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96–023 PDF 2015

S. HRG. 113–732 

THE NEED TO INVEST IN AMERICA’S INFRASTRUCTURE AND PRESERVE FEDERAL TRANSPORTATION FUNDING 

HEARING 

BEFORE THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

SEPTEMBER 25, 2013 

Printed for the use of the Committee on Environment and Public Works 

( 

Available via the World Wide Web: http://www.gpo.gov/fdsys 
(II) 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

BARBARA BOXER, California, Chairman 

MAX BAUCUS, Montana 

THOMAS R. CARPER, Delaware 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

SHELDON WHITEHOUSE, Rhode Island 

TOM UDALL, New Mexico 

JEFF MERKLEY, Oregon 

KIRSTEN GILLIBRAND, New York 

MAZIE K. HIRONO, Hawaii 

DAVID VITTER, Louisiana 

JAMES M. INHOFE, Oklahoma 

JOHN BARRASSO, Wyoming 

JEFF SESSIONS, Alabama 

MIKE CRAPO, Idaho 

ROGER WICKER, Mississippi 

JOHN BOOZMAN, Arkansas 

DEB FISCHER, Nebraska 

BETTINA POIRIER, Majority Staff Director 

ZAK BAIG, Republican Staff Director 
(III) 

C O N T E N T S 

Page 

SEPTEMBER 25, 2013 

OPENING STATEMENTS 

Boxer, Hon. Barbara, U.S. Senator from the State of California ........................ 1 

Barrasso, Hon. John, U.S. Senator from the State of Wyoming .......................... 3 

Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland ................ 3 

Carper, Hon. Thomas R., U.S. Senator from the State of Delaware ................... 6 

Fischer, Hon. Deb, U.S. Senator from the State of Nebraska ............................. 8 

Whitehouse, Hon. Sheldon, U.S. Senator from the State of Rhode Island ......... 9 

Wicker, Hon. Roger, U.S. Senator from the State of Mississippi ........................ 11 

Vitter, Hon. David, U.S. Senator from the State of Louisiana ............................ 11 

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma .................... 20 

Merkley, Hon. Jeff, U.S. Senator from the State of Oregon ................................ 21 

Baucus, Hon. Max, U.S. Senator from the State of Montana, prepared statement ...................................................................................................................... 146 

Boozman, Hon. John, U.S. Senator from the State of Arkansas, prepared 

statement .............................................................................................................. 229 

WITNESSES 

Ruane, T. Peter, President and CEO, American Road and Transportation 

Builders Association ............................................................................................. 22 

Prepared statement .......................................................................................... 24 

Responses to additional questions from Senator Boxer ................................ 43 

Response to an additional question from Senator Vitter .............................. 51 

Responses to additional questions from Senator Inhofe ............................... 54 

Lewis, Hon. Michael P., President, American Association of State Highway 

and Transportation Officials ............................................................................... 61 

Prepared statement .......................................................................................... 64 

Responses to additional questions from: 

Senator Boxer ............................................................................................ 76 

Senator Vitter ............................................................................................ 78 

Senator Inhofe ........................................................................................... 82 

Kavinoky, Janet, Executive Director of Transportation and Infrastructure, 

Vice President of Americans for Transportation Mobility Coalition, U.S. 

Chamber of Commerce ......................................................................................... 84 

Prepared statement .......................................................................................... 86 

Cohen, Gregory M., P.E., President and CEO, American Highway Users Alliance ....................................................................................................................... 104

Prepared statement .......................................................................................... 106 

Responses to additional questions from: 

Senator Vitter ............................................................................................ 113 

Senator Inhofe ........................................................................................... 114 

Poupore, Ray, Executive Vice President, National Construction Alliance .......... 117 

Prepared statement .......................................................................................... 119 

DiLoreto, Gregory, P.E., President, American Society of Civil Engineers .......... 123 

Prepared statement .......................................................................................... 125 

Response to an additional question from Senator Boxer .............................. 131 

Responses to additional questions from Senator Inhofe ............................... 132 

Basso, Peter J. ‘‘Jack,’’ Principal, Peter J. Basso and Associates, LLC .............. 150 

Prepared statement .......................................................................................... 152 

Ruffalo, Kathy, President, Ruffalo and Associates, LLC ...................................... 156 

Prepared statement .......................................................................................... 158 
Page

IV 

Ruffalo, Kathy, President, Ruffalo and Associates, LLC—Continued 

Responses to additional questions from: 

Senator Boxer ............................................................................................ 164 

Senator Vitter ............................................................................................ 165 

Response to an additional question from Senator Inhofe ............................. 166 

Schenendorf, Jack, Of Counsel, Covington and Burling, LLP ............................. 167 

Prepared statement .......................................................................................... 169 

Responses to additional questions from Senator Vitter ................................ 205 

Response to an additional question from Senator Inhofe ............................. 209 

Connaughton, Hon. Sean T., Secretary of Transportation, Commonwealth of 

Virginia ................................................................................................................. 213 

Prepared statement .......................................................................................... 215 
(1) 

THE NEED TO INVEST IN AMERICA’S INFRASTRUCTURE AND PRESERVE FEDERAL 

TRANSPORTATION FUNDING 

WEDNESDAY, SEPTEMBER 25, 2013 

U.S. SENATE, 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, 

Washington, DC. 

The full Committee met, pursuant to notice, at 10 a.m. in room 

406, Dirksen Senate Building, Hon. Barbara Boxer (chairman of 

the full Committee) presiding. 

Present: Senators Boxer, Vitter, Baucus, Carper, Cardin, 

Whitehouse, Merkley, Inhofe, Barrasso, Wicker, Boozman, and 

Fischer. 

OPENING STATEMENT OF HON. BARBARA BOXER, 

U.S. SENATOR FROM THE STATE OF CALIFORNIA 

Senator BOXER. We will come to order. We are very, very 

pleased, we have quite a great panel and a second that is wonderful. We have a big job ahead of us and I am going to put my statement into the record and just ad lib and hear from my colleagues 

for an opening statement. 

The ranking member is on his way, he has been delayed, so he 

will be here soon, I hope. He is speaking on the floor. So we won’t 

get into that. 

Anyway, we are here on an issue that has united us, and that 

is a good thing, given that we probably couldn’t pass a Mother’s 

Day resolution. So I think it is excellent that we can agree that 

transportation is something we can rally around and work together 

on. 

A lot of the people here today I know very, very well. We have 

been in the trenches in the last MAP–21 bill, and we are in the 

trenches now. But I really believe we can work and get a sustainable funding source for transportation. I believe this. I have seen 

some ideas that are quite compelling on how to do this. Simplify 

things, get one funding source, follow the lead of some of our States 

that are turning to a percentage highway fee that is paid for at the 

refinery level. This could bring in more than all the other taxes 

bring in for transportation. 

There is also the talk of a more controversial idea that some of 

us don’t think is controversial, and that is a carbon fee. That brings 

in quite a lot, some of that could be used. There are many ideas 

out there. And the one that I am leaning toward myself, although 

this is going to be a decision of the Finance Committee, and that 
2 

is for sure, is to be able to do away with the per gallon fee at the 

pump and replace it with this sales fee as they have done in Virginia and Maryland. It would fund the entire highway program for 

6 years, or is it 5 years? Six years, I think, David. And it would 

do that, we are doing away with all the other fees. It is a very exciting idea. 

Here is the point. We know that the status of our roads, the condition of our roads and our bridges is just not acceptable. Not acceptable. We know that we have 70,000 of our Nation’s bridges 

which are structurally deficient. One in four bridges is either structurally deficient or functionally obsolete. This is the greatest country in the world and we have 70,000 deficient bridges. And one in 

four of our bridges is either structurally deficient or functionally 

obsolete. 

In fact, according to the American Society of Civil Engineers, listen to this, every day more than 200 million cars, trucks and buses 

cross a deficient bridge. Just think about that. People are actually 

in danger just going to work. And we have seen it too many times. 

So this job that we are doing is not a lighthearted job. It is very 

serious. And we need to keep our economy moving. You cannot be 

a great economy if you can’t move people and you can’t move goods. 

And the system is not reliable. 

That is why we have the Chamber of Commerce here and that 

is why we have the unions with the Chamber on this. This is something we can all unite behind. 

A recent report from the National Association of Manufacturers 

found that 70 percent of our manufacturers believe America’s roads 

are getting worse. And 67 percent believe infrastructure is important enough to American business that all options to fund investments should be on the table. Look, roads and bridges are not Republican or Democrat. So we need to work together. And we have 

a wonderful history of working together on this. We worked with 

Senator Inhofe when he was the ranking, we work with Senator 

Vitter as he is the ranking, we have worked with Senator Barrasso, 

Senators from both sides of the my colleagues on the Democratic 

side, because we all understand this. 

In closing, I would say the States are demonstrating greater 

leadership. They are taking bold action. And we will have a representative from Virginia here to discuss that State’s successful effort, and again, quite bipartisan. So we are facing a challenge. I believe we are going to find the sweet spot, I really do. I have spent, 

I think now, more than a year looking at all the funding options. 

I think we can unite behind something that takes us away from the 

per gallon tax and moves us away from that toward a sales fee for 

highways. It would make a big improvement in the security of this 

fund. We know that the funds will then go be deposited in the 

fund. 

The last time we did this we had to take from the General Fund. 

Those days are over. We are trying to get rid of a sequester that 

is hurting our economy deeply. I hope we succeed. But we certainly 

have no room to go to the General Fund to fund highways and 

transportation. It is not going to happen, let’s be clear. 
3 

So we must work together, and I thank you very much. Seeing 

that my ranking isn’t here, we will be happy to call on Senator 

Barrasso. 

[The prepared statement was not received at time of print.] 

OPENING STATEMENT OF HON. JOHN BARRASSO, 

U.S. SENATOR FROM THE STATE OF WYOMING 

Senator BARRASSO. Thank you very much, Madam Chair, for 

holding this hearing. As the ranking member of the Transportation 

and Infrastructure Subcommittee, I do look forward to working 

with you, Madam Chair, about our national transportation investment needs. 

I would also like to welcome Janet Kavinoky, who is testifying 

on behalf of the U.S. Chamber of Commerce. She is from 

Thermopolis, Wyoming, which is my wife Bobbi’s home town. 

Janet, thank you for being here. 

Wyoming is one of those bridge States, Madam Chairman, where 

it allows for the flow of commerce to move coast to coast. This Committee must not lose sight of the importance of a national, interconnected system of highways that includes access for rural America. 

The I–80 corridor is a crucial link and a critical link for moving 

commerce from the west coast ports to cities throughout the United 

States. Interstate 80 captures about 60 percent of the truck traffic, 

most of which doesn’t originate or terminate in my home State of 

Wyoming. 

In the next 20 years, traffic on I–80 is going to double, according 

to the Federal Highway Administration. Wyoming, like many other 

low-populated States, will have needs that are very different from 

the needs of cities like New York or San Francisco. So in order to 

meet the highway system’s national needs, rural States must have 

flexibility to use Federal dollars that serve the national interest. 

Madam Chairman, I have full faith in the Wyoming Department 

of Transportation that they will continue to direct Federal resources that will keep our highway system whole. Thank you so 

much for your leadership and holding this hearing. 

Senator BOXER. Thank you, Senator, for your leadership. 

Now, by order of arrival, we will go to Cardin, then Carper, then 

Whitehouse. 

OPENING STATEMENT OF HON. BENJAMIN L. CARDIN, 

U.S. SENATOR FROM THE STATE OF MARYLAND 

Senator CARDIN. Madam Chairman, thank you very much for 

holding this hearing. I want to thank all the witnesses that are 

here today to help us deal with the funding of our transportation 

priorities here at the Federal level. 

It has been 20 years since we last adjusted the transportation 

revenues, 1993. And we have an opportunity now to do something 

about it. I serve not only on this Committee, but I serve on the 

Senate Finance Committee, and we are engaged in tax reform discussions, including the transportation revenues. 

So I hope this Committee can work with the Senate Finance 

Committee, leadership of both parties, to recommend a responsible 

way to deal with the transportation needs of this country. 
4 

We need a long-term reauthorization of our transportation programs. I was proud to be part of the MAP–21 effort. It was extremely important and difficult to get done. I applaud the leadership of this Committee, Senator Boxer, what you did to get that bill 

passed. But we know we need a longer term transportation reauthorization. We couldn’t get that, because we didn’t have the revenue to deal with the longer term. So we need a longer term solution to these problems. 

I want to compliment the representative from the Chamber of 

Commerce, because I think you have laid out the three fiscally responsible options we can do. One is to cut the transportation programs commensurate with available funding levels. That would be 

fiscally responsible, but it would shift dramatically the burdens on 

transportation to our State and local governments, as they do not 

have this capacity and these programs are national in need and 

that is not what we should be doing. 

Second option would be to continue to shift General Funds into 

the transportation funds, motor vehicles and dollars. That violates 

the user pay philosophy of the transportation funding and would 

jeopardize our ability to pay our other bills. That is not really a 

very viable option. 

The third option you spell out very clearly, is that we can increase user fees and identify new revenue sources to address the 

well-documented needs of today and tomorrow. 

I particularly want to compliment the comment that you make 

in your written statement saying this debate, particularly the revenue consideration it entails, will never be convenient. Well, matters of convenience are not what Americans are asking their leaders in Washington to do. And let me just underscore that point. Because in my State of Maryland, our Governor, our legislature 

stepped up to the plate. They changed their transportation revenues. Changed the gasoline tax into a more inflation-sensitive revenue source. It was not popular. 

But guess what? The Governor is now going around to all the 

communities in our State, showing what that revenue increase 

meant as far as community improvements and transportation. 

Communities are now saying, gee, this was a pretty good thing to 

do. 

So I understand it may be difficult for us to take up these issues. 

But politically, from a responsible point of view we need to, but politically, at the end of the day I think it will be rewarded when we 

give the communities the type of transportation they need. 

I will just give you one example, Madam Chair. The Texas 

Transportation Institute at Texas A&M rates the different communities as far as the most congested in the country. Congratulations, 

we won. The Washington area was rated the most congested area 

in the country. 

And I experience it first hand, because I do travel into the city. 

You can’t find too many more places to build highways or expand 

capacity for automobiles, but we can improve transit. One of the 

things that I have urged as we go through this debate, maintain 

the comprehensive nature of transportation. We have a Purple Line 

in this area that we are working on that will help a great deal in 

the Washington area. In Baltimore, we have the Red Line. We have 
5 

alternatives and transportation programs that help get cars off the 

roads and help us. 

My point is this. For quality of life, we have to succeed here. It 

is just unacceptable that it takes a couple of hours to get into the 

Nation’s capital. That is what it takes me to get in from Baltimore, 

a couple hours. 

So this is an urgent issue. I would urge us to, and I think this 

hearing, and we have the experts who can help us develop a way 

that we can be responsible to find the revenue we need to carry out 

our Federal responsibility. 

[The prepared statement of Senator Cardin follows:] 

STATEMENT OF HON. BENJAMIN L. CARDIN, 

U.S. SENATOR FROM THE STATE OF MARYLAND

Madam Chairman, thank you for holding today’s hearing on a very important 

issue that is especially timely with ongoing talks about comprehensive tax reform, 

coupled with the expiration of MAP–21 being just about a year away. The last time 

the gas tax increased it was done as part of the 1993 Tax Reform Act, and I am 

glad that in the Finance Committee we have been discussing including surface 

transportation revenues in tax reform. 

When SAFETEA-LU expired the Highway Trust Fund was in the red. Keeping 

the Trust Fund solvent so that USDOT wouldn’t default on its obligations to the 

States required a series of General Fund transfers. The incremental diversion of billions and billions of dollars from the General made each SAFETEA-LU extension 

increasingly more controversial to point that there were credible threats from the 

House to allow USDOT to default on its debt. 

We cannot afford to go through that situation again. 

Especially not now, not when the infrastructure needs of our States is so great. 

MAP–21 has certainly helped. The American Society of Civil Engineers (ASCE) Infrastructure Report Card noted modest improvement in the quality and condition of 

our Nation’s bridges and roads. But there is still a lot of work to do. 

The needs in Maryland are extremely high. The Texas Transportation Institute, 

at Texas A&M, for the second year in a row gave the Greater Washington region 

the dubious distinction of having the worst traffic congestion in the Nation. Traffic 

congestion across the region hurts my State’s economy, the quality of life of my constituents and the public’s health both in terms of air quality and mental stress. 

My home State of Maryland has set forth ambitious plans to improve the safety 

of the State’s highways while reducing traffic congestion in our major metropolitan 

regions. 

As several traffic and community planning studies have concluded: the long term 

path toward reduced traffic congestion is best achieved by providing and improving 

transportation options in and around population centers. The best way to reduce 

long term congestion is by having fewer vehicles on the road. Providing convenient 

and affordable public transportation options as well as safe bike and pedestrian infrastructure are especially effective at eliminating the number of single occupancy 

vehicles on the road. 

It is these benefits that highway users receive from local and regional investments 

in transit systems and transportation alternatives that more than justify the modest 

investment of Federal gas tax dollars in public transit service. 

I am a regular highway user and my daily commute from Baltimore to DC is usually pretty bad. It can take upwards to 2 hours for me to travel the 45 miles between my house and the Capitol. I cannot imagine how many times worse it would 

be if Metro and MARC didn’t provide hundreds of thousands of commuters rides to 

work each morning. 

The fact of the matter is the Old Line State is at about capacity for new roads. 

Expansion of transit service is the best, if not only, option to significantly reduce 

congestion in Maryland. 

Maryland’s top transportation priorities recognize this forward thinking approach 

to transportation planning. 

The development of the Purple Line in the Washington suburbs of Montgomery 

and PG Counties will provide needed congestion relief along East/West corridors of 

the inner suburbs. In Baltimore, the Red Line will provide fast and convenient light 

rail service for the inner suburbs into downtown Baltimore. 
6 

MDOT’s plans are not limited to just our two major metropolitan areas. In the 

rural reaches of the State, improving local road safety along the major trucking 

routes is incredibly important, and the State is making safety improvements along 

some of the State’s more deadly stretches of highway a priority. 

If all of this sounds ambitious it is because it is. The reason, however, it is possible is because Maryland recently did something that we desperately need to do 

at the Federal level. Earlier this year, Maryland raised new transportation revenues. 

Reforming the State’s gas tax, indexing it to CPI, and putting in place other 

smaller revenue measures will provide the State an estimated $3.4 billion in additional transportation revenues. The State’s transportation needs are great. Raising 

new transportation revenues was the right decision for the legislature to make, even 

if it was not the politically popular thing to do at the time. 

I say ‘‘at the time’’ because now, as Governor O’Malley and Maryland Transportation Secretary Jim Smith visit communities across the State to detail and explain 

the new transportation projects coming to their communities and the improvements 

these communities will experience to their local economies and the livability of their 

neighborhoods, the State’s decision to raise the gas tax is no longer a controversial 

issue. 

Transportation infrastructure happens to be very visible and tangible evidence of 

taxpayer dollars. And when our constituents experience a safer drive across their 

county, a new transit line serving their neighborhood, or less congestion on the 

highway they know, and usually approve, of how their tax dollars are being spent. 

It probably goes without saying, but Maryland cannot succeed with its ambitious 

transportation goals without a sound Federal partner. This is true in every State. 

Maryland has shown its commitment to improving its share of responsibility for 

America’s economic competitiveness and meeting our national goals to improve highway safety. The Federal Government must do the same, starting with Congress approving the means of acquiring the necessary resources to make these investments. 

Thank you, and I look forward to our witnesses’ testimony. 

Senator BOXER. Thank you so much, Senator. 

Senator Carper. 

OPENING STATEMENT OF HON. THOMAS R. CARPER, 

U.S. SENATOR FROM THE STATE OF DELAWARE 

Senator CARPER. Thank you, Madam Chair. 

For those of you who are sitting out at the dais, every now and 

then you see us take a drink of water. This glass that is right here 

where I am sitting, it is empty. This is our transportation trust 

fund. It is empty. 

What we have been doing for a number of years now, to the tune 

of, I think about $53 billion, we have been drawing from another 

fund, this is the General Fund of our country, in order to replenish 

the transportation trust fund. This one is empty, too. 

And when that is the case, we go to a big fund. This is, I think 

of this as the world capital markets. What we do is we go around 

the world with a glass in hand, and we draw on the world capital 

markets and we fill up the General Fund, so that we can then turn 

around and put something in our transportation trust fund. So far 

about $53 billion have gone from here to here in recent years. 

If we are going to have the kind of transportation system we 

want, we are talking about in the next several years about $100 

billion more that we have to borrow to replenish the General Fund 

to in turn provide for transportation improvements. 

I don’t think it is a very smart way to do business. Not a very 

smart way to do business. There are a number of kinds of investments that we need to make in order to grow our economy. We 

need to invest in the work force, so we have a world class work 

force. We need to invest in R&D that can be commercialized and 
7 

turned into products that people around the world will want to invest in. 

A number of years ago, I don’t recall exactly what year, Madam 

Chair, I would say about a half dozen or so years ago, when we 

passed the Railroad Transportation Bill, we created a commission. 

We created a commission and we said we would like for this commission to actually look at all the different options for revenues 

that we know that we need. They came up with, I want to say, 

maybe 25 different proposals. And their proposals came to us in 

very short order. Their recommendations were basically labeled 

dead on arrival. Dead on arrival. And for the most part, nothing 

much has happened to those ideas. 

Well, one of our former colleagues on this Committee is a fellow 

named George Voinovich from Ohio. Former mayor, Governor, Senator. He and I served together as Governors and Senators, he is 

one of my closest friends. He was by here about a week or two ago 

and we had a chance to commiserate. 

He was the only person in the Senate I could find who would join 

me in writing a letter to the Bowles Simpson Commission suggesting that we actually address this problem by raising the gas 

tax. Not like a dollar or 50 cents, but to do it over a period of time, 

and essentially to raise it a penny a month for, I think we suggested 25 months. Ten cents would go for deficit reduction, the 

other 15 cents would go into the transportation trust fund. 

The Bowles Simpson Commission took that idea and they amended it, as you may recall. They said no, don’t do 25 cents, do 15 

cents. And don’t do it a penny a month for 15 months, do it a 

penny a quarter for 15 quarters, which is just under 4 years. A majority of the commission actually voted for that. 

We need to do something like that. And what we then said, what 

the commission then said, then index whatever the gas tax ends up 

being, index it to the rate of inflation so we don’t end up in this 

same kind of problem again. 

When George Voinovich and I sent that idea to the Bowles Simpson Commission, private letter, the next day it was public knowledge that we had done it. One of my colleagues said to me then, 

you have just written your first 30-second commercial that will be 

used against you the next time you run for office. I ran for office 

last year, I was reelected with 67 percent of the vote, just about. 

And the first 30-second commercial that was used against me was 

on this subject. And yet, all the other three candidates combined 

got about a third of the vote. 

My colleagues and I are reluctant to do this kind of thing, because we know it could have real political consequences. I am just 

here today to say, it did in my State. What I have said to my State 

for years, my constituents for years, if things are worth having 

they are worth paying for. If things are worth having, they are 

worth paying for. We need a world class transportation in our 

country. We have a number of States that have stepped forward 

and said, we have the political courage to do what is the right 

thing to do. We need as a body, as the U.S. Senate, the House and 

the Congress, to also figure out what is the right thing to do, and 

summon the courage to do it. 

Thank you. 
8 

Senator BOXER. Thank you so much. Senator Fischer, followed by 

Senator Whitehouse. 

OPENING STATEMENT OF HON. DEB FISCHER, 

U.S. SENATOR FROM THE STATE OF NEBRASKA 

Senator FISCHER. Thank you, Chairman Boxer, for holding the 

hearing today to discuss the need to invest in America’s infrastructure and preserve Federal transportation funding. 

Our transportation infrastructure expands and strengthens commerce. It provides for the movement of goods, the efficient transportation of products in and out of State, and from farm to market, 

is vital to our economy. Highways promote commercial development in our communities and growth from businesses. They provide citizens access to services and a better quality of life. 

One of my guiding principles in the Nebraska legislature, a principle I now apply in the U.S. Senate, is that a limited government 

should focus its resources on meeting its core duties. Infrastructure, including highway maintenance and construction, is one of 

these important responsibilities. 

In the Nebraska legislature, I served as chair of the Transportation and Telecommunications Committee. In that role, I had the 

opportunity to examine how State government can responsibly invest in the lifeblood of its communities, its roads. I traveled the 

State and spoke to countless Nebraskans and various organizations. Throughout these conversations, I heard a reoccurring 

theme: Nebraskans wanted their State government to live within 

its means and fund only what could be done with existing resources. In Washington, I refer to this point as Nebraska common 

sense. 

I am proud that my colleagues and I were able to craft a bill that 

the legislature passed in 2011 and it carries out this objective. The 

Build Nebraska Act directs a portion of Nebraska’s existing sales 

tax fund to fund new road construction. Now we are beginning to 

see the results. The economy is improving. We have completed, and 

there are ongoing infrastructure projects now across the State. 

The success of this Build Nebraska Act, I believe, is a model for 

other States, and importantly, it is a model for our Federal Government. Rather than raising taxes to solve the problem, the State 

government lived up to its duty by using only these existing resources. 

At the Federal level, I am committed to ensuring that infrastructure funding challenges are addressed with the same fiscal responsibility that we have demonstrated in Nebraska. And we have demonstrated that it works. 

I look forward to today’s hearing to examine our transportation 

funding needs and to explore solutions to meet these demands. 

Thank you. 

Senator BOXER. Thank you, Senator. 

I want to point out that with the current Highway Trust Fund, 

it will be empty, completely empty, by 2015. So we have to come 

up with a better way to pay for it, and I believe we can do it, and 

do away with a lot of the current taxes, and replace it with something that is more reliable. That is going to be what we do. 
9 

But if we take the position that we have to live within the current situation, there will be no Highway Trust Fund in 2015. I 

think that is an important point for us to remember. 

Senator Whitehouse. 

OPENING STATEMENT OF HON. SHELDON WHITEHOUSE, 

U.S. SENATOR FROM THE STATE OF RHODE ISLAND 

Senator WHITEHOUSE. Thank you, Chairman Boxer. 

My most important task this morning is to welcome Mike Lewis, 

who is our Rhode Island Director of Transportation and is here representing the American Association of State Highway and Transportation Officials, of which he is now the president. He has done 

a wonderful job for us in Rhode Island. When the Economic Recovery Act passed and we tried to get money out to stem the worst 

of the great recession, I don’t think there was a single State that 

put more of their money out more rapidly into more shovel-ready 

projects and often used it to leverage private financing as well than 

Mike did. He was a bright spot in a previous administration, and 

he was kept on by a former member of this Committee, Lincoln 

Chafee, now as Governor Chafee. I am delighted to welcome him 

here. 

He is somebody who clearly sees the infrastructure deficit that 

this country has. I would note that we have a water infrastructure 

deficit as well as a road and highway and bridge infrastructure deficit. We tackled about 1 percent of our water infrastructure deficit 

in the Economic Recovery Act, leaving 99 percent of the hole still 

to be filled. And on the roads and highways and bridges side, we 

continue to earn a D from our civil engineers for the second rate 

state of our infrastructure in our first rate Nation. Our first rate 

Nation should not have second rate infrastructure. 

But we are going to need 60 votes in the Senate to do anything, 

and we are going to get many things through a Republican-controlled House. So if we are going to do this, it is going to have to 

be bipartisan. So far, that record hasn’t been so great. We passed 

a very bipartisan Water Resources bill here and it is still tangled 

up in the House of Representatives and has not passed there. We 

tried to pass a Transportation Funding bill and that got torn up 

by filibuster on the Senate floor, and torn apart in the House by 

the battle that we are seeing now between the more practical Republicans and their extremist fringe. So we are no place on the 

Transportation Funding bill. 

So I think we need, if we are really going to try to move from 

having second rate infrastructure for roads and highways and 

bridges to having first rate infrastructure, we really are going to 

have to rethink where everybody’s position is. And particularly I 

think the absolute no revenue pledge that has characterized the 

Republican position to the point where it has been less important 

to them to address the deficit than it has been to protect the embarrassingly low tax rates paid by hedge fund billionaires. They 

pay lower tax rates than a brick mason does in Rhode Island. That 

is a principle that is worth defending. The oil subsidies to the most 

profitable companies in the history of the universe, those are worth 

defending. Companies that hide revenue by off-shoring or they 

move jobs offshore and get protection in the tax code, that is all 
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worth protecting, because of this no revenue rule. And I think it 

is a mistake, frankly, to have those very unfair peculiarities built 

into our tax code. They are the product of special interest lobbying 

over the years, and I don’t think they are entitled to that vigorous 

of a defense. 

But while the no revenue rule applies, they get that vigorous of 

a defense, and of course, they love it. If you are a hedge fund billionaire and you are paying a lower tax rate than a brick mason, 

life is really good for you. You might even actually be willing to 

spend a little money on politics to try to keep it that way. 

So I think we are headed for a bit of a collision here, and it’s 

going to take some rethinking by our colleagues to figure out how 

we are actually going to refill the—to use Senator Carper’s very 

good show and tell there—the empty glass of our Highway Trust 

Fund without just borrowing. That I think requires is to cross the 

revenue threshold. That is something that we should be going 

about, because otherwise we are just spinning in circles here in 

this Committee. 

I think our infrastructure deficit is important. I think we need 

to fill it in. I think the American people deserve first rate infrastructure. And I think frankly, if you took a poll, most Americans 

would say, yes, I will pay to have first rate infrastructure. I want 

my roads to work right. I want my water to be clean. I want to 

have first rate resources, and not to travel to other countries and 

see how much nicer their airports or their roads or their bridges 

are than ours. That is not something that we should be proud of. 

Thank you for your leadership on this, Chairman, and I am sorry 

to put a bit of a cloud in the sky. But I really do think that we 

are going to have to address this no revenue issue if we are going 

to get this solved. 

Senator BOXER. That is exactly the point of this hearing. I just 

feel even more optimistic than you do. That is just the way I am. 

I do feel that, we did do the WRDA bill and I do believe the House 

will pass the WRDA bill. I have no reason to believe that they 

won’t. You are right, it took them a long time. I think Chairman 

Shuster now believes he has the votes to do it. We will see. Leader 

Cantor said he believes that it can pass as well. So I hope that my 

optimism is not misplaced. 

I also feel this Committee has been a bright spot in terms of 

what we have done on transportation before. I also believe, and I 

have spoken to Senator Barrasso about this, Senator Vitter about 

this, Senator Inhofe and others, that there are ways to follow the 

leadership of the States who have worked in a bipartisan way to 

do away with a lot of taxes and they have come up with a new way 

to fund. 

But I share your view. If we fail on this, this is our moment in 

the sun or in the darkness, to be honest. Because if we fail to get 

a way to fund it, there is no program because there is no room in 

the General Fund as we face sequester. So it is, the challenge is 

as stark as you have posed it, Senator Whitehouse. I just believe 

that we can do this. We can set aside some of our deep differences 

and we can do this, because business, labor, the public, wants this. 

You are absolutely right. Seventy-five to 80 percent of them, they 
11 

see what is happening. The Business Roundtable sees what is happening, the Chamber of Commerce sees what is happening. 

So I think that there is political will out there in the community 

for us to work together. That should reflect, that light should reflect on all of us. It certainly has on me and I hope, dare I say 

pray, because I think it is that important, because it is saving 

lives. These bridges go down, there are Republicans and Democrats 

on the bridges. 

Senator Wicker, it is your turn and then Senator Vitter. 

OPENING STATEMENT OF HON. ROGER WICKER, 

U.S. SENATOR FROM THE STATE OF MISSISSIPPI 

Senator WICKER. Thank you, Madam Chair. We have a distinguished panel today and I am eager to hear what they have to say. 

I look out over the audience and I see faces that I saw yesterday 

at a subcommittee hearing of the Commerce Committee on the innovative ways to finance transportation projects. 

Let me weigh in on behalf of the optimism expressed by the 

Chair of this Committee and hope that my distinguished friend 

from Rhode Island will have his spirits lifted by the sort of bipartisanship that we had with the WRDA bill. And indeed, a work of 

art. I am optimistic, having talked to Chairman Shuster in the 

House and others that we can move that in addition to other transportation legislation. 

So thank you, Madam Chair. I am very interested to give our 

panelists an opportunity to talk. 

Senator BOXER. Thank you. 

Senator Vitter, Ranking Member. 

OPENING STATEMENT OF HON. DAVID VITTER, 

U.S. SENATOR FROM THE STATE OF LOUISIANA 

Senator VITTER. Thank you, Madam Chair, and thank you for 

your leadership in calling this important hearing, which we fully 

support on the Republican side. This is very, very important. 

We all know what has been happening over several years to 

erode the sustain ability of the Highway Trust Fund. We are going 

to have some great testimony about that today. I won’t repeat that. 

But I will say the Highway Trust Fund was designed to create 

a sustainable fund paid for by users to benefit those users. Such 

a structure was intended to not only facilitate the unique characteristics of funding transportation infrastructure, but also to provide safeguards for dedicated transportation funding. 

Putting such a structure back on a sustainable course is essential 

and it will restore confidence in the highway program and provide 

the needed certainty of continual investment that can produce the 

long-term reauthorization bills that meet our infrastructure needs. 

Now, since 1993, the trust fund has relied on a set of static funding mechanisms to maintain and grow this Nation’s infrastructure. 

As a result, every year its purchasing power is eroded by rising gas 

prices, increased fuel efficiencies, inflation, rising costs of material, 

et cetera. Some believe that it is somehow some core conservative 

principle to adhere forever to this static, flawed mechanism in perpetuity and that is all there should ever be to meet our infrastructure demands. 
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I don’t understand that, I don’t agree with that, I don’t think 

that is a core conservative principle. 

Equally, I would caution, I don’t think it is fair or reasonable to 

expect middle class families to endure a net tax increase. And I 

don’t agree with that, won’t support that, and I don’t think that is 

doable in terms of this Congress at all. So I think we need to look 

hard in the realm of the possible and put this important financing 

mechanism back on a sustainable course that is sustainable, that 

is a user fee but that isn’t net tax increase to those middle class 

families who can’t afford it, particularly in a horrible economy 

where they endure many other cost and tax increases. 

This hearing is a very important part of the discussion to hopefully get us there. Again, I want to thank the Chair and the witnesses for all of their hard work, and look forward to continuing 

down this path to get to that important goal. 

Senator BOXER. Thank you very much, Senator Vitter. 

I ask unanimous consent to place in the record two very thoughtful statements, one from the American Council of Engineering 

Companies, representing a half-million employees. And then this 

very interesting long and thoughtful piece, written by the Associated General Contractors of America, the AGCA. And I will quote 

briefly, they lament the fact that MAP–21, once it is expired, we 

will be out of funding. And we have to ‘‘avoid draconian cuts,’’ and 

how important it is. 

In their conclusion, they say that the U.S. has been under-investing in our transportation systems far too long. The impact is being 

felt in every State and town. With the interstate system beyond capacity and design life, this under-investment is costing U.S. business and individuals time and money. 

I think this is very important, so we will put those in the record 

and we will get started with you, Dr. Ruane. 

[The referenced information follows:] 
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Senator BOXER. Yes, we are just about finished with opening 

statements, but go ahead. 

OPENING STATEMENT OF HON. JAMES M. INHOFE, 

U.S. SENATOR FROM THE STATE OF OKLAHOMA 

Senator INHOFE. We were a bit busy on the floor this morning, 

I apologize. I really do want to get my opening statement in. When 

we have an area where Senator Boxer and I agree so closely, I 

want to make sure everybody knows it. 

So I do thank you, the panelists, for taking time to be here as 

well. It is no secret I am one of the strongest advocates of strong, 

robust investment in our Nation’s transportation system. I think a 

lot of people don’t understand, a lot of my conservative friends, that 

the conservative position is to have this, that is what we are supposed to be doing. 

As CBO reported earlier this year, absent a new revenue source 

and General Fund transfer to address the $14 billion annual shortfall in the Highway Trust Fund, we are going to need to cut the 

current highway program by almost 80 percent. I am sure out witnesses will agree that at a time when the highways we built more 

than 50 years ago are at the end of their useful life, this kind of 

cut would be catastrophic. 

There is no hiding from the problem. We still need substantial 

infusions of cash just to maintain what we have now. 

Last month I hosted our new Secretary of Transportation, Secretary Foxx, in my State of Oklahoma, and showed him the major 

project being built with I–44 and I–235 in Oklahoma City. I see 

that Gary Ridley is in the audience today, and of course he was 

there. This interchange supports over 200,000 vehicles a day, many 

of which are passing through from other States, and encompass a 

railroad bridge crossing as well as two structurally deficient 

bridges over creek beds. With $100 million of this $231 million 

project complete, there is a very real possibility that we would just 

have to halt construction after this year without the confidence of 

a solvent Federal highway program. This is just one of a couple of 

thousands of projects that the Oklahoma Department of Transportation has identified in its 8-year plan, which includes replacement 

of our structurally deficient bridges. 

Unfortunately, States are already backing away from their longtime regionally significant projects, like I–44, because of the uncertainty in Federal action. It is time to look at all options for the 

General Fund to avoid public disruptions, public bond defaults and 

continuing, as the market is uncertain. I feel very strongly that 

Congress needs to reassure our States and our cities that we are 

prepared to redirect this. 

I am committed to working with Senator Boxer and Senator 

Vitter to find new sustainable revenue sources for the Highway 

Trust Fund, even if that includes devolving the decision to totally 

new Federal highways back to the States to ensure all users pay 

their fair share. I recognize removing the Federal tolling prohibition is controversial. But we can’t handcuff States’ and localities’ 

ability to maintain and modernize their obsolete roads, while 

threatening an 80 percent cut in their budget. 
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So as for the General Fund, we have $14 billion annual shortfall 

in the Highway Trust Fund. We can’t ignore the $200 billion we 

pay farmers not to farm their land or the $24 billion annually on 

vacant Federal properties or the $47 billion spent on improper or 

fraudulent medical costs we pay out of the General Fund. We just 

have to say, there is nothing more significant except for our Nation’s defense than infrastructure. To me, that should be further up 

the line in terms of the General Fund. 

So we have a lot of things to look at. The last thing I would say 

to my conservative friends, the conservative position is to have another highway reauthorization program instead of relying on extensions, which arguably cost about 30 percent more to do without any 

of the planning or the reforms. 

Thank you, Madam Chairman, for allowing me to come in late. 

Senator BOXER. Senator, I think your statement is very important. You have nailed it. This is our moment in this Committee. 

What we do now is going to be critical. Because we are going to 

do a 5- or 6-year bill, and we have to figure out a way to fund it. 

We will work with our friends on the Finance Committee. I am 

going to go see Dave Camp and Max Baucus and talk about this. 

I have been working to figure out a way where we can replace 

that gas tax at the pump with a different type of funding mechanism. I am hopeful we can come together, we need to come together 

for the good of the country. This is a place where, you are right, 

conservatives and liberals and moderates can come together. 

I see we have been joined by Senator Merkley. Do you have an 

opening statement? If so, please proceed. 

OPENING STATEMENT OF HON. JEFF MERKLEY, 

U.S. SENATOR FROM THE STATE OF OREGON 

Senator MERKLEY. Thank you. Very briefly, I want to offer special thanks and a welcome to a fellow Oregonian, Greg DiLoreto. 

Thank you, Greg, for coming. He brings extensive experience as an 

engineer and general manager of Oregon’s second largest water 

utility in Tualton. And your front line experience is very welcome 

in this conversation. 

I have other comments that I will save for later so we can get 

on with the testimony. 

Senator BOXER. Thank you. 

Senator Inhofe, did you see if Gary Ridley is out there? 

Senator INHOFE. Yes. 

Senator BOXER. Your friend and my friend now? 

Senator INHOFE. Yes, our friend Gary Ridley. Hold your hand up. 

Gary Ridley has been a witness at this table more than any other 

one person. He is our Secretary of Transportation in Oklahoma. He 

knows what he is doing. 

Senator BOXER. It is nice to see you here, Mr. Ridley. 

All right, we are going to go to Dr. Ruane, President and CEO, 

American Road and Builders Association. Please proceed. 
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STATEMENT OF T. PETER RUANE, PRESIDENT AND CEO, 

AMERICAN ROAD AND TRANSPORTATION BUILDERS ASSOCIATION 

Mr. RUANE. Good morning, Chairman Boxer, Senator Vitter, 

members of the Committee. 

Thank you for inviting me to participate in this important discussion about the challenges facing the future of the Federal surface 

transportation program. 

For too long, the primary metrics that gauge the impacts of the 

Federal highway program have been each State’s apportionments, 

highway trust fund rate of return, and in times past, earmarks. 

Unfortunately, these methods of evaluation drastically understate 

the value of Federal highway investment. 

The purpose of the Federal highway program is to ensure the 

movement of people and goods among the States. As a result, an 

efficient national system of roads and bridges is the linchpin, the 

linchpin for a strong, growing U.S. economy. While this relationship is both intuitive and irrefutable, it is sometimes hard to quantify. 

What is more absorbable, however, is the contribution Federal 

highway investment makes to each State’s annual road and bridge 

improvements. Federal funds account for roughly 50 percent of 

State roadway and bridge capital outlays. And looking at the very 

specific State situation is particularly illuminating. 

The map that has been displayed here behind me shows that 11 

States rely on Federal highway investment for 70 percent, 70 percent or more of their road and bridge capital improvements. It also 

shows that Federal reimbursement support between 50 and 69 percent of capital outlays for some 20 States. For the remaining 19 

States, Federal highway investment accounts for between 35 and 

49 percent of their highway construction activities. 

These figures are a 10-year average of the relationship between 

Federal highway investments and State road and bridge improvements. Although the amount of reliance on Federal funds for needed road and bridge improvements may vary by State, it is clear, it 

is clear that for the vast majority of States, in fact 61 percent, the 

effectiveness of the highway construction programs is heavily dependent on a strong and reliable Federal partner. This is a very 

good proxy for the importance of the Federal program. 

This makes the fact that the Highway Trust Fund will face, as 

you know, the fifth insolvency crisis in 7 years when MAP–21 expires at the end of 2014, even more disturbing. We should be clear 

that this continuing saga is not the result of runaway spending. In 

fact, Federal highway investment is less today than it was in fiscal 

year 2011. 

We should also be clear that the root cause of this problem is not 

declining Highway Trust Fund revenues. The revenues from the 

Federal gasoline, diesel and truck taxes have returned to their prerecession levels, and the Congressional Budget Office rejects continued moderate growth in trust fund revenues over the next decade. 

The simple fact is the user fees that generate the Highway Trust 

Fund’s revenue stream, as you know, have not been adjusted for 

20 years. As a result, the trust fund has limped along from insol-
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vency crisis to insolvency crisis since 2008. We have all seen the 

CBO’s projections on the devastating investment cuts that would 

be necessary if remedial action is not taken to avert the revenue 

shortfall that again looms at the end of 2014. Alternatively, as Congress continues the recent practice of transferring resources from 

other parts of the budget to the Highway Trust Fund, you will have 

to add some $135 billion to the Federal deficit over the next 10 

years, or shift about $135 billion from other Government activities 

to the trust fund. Neither of these approaches, in our judgment, are 

sound fiscal or economic policy. 

Chairman Boxer, the reforms that you and this Committee 

helped to craft as part of MAP–21, including the substantive refocusing of the entire program, are deeply appreciated. The remaining impediment that faces us right now is to come up with a longterm, sustainable, reliable source of funding for our Nation’s transportation infrastructure. Thank you very much. 

[The prepared statement of Mr. Ruane follows:] 
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Senator BOXER. Thank you very much. 

Now we will hear from Hon. Michael P. Lewis, President, American Association of State Highway and Transportation Officials. We 

welcome you, sir. 

STATEMENT OF HON. MICHAEL P. LEWIS, PRESIDENT, AMERICAN ASSOCIATION OF STATE HIGHWAY AND TRANSPORTATION OFFICIALS 

Mr. LEWIS. Good morning, Chairman Boxer, Ranking Member 

Vitter, Senator Whitehouse, distinguished members of the Committee. 

I am Michael Lewis, Director of the Rhode Island Department of 

Transportation and President of the American Association of State 

Highway and Transportation Officials. Thank you for the opportunity on behalf of AASHTO and the State DOTs to share our 

views on the need for robust Federal investment in surface transportation and the potential impacts of the impending cash shortfall 

in the Highway Trust Fund. 

I have three brief points to make. One, if Congress does not act 

within the next 12 months to either increase the Highway Trust 

Fund revenues or provide additional General Fund support, the 

States will be unable to obligate virtually any new Federal funds 

in fiscal year 2015. Two, if Congress does not act there will be immediate and direct impacts to the States’ economies, with lost jobs 

and permanently shuttered business. And there will be substantial 

additional economic, social and environmental costs associated with 

canceled or delayed projects. And three, if Congress does not act, 

the States, even with their local and private partners, simply cannot fill the infrastructure funding gap. 

Let me elaborate briefly on each of these. First, the Federal Surface Transportation Program is at a crossroads, as we have all said. 

The Highway Trust Fund has provided stable, reliable and substantial highway and transit funding over decades since its inception in 1956. This is no longer the case. According to CBO, spending from the trust fund is estimated to exceed receipts by about 

$15 billion per year on average over the next 10 years, starting in 

fiscal year 2014. 

Furthermore, the trust fund is expected to experience a significant cash shortfall in fiscal year 2015. By our estimate, States will 

not be able to obligate any new Federal highway funds in fiscal 

year 2015, a drop from approximately $40 billion a year to virtually 

zero. 

In addition to allowing no new obligations, it is possible that this 

cash shortage could slow down Federal reimbursements to States 

for costs already incurred and from prior obligations leading to serious cash flow problems for the States. Simply put, failure to act 

to address the current cash shortage would result in a devastating 

scenario that we must do all we can to avoid, which leads to my 

second point. 

What are the impacts, if Congress fails to act? A significant portion of much needed highway and transit projects, projects that underpin economic development and improve the quality of life in 

every community and congressional district will either be delayed 

or canceled outright. Cutbacks on contract lettings will mean 
62 

missed opportunities to pare down the backlog of investment needs, 

causing a negative domino effect on the construction industry employment, exactly when it is starting to rebound after being one of 

the hardest hit segments in the recent recession. 

In my State of Rhode Island, if no additional revenue are found 

for the Highway Trust Fund by October 1st of next year, the immediate and long-lasting impacts will be devastating. As I just mentioned, without additional revenues, States will be unable to obligate new funding in fiscal year 2015. In the worst cases, States like 

Rhode Island and Louisiana could be facing a cliff now, in 2014. 

That is because of many large projects or multi-year projects that 

have committed funding future obligations to address cash flow 

needs. 

In addition, a decade ago, Rhode Island committed to a large 

number of regionally vital transportation projects using innovative 

garvee financing, which pledges future Federal funds for debt service. Without assurance that we can expect at least level funding in 

fiscal year 2015, Rhode Island will be facing the real possibility 

that all fiscal year 2014 funds will need to be pledged to cover existing obligations for both fiscal years 2014 and 2015, thereby 

eliminating new contract awards for 2 full years. 

Not only will this have devastating effects on the local construction industry, but it comes at a time, even with level funding, when 

Rhode Island’s bridges are expected to further deteriorate from 20 

percent structurally deficient today to over 40 percent structurally 

deficient by 2020. 

Third point, a long-term and dependable Federal partner for investing in surface transportation is essential to all States, large 

and small, rural and urban. Even those States that have recently 

increased their revenues and become leaders in infrastructure investment ultimately cannot do it alone. Robust Federal investment 

in surface transportation is needed today and in the future. 

Going back to the founding days of this Nation, Article 1 Section 

B of the Constitution declares that it is a duty of the Federal Government to provide support for national transportation investment 

through the development of post roads, canals, railroads, highways 

and airways. With strong Federal support throughout history, 

transportation investment has an exceptional track record of creating jobs and supporting economic development throughout the 

country. 

In summary, transportation infrastructure investment is critical 

for long-term economic growth, increasing productivity, employment, household income, exports and overall quality of life. The 

outlook for the Federal Highway Trust Fund and Federal surface 

transportation program is unsustainable because the current Federal revenues are simply not enough. 

Congress can address this projected shortfall in one of three 

ways, as was mentioned earlier, by substantially reducing spending 

for surface transportation, not something I think that we support, 

by boosting revenues or some combination of the two. We know 

there is a long list of potential revenue options. We believe that at 

a minimum we need an approach that will allow us to sustain 

MAP–21’s investment levels in real terms. We believe it is possible 

to reach this level without placing an unreasonable financial bur-
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den on most of the traveling public. Given the alternative, potentially devastating economic impacts from virtual elimination of 

Federal surface transportation funding, we believe the only solution is to find and implement a viable set of revenue solutions to 

the Highway Trust Fund shortfall that will work for 2015 and are 

sustainable over the long term. 

Thank you. 

[The prepared statement of Mr. Lewis follows:] 
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Senator BOXER. Thank you so much. 

Next we turn to Janet Kavinoky, a friend of all of us. She is Executive Director of Transportation Infrastructure, Vice President of 

Americans for Transportation Mobility Coalition, United States 

Chamber of Commerce. We welcome you. 

STATEMENT OF JANET KAVINOKY, EXECUTIVE DIRECTOR OF 

TRANSPORTATION AND INFRASTRUCTURE, VICE PRESIDENT OF AMERICANS FOR TRANSPORTATION MOBILITY COALITION, U.S. CHAMBER OF COMMERCE 

Ms. KAVINOKY. Thank you, Chairman Boxer, Ranking Member 

Vitter, Senator Barrasso and members of the Committee, for the 

opportunity to lay out the case for Federal leadership and funding 

for transportation infrastructure. 

Quite simply, roads and bridges, transit systems, railroads, waterways and ports, airports and air traffic control form the framework that makes economic activity possible. A national transportation network that meets current and future demand enables mobility for customers and employees and supports seamless, reliable 

and safe supply chains will boost gross domestic product. A system 

that is disjointed, unreliable, unsafe and inadequate for future economic and population growth will drag down the economy. 

When transportation networks support predictable logistics, 

there is a positive and strong correlation with job-creating foreign 

direct investment. But as the United States transportation infrastructure becomes less competitive with the rest of the world, business will look to invest and employ people in other countries with 

more efficient physical platforms. 

Market outside their borders represent more than 80 percent of 

the world’s purchasing power, 92 percent of its economic growth 

and 95 percent of its consumers. More than 38 million American 

jobs depend on trade. One in three manufacturing jobs depends on 

exports, and one in three acres on American farms is planted for 

hungry consumers overseas. The transportation system can either 

build and strengthen or undermine efforts to build these bridges to 

promising markets abroad and secure a brighter future where 

international commerce generates economic growth and job creation at home. 

The good news is that MAP–21 reflects a belief that the Federal 

Government plays a role in furthering national interests, such as 

U.S. global competitiveness, international trade and interstate commerce. In addition, the work of this Committee provided MAP–21 

with critical reforms such as ensuring accountability for spending 

money wisely, improving planning and prioritizing, delivering 

projects faster and stretching user fees farther. 

Now we must focus on the money and the future of the Federal 

Highway Trust Fund, avoiding the impending crisis in 2015, establishing a structurally sound revenue approach for the period of 

2015 to 2024, and preparing for 2025 and beyond. 

There are three different paths to choose from. The first is to cut 

back programs to fit available resources. According to the Congressional Budget Office in July, this means zeroing out new Federal 

obligations for highways, transit and safety in 2015, and substantial reductions from current services levels in subsequent years. 
85 

In the last several years, Congress has repeatedly voted to reject 

dramatic cuts in highway and transit programs. We ask you to do 

so again, because this path is unacceptable. 

The second is to continue General Fund transfers. We are concerned that this approach may not support economic growth competitiveness in jobs over the long term, because the user fees are 

the key to contract authority in multi-year Federal funding commitments. 

The third is to increase existing user fees and/or find new userrelated revenue sources, so that we can address the well-documented needs for today and tomorrow. 

In the years through 2024, there are multiple revenue options 

that could work alone or in combination. But we continue to believe 

that the simplest, most straightforward and effective way to generate enough revenue for Federal transportation programs is 

through increasing Federal gasoline and diesel taxes. 

In addition, we must take full advantage of private sector capital, 

innovation, problem-solving and collaboration. However, public-private partnerships and other forms of private sector involvement 

still require revenues and do not resolve the Highway Trust Fund 

solvency issue. 

Finally, now is the time to initiate aggressive research and development in anticipation of 2025, when CAFE standards increase and 

revenues from excise taxes on fuel are likely to require substantial 

replacement as a primary source of funding. 

There is no shortage of research that looks to the questions of 

who pays how much and by what mechanism. One thing is for certain. There is no free lunch, there is no creative option and there 

is no avoiding the revenue discussion. 

Yes, this Nation is faced with difficult fiscal circumstances. However, without proper investment and attention to infrastructure, 

our economic stability, job growth, global competitiveness and quality of life are all at risk. The Federal role is at its simplest: to make 

sure that the Nation’s transportation system functions well as a 

whole to support the economy. Let’s seize the initiative now to set 

a new path that will ensure adequate funding to support that role 

for years to come. 

Thank you. 

[The prepared statement of Ms. Kavinoky follows:] 
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Senator BOXER. Thank you very much. 

And we are going to move ahead with Mr. Gregory Cohen. We 

are very happy to see him, he is President and CEO of American 

Highway Users Alliance. 

STATEMENT OF GREGORY M. COHEN, P.E., PRESIDENT AND 

CEO, AMERICAN HIGHWAY USERS ALLIANCE 

Mr. COHEN. Thank you, Madam Chairman, Ranking Member 

Vitter and members of the Committee. I appreciate this opportunity to present the views of the Highway Users Alliance. 

I want to emphasize up front that we are facing an epic crisis 

with the insolvency of the Highway Trust Fund, and that a transportation fiscal cliff is approaching rapidly. 

As America fails to keep up with investment needs, we are sliding on the economic ladder. For decades, American roads were No. 

1 in the world, indisputably. According to the World Economic 

Forum, today we are No. 18. This is no longer the exceptional system that we inherited from the greatest generation. 

The Federal highway program benefits every State, rural and 

urban; serves every citizen, whether they drive or not. My statement discusses the needs in detail, but I am going to select four 

areas to highlight: First is congestion. We talk about $100 billion or $124 billion as 

the cost of congestion. That is just the cost of fuel and time lost. 

It scratches the surface. When you look at qualitative issues, the 

safety impacts of congestion, logistics, unreliability, jobs access, access to employees, stress and health effects of congestion, EMS 

slowing their responses, it is several times, probably, what we get 

from the Texas Transportation Institute. 

Let me talk about bridges. Yesterday’s hearing that talked about 

the bridge collapses in Washington and Minnesota, tragedies. But 

our bridges, 25 percent, as the Chairman mentioned, are now deficient. That is the equivalent of 5,000 miles of bridges. You could 

drive on I–10 all the way from the east coast to the west coast and 

back. That is the mileage of bridges that need work. 

Safety. One thing we can really guarantee is that if this program 

can’t fund new projects in 2015, that 33,000 death toll that we are 

facing is going to go up. We know our safety projects have a benefit 

to cost on average of $42 for every $1 invested. It is just crazy not 

to put in guardrails where they are needed. And that is the kind 

of thing that is going to happen. 

Commerce, particularly for road needs. Four percent of the road 

network is our national highway system, that carries 40 percent of 

the traffic, 85 percent of the truck traffic and 95 percent of the 

tourist traffic. If nothing else is a Federal issue, these interstate 

commerce routes certainly are. 

Let me turn to funding. As the voice of highway users, I will 

admit that we haven’t always jumped at the idea of raising user 

fees. There are two main reasons we strongly support it now: First, 

as I mentioned, the situation is critical, and the very existence of 

the Highway Trust Fund is at stake. Second, the reforms in MAP– 

21 we really believe went a long way toward restoring public trust 

in Federal transportation programs and trust in the Highway Trust 

Fund. 
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At this point, the Committee is focused on preventing a catastrophic cut, but there should also be some consideration to meeting actual needs. An annualized growth rate of about 1 percent 

above inflation is basically what you need just to keep the situation 

from getting worse. 

Of course, it would be better to provide enough funding to actually improve the conditions. Here are three principles on funding 

we think are important to consider: 

No. 1, the mix of funding solutions must be focused on keeping 

the Highway Trust Fund solvent and robust. Any supplements that 

are beyond the Highway Trust Fund are good, but we need to focus 

on the trust fund itself. 

No. 2, we need to keep the tax broad, where everyone pays and 

everyone benefits. And No. 3, let’s solve this problem once and for 

all. The funding solution has to be sustainable so that future reauthorization bills can be enacted with guaranteed funding levels 

that are a minimum of 5 to 6 years. 

Keeping these principles in mind, let’s get specific. No. 1, we 

need to look at raising the fuel tax once or in chunks to make up 

for what has been lost to inflation since 1993. No. 2, we need to 

look at indexing those fuel taxes to one or more variables to maintain or increase the purchasing power over time. 

Three, we need to look at what Maryland and Virginia have 

done, consider taxing fuel as a percent of wholesale fuel costs at 

the terminal rack and provide the additional protections to ensure 

stability when prices are volatile. Four, and this is really the last, 

I hear you, Madam Chairman, but this is sort of a last thing, if we 

can’t do everything we need to do, we might need to supplement 

certain or all highway programs with either a one-time or small 

General Fund contribution. After all, everyone, whether they drive 

or not, benefits from good roads. 

In conclusion, MAP–21 was a great example of doing the right 

thing for the American people. Still, we can do better. Fiscal sustainability can be achieved, reforms can further be strengthened 

where appropriate. And it is in the national interest that we solve 

this problem. The benefits of the Federal highway program reach 

every corner of the country, urban and rural, all kinds of people 

and businesses, farmers, office workers, truckers and tourists. 

Thank you again for the opportunity to appear today and for 

your consideration of our views. 

[The prepared statement of Mr. Cohen follows:] 
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Senator BOXER. Thank you. What was your No. 1 again, of your 

list? You said there were four things, but I missed No. 1. 

Mr. COHEN. Raise the fuel tax, once or in chunks to make up for 

inflation lost since 1993. 

Senator BOXER. Thank you. 

And we now are going to hear from our friend from the National 

Construction Alliance, Ray Poupore. 

STATEMENT OF RAY POUPORE, EXECUTIVE VICE PRESIDENT, 

NATIONAL CONSTRUCTION ALLIANCE 

Mr. POUPORE. Thank you, Chairman Boxer, Ranking Member 

Vitter and distinguished members of the Environment and Public 

Works Committee. 

The NCA2 that I represent is a partnership between four of the 

Nation’s largest construction unions—the International Union of 

Operating Engineers, the United Brotherhood of Carpenters and 

Joiners of America, the Laborers International Union of North 

America, and the International Association of Bridge, Structural, 

Ornamental and Reinforcing Iron Workers. These four unions of 

the alliance represent more than 1.5 million workers, many of 

whom build our Nation’s infrastructure. 

I myself am a member of the Operating Engineers, Local 324 

Michigan, where I spent a lot of time working on transportation 

projects as a young man, as a crane operator. These four large 

basic trade unions that I represent build some of the Nation’s largest transportation infrastructure projects. We just are finishing up 

the first phase of the Dulles Light Rail project. We built the Wilson 

Bridge a few years ago, and we just finished up the hot lanes in 

this capital area. 

If you move a little bit toward the midwest, right now we are just 

starting the Ohio River bridges in Kentucky and Indiana. We recently finished the Hoover Dam bypass bridge in Nevada and Arizona. And a couple years ago, 4 or 5 years ago, we finished building 

the Tacoma Narrows Bridge. We are currently underway with the 

Alaskan Way Viaduct replacement in the Pacific Northwest, which 

is in the State of Washington. 

Bottom line is, Madam Chairman, we build the Nation’s infrastructure. This is the most important jobs bill for construction 

workers that we have. And the reason we are here today is because 

of the crisis to the Highway Trust Fund. We thank you for bringing 

everybody’s attention to it, and hopefully we can do something with 

the time. We have 1 year to get this thing fixed. 

We thank you for the great work you did on MAP–21. But I 

would like to turn you and hopefully, I have extra copies if you 

don’t of this graph that I included in my submission of testimony. 

It shows the amount of unemployment we have in construction. 

This is not a graph of my 401(k), it is worse. It is a graph of, we 

had in construction 7,490,000 jobs in 2008; we are down to 

5,798,000. We have lost almost 1.7 million jobs since 2008, Madam 

Chairman. 

I testified in front of your Committee back in January 2011. I 

mentioned what these numbers really mean. And I tried to paint 

a visual and I used a stadium analogy, the SuperBowl holds 

100,000 people. Well, Madam Chairman, we could still fill 17 
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SuperBowl stadiums with the amount of people we have out of 

work. And as you know, these are friends of yours and friends of 

mine, and everybody on the panel here. It is important that we get 

our neighbors, your constituents, back to work. 

Simply put, this battered industry cannot sustain the type of 

blow that would be inflicted if Congress fails to enact a multi-year 

fully funded surface transportation bill when MAP–21 sunsets. 

Congress cannot allow the Highway Trust Fund to deliberately run 

off the cliff like Thelma and Louise. The effect on the employment 

in the construction industry would be catastrophic. 

So NCA2 offers a few ideas and suggestions on how we might be 

able to fix the hole in the Highway Trust Fund. We believe Congress should allow States more flexibility in opening up new transportation revenue streams, including a lifting on the ban on tolling 

for new capacity. In addition, programs such as the vehicle miles 

traveled tax, VMT, and other pilot projects, should be supported 

over the duration of the next authorization to explore the viability 

of these revenue sources. 

We believe that bonding some part of the dedicated revenue 

stream for the Highway Trust Fund may be a useful way to sustain 

the program. And we believe that in order to achieve the needed 

level of infrastructure investment, a gas tax increase is necessary 

at an absolute minimum. As a long-term strategy, the gas tax must 

be indexed as part of the solution. 

The Nation’s roads and bridges are crumbling before our eyes. 

Millions of American construction workers have left the industry 

for lack of opportunity. We cannot afford to lose more construction 

jobs. Yet without a solution to the problems in the Highway Trust 

Fund, that is precisely what will happen. 

The passage of a robust, multi-year transportation bill will stop 

the bleeding and give the industry a much-needed shot in the arm. 

You have the power to make this happen. But it will require 

leadership. Saying no to every revenue option will not get us there. 

We need to say yes to investing in this country, raising new revenue. This Committee demonstrated that type of leadership in the 

last Congress. We are eager to continue to work with you in this 

113th Congress to remedy an even bigger problem, and indeed, 

save the program. 

Thank you, Chairman Boxer, Ranking Member Vitter, distinguished members of the Environment and Public Works Committee, for the opportunity to join you this morning, and for all the 

work that you do that puts construction workers to work and especially the ones that I represent, I say thank you. 

[The prepared statement of Mr. Poupore follows:] 
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Senator BOXER. Thank you so very much. 

And our last speaker is Mr. Gregory DiLoreto, President of the 

American Society of Civil Engineers. We just received a really indepth letter from them, but please proceed. 

STATEMENT OF GREGORY DiLORETO, P.E., PRESIDENT, 

AMERICAN SOCIETY OF CIVIL ENGINEERS 

Mr. DILORETO. Thank you. Good morning, Chairman Boxer, 

Ranking Member Vitter, Senator Merkley, members of the Committee. 

It is an honor for me to appear before you today to discuss the 

status of our Nation’s infrastructure. As noted, my name is Greg 

DiLoreto, and I am the President of the American Society of Civil 

Engineers. 

As you noted, Chairman Boxer, our Nation’s infrastructure is in 

trouble due to the under-investment at all levels of government. As 

a result, ASCE believes that all options must be on the table as 

we consider long-term funding solutions to our Nation’s surface 

transportation system. 

However, as we consider funding solutions, the question arises, 

how have we gotten here and what can we do to fix it? The story 

of our transportation infrastructure in this country is a story of our 

American system working exactly as it should, with government 

meeting the needs of the free market. 

So why does the system not work? I am not the only person here 

who has told you that our Nation’s infrastructure is hurting. By 

looking to the past, I have to ask, now that we live in a global economy, why is our infrastructure not keeping pace with our growing 

demands? 

I recently spent time traveling in Asia on behalf of ASCE. I met 

with transportation ministers and public works officials from several countries. These countries are spending billions in transportation as they race to be competitive in a global market. As has 

been noted this past year, ASCE released the 2013 Report Card for 

America’s Infrastructure, which gave our country’s infrastructure a 

D∂. A committee of civil engineers, experts in the field of infrastructure, used their expertise to analyze publicly available information to assess our progress as a Nation over the last 4 years. 

The good news is that we went from a D in 2009 to a D∂ in 

2013. However, when a D∂ is good news, it is time for self-assessment. 

So what does a D∂ mean? Does it mean we are one stiff wind 

from total collapse? No. But it does mean we are not meeting our 

country’s growing needs. We are not creating reliable funding 

mechanisms to assure maintenance of our transportation systems. 

Now, notice, I am not even talking about all the new infrastructure we are going to need to meet new demands. No, I am talking 

about the maintenance and condition of the entire infrastructure 

system that made this country great in the last century. 

Deteriorating and aging infrastructure affects our families, our 

local communities, our entire country. As was noted, for example, 

more than 40 percent of our urban highways are congested. That 

means Americans waste almost 2 billion gallons of gas per year 

and that folks spent more than $7 billion on gas idling while in 
124 

traffic. The point is that indirectly, we are spending this money 

and we are not getting anything for it. 

The Highway Trust Fund is essential for maintaining and improving our infrastructure system. Poor infrastructure hurts our 

quality of life, but it also hurts our economy. We also know that 

investing in the building and maintaining of our infrastructure creates jobs for every American, both directly and indirectly. Not just 

jobs for construction crews and manufacturers or even engineers, 

but jobs for everyone. 

In fact, at ASCE, we have conducted a series of economic studies 

and found that deteriorating surface transportation infrastructure 

will cost the American economy nearly 900,000 jobs in the year 

2020 alone. However, if we can increase investments for surface 

transportation, we can reverse this trend and instead create millions of jobs. 

Since the creation of the interstate highway system in 1956, the 

Highway Trust Fund has been supported by revenue collected from 

road users. The system has served America well in the past, allowing States to plan, construct and improve our surface transportation network. Now with the trust fund going bankrupt, the States 

alone cannot solve our national transportation infrastructure 

issues. 

To prevent bankruptcy of the Highway Trust Fund in 2015, Federal surface transportation investment is estimated to have to be 

cut by 92 percent. That is an unacceptable path. What would that 

92 percent cut mean for your State? State transportation projects 

would be delayed. Employees would be furloughed. Families would 

see their infrastructures fall into disrepair, congestion would worsen while businesses would not be able to operate efficiently, thereby increasing costs to American consumers. 

We need your leadership to achieve a long-term revenue solution 

for the Highway Trust Fund, which will help grow the economy, 

create jobs and improve the quality of life for all Americans. We 

need bipartisan, long-term solutions to ensure the Highway Trust 

Fund can support the transportation infrastructure improvements 

America needs. 

ASCE wants to thank you, Chairman Boxer, and members of the 

Committee, for your continued commitment to our Nation’s infrastructure and for the opportunity to visit with you today. We look 

forward to working with the Committee as it develops sustainable 

revenue solutions for modernizing our infrastructure. Thank you. 

[The prepared statement of Mr. DiLoreto follows:] 
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Senator BOXER. I just want to thank this entire panel. Sometimes we have great splits and divides in a panel because the 

Democrats pick our witnesses and the Republicans pick their witnesses, and we are all in contention. This has been a very important bipartisan statement of support for making sure that we invigorate the Highway Trust Fund and we have to do it in a smart 

way. 

So I want to start, I have so many questions, but I will stay to 

my 5 minutes. Mr. Poupore, thank you so much. First of all, this 

chart, it is not a happy read. And we are moving toward 2 million 

workers out. 

What I wanted to ask you is, does this not also reflect on the status of a lot of our small business people? Because obviously, these 

workers work for the contractors. So if you could comment on not 

only has it been such a disturbing trend for the workers, but the 

businesses who employ them as well. 

Mr. POUPORE. You are absolutely right, Madam Chairman. The 

way it works with infrastructure, if we can get the funding out 

there, then the contractors have an opportunity to bid the projects. 

What that reflects with 2 million, almost 2 million people out of 

work, is a lot of contractors not having work. And I am sure the 

AGCE and Pete’s group will confirm that, that it has been a real 

struggle. 

I would also like to put a point that I look at these million and 

a half, 1.7 million workers that are out of work, they are small 

family businesses. They support their family; if they don’t have a 

job, they can’t get anything done with that family and it is a burden on the rest of us. So anything that we can do to kind of get 

things moving in the right direction, rebuild America and put 

America to work. Again, we appreciate your support. 

Senator BOXER. Ms. Kavinoky and Dr. Ruane, please comment 

on the impact on our business community. Because when we hear 

these job losses, they are enormous. I don’t know how many of 

these businesses have been impacted, if you could address that. 

Mr. RUANE. Yes, Madam Chairman. The exact number, according 

to Census Bureau reports, in the last 5 years we have lost about 

740 business in this space. Our employment is down by over 

50,000, this is transportation construction I am talking about, not 

construction generically. And that alone is a measure of, some of 

that is consolidation and mergers. But a lot of this is folks going 

out of business. Because I think what is not understood is, everyone at this table and in this room, I am sure, is very grateful for 

the leadership of the Congress and the Administration on the stimulus program. The fact today is the States, because of their own 

challenges, many of them are spending much less than what they 

were spending prior to 2008. In fact, the majority are not. 

So that is what is not understood by the general public. It is not 

a situation where it is a robust, we are still at a 9 percent unemployment rate in construction, down from 20, which is a great Improvement, but it is still a very serious problem. 

Senator BOXER. So it is fair to say we are looking at hundreds 

of businesses? 

Mr. RUANE. Yes, absolutely. 

Senator BOXER. Just in this, as you call it, this space. 
136 

Mr. RUANE. Yes. 

Senator BOXER. Janet, do you have anything to add to that? 

Ms. KAVINOKY. I would take a step further to the suppliers into 

the construction industry. You realize that without a long-term 

view of where transportation funding is going in this country it ripples through that pipeline as well. So I think it is safe to say, and 

I would be happy to work with ARTB and others to look more 

closely at this, that there is that direct impact on the individuals, 

on the businesses directly in the construction industry, but then extending out through the economy as well. 

Senator BOXER. I wanted to talk to Mr. Lewis for a second. Could 

you elaborate on what would happen to States like Rhode Island 

that have prior financing obligations that must be met? How would 

they fare under a 100 percent cut to Federal transportation funding in the year 2015? Because that is where we are looking. We 

need to be very clear. This is a crisis, and we pushed that crisis 

down the road with a very good reform bill. I am so proud of members on both sides, by the way. 

And if I could just say, as a result of our work on the reform side, 

I say to my ranking member and Senator Inhofe, and of course my 

Democrats, we really don’t have that much work to do in terms of 

more reforms. We just want to make sure these reforms are working. Our work can all be focused on the financing, and doing it in 

a way that we can all support. But tell us what it would be like 

if we fail. Because frankly, I don’t want to mince words here. What 

would it be like if we fail and there is no Federal contribution? 

Mr. LEWIS. That is a very critical question, and I don’t think 

there is a lot of awareness of this out there. In Rhode Island we 

are at opposite ends of the spectrum from California in terms of 

scale and in geography. In Rhode Island, because of our past obligations and because of using garvee financing to do big regional 

projects over the past decade—long-term multi-year projects that 

require multi-years of obligations—with our existing commitments 

if we can’t rely on 2015 level funding, we will be basically in a position of not being able to obligate any new funds even next month 

for fiscal year 2014. This is a huge impact to a small State like 

Rhode Island. I believe Louisiana and some other smaller and rural 

States may be in the same situation we are in. 

But even a State like California, which has a huge program, 

without obligations in 2015, is facing planned construction of 250 

State-sponsored rehabilitation projects costing $2 billion that will 

be put at risk. So it is not just the small States that are dependent 

upon Federal funding for a large portion of our program. It is the 

big States too. 

Senator BOXER. And you are saying it is already being felt? 

Mr. LEWIS. It is being felt, and I don’t think that the immediacy 

of the impacts are truly understood because we have all been talking about the cliff in fiscal year 2015. We are at the edge now. 

Senator BOXER. That is why we are having this hearing. And I 

am grateful to colleagues on both sides for their interest. 

Senator Inhofe said he got permission from you, Senator 

Whitehouse, to go before you. 

Senator WHITEHOUSE. Absolutely. 
137 

Senator BOXER. That is very kind of you. So we will go to Senator Vitter, Inhofe, Whitehouse, then we will go to Senators Fischer 

and Boozman. 

Senator VITTER. Thank you, Madam Chair, and thank you again, 

witnesses. 

I guess this is to any or all of you. There is a pretty broad consensus that the gas tax is really not sustainable, middle and longterm. And yet there is still a lot of focus on the gas tax for this 

next bill. Do any of you have a concern that if we do a pretty big 

heavy lift in this bill and still focus on the gas tax, we are still not 

getting to a fully sustainable system? 

Mr. COHEN. Senator Vitter, I appreciate that question. I think 

that there are two things going on. One is that the current gas tax, 

the flat gas tax that has existed since 1993, is not sustainable. But 

I do think there is some hype out there that gas taxes in general 

are not sustainable, or that the whole country is not going to be 

using gasoline or diesel in the near or long-term future or medium 

term future. 

That is really just not correct. Set at the right rate and adjusted 

for the right variables, and we know that the fleet is going to become more efficient, you have to adjust for that. If you adjust for 

the right things, then I think the gas tax and the diesel tax have 

a great ability to continue to serve as a proxy for a good user fee 

for all. 

There are of course some vehicles that don’t pay any fuel tax at 

all, battery electric, and the Chairman has talked about this in the 

past. At some point they are going to have to pay, once they are 

more prevalent in the marketplace. But for the vast majority, I 

think the gasoline tax set at the right rates, adjusted for the right 

variables, will work. 

Senator VITTER. Does anybody else have any reactions on that 

point? 

Mr. RUANE. I would say, Senator Vitter, that the gas tax remains 

as the most viable, efficient, reliable source of funding for the surface transportation program across the board. Nonetheless, I think 

what is not understood is what makes up the problem. The drop 

in revenue to the trust fund in recent years primarily came from 

the trucking industry’s diesel fuel purchases going down and their 

purchases of equipment. The actual drop in gas tax revenues from 

the average user was about 1 percent. And that is all coming back 

as the revenue from the trucking-related fees as well. 

So our position has always been that needs to be sustained, and 

many people here, everyone, I think there is unanimity about the 

idea of indexing that. The real issue is we are not doing what 

needs to be done with our existing infrastructure, let alone the 

need for new infrastructure. And the purchasing power that has 

been lost, several people mentioned that, I would like to underscore 

that again, is that we have lost a third, and over the next 5 years 

it is going to get up to some 50 percent of the purchasing power 

since 1993, the last time this was dealt with. 

Then again, the reason I have used that chart of the States, well, 

some pundits and cynics like to joke about this as a fact-free zone 

in this city. Those facts are undeniable. I don’t think people get lost 

in the shuffle sometimes, the dependence of the States for capital 
138 

improvements, real world construction and improvements, is heavily reliant, over 50 percent for all States. And some, you saw the 

yellow States, my God, it is way, way up there. 

So the removal of any kind of funding source, a gas tax or whatever, or diminishment of that, is going to have a devastating impact across this country. 

Senator VITTER. Let me ask a related question to my first. There 

are some users now who aren’t paying through that core mechanism. That is at the margin, but that is going to grow over time. 

If you all have specific ideas about how to address those alternative 

vehicle users? 

Mr. LEWIS. If I could, Senator, I think we are referring to alternative fuels, whether it is natural gas or electric vehicles. I think 

there is a way to factor in on a stepped basis how they will contribute on a user fee. I think that it is a relatively simple approach. 

Senator VITTER. Describe how that might be done. 

Mr. LEWIS. There may be vehicle miles traveled as a way of addressing use by an electric vehicle that doesn’t purchase any fuel. 

There could be a different rate for a natural gas vehicle. I think 

those are a relatively small percentage of system users now, but I 

think there are pilot programs that could be targeted specifically 

at those vehicles. 

Senator VITTER. A final question, I am running out of time. Mr. 

Poupore, in your submitted statement, you supported linking revenue from domestic energy production with Highway Trust Fund 

infrastructure investment. Would you also support that, I think 

you supported that for present or past. Would you support that for 

future or expanded energy production if we could achieve some consensus on some expansion? 

Mr. POUPORE. The organizations I represent have been on record 

supporting that type of revenue. We want to find solutions to fixing 

the revenue need for mass transit and the highways. So the answer 

is yes. 

Senator VITTER. Thank you. Thank you all very much. 

Senator BOXER. We are going to move to Senator Inhofe by the 

graciousness of Senator Whitehouse, then we will go to Senator 

Whitehouse, then we will go to Senator Boozman, then we will go 

to Senator Carper. 

Senator INHOFE. Thank you, Madam Chairman. I appreciate 

Senator Whitehouse letting me go in front of him. We have a conflict I really can’t get out of. But I have a message I have to deliver 

here, and I will need your help in doing this. 

One of the frustrating things that I went through a year ago 

when we did our small 27-month reauthorization was not the 

Democrats, but the Republicans. And I can say this, others can’t 

say it, because I have been ranked as the most conservative Republican, more than anybody else has. Yet we had a lot of born-again 

conservative Republicans using this issue down on the floor to 

sound like this is a huge liberal versus conservative issue. 

And it wasn’t. Because very clearly, as I mentioned, Gary Ridley 

back there, and he will nod with approval, it is hard to say just 

how much more it costs if we rely on extensions. We don’t get any 

of the reforms. 
139 

Now, I was in shock, and I want to applaud the Chairman, there 

are a lot of things that Senator Boxer went along with that I know 

she personally disagreed with. But we got the reforms in there, and 

there are no reforms when you operate on extensions. 

Second, the fact that you can’t plan ahead, and we have been 

using, without being challenged, about 30 percent more than it 

costs. It costs about 30 percent more to do extensions versus a reauthorization. 

That is what the issue is right now. Because the alternative to 

our passing something that we all up here want to pass is it is 

going to go back to extensions. 

Now, when I listened to a lot of the Republicans on the floor, I 

didn’t respond to them because I knew we had the votes to pass 

it. But I went right over, I walked right out the door and went over 

to the House side. I got the T&I Committee, Transportation and Infrastructure Committee, all the Republicans, 36 of them, in one 

room and sat down with them and explained why the conservative 

position, and thank goodness for the ACU, they came out, and I 

know Mr. Lewis, you mentioned the Constitution, actually Article 

1, Section 8 of the Constitution says that is what we are supposed 

to be doing here. And what the conservative position was. 

As a result of that, I am sure that had something to do with it, 

because I talked to them before and after, every single one of the 

36 Republicans voted for it. Now, what does that tell you? It tells 

you that when you really sit down and talk to them, this is something that is not liberal, conservative, Democrat or Republican. 

And I say that with one other part, and that is where you come 

in. If we are able to go to some of these States where we have 

someone who is opposing this, because of spending, transportation, 

all we have to do is go there and get the people, get the Gary 

Ridleys in each one of these States and talk about how this is the 

conservative position. I have yet to hear one Republican in one of 

these States not change his or her mind and say yes, transportation is important. 

But this has to be done at the grass roots. I know, Peter, you are 

tired of hearing me say this. But that is where you folks come in, 

that we are going to have to be able to go back to the States and 

let them lean on their own people. And I think we can get something passed. We are going to work hard to come up with a robust 

bill, and this is something that should be rallied around by both 

conservatives and liberals. 

So the only question I have, would any one of you want to validate what I just said in terms about, of the extensions versus a reauthorization bill? Anyone want to comment? 

Mr. LEWIS. Senator, I absolutely agree with that. Not knowing 

some years ahead the funding you can plan for, we can’t plan, we 

can’t engineer, because we don’t know what level of funding we are 

going to have in order to implement the construction. Any dollar 

spent today on the planning or designing of projects that we don’t 

know we can build is a wasted dollar. It is just money that we are 

throwing away. 

In Rhode Island we have an interchange just west of Providence, 

which is critical to our capitol city. It is a structurally deficient 

structure, and it is close to a half a billion dollar project. I can’t 
140 

even begin to invest in the planning, because I have no idea where 

that construction money is going to come from. 

Senator INHOFE. All right. Since I have to go now, I would like 

to have the rest respond to that for the record. Let me thank Senator Whitehouse and the Chