplement about $1 billion 

that we anticipate from the existing fuel tax. The additional revenue would enable a more robust level of funding for safe, reliable, 

highly cost effective and environmentally sustainable waterways, 

and contribute to deficit reduction and economic growth. 

I expect the administration to submit the specifics of this legislative proposal to the Congress very shortly. The administration initiated discussions with the inland navigation stakeholders and will 

continue the dialogue with them on this very important matter. I 

hope that the submission to the Congress of a specific proposal will 

facilitate these discussions by identifying areas of common ground 

and workable solutions on a path forward to address the revenue 

shortfall. 

The Army is committed to improving its project planning, design, 

construction, and operation and maintenance processes in order to 

more efficiently use available funds to achieve inland waterways 

navigation benefits. As part of this effort, the Army has initiated 

discussions with the Department of Transportation to coordinate 

infrastructure investment planning between the two agencies. 

17 

The administration plans to work with Congress and stakeholders to explore ways to provide a framework across all of the 

Civil Works mission areas for decisions on the recapitalization of 

aging Corps infrastructure, which could include modification of 

Corps operations, or deauthorization of projects, consistent with the 

modern-day water resources principles, and today’s, as well as tomorrow’s water resources priorities and challenges. 

For example, under these principles, which were spelled out in 

the President’s fiscal year 2012 budget, direct beneficiaries would 

be asked to pay a significant share of the costs to extend, expand, 

rehabilitate, or replace projects, as they would for a new project, 

commensurate with the benefits that they receive. Options such as 

direct financing will be considered as part of this effort, where appropriate, and in accordance with the Federal Government’s budgetary standards for such arrangements. 

In summary, the administration will work with Congress and 

stakeholders to revise the laws that govern the Inland Waterways 

Trust Fund to ensure that the revenue paid by commercial navigation users on the inland waterways to meet their share of the cost 

of fund-financed activities is sufficient to allow needed inland waterways capital investment to go forward. 

Mr. Chairman and members of the subcommittee, I look forward 

to working with this subcommittee to achieve that objective. Thank 

you. 

Mr. GIBBS. Thank you. 

Mr. Little, the floor is yours. Welcome. 

Mr. LITTLE. Thank you, Chairman Gibbs and Ranking Minority 

Member Bishop. I appreciate the invitation to testify today, and I 

also appreciate the subcommittee holding this hearing. I am Stephen Little, president and CEO of Crounse Corporation. I also have 

the distinct honor and privilege of having been the most recent 

chairman of the Inland Waterways Users Board. 

The users board is a Federal advisory committee established by 

Congress in the Water Resources Development Act of 1986, one of 

this committee’s many significant legislative achievements. Congress created the users board to give commercial users a strong 

voice in the investment decisions that those users are supporting 

with their diesel fuel tax payments. At full strength, the users 

board is comprised of 11 voting members who are appointed to represent the various regions of the country, as well as a spectrum of 

commercial users and shippers. 

I am pleased to appear before this subcommittee this morning to 

testify in strong support of the recommendations developed by the 

Inland Marine Transportation Systems Capital Investment Strategy Team, or, as I will refer to it, the CIS Team, a 50-member 

Corps and industry team on which I was a participating team 

member. Those recommendations have been approved unanimously 

by the users board, and are supported by more than 200 other associations and companies throughout the Nation. 

The CIS Team produced a comprehensive, consensus-based, joint 

industry/Corps set of proposals to address the capital investment 

needs that need to be made over the next 20 years in order to preserve and enhance the performance of our Nation’s inland waterways transportation system. 

18 

In summary, those recommendations present a proposed plan to 

identify ways to improve the Corps’ project delivery system, implement a capital investment strategy that balances reliability and affordability, prioritize specific capital investments needed over the 

next 20 years, and also defines revenue and cost-sharing approaches that can be met with reasonable certainty and efficiency. 

The current business model for modernizing the Nation’s locks 

and dams is seriously broken, and must be reformed. As a Nation, 

we seem to have lost the ability we once had to plan and construct 

individual inland waterways capital projects in a timely fashion. In 

my prepared statement that will appear in the record, I contain 

many examples of this failed system, most notably the Olmsted 

Lock and Dam. 

We have a project funding and delivery system that is terribly 

inefficient, resulting in enormous waste of taxpayers’ dollars. In an 

effort to fix this broken business model, for about a year-and-a-half, 

roughly 50 key Corps of Engineers and industry representatives 

worked diligently to develop a comprehensive solution to the challenges facing our waterways infrastructure, a solution that improves the project delivery system, that dimensions the most critical physical needs of the system, figures out what it will cost to 

address those needs, and how to pay for it. 

Representing the Corps side of that team were senior leaders and 

technical experts from virtually every level of the Corps hierarchy. 

This effort required an enormous commitment from everyone involved, Corps and industry. But it was a most important endeavor, 

and a completely worthwhile commitment. At the end of the day, 

the CIS Team was able to meet the challenge it was given to develop the consensus recommendations I am now honored to testify 

in support of today. The CIS Team’s plan envisions a $7.6 billion/20-year inland waterway capital investment program. The program anticipates an 

average annual investment level of $380 million. 

Mr. Chairman, I see that my time is nearing an end, so I will 

conclude my statement by simply pointing out that the CIS Team 

concludes its report with these words: ‘‘While unlikely that any set 

of recommended improvements could completely eliminate cost increases and scheduled delays, these recommended improvements, 

in combination with the development of the capital investment 

strategy, with the underlying premise that the funding will be provided in an efficient manner, will achieve the goal of an improved 

capital projects business model.’’ 

I believe that to be a true statement, and I urge the committee 

to implement this full inland waterways modernization plan at the 

first opportunity. Thank you. 

Mr. GIBBS. Thank you. 

Dr. Bray, welcome, and the floor is yours. 

Mr. BRAY. Thank you. I too would like to thank the subcommittee for inviting me to speak here today. It is quite an honor 

for me to do this. Much of what I intended to say has already been 

covered, so I don’t want to cover old ground. But I want to make 

three basic points. 

The navigation system is a valuable component of the national 

transportation system. It has been mentioned you have about 589 

19 

million tons on the inland system, 8.6 percent of the total tonnage 

shipped in the Nation is by barge, 11 percent is measured by tonmiles. And one number I haven’t heard is the value of barge cargo 

can be conservatively estimated at about $124 billion. 

Not only do you have these tons, but even on the tributaries, 

where you don’t have a lot of traffic, you have the ability to move 

overweight, oversized commodities that probably could move on the 

overland system—maybe not—but they can be moved cheaply on 

the river system. You have shipments to utilities and environmental projects. Even down in north Alabama you have the Boeing 

common booster core rockets that locate inland to stay away from 

the effects of hurricanes on those big buildings and expensive 

equipment. 

I want to say secondly that the system is old, and funding for 

maintenance and modernization has not been adequate. This point 

has already been made, but I want to give a couple of examples. 

Lock and Dam 18 on the Mississippi River has aggregate silica reaction which causes the concrete to spall. The dam is in such bad 

shape the rail tracks and hand rails are warping. The personnel 

platforms have been relocated from the side of the dam, for the fear 

that they will detach from the dam, and spill the workers into the 

river. It is that bad. 

And at Chickamauga Lock, Representative Duncan mentioned 

the problem with the lock is aggregate alkali reaction, and TVA engineers, when I was there, projected a finite life. It will eventually 

need to be closed. This will probably happen before there is any 

further large work done. So you’re going to put the people who rely 

on the river in competition with each other. How should the river 

be operated without navigation? It is unprecedented. 

And lastly, I want to talk a little bit about the beneficiaries of 

the system of navigation locks and dams, which this problem at 

Chickamauga will probably manifest itself. Representative Duncan 

said most people don’t know that they—what benefits they received 

from the navigation channel, and that is what we found at TVA 

when we were doing surveys in early 2000. I’m just going to go 

over just a few of these—about 2 minutes left. 

Shipper savings. Shippers can ship cheaper by barge. On the 

Ohio River system, we estimated that to be in the neighborhood of 

$3 billion a year. Nationally, that is probably $7 billion a year. 

Now, when you ship cheaper, you can increase employment. On the 

Ohio River system we found the present value was $497 billion in 

sales, and 80,000 annual jobs on the Ohio River system you can attribute directly to navigation. This yields an annual impact of 

about $20.5 billion in sales. The service area of these utilities encompasses about 829 counties. All of these people potentially benefit from shipper savings to the utilities that ship coal on the Ohio 

River and its system. 

Cooling power plants. If all of the power plants had to convert 

to cooling towers, it would cost about $22 billion over 50 years. Of 

course you have hydropower benefits and one thing that people 

don’t realize: property value benefits. On one reservoir on the Tennessee River alone, $1.12 billion—property values, that is about 34 

percent of the value of the property. You also have congestion and 

20 

safety impacts. They’ve been mentioned. And, of course, there are 

additional large benefits due to recreation. 

I am out of time. I thank you for the opportunity to speak here 

today. 

Mr. GIBBS. Thank you. 

Mr. Toohey, welcome, and the floor is yours. 

Mr. TOOHEY. Thank you, Mr. Chairman and Ranking Member 

Bishop. It is an honor to be here today. Mr. Chairman, I am Mike 

Toohey, the president and CEO of the Waterways Council, the Nation’s public policy organization advocating a modern and wellmaintained system of ports and inland waterways. Our membership consists of over 250 waterway carriers, shippers, port authorities, shipping associations, and waterway groups from all regions 

of the country. 

The inland waterway system is one of this country’s greatest assets. The waterways have been recognized as an area of fundamental Federal responsibility since the earliest days of our United 

States. 

For over 200 years, our river system has facilitated the reliable 

and environmentally friendly transportation of the building blocks 

of our economy. A vibrant economy funds our national defense, our 

national security, our social benefits, our place in the world. And 

with the underpinning that the foundation of transportation provides, we enjoy a tremendous quality of life because of it. And 

thank you for this committee’s recognition of that value. 

Congressman Duncan and others have testified to the efficiency 

of the inland waterway system. It is the most efficient fuel-efficient 

system in the transportation modes. It is also the most environmentally friendly, because it has the fewest emissions of carbon dioxide. 

Our inland waterway system is 12,000 miles and it impacts 38 

States, thus the need for a Federal system. Because without it, we 

would not have the interconnectivity to get our grains to the export 

market, our coal to the export market, our petroleum to the domestic market, and our construction materials to our building markets. 

Despite all these advantages, our inland waterway system infrastructure is suffering, and in need of immediate modernization. As 

many have noted—thank you, Congresswoman Johnson—we have 

many aged facilities that are in critical condition. And today we 

could plant a forest and yield—realize the yielding of that timber 

before we could get a lock and dam modernized in this country. 

That is ridiculous. 

So, to fully understand this crisis, let me talk 1 minute about 

how this system is financed. The inland waterway system—this 

committee, in 1986, established or modified the established waterway trust fund to support a more viable, energetic program. They 

authorized seven new lock and dam projects, and doubled the fuel 

tax on the inland waterway system user—commercial users. Not on 

all the beneficiaries, but on the commercial users of the system. 

And that tax now generates between $70 million and $90 million 

a year. That is matched by a 50–50 contribution from the Federal 

Government, which recognizes some of the national defense, municipal water supply, flood damage prevention, electrical generation 

21 

from hydropower, and other beneficiaries that Dr. Bray has identified. 

As a result of that, 50 percent of the cost of construction are paid 

by the users, the commercial users, but not all the beneficiaries, 

and 50 percent by the Federal Government, recognizing that the 

general fund contribution is the mechanism to recognize the other 

beneficiaries’ contribution to the construction of these facilities, and 

the maintenance of these facilities. 

Now, the most glaring example of the deficiencies of the current 

system is the Olmsted Lock and Dam project on the Ohio River, 

originally authorized in 1988 at $775 million, located on the Ohio 

River, as I stated. It replaces two aged locks, one of which was constructed with a 15-year expectation of life. It is now 80 years old. That project has escalated in cost to $2.1 billion, $1.3 billion in 

sunk costs, to build the two 1,200-foot locks, which are in place. 

And now the Corps is placing the dam. We have recently been notified of a significant change in the project cost. We don’t know what 

that is. We are informed that we may know that by December. 

But a lot of our membership is vitally concerned about this cost 

escalation, because it is a blank check for us. We just get to pay 

50 percent, we don’t get to say anything about how it is to be constructed. 

Originally this project was to be constructed through the use of 

coffer dams. Then it was changed, because the thought of cost savings through the construction of—or in place—I’m sorry, build inthe-wet, and that experimental engineering technology has not 

worked out. 

Mr. Chairman, I would conclude my statement by saying, as Mr. 

Little emphasized, we have a business-Government proposal, jointly worked on, jointly recommended to you to develop a capital investment plan for this program. We think it is reasonable. It has 

a prioritization component. It has a cost-sharing component. It has 

a project reform component, and it has a revenue component, 

where the users recommend additional user fees be paid by the 

commercial sector. 

I commend that to you, and I also commend the President for 

recognizing—the first time ever a President has recognized that inland waterways are vital, job-creating opportunities. And the President’s jobs act, he included specifically inland waterways. 

And I would like to thank Secretary Darcy for the recognition of 

the President of the vital nature of our program. 

Mr. Chairman, I look forward to questions, and thank you for 

your generosity in having me here today. 

Mr. GIBBS. Thank you. 

Mr. Ebke, the floor is yours. Welcome. 

Mr. EBKE. Chairman Gibbs, Ranking Member Bishop, and distinguished members of the subcommittee, thank you for the opportunity to testify today on behalf of the National Corn Growers Association as part of this hearing on the importance of our Nation’s 

inland waterways transportation system. My name is Steve Ebke, 

and I am chairman of NCGA’s production and production and stewardship action team, which handles transportation policy for our 

national organization. I am a third-generation farmer from Daykin, 

Nebraska, where I grow corn, soybeans, and wheat. 

22 

The U.S. agricultural sector is the largest user of the freight 

transportation network, accounting for nearly one-third of all 

freight transportation services utilized across the country. With the 

primary agricultural production in the interior of the country, far 

from the ports that link to international trade, transportation is 

critical to the competitiveness of U.S. agriculture in world markets. 

U.S. Department of Agriculture research shows the cost of transportation from the farm gate to the consumer accounts for nearly 

half the cost of U.S. grain at its final destination. Farmers move 

their crops and receive their inputs by barge, rail, and truck. The 

competition among these modes of transportation helps farmers receive the best price for their crops, meet their customers’ demand 

for timely delivery of products, and successfully compete with foreign producers. 

Even though not all corn growers ship to the Mississippi River, 

all growers are impacted by it. While my home State of Nebraska 

is not adjacent to the Mississippi River system, farmers in my area 

understand the importance of our inland waterway transportation 

system. Every day the price of grain a farmer receives at his home 

market is impacted by the price of grain that moves on the Mississippi River to export markets. Each year, more than 1 billion 

bushels of grain—about 60 percent of all grain exports—are 

shipped on the Mississippi River. 

Modernization of the Panama Canal, expected to be completed in 

2014, will lead to expanded agricultural export opportunities within the next few years. Currently, 57 percent of U.S. grain leaving 

gulf ports makes its way through the Panama Canal. The expansion is good news for corn farmers, as it will lessen transport time, 

and should reduce ocean freight costs. This is particularly important for containerized dried distillers grains bound for Asian markets. 

However, if domestic infrastructure is inadequate, the canal expansion project will be a missed opportunity. The truth is that 

many locks currently in use within the U.S. inland waterways system are too small for today’s larger tows, susceptible to closures 

and long delays for repairs, and unable to deal effectively with the 

lines and wait times that result from their obsolescence. 

The American Society of Civil Engineers, in their 2005 Report 

Card for American Infrastructure, assigned a grade of D – to the 

condition of our river infrastructure. As we heard from the chairman, on the Upper Mississippi River many lock chambers are 600 

feet in length. However, the average length of a modern tow, which 

is 15 barges pushed by a tow boat, is 1,200 feet. Consequently, for 

a modern tow to navigate through these antiquated locks, it must 

split in half and transit the lock one section at a time, resulting 

in costly delays. 

The good news is that the construction—that construction has 

been planned for five new locks along the Upper Mississippi River, 

and two new locks along the Illinois River. The planning was completed by the U.S. Army Corps of Engineers, and approved by the 

chief of engineers in December of 2004. 

In the 2007 Water Resources Development Act, Congress authorized construction on these seven projects. Unfortunately, in the 4 

23 

years since the passage of WRDA, little or no funding has been allocated. 

Of course we all realize that in this time of severe budget constraints we must be more responsible and efficient with our Federal spending. That is why, in 2009, the U.S. Army Corps of Engineers collaborated with the Inland Waterways Users Board and 

other stakeholders to draft the inland waterways capital development plan, which recommends major improvements to project funding and delivery. 

In March of 2010, NCGA officially endorsed the inland waterways capital development plan, and we have advocated for its inclusion in any future WRDA bill or infrastructure development proposals. We recognize that any increase in the fuel tax will ultimately be passed on to corn farmers. But NCGA strongly believes 

that a strategic investment in our Nation’s waterways will provide 

long-term benefits to the agriculture industry. Without a restructured capital development plan, the seven locks authorized in 

WRDA in 2007 could be waiting decades to begin construction. 

In closing, NCGA believes that improving transportation capacity 

should be a national priority that deserves urgent attention. It is 

time to provide necessary and long overdue improvements to our 

Nation’s waterways. 

Thank you for considering our comments on this important issue. 

Mr. GIBBS. Thank you. 

Mr. Ellis, the floor is yours. Welcome. 

Mr. ELLIS. Thank you, Mr. Chairman. Good morning, Chairman 

Gibbs, Ranking Member Bishop, members of the subcommittee. I 

am Steve Ellis, vice president of Taxpayers for Common Sense, a 

national non-partisan budget watchdog. Thank you for inviting me 

here today to testify. I have developed a deep knowledge and experience on the inland waterway system through my time in the 

Coast Guard, and as an advocate. 

We have heard about the locks, dams, and engineering, also that 

the inland waterways system is an important part of our Nation’s 

transportation network. It is, carrying nearly 5 percent of the total 

freight in 2007, according to the Congressional Research Service, 

the vast majority on the Mississippi and Ohio river systems. 

While others have extolled the efficiencies, the system also has 

limitations. Barges have to follow the river, while trucks and rail 

go virtually anywhere in the country. All of the segments require 

some engineering to be navigable. Many have a series of dams to 

maintain adequate depth, with locks to provide passage through 

the dam. 

Beginning in 1986, users contributed to the construction and 

major rehabilitation costs, half from a fuel tax-financed Inland Waterways Trust Fund, half from the treasury. Since 1996, that tax 

has been 20¢ per gallon. The administration estimated $87 million 

in revenue from the tax in fiscal year 2012. 

Unlike the highways, railways, ports, and other Corps programs 

under this committee’s jurisdiction, inland waterway users pay 

nothing for maintenance. There is no market mechanism to separate the waterway wheat from the chaff, yielding a system where 

17 segments had 2.3 percent of the total traffic, yet reaped 30 percent of the operations and maintenance funding. By the Corps’ own 

24 

analysis, over the last 3 years users have recovered only about 8 

percent—8 percent—of inland navigation costs. In contrast, coastal 

ports users cover nearly 80 percent of the costs. 

The taxpayer-funded Inland Waterways Users Board developed a 

proposal, with significant Corps assistance, to dramatically increase the subsidy for the inland waterway system. In light of a 

$1.3 trillion budget deficit, and our Nation’s more than $14 trillion 

debt, I thought about how to charitably characterize the proposal, 

but all I could come up with was ‘‘greedy.’’ 

The draft proposal that has been circulating jettisons the modest 

increase of the gas tax included in the original. Everything else is 

the same, including shifting major lock rehabilitation projects costing less than $100 million to the taxpayer. That would represent 

all major lock rehabilitations to date. It also illogically makes taxpayers solely responsible for navigation, dam construction, or major 

rehabilitation. The dams were built to facilitate navigation. You 

can have a dam without a lock, but a lock without a dam is worthless. This would also violate Federal cost-sharing rules for dam 

projects. 

Lastly, all cost overruns would be charged to taxpayers. Look, I 

think the Corps’ motto should be, ‘‘We may take twice as long, but 

we cost twice as much.’’ The Corps noted cost overruns are, in part, 

because optimal funding is assumed, while also noting, ‘‘This is 

never the case.’’ This calculation skews the benefit cost ratio in 

favor of approving all Corps projects. The proposal would put inland waterway construction projects in an exalted status that exists for no other Federal project. 

Any lawmaker with Corps projects in their district should take 

note. There will be real and serious impacts from the Inland Waterways Users Board proposal. They want $380 million for construction annually, more than doubling present spending levels. Congress is supposed to adopt at least $1.2 trillion in deficit reduction by year’s end. It is unrealistic to think the Corps’ budget 

is going to increase in the foreseeable future. That means it is a 

zero sum gain. Any increase for inland waterway projects will come 

at the expense of harbor deepenings, beach replenishment, flood 

control, and environmental restoration projects. 

I am not aware of an entity similar to the Inland Waterways 

Users Board. There is no port or highway or airport users board 

made up entirely of industry officials and staffed by Government 

employees, empowered to make spending recommendations from a 

trust fund. The Inland Waterways Users Board should be abolished. 

One of the main drivers of cost in an inland waterway system, 

both construction and operations and maintenance, is the navigation locks. A new financing structure must incorporate some sort 

of lockage fee, be it flat or sliding, to help combat congestion 

delays. Rather than increasing the current 90 percent subsidy, the 

inland waterway industry needs to bear at least some of the cost 

of operations and maintenance. 

Finally, we sorely need a prioritization mechanism. Earmarks detracted from a rational budget process. The earmark moratorium, 

which we strongly supported, but one of the problems of it is that 

it enables the administration to select the winners and losers, 

25 

using black box decisionmaking. Congress should work with the administration to develop transparent and realistic criteria and 

metrics to evaluate and prioritize projects. We cannot afford to 

spend, based on political muscle. 

Our Nation’s debt dictates hard choices and shared sacrifice. Instead of another taxpayer handout, we need a thorough re-evaluation that shuts down the deadbeat waterways, and prioritizes our 

investment Corps-wide. It cannot simply be about spending more, 

it has to be about spending wisely. 

Thank you for the opportunity to testify, and I look forward to 

answering any questions you might have. 

Mr. GIBBS. Thank you. We will begin questions. I will start off. 

Secretary Darcy, in your testimony you talk about the $420 million in the stimulus bill to go for capital projects for our inland 

water system, and another $394 million for operation and maintenance. Since I’ve been in this job just a little more than a half a 

year, I’m trying to figure out where the spending is happening on 

the projects, and trying to prioritize. 

Can you describe, on the capital side, the $420 million, what 

projects those went to? Or, if you can’t, can you provide us with a 

specific list of the expenditures? 

Ms. DARCY. I can provide the specific list of the expenditures, but the $420 million, that number was for the inland system. 

Mr. GIBBS. OK, yes, but I just would like to see a specific—— 

Ms. DARCY. And that was—again, that was the construction side, 

because we didn’t have to take—the Congress waived the match 

from the trust fund. 

Mr. GIBBS. OK. I would like—I would be interested to see the 

specific list of—— 

Ms. DARCY. Be happy to. 

Mr. GIBBS [continuing]. Dollar to dollar expenditure. Also, on the 

Inland Waterways Users Board, it is my understanding that the 

board is not functioning right now, because the administration 

hasn’t re-appointed, or appointed, so that everybody’s terms have 

expired. What’s the status on those appointments? 

Ms. DARCY. The appointments are pending. What has happened 

is within the larger Department of Defense, all boards and commissions are being evaluated as to their current status. And what we 

have done in the past, because of the requirement in statute about 

the membership on the board, it says that those members should 

be representing their industry. We have had to get a waiver from 

the Department in order to have that requirement met. 

So, we have asked for that waiver again, because currently, if 

you are on a board, you have to serve as a consultant to the Army, 

and that would fly in the face of why these people are actually representing their industries on this board. So we have always asked 

for a waiver. This year we’ve asked for a waiver again, but that is 

currently under consideration at the Department of Defense. 

Mr. GIBBS. OK. So the—even though the WRDA—I think it was 

the 86—— 

Ms. DARCY. 1986, right. 

Mr. GIBBS. Yes, specified, set the board up. But you’re saying you 

have to have a waiver, because the Defense policy—is that administration policy, or is that a conflict with another law? 

26 

Ms. DARCY. It is—I think I can cite the regulation for you, if you 

give me a second here. Hold on 1 second. 

[Pause.] 

Ms. DARCY. I don’t have the exact—in my notes I don’t have the 

exact regulation. 

Mr. GIBBS. OK, can you get back to the committee? 

Ms. DARCY. Yes. 

Mr. GIBBS. Answer that question, because I’ve looked at the law, 

and it seems to me the law is clear that the industry should be represented. 

Ms. DARCY. Right. 

Mr. GIBBS. After all, they are paying the diesel fuel tax going— 

that was how it was set up. 

Ms. DARCY. Right. And I agree, and that is why we have asked 

for the waiver in the past, so that we could comply with the statute. 

Mr. GIBBS. But I just want to know why we have to have a waiver. 

Ms. DARCY. Right. 

Mr. GIBBS. OK? 

Ms. DARCY. Yes sir. 

Mr. GIBBS. Also, any specific recommendations from the board, 

inland waterways board, has the Corps carried out to speed up 

project delivery? Can you cite anything that the users board has 

specifically recommended that the Corps has adopted to help speed 

up project delivery? 

Ms. DARCY. They had several recommendations, some administrative recommendations in their plan, and some of them we have 

undertaken. One was the call for independent external peer review, 

which we have been doing. One was increased training for our 

project managers, which we have been doing. Another is to use 

risk-based cost analysis, which we have been doing. 

And we also are considering some of the other administrative 

recommendations that they have recommended, and we’re considering those at headquarters now. 

Mr. GIBBS. I want to open it up, question to all the panelists who 

want to respond. And we talked about Panama, widening and deepening, and 2 or 3 years away. And I don’t think it is been that 

many years they’ve been working on it. 

I know in some of your testimony there was a lock and dam 

around Louisville, Kentucky, that was built in the late 1950s, early 

1960s, and then one right next to it, took 10-plus years, or whatever it was. I’m really concerned about project delivery. 

Can anybody respond to what is happening? Because back in the 

1950s and 1960s, when the projects were carried out, they seemed 

to be carried out in a pretty efficient manner, and within budget. 

And now we’re seeing delays, delays, and expenditures—of course 

the Olmsted really sticks out. 

What’s happening here? Is it—and Mr. Little, I will let you respond. 

Mr. LITTLE. Yes, thank you, Mr. Chairman. If—I could begin to 

try to answer that question, because we had the same question. 

Why is it taking so long? Because we used to see these projects 

completed in a much more timely fashion. 

27 

The example you referred to, McAlpine Lock at Louisville, Kentucky, there is a 1,200-foot lock chamber at McAlpine that was 

built in 3 years, from 1959 to 1962. Next to it, a virtually identical 

lock chamber, 1,200 feet, took at least 10 years to build. And it was 

dedicated in 2009. There are example after example like that. 

We went to the Corps of Engineers a few years ago—I may have 

referred to the year in my testimony, so I’m relying on my memory 

right now, which may not be exactly right, but it was around the 

2006 timeframe—with the exact same question. Why is it taking so 

long? And we asked the Corps at that time to consider undertaking 

a study to examine projects that are lagging behind, versus better 

projects. 

The Corps did that study, and after about a year they reported 

their findings to us. It is called the selective case studies. Those of 

us in the industry refer to it as the good, the bad, and the ugly, 

because they looked at different projects, some better than others. 

They began to identify some factors that explained why projects 

were taking so much longer. 

They briefed the users board at a users board meeting a year 

after they started the study. And to their credit, the Corps at that 

time said there were some improvements that needed to be made. 

About a third of these costs have to do with inefficient funding, because it is kind of like when you build a house. When you start to 

build a house, you want the money, you want to get it in, get it 

done. And the other two-thirds of the cost increases were due to 

changed conditions with the Corps’ estimate and conditions at the 

site, and various other things. About two-thirds was within the 

Corps’ purview, about a third was inefficient funding. 

Based on that study, and those findings, the Corps then asked 

the industry to join with them and to try to develop a better way 

of scoping these projects, of funding these projects, of prosecuting 

this plan. It was that effort that led us to the report. 

Mr. GIBBS. OK, I’m going to interrupt you, because my time is 

up. 

Mr. LITTLE. OK, I’m sorry. 

Mr. GIBBS. We will get back to that, because I’ve got some followup questions. 

Mr. LITTLE. Yes, sir. 

Mr. GIBBS. Mr. Bishop? 

Mr. BISHOP. Thank you, Mr. Chairman. Let me start. Secretary 

Darcy, a few moments ago you were—the chairman asked you 

about the waiver and the policy. Just to be clear, the policy of the 

Department of Defense from which you are requesting a waiver 

represents longstanding policy of the Department of Defense. Is 

that correct? 

Ms. DARCY. That is correct. 

Mr. BISHOP. It is not new policy implemented by the Obama administration. Is that correct? 

Ms. DARCY. That is correct—— 

Mr. BISHOP. Thank you. 

Ms. DARCY [continuing]. It is not new, and it is not just targeted 

toward this. 

Mr. BISHOP. Thank you, I appreciate the clarification. Mr. Little, 

I want to sort of focus in on the funding piece of this. I think we 

28 

all recognize that the inland waterway infrastructure is in need of 

upgrade, need of ongoing maintenance, need of modernization, et 

cetera. I don’t think anyone argues with that. I think the challenge 

is how do we fund it. 

And the proposal that the board has made represents, I think it 

is reasonable to say, a significant proposal to cost-shift away from 

users to general revenue. And let me be specific. For lock rehabilitation, for between—for projects that cost between $8 million and 

$99 million, current law, 50 percent trust fund, 50 percent general 

revenue. The proposal is it would be 100 percent general revenue. 

For dams, current law, 50 percent trust fund, 50 percent general 

revenue. The proposal is 100 percent general revenue. For all cost 

overruns, 50–50 split current law, 100 percent proposed for general 

revenue. 

So, there is a significant movement away from dependence on the 

trust fund to dependence on general revenue. I think Mr. Ellis, in 

his testimony, quite correctly pointed out that in the environment 

in which we find ourselves, it is simply unreasonable to think that 

the top lines for the Army Corps of Engineers budget are going to 

increase. Construction budget isn’t going to increase, operation and 

maintenance budget isn’t going to increase in any meaningful way, 

and most likely it is going to decrease in the environment we’re 

currently in. 

So, my question to you is, if, in fact, we are going to undertake 

these projects, and if, in fact, a significant share of the burden for 

undertaking these projects is going to move away from the trust 

fund onto general fund revenue, what is your construct? How do 

you see the Corps going forward? How do you see—I mean, in other 

words, whose ox gets gored? If we’re going to spend more than 

we’re spending now on infrastructure projects related to the inland 

waterway system, who is going to lose? I mean what’s your notion 

of who loses? 

Mr. LITTLE. I appreciate—— 

Mr. BISHOP. Someone’s going to lose. 

Mr. LITTLE. And I appreciate the question, and the nature of the 

question. If I could, let me try to address some of the points you 

made, and maybe elaborate a little bit on what our thinking was, 

as we worked through this. 

Mr. BISHOP. OK, I’d ask you to do it as quickly as you can, because I’ve got 1 minute and 51 seconds. 

Mr. LITTLE. All right, I will go as quickly—— 

Mr. BISHOP. And I have one other question. 

Mr. LITTLE. All right. $100 million on rehab. What we have seen 

in our review was some O&M money—or O&M work was being deferred, we thought, so we thought we saw some migration of some 

work that should have been O&M migrating over into the rehab 

sector. So that is why we thought a bright line test on the rehab 

was appropriate. $100 million was where we pegged it. There is no 

magic in that number, maybe it needs to be a different number, but 

that made sense to us to keep work from migrating from O&M into 

rehab. 

Regarding the 100 percent cost share on dams, we recognize, as 

Dr. Bray has identified, there are many beneficiaries to the system. 

We are not proposing—— 

29 

Mr. BISHOP. Mr. Little? 

Mr. LITTLE. OK. 

Mr. BISHOP. I want you to focus in on—— 

Mr. LITTLE. OK. 

Mr. BISHOP. I mean I understand you represent a subset of our 

transportation infrastructure, and I understand you have an obligation to advocate for it. We have an obligation to make judgments 

that are balanced. 

Mr. LITTLE. Right. 

Mr. BISHOP. So, guide us. If we’re going to provide more general 

fund revenue to the inland waterways system, who should we take 

it away from? 

Mr. LITTLE. I can’t answer that question for you, but I can tell 

you that the service that we provide to the Nation—and we are just 

working for the electric utilities, the farmers, the petroleum product producers—is of great value to the Nation—— 

Mr. BISHOP. So, if I may, it sounds to me like what you’re arguing for is a higher top line for the Army Corps of Engineers, because I think most reasonable people would say that what the 

Army Corps of Engineers does, in general, has a benefit to either 

the Nation, as a whole, or to a subset of the Nation. Correct? 

Mr. LITTLE. Yes. And I believe this does have a benefit—— 

Mr. BISHOP. So—— 

Mr. LITTLE [continuing]. To the Nation, as a whole. 

Mr. BISHOP. So you would suggest higher Federal expenditures 

from general fund revenues for the Army Corps of Engineers. 

Mr. LITTLE. And, with our business model, we are saying we are 

willing to pay more fuel tax. We’re looking at a 30 to 45 percent 

increase of tax on our—— 

Mr. BISHOP. Chairman, I thank you for indulging me on that 

issue. And either Mr. Little or Mr. Toohey, my understanding is 

that there are proposals circulating now that do not yet have a legislative vehicle, but are—that would eliminate the proposed increase in the diesel fuel tax, and that—but we would still go forward with the cost share as proposed in your business model. 

Mr. LITTLE. Right. 

Mr. BISHOP. And my question to you is, how serious are you 

about the increase in the diesel fuel tax? Will you reject a proposal 

that doesn’t include both? 

Mr. TOOHEY. It is a package, Mr. Bishop. Yes, sir. 

Mr. LITTLE. Yes. 

Mr. TOOHEY. We want a package. 

Mr. BISHOP. So—— 

Mr. TOOHEY. We’re not—we don’t want just the tax increase, and 

we don’t want just the cost sharing. It is a package. Yes, sir. 

And the other thing I’d suggest to you is, if you’re looking for 

areas, this is investment spending. It returns value to the Nation, 

it creates economic opportunity, it funds our place in the world, 

versus consumption spending, which is taken and spent and returns nothing. 

Mr. BISHOP. Sir, I would like you to join us as we argue other 

pieces of what has been proposed. You heard earlier the stimulus 

referred to as the failed stimulus. That was investment spending. 

30 

A great deal of it in the main was investment spending. So if you 

want to help me make that argument—— 

Mr. TOOHEY. But a small percentage went to infrastructure, 

versus consumption spending. And I’m not arguing what’s right or 

wrong. I mean those are all legitimate appropriations by the Congress. You make the decisions—— 

Mr. BISHOP. Right. My time has expired, I appreciate the indulgence of the chairman. 

Mr. GIBBS. OK, thank you. Representative Bucshon, do you have 

a question? 

Dr. BUCSHON. Thank you, Chairman Gibbs. Chairman Gibbs and 

I had the pleasure of touring the Olmsted Lock, and good to see 

you again, Mr. Little. 

A couple of things, being a new Member of Congress, are clear 

to me, that all of us are really charged, I think, when it comes to 

the understanding of the American people, the importance of our 

inland waterway system. 

I mean I consider myself a fairly well informed citizen. And to 

be honest with you, before I became a Member of Congress and a 

member of this subcommittee, I really had no idea about this system, or the significance, and what it means to our country, economically. And so, I would just like to say that all of us are 

charged to inform the American people about the importance, and 

get the American people on our side. 

That said, we have significant challenges when it comes to funding not only our inland waterway infrastructure, but our highways 

and other infrastructure projects around the country. 

And I guess my question—I will just ask Mr. Little—under the 

current system, how many authorized projects will we be able to 

complete, do you think, in the next 20 years? And under the capital 

development plan, how will that improve? 

Mr. LITTLE. Our estimate is, if we don’t fix the broken business 

model, we can expect to finish about 6 projects over the next 20 

years, versus our plan, based on the information we had at the 

time we developed the plan, it looks like we could finish 25 

projects. 

Dr. BUCSHON. That is a tremendous difference. And again, reiterate that your plan does propose an increase in, essentially, the 

user fees as a balanced type proposal to fund the infrastructure, 

going forward. 

Mr. LITTLE. Yes, sir. That is correct. 

Dr. BUCSHON. And Mr. Chairman, I don’t have any other specific 

questions, so I will yield back my time. 

Mr. GIBBS. OK, thank you. Representative Ribble, do you have 

any questions? Go ahead. 

Mr. RIBBLE. First of all, thank you, Mr. Chairman. Thanks to the 

panel for being here. 

I spent my entire lifetime in construction, and so I guess my first 

question is going to go to Ms. Darcy. 

In your testimony, you advocate for additional revenue that 

would enable a more robust level of funding for safe, reliable, costeffective, and environmentally sustainable waterways, and contribute to deficit reduction and economic growth. Do you think that 

31 

the Olmsted project that now is costing the taxpayer three times 

as much and taking twice as long meets this criteria? 

Ms. DARCY. Congressman, as you know, we are confronted right 

now at Olmsted with increased costs. We are currently evaluating 

those increased costs, and will come up with a determination as to 

whether those increased costs would meet the criteria you just outlined. 

Mr. RIBBLE. But typically, ma’am, when demand is down—which 

it is, down in the U.S. construction industry, by about 20 percent— 

costs go down. And efficiency goes up, as contractors want to compete for this type of work. Why do you suppose that is not happening? What is lacking in your controls that are causing this debacle on the taxpayer? 

Ms. DARCY. That is the point of what we’re trying to undertake 

in the next couple of months, is to see what went wrong. These 

costs have escalated. Part of it is due to some of the conditions in 

the river. Some of it is because we, this year, had five 3,500-ton 

shells that we put in the water that actually are going to cost us 

more. And so we’re learning from what we did there. 

And we have an outside independent review of the costs that we 

hope to have by the end of the year, so we can make a determination on what we should be spending, going forward. 

Mr. RIBBLE. You heard Mr. Ellis testify. And his—at least implied—or implication was that the problems are systemic. Are they 

systemic? 

Ms. DARCY. I don’t think they’re systemic, but Olmsted is indicative to us that there is a problem that we need to address. And 

some of the recommendations made by the earlier report are some 

that I think we need to take into consideration, especially in going 

forward. And this is—it is a huge capital investment, and that is 

one of the reasons we need to take a closer look at it. 

Mr. RIBBLE. I’m concerned, as a Member of Congress being responsible for taxpayer dollars, giving the department any money 

right now, until the problem is fixed. And I know that might slow 

things down, but at the end of the day it should speed things up. 

Mr. Ellis, did I summarize your testimony accurately? Do you believe the problem is systemic? 

Mr. ELLIS. Certainly some of the problems with cost overruns 

with the Corps program are systemic. And so, yes, sir. 

You know, you look at the way the cost estimation is being 

done—and some of this came out in the study that was referred to 

as the good, bad, and the ugly study, that essentially you had instances where they estimated there would be optimal funding. And 

the Corps recognizes there is never optimal funding. Congress has 

got 535 mouths to feed, and likes to spread the Corps funding over 

a lot of different projects, it is part of the reason why things are 

delayed. 

Also, the fact that they’ve gone for technological advances and 

assumed savings that aren’t reality right now, and that is a problem also in other lock projects, as well. And so I think that there 

are lessons to be learned. Unfortunately, for taxpayers, sad lessons 

to be learned, but lessons to be learned that could try to improve 

the Corps program. 

32 

I would also note that one of the recommendations was independent peer review, which was something that wasn’t in the 

Water Resources Development Act of 2007, and we broadly supported and think should be increased and empowered greater. 

Mr. RIBBLE. As a commercial roofing contractor, maybe I need to 

get into locks construction. It is kind of the job that keeps on giving. 

I would like to refer to Mr. Toohey. First of all, thank you for 

your testimony, particularly the written testimony. It is rare that 

I get to read a document that refers to the Federalist Papers. I appreciate how thorough your testimony was today. 

In your recommendations, you suggested on the revenue side, ‘‘to 

provide additional revenues to the IWTF in a reasonable and supportable fashion, possibly through user fees assessed in a fair and 

equitable manner.’’ I only have a few seconds left; what is fair and 

equitable? 

Mr. TOOHEY. We recommend a 6¢ to 9¢ increase in the fuel tax 

paid by the commercial users of the system. 

Mr. RIBBLE. And that would be the net sum total of the 

users—— 

Mr. TOOHEY. Of the commercial contribution. Now, recognize 

there are many beneficiaries of the system, as Dr. Bray testified to. 

And their contribution is manifest through general fund appropriations. 

Mr. RIBBLE. How do we protect commercial users from unreasonable project cost escalation and delay? 

Mr. TOOHEY. Our suggestion is to fundamentally change the formula by which we are assessed the burden of paying for the system, and that is that we cap the cost at Olmsted at the—and—at 

our current contribution, and any further cost overruns be borne by 

the general revenue, the general beneficiaries, the other beneficiaries of the system. 

We cannot provide a commercially viable system, we cannot get 

a return on investment, we cannot stay in business, if we are constantly faced with a blank check, where one entity tells us, ‘‘This 

is the amount you’re going to pay,’’ and we don’t have anything to 

say about it. You know? 

And we are terrified about the number that the Corps is going 

to impose at Olmsted on us, and it prevents 24 job-creating projects 

on the Upper Mississippi from going forward, and $3 billion in environmental restoration funds for that system to be expended by 

the Corps. The Upper Mississippi program is $5 billion: $2 billion 

goes to navigation improvement and $3 billion goes to environmental restoration. None of that is going to go forward until we figure out Olmsted. 

Mr. RIBBLE. Thank you very much for your testimony. Mr. Chairman, I apologize for going over my time. Thank you, and I yield 

back. 

Mr. GIBBS. Representative Napolitano? 

Mrs. NAPOLITANO. Thank you, Mr. Chairman, and Ms. Darcy, I 

would like to start off with asking you the—in December of 2010 

you sent a letter to the former chairman of the committee, expressing the administration’s views on the Inland Waterways Users 

33 

Board capital development proposal. Does this letter still represent 

the view of the administration? 

Ms. DARCY. Yes, it does. 

Mrs. NAPOLITANO. Thank you. And I will ask, Mr. Chair, unanimous consent to include this letter for the hearing. 

Mr. GIBBS. So ordered. 

[The information follows:] 

34 


Insert offset folio 14 here 68481.014
35 


Insert offset folio 15 here 68481.015
36 


Insert offset folio 16 here 68481.016
37 


Insert offset folio 17 here 68481.017
38 

Ms. DARCY. Thank you, ma’am. 

Mrs. NAPOLITANO. Question. Just following up on some of the 

dialogue just previously had, a key proposal of the capital projects 

business model is the project-by-project cost sharing cap. Under 

this proposal, if the cost of that project increases over time, all of 

the costs associated by this increase are the responsibility of the 

Federal Government and the taxpayer, through general revenues. 

The question, then, is are you aware of any analogy in any other 

Federal construction program where the Federal Government assumes any and all cost increases for the total construction of the 

project? Mr. Little, Mr. Bray? 

Mr. LITTLE. Thank you for the question. I am certainly not an 

expert on other practices within the Federal Government. I can’t 

sit here today and tell you I’m aware of a practice elsewhere. 

What we were trying to address was obviously a very important 

part of the program that we think has failed, and that is the continuously escalating cost of these projects, well beyond their original estimated cost. So we were trying to develop an incentive to 

hold those costs down, so we could save taxpayers dollars. 

Mrs. NAPOLITANO. Thank you. Mr. Ellis? 

Mr. ELLIS. We reviewed other infrastructure investments done by 

the Federal Government. We were not able to find a similar proposal, or similar policy, where the Federal taxpayer picks up the 

entire tab of any cost overruns. No, ma’am. 

Mr. TOOHEY. May I comment? 

Mrs. NAPOLITANO. Yes, sir, Mr. Toohey. 

Mr. TOOHEY. Recognize that this is a different Federal program. 

The highway program, the aviation programs are federally assisted 

programs. The States run the highway program. You know, the 

local sponsors at the airport authorities run the aviation programs. 

This is the only Federal, direct Federal interest that we have. And 

so, the cost sharing is necessarily different, recognizing that. 

And remember, Congress once declared that the waterways shall 

be forever free, the Land Ordinance of 1789. 

Mrs. NAPOLITANO. Yes. 

Mr. TOOHEY. And now, today, we are confronted with a system 

that was constructed in the 1920s and 1930s by the WPA—— 

Mrs. NAPOLITANO. And I understand. I’m sorry, my time is running out. But I understand, because I am also on water, and we 

have infrastructure that is decaying, and not—we had no infrastructure—way of dealing with the infrastructure repair. 

Mr. TOOHEY. But the bar to entry for people on the highway program is you got to buy gasoline, and it is a fuel tax. So 100 percent 

of the beneficiaries pay the tax. You don’t get on an airplane without paying the passenger facility tax, 100 percent of the beneficiaries pay for the system. This system—— 

Mrs. NAPOLITANO. Thank you. 

Mr. TOOHEY [continuing]. One hundred percent don’t pay. 

Mrs. NAPOLITANO. Thank you. Yes. There are some differences of 

opinion in some of the areas. 

Mr. Little, costs vary substantially from one river segment to another. The current systemwide fees offer limited incentives for efficient use of the resource. Is there any value, in your mind, of setting different fees for different segments, effectively allowing the 

39 

market to dictate who should pay to maintain or increase efficiency? 

Mr. LITTLE. Yes. We view the waterway system as a system. Mississippi River Basin, the Ohio River Basin, there is a tremendous 

amount of cargo that comes off the Kanawha River. 

Mrs. NAPOLITANO. There is 27 segments, right? 

Mr. LITTLE. Right. But the cargo that moves off many of those 

segments go through the Gulf Coast. So that may be a busy segment, but certainly the cargo and importance to the Nation reaches 

to all those other segments as well. This is a system that serves 

the Nation very well in moving cargo to export and to consumers. 

Mrs. NAPOLITANO. Thank you. Mr. Ellis? 

Mr. ELLIS. It is less of a system, in the fact that there are certain 

trunks. I mean the vast majority of the traffic goes on the Upper— 

well, the Mississippi River and the Ohio. Also on the Illinois. 

But what you really find is the Lower Mississippi, and particularly even going up the Middle Miss from St. Louis to the Gulf of 

Mexico, there are no locks. You know, people talked about 15-barge 

tows? They push 30-barge tows down on that part of the Lower 

Mississippi River. 

And so, generally, you can bring your cargo directly to the Mississippi, rather than going to the McClellan-Kerr, the Arkansas 

River, and going through a series of locks. So, essentially, there are 

differences here that you could try to cost out and have cost sharing. 

And the other thing I would just point out is that so a lot of the 

money, the construction money, ends up going to lock construction. 

As I pointed out, the major workhorse, the Lower Mississippi 

River, there are no locks. So they pay a huge amount of the gas 

tax, but actually get not nearly as much of the benefit. 

Mrs. NAPOLITANO. Thank you, sir. Dr. Bray, investing in reconstruction and rehabilitation of the IWTF is based on an assumption 

that total domestic freight traffic will increase. And, to your knowledge, has an assessment been made of that 27 individual river segment to see whether the anticipated future freight use traffic can 

be balanced against the cost of operations and maintenance, and of 

course, the rehabilitation of existing structures? 

Mr. BRAY. Well, the projections you’re talking about are made by 

the Army Corps of Engineers when they do these studies. And in 

2004, the National Academy of Sciences set a peer review process 

in place. And one would have to believe that some really good people now review those studies, and you would have to believe that 

any forecast is, you know, a guess, that they are doing probably as 

well as could be expected, if I get your question correctly. 

Mrs. NAPOLITANO. Well, these were assumptions. And given our 

current economy, it is not really something that we have—and I’m 

not sure how long ago these reviews were made, as to whether they 

apply to the current condition of our state of affairs—— 

Mr. BRAY. Generally speaking, I know the Huntington District— 

excuse me for interrupting, I know you’re short of time—the Huntington District, with which I’m most familiar, will go back every 

few years and revisit those forecasts. So a forecast that might have 

been made—it takes 19 years now from the time somebody puts a 

pencil down to actually a gate closes—would be revisited. 

40 

So, to answer, to address the issue you’re referring to, they are 

pretty careful about that. And every few years they do go back and 

revisit these forecasts. 

Mrs. NAPOLITANO. Thank you, Mr. Chair, for your indulgence. 

Thank you, gentlemen, ma’am. 

Mr. GIBBS. Mr. Cravaack? 

Mr. CRAVAACK. Thank you, Mr. Chair, and thank you to our 

panel members. Mr. Toohey, you’ve been in the business for, what, 

40 years? 

Mr. TOOHEY. Yes, sir. 

Mr. CRAVAACK. Obviously, you’ve seen a lot through your experience. You’re very familiar, I’m assuming, with the work of Dr. 

Bray. Can you kind of compare and contrast what the capital development plan would be, in regards to his program? 

Mr. TOOHEY. Well, I think it builds—you know, we build upon 

Dr. Bray’s research, and our recommendations are based on a lot 

of the findings of what he says. I don’t have his statement in front 

of me, but he makes many points that we agree with about the 

need for a Federal interest. So, you know, the identification of 

beneficiaries, which is a cornerstone of our cost sharing recommendation, those are two of the areas we fundamentally agree 

with him. 

And I think, you know, that his scholarly research is the whole 

justification for our program, and this committee’s Federal interest 

in navigation. 

Mr. CRAVAACK. OK. I was kind of concerned. Right now there is 

supposed to be a board that is supposed to identify projects. Is that 

correct? 

Mr. TOOHEY. Yes, sir. 

Mr. CRAVAACK. OK. Ms. Darcy, can you tell me—I’m sorry I came 

in late, you might have already mentioned it—what is the status 

of this board? 

Ms. DARCY. Congressman, I did talk about it earlier, but the current status of the board is that the nominations to the board are 

pending review from the Department of Defense to a waiver request that we have asked from them. And that is where it is at the 

moment. 

And unfortunately, we need a waiver to exempt Inland Waterways Users Board members from being special Government employees, so we’re just waiting for a decision from the Department 

of Defense in order to make that—hopefully make the board operational again. 

Mr. CRAVAACK. OK. Any idea when that is going to occur? 

Ms. DARCY. I don’t. 

Mr. CRAVAACK. OK. So right now we’re kind of like in limbo status with this board that is supposed to be identifying projects? 

Ms. DARCY. Correct. 

Mr. CRAVAACK. Well—— 

Ms. DARCY. However, we have been in communication with the 

board on a number of issues, including how we can—or members 

of the board and stakeholders, as to how we can move forward on 

trying to find a revenue source for the fund. 

Mr. CRAVAACK. OK. Speaking of revenue source, you said gas receipts are down. Is that correct? 

41 

Ms. DARCY. I did not say that. 

Mr. CRAVAACK. I think in your written testimony, or someone— 

well, I read in testimony somewhere that gas receipts are down. 

Could you tell why do you think the gas receipts are down? Or 

can’t you comment on that? 

Ms. DARCY. I don’t—it was not in my testimony, and I’m—if it 

wasn’t someone’s here, I would defer to them. But I don’t know 

why gas receipts are down, other than the fact that people aren’t 

driving as much. 

Mr. CRAVAACK. OK. 

Ms. DARCY. But that is just my uneducated guess. 

Mr. CRAVAACK. OK. Well, Mr. Ebke, you said, coming up from 

the northern part of the Mississippi area up in Minnesota, you said 

that the increase in fees are going to be passed to your members. 

So does that mean you endorse the increase of fees? Would that be 

correct? 

Mr. EBKE. That is correct. In March of 2010 the delegates to our 

policy-setting session agreed that we would accept—in fact, we’re 

probably a little higher than what they’re suggesting. We would go 

up to 20¢. 

Mr. CRAVAACK. OK, 20¢. And do you think this is sustainable 

within the system without, you know, eliminating jobs? Mr. 

Toohey, what do you think? 

Mr. TOOHEY. What do I think about a 20¢ per gallon gas tax? 

Mr. CRAVAACK. Yes. 

Mr. TOOHEY. I think it is too much. 

Mr. CRAVAACK. Yes? 

Mr. TOOHEY. And it will stifle economic opportunity. 

Mr. CRAVAACK. OK. Mr. Ellis, you made a good comment, you 

have 535 mouths to feed as part of the systemic problem of, you 

know, which Army Corps project is going to be utilized, which I 

think is—probably going back to the board, shouldn’t a board be 

identifying which projects should be—for the right projects for the 

right reasons at the right time? I mean—— 

Mr. ELLIS. Well, I think that the Corps has to work with all of 

its constituencies. It is not just the inland waterways, as far as 

projects. I mean there are projects all over the country that are 

beach replenishment or flood control or environmental restoration 

or other navigation projects. 

And so, clearly, the Corps has to work with the stakeholders. 

And they do, generally, in the development of these projects. But 

also, Congress needs to work with the administration to develop a 

prioritization system. And that is really what I’m getting at, is the 

program has been spread too far and too thin, which is how a lot 

of these cost increases happen, Congressman Cravaack. 

And so, I think that it actually would serve the beneficiaries, the 

Congress, and the administration, and the taxpayer better if we actually prioritized our funding, finished a project, moved on to the 

next project, finish that one, move on to the next project. 

Mr. CRAVAACK. And do you think that method, there would be— 

like, what is there, 25 outstanding projects right now? That would 

be a way to conquer this? 

Mr. ELLIS. Well, I think that you would start tackling, you know, 

the top of the list, wherever it is in the Corps’ program, and you’d 

42 

knock those out, and you’d move on to the next projects. And the 

problem with that is, of course, it doesn’t go very well with politics, 

because some people, some of those 535 members, both the House 

and the Senate, are going to go home empty handed. And Congress 

doesn’t like doing that, normally. 

Mr. CRAVAACK. Just—indulgence for just a second. Ms. Darcy, in 

this board are politics part of this? Or is it prioritizing which 

projects need to be done? 

Ms. DARCY. No, it is prioritizing which projects need to be done. 

Mr. CRAVAACK. OK. Then I strongly suggest we get this board 

rolling. 

Ms. DARCY. OK. Could I—— 

Mr. CRAVAACK. So—— 

Ms. DARCY. Could I also correct—when you asked me about the 

gas tax, I was thinking gasoline tax, as opposed to the diesel tax 

that is on the—— 

Mr. CRAVAACK. Diesel? Oh. 

Ms. DARCY. Right. And—— 

Mr. CRAVAACK. My fault. 

Ms. DARCY. No, it is not your—I just had a different tax in my 

head. But in answer to your question, I think some of the reasons 

that the receipts are down is there has been lower traffic because 

of the slowed economy, in addition to the fact that we have also 

had some more efficient engines on our tugs. So, you know, that 

can be another contributor. 

Mr. GIBBS. Mr. Little, I think you wanted to respond, and I will 

give you a chance. 

Mr. LITTLE. Yes, Chairman Gibbs, and thank you. I just want to 

make sure that the record is clear on a couple of things. 

As this board—and I served as chairman on the users board for 

2 years—my term has expired. So there are no current users board 

members right now. 

Mr. CRAVAACK. Right. 

Mr. LITTLE. There are no members to talk to. There is not even 

one member to talk to. 

But part of the process we went through in developing this capital development plan was to look at all the work out there for inland waterways projects, and we went through a prioritization 

process, very elaborate, established objective criteria, basically 

looking at the condition of the project and the economic benefit. 

And so, we did a ranking. It is not perfect, we’ve never said it was 

perfect, but it was our good faith attempt to develop some kind of 

rational objective prioritization, so that we could start to complete 

these projects, one after one. 

As you may well know, we do pay—the commercial users do now 

pay a 20¢ a gallon fuel tax. We pay that now, it goes into the trust 

fund. We have fixes, we think, to the broken model. And we believe 

in it enough that we have said we are willing to see that tax increase from 20¢ to about 26¢ or 29¢ a gallon if we fix all these 

other things that need to be fixed. This plan was developed with 

the Corps of Engineers professional staff and the industry, and it 

is a good plan. 

One final thing is—I think Secretary Darcy touched on it—during the recession we saw revenues into the trust fund diminish, as 

43 

you would expect. We are seeing the revenues increase a little bit 

now, not so much because of the domestic economy, which still has 

a tepid recovery going on, but we’re seeing some increase in traffic 

due to exports: grain exports and coal exports. That is the thing 

that is starting to kind of tip this thing in the positive direction a 

little bit more. 

Mr. CRAVAACK. Thank you, Mr. Little. Appreciate that. And with 

that, sir, I yield back the remainder—— 

Mr. GIBBS. Thank you. 

Mr. CRAVAACK [continuing]. Negative part of my time. 

Mr. GIBBS. Mr. Lankford? 

Mr. LANKFORD. Thank you, Mr. Chairman. Let me just kind of 

jump in the conversation on a couple things. 

Ms. Darcy, what is your best guess—I know you all have been 

studying it, looking at some of the cost overruns and the expectations, the estimates coming in. You’ve got to have something in the 

back of your mind when an estimate comes in at one level, it comes 

up much higher. As you’re beginning the process of studying it, 

what are the big rocks that are in that that you would see? 

Ms. DARCY. Are you referring to Olmsted? 

Mr. LANKFORD. Yes. 

Ms. DARCY. Yes. 

Mr. LANKFORD. Or just take any one of the projects. 

Ms. DARCY. Oh. 

Mr. LANKFORD. So—but if you want to take that one in particular—— 

Ms. DARCY. Well, Olmsted, I earlier said that we are reviewing 

the increased cost estimates, and it would just be a guess to give 

you a number, and I don’t want to do that. 

Mr. LANKFORD. Not a guess of the number, a guess of why. 

Ms. DARCY. I think probably a number of things. One was some 

of the conditions in the river were different than what we had initially thought would be there. Again, some of the shell casings that 

we have put in have been more expensive than we had originally 

thought, as far as not only the time it takes to process—to produce 

them, but also the time it takes to install them. Those are two of 

the many reasons I think that we’re going to—— 

Mr. LANKFORD. Does the Corps currently—with some of the 

projects that are ongoing, does the Corps currently work with—I 

know—let me back up and say this. I know you work with the people that it affects. Obviously, all the different ports, all the different folks, and the people that are affected on that. 

How are they engaged in setting priorities through the board on 

these different individual—and I’m from Oklahoma, to give you 

some clarity there, and so we have a great interest there in the 

Port of Muskogee, Port of Catoosa, and others. How are those priorities set? 

And then, are they allowed to engage? Because obviously, those— 

that port has great interest in seeing the projects done. The dredging the locks, they can cry out and they can complain, they can say, 

‘‘Move us higher on the list.’’ How can they get engaged in the process? 

Ms. DARCY. Well, I guess, from the—we have been engaged with 

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homa, what region—who would have been appointed to the 

board—— 

Mr. LANKFORD. Right. 

Ms. DARCY [continuing]. To represent those interests. But that is 

what the board was established to do, was to be able to represent 

the interests of the—— 

Mr. LANKFORD. But now, with the board not functioning at that 

point, now how do they do that? 

Ms. DARCY. At the moment there is no official board input. However, we have sought to continue the dialogue that the industry has 

provided for us, in trying to establish a new revenue source. 

Mr. LANKFORD. OK. Is there a way for the Corps to be able to 

look at some of these projects—and let me give you—I’m going to 

run a couple questions at a time around it. 

One of them is—I have an impression, and it is only my guess 

based on construction background and some things—if you run 1 

project and do it fast and get it done, it seems to be cheaper than 

running 20 projects, each of them taking 20 years apiece. Would 

you say that is right or wrong on that? Just in a general sense. 

Ms. DARCY. I think generally that is correct. 

Mr. LANKFORD. See, it goes back to Mr. Ellis’s comment that 

every congressional district wants the work done in their district. 

And so, to show progress, that we are working in your district, 

we’re going to start this year and we will end some time before the 

sun burns out. And so it is this ongoing—it never seems to get 

done, because there is not enough funding to complete projects. 

There is enough funding to start projects and to be able to keep 

them going. 

Is there any interest in saying, ‘‘We’re going to set this priority, 

we’re going to run these priorities. But for you in this location, here 

is the year your project is going to start, here is the year it is going 

to stop and be complete’’? 

Ms. DARCY. One of the things we’re looking at doing in developing our budgets in the years ahead is to look for project completions. I mean as you say, you know, funding something to completion is more efficient. And that is, hopefully, the way we are going 

to be able to—you know, you can’t complete everything, but that 

is part of the priority in setting our budget goals. 

Mr. LANKFORD. Right. But there has got to be some way to be 

able to say, ‘‘We are doing fewer projects, but those projects we are 

doing we are going to get finished, and yours is next in line,’’ and 

as soon as this one is finishing, this one starts, here is the year 

this one is going to be complete, and this is the year this is going 

to take up, just to be cheaper in the process of doing that. 

Mr. Toohey? 

Mr. TOOHEY. The capital development plan that we developed in 

cooperation with the Corps of Engineers lays out a schedule for 

every project that we are aware of, when it will start, when it will 

end, if our recommendations are adopted by this committee. And 

it is available. We have it available for the committee. You can look 

right in there and find those things that are of interest to the members of the committee. But that is our recommendation to this committee. 

45 

Mr. LANKFORD. Right. Because if I could say only one thing, it 

would be it is not a matter of I want to see some dirt turning in 

my district, it is I want to know when that is going to get solved. 

Even if I can tell some people, ‘‘It is 3 years away, but here is the 

day it is going to start, and here is the day it is going to be done,’’ 

is dramatically different than saying, ‘‘You see that tractor out 

there, parked? That is going to be doing something at some point.’’ 

Mr. TOOHEY. Yes, and this is our best thinking between the 

Corps of Engineers and the commercial users of the system on 

when we can accomplish those projects, and in what order, with a 

funding level of $380 million a year. You know, we love the highway program, but we love it with envy, because they’re worried 

about a $42 billion program versus $35 billion. We’re looking for 

$170 million. 

Mr. LANKFORD. Right. Mr. Ellis, were you going to say something? 

Mr. ELLIS. Just really briefly, Congressman. I was just going to 

add that it has to be looked at in the overall context of the Corps 

portfolio. And so, just simply looking at the inland waterway system and not looking at the overall Corps construction budget isn’t 

going to be solving the problem, it is going to kind of pick one set 

of winners. And so we certainly don’t support that. 

The other thing I would just point out is that even though the 

Inland Waterways Users Board, it is expired right now, it is not 

the only body—I mean the Waterways Council exists to advise the 

Corps and talk to them, just like the American Association of Port 

Authorities does the same thing on the harbor program. There is 

no harbor maintenance trust fund users board. And so I think that 

there are certainly groups that can try to represent their views to 

the Corps and to the Congress, absent the Inland Waterways Users 

Board. 

Mr. LANKFORD. OK, thank you. Thank you. 

Mr. TOOHEY. But the users board, the intent of Congress laid out 

in statute in 1986 is that there will be a consultive, consultative 

process, and it is not happening, because we don’t have a board any 

more. 

Mr. GIBBS. And, Representative, that is my point. The law was 

clear, there will be a water user inland board, and that is why I 

asked Secretary Darcy earlier to give us the documentation, because my feeling is that the law is clear, and this is the Department of Defense policy decision at the administration level, and I 

have major concerns about that. And so I want that rectified. 

I want to quickly just follow up on my line of questioning earlier, 

and I want to start with Dr. Bray. We talked about project— 

streamlining project delivery and I mentioned earlier how many 

years it has been to do things now. And I understand the Upper 

Mississippi is an example. They did a 15-year study, spent $75 million. How long do we have to keep studying things? And, you know, 

is that part of the problem? 

Mr. BRAY. It is part of the problem. And it is not just the Upper Mississippi. They spent about $70 million on the Missouri. I think 

that—I think the Missouri River master water manual control 

project has been looked at, I don’t know, three times, maybe four. 

And they’re looking at it again. 

46 

And I talked to a guy yesterday in the Corps of Engineers. And 

in 2004 the National Academy of Sciences made their proposal. 

And one of the things that came out of all that was small-scale improvements, small-scale improvements like switch boats, mooring 

cells, which make the lockages go faster. They don’t give you any 

redundancy, but they make everything better, in terms of time. 

They haven’t even done that. I mean there has been no money for 

that. So it is just been languishing for a period of time. 

And I think maybe—there may be some movement now, but from 

the best I can determine, you’re right. 

Mr. GIBBS. So we have a big bureaucracy doing a lot of studies, 

different agencies—I assume the EPA and I don’t know who else, 

but—— 

Mr. BRAY. I would assume so. 

Mr. GIBBS. OK. Does anybody else want to follow up on—yes, Mr. 

Ellis? 

Mr. ELLIS. Chairman Gibbs, I would just point out, though, on 

the Upper Mississippi River, part of the reason why the study took 

so long and costed so much was because in 2000 the Corps was 

found to be cooking the books, that they had actually manipulated 

the—a formula to justify the project. And the Army inspector general went in, investigated that, and there was two generals and a 

colonel that were reprimanded for their actions there, and certainly 

delayed the process—— 

Mr. GIBBS. I will just interrupt you. I don’t know if they cooked 

the books in 2000, I’m not going to go back to 2000. 

Mr. ELLIS. But an Army inspector general did say that. I mean 

it is—— 

Mr. GIBBS. That is not my concern. My concern is now I want 

to see project delivery be reasonable and in budget. And—— 

Mr. ELLIS. Agreed, sir. Yes, sir. 

Mr. GIBBS. And I know we have some issues at Olmsted, and 

that is why I went out there. And obviously, it is a major engineering challenge, and there is discussion. But I do know that we need 

to get that project done, because it is taking most of the resources, 

and we’re not getting other projects done that need to get done. 

And we are—my fear is, and I think the Corps’ fear—interpreted 

to me—that we are setting ourselves up for a major catastrophe, 

failure that is going to—the American people will notice it when it 

happens, and it is serious. 

One last question I want to follow up a little bit. Mr. Little, the 

users board—I think it was an 18-month study, you put your capital development plan together—and before I do that, before I forget, I also want to ask unanimous consent for the record to put in 

the letter to Secretary Darcy from the Inland Waterways Users 

Board, the response that you had. So no objections, we will order 

that in. 

[The information follows:] 

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Mr. GIBBS. Mr. Little, can you give us a little synopsis of what 

the feedback was from the administration, their disregard or not 

supportive of the industry’s recommendations for the—— 

Mr. LITTLE. Right. Chairman Gibbs, after we had worked at the 

Corps’ invitation for 18 months in developing this capital development plan, we read the letter from Secretary Darcy to Congressman Oberstar, soon to be leaving Congress, Congressman Oberstar, 

in which she laid out the administration’s views at that time. 

We were disappointed that we had made this effort and worked 

so hard in developing this plan at the Corps’ invitation to hear a 

response like that, read a response like that. And it was contrary 

to some of the positive things we were hearing from the Corps and 

the administration about how what we were developing, they 

thought, could be a model for how other programs could be reformed and made more efficient. So we were very shocked and disappointed in it. 

Mr. GIBBS. Ms. Darcy, I suppose you want to respond. Why 

weren’t you and the administration supportive of the plan? 

Ms. DARCY. I think a lot of the reasons are explained in the letter to Chairman Oberstar. But overall, there was a great deal of 

change in the cost sharing, a great deal of the payment would be 

put back on the Federal taxpayer. 

Mr. GIBBS. I’m curious. Why didn’t you respond directly to the 

inland waters board? You responded to former Chairman Oberstar, 

but you didn’t respond directly to the board, is that correct? 

Ms. DARCY. Not in a letter, sir, no. 

Mr. GIBBS. OK. So there was no written response from you to the 

users board? 

Ms. DARCY. No, sir. 

Mr. GIBBS. OK. I’ve got one last question I will open up to the 

panel. I think there was a lot of discussion today about the infrastructure and that, but what’s the—anybody want to respond to 

what the likelihood of a failure is, and what would be economic— 

or just consequences, in general? 

I don’t think you can answer the likelihood of a failure, but if 

there is a failure what would be the consequences to the grain industry? 

Mr. EBKE. Well, I think what we look at is the effect that 

Katrina had on the system. And I think we had—at one point were 

looking at doing some studies, and I don’t have those. If we have 

those, I could certainly pass them forward. But I think Katrina 

showed us that things, as far as the grain impact, significant bottleneck, the railroads had to try to take the slack up, you know, 

find a place for the grain to go, keep the system functioning. So it 

was pretty dramatic. 

Mr. GIBBS. I would like to follow up, I’m going to follow up to 

the panel again with my question, to put a little bit more to it. 

I know the President—I think it was in a State of the Union— 

wants to double exports, I think, in 5 years. Couple with that failure. Do we have the capacity to be able to do that? So you can put 

all that together in one whole question. Mr. Little? 

Mr. TOOHEY. Well, one thing to be aware of, you know, all of the 

fuel that goes into western Pennsylvania comes by waterway. It is 

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ways, 300,000 barrels of petroleum product a day. All of the fuel 

that goes into the UPS package service system at Louisville, where 

they take cargo and then move it on, totally dependent on the waterways. 

So, a failure of any of the locks between Catlettsburg, Kentucky, 

and Louisville, or any of the locks between Catlettsburg, Kentucky, 

and Pittsburgh will eliminate the opportunity to have petroleum 

products in that region, because that is such a critical asset, such 

a critical asset that in—during World War II, the Federal Government came to Ashland Oil and said, ‘‘We want to build a secure 

aviation facility if you will run it.’’ They did. 

All of the fuel use in the aviation—the air campaign in Europe 

was manufactured at Catlettsburg, Kentucky, and shipped down 

the inland waterways. All of the classified programs, one of which 

now you can talk about, SR–71, fuel manufactured at Catlettsburg, 

Kentucky. Why? It was a secure, national defense facility. That is 

why we recognize our national defense component of the waterways. There is no cost-sharing for that. That is a 100 percent Federal responsibility. That is not Mr. Little’s responsibility, or any 

other carrier’s. Vital to the national defense. 

But we don’t know that. We forget that. It is invisible today, 

some of it for strategic reasons. But it is there for a purpose. 

Mr. GIBBS. Mr. Little. 

Mr. LITTLE. And, Chairman Gibbs, also to your first question, I 

believe that the administration is looking at some of the impact to 

perhaps catastrophic failure in certain places. We talked about 

Olmsted. 

There is another big project out there that is not getting funding, 

and that is the Lower Monongahela project. It is 100 years old. And 

I believe, based on what I have heard, that the administration is 

looking at just the energy impact if there is a catastrophic failure 

there, which will be a tremendous impact. So that is one area that 

needs to be looked at, and we need to learn more about what 

they’re finding there. 

As to your question as to capacity, yes. If we can put more cargo 

on the waterways, we have the infrastructure capacity out there to 

move more products. And, of course, that is the most environmentally friendly, safest mode of transportation, so we should be 

looking to do that. 

Mr. GIBBS. Mr. Ellis. 

Mr. ELLIS. Yes, Chairman Gibbs, just replying to your initial 

question about the impact. And obviously, a lot of it depends on 

where it is. So, you know, if you look at Katrina, which impacted 

New Orleans, which is basically the exit for all of our international 

commerce coming down the Mississippi, it is going to have a huge 

impact everywhere, all the way through the system. 

If it is at the Monongahela, near the end of the Ohio system, it 

is going to have a different impact. And certainly Mr. Toohey pointed out that there were the impacts, in that stretch—on the Ohio 

River. So a lot of it is going to depend on where this actually happens. 

I would also point out, though, on the Ohio, the vast majority of 

the projects that are going on there are about—there already is a 

1,200-foot lock, and there is a second lock, a 600-foot lock, that they 

56 

are trying to make 1,200 feet. So it is 100 percent redundancy that 

they’re trying to have there. So it is not like you still couldn’t get 

through in many of these places, you know, unless there is a catastrophic failure across there. 

And then, the only other thing I would point out about the cost 

sharing and the Federal Government, you know, national security, 

the Federal Government—by far, the biggest expense in the inland 

waterway system is operations and maintenance. Right now, that 

is 100 percent Federal. That isn’t cost-shared at all. And so, the 

Federal Government is certainly well represented in providing its 

cost share. And also, 50 percent of any of these projects are being 

paid for by the Federal taxpayer. 

So, I mean certainly there is other uses and other beneficiaries, 

but that is being picked up through the taxpayer. 

Mr. GIBBS. Mr. Bray. 

Mr. BRAY. It is the Mississippi River that has no redundancy. 

Mr. GIBBS. Pardon? Say again. 

Mr. BRAY. It is the Mississippi River who has no redundancy. 

And failures of any of those projects, within certain driving distance of St. Louis—of course, the option is trucking. Many of those 

farmer in that area don’t get rail service now because of the rail 

Staggers Act. And the roads up there aren’t good, really, the secondary roads. 

And so, that is one big impact you’re going to see, is this shift 

to more and more trucking. And that was one thing I was talking 

to them about Lock and Dam 18. What did they think would happen if Lock and Dam 18 closed, because there are three big grain 

shippers in that pool, and what would the farmers do? They’d probably truck on to St. Louis. 

Mr. GIBBS. Yes. 

Mr. BRAY. Go ahead. 

Mr. GIBBS. Mr. Little. 

Mr. LITTLE. I just wanted to address the redundancy comment on 

the Ohio River, because there are twin locks at many locations on 

the Ohio River. In many places, that is a 1,200-foot chamber and 

a 600-foot chamber. So at Markland Lock, which is in between Cincinnati and Louisville on the Ohio River—in fact I just drove across 

that lock on Monday and looked at it—there is work being done 

now on the 1,200-foot chamber. So that chamber is closed. All the 

traffic is going through the 600-foot chamber. 

Annually, that passes about 58 million tons a year. The delays 

there are averaging 33 hours. That work began in July and is not 

scheduled to be completed until November. So, by my estimates, 

kind of the back-of-the-envelope estimate, which I think is pretty 

close, just to the industry I expect that cost to be over $40 million 

in delay costs, which will eventually, one way or the other, get 

passed on to the consumers. 

Mr. GIBBS. I just want to, Secretary Darcy, follow up quick. It 

is sad, just coming on in the Congress and seeing the $800 billion 

or so stimulus spent, and you say $400 million of it was for the infrastructure, you’re going to supply me with a specific list of the 

projects, so we know what’s going on—and then the President just 

talked about—I think you said in your testimony he is going to 

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line any major investment expenditures into the inland water system until just, basically, when we called this hearing, I believe. 

So, could—you have any specifics you could tell us how—where 

the money is going to come from, or do you have any idea what the 

plan is? 

Ms. DARCY. The plan that the President announced on Monday 

is to have a user fee, in addition to the current diesel fuel tax. And, 

as I said, the specifics are forthcoming, but it would be a users fee 

that we hope would generate about $1 billion over 10 years. 

Mr. GIBBS. OK. Is there any more? Go ahead, Representative. 

Mrs. NAPOLITANO. Thank you, Mr. Chair. Ms. Darcy, can you tell 

me—this is a little bit different, because I look at all things—the 

annual cost to the taxpayer of the Inland Waterways Users Board, 

and from which account does it come from? 

Ms. DARCY. It comes from our account. I would have to get back 

to you. It is something like—$60,000 sticks in my head, but that 

is just a guess. I would have to get you—— 

Mrs. NAPOLITANO. For the board? 

Ms. DARCY. For the board, correct. 

Mrs. NAPOLITANO. My figure is $895,000. 

Ms. DARCY. That—I would—— 

Mrs. NAPOLITANO. A little different. 

Ms. DARCY. It is a little different, and I just don’t know. 

Mrs. NAPOLITANO. Right, I know. But that may be one of the 

things we may want to look at—— 

Ms. DARCY. OK. 

Mrs. NAPOLITANO [continuing]. To see which expenses can be reduced to be able to save the taxpayers some money. 

Ms. DARCY. OK. 

Mrs. NAPOLITANO. Mr. Ellis? 

Mr. ELLIS. I was just asking, because we had looked at this. And 

I believe in the Federal—in the fiscal year 2012 budget there was 

$850,000 set aside, requested in the budget request for fiscal year 

2012 for the Inland Waterways Users Board. 

Mrs. NAPOLITANO. So it is quite a chunk of money. 

Now, the other thing that is just really a comment, more than 

anything, in many of the areas that I have served here in Congress, we look at our—ignoring the basic tenements of infrastructure repair and maintenance, the O&M. Sometimes we put it on 

the user, sometimes we put it on the private owners, whether it is 

dams in other areas. But I believe that there is some discussion 

and dialogue ongoing—and hopefully the President—I believe he 

also mentioned it, to develop an infrastructure bank to be able to 

assist those entities that are not able to fund their own, to be able 

to borrow it, whether it is a low-interest rate, or whatever. 

But I can tell you in my subcommittee the—in dams, rivers, in 

canals and everything else that we have, I think we need to begin 

to look at it. When you have water leaks, they use up more than 

50 percent of the water, potable water. And we are running into 

drought cycles throughout the United States. It is imperative we 

begin to look at how do we help the communities face these things. 

So, that is something else. 

And, Mr. Chair, I have other questions that I will submit for the 

record. Thank you very much. 

58 

Mr. GIBBS. Thank you. I want to thank all the panelists for coming. And I think it is quite evident we have a lot of work to do. 

And make sure we enhance our inland water system, and I think 

my personal prerogatives are really focused on projects that are 

specifically important to moving commerce and growing our economy and creating jobs. And so I look forward to working with the 

administration and the private sector to accomplish that. So that 

concludes this hearing today. Thank you. 

[Whereupon, at 12:12 p.m., the subcommittee was adjourned.] 

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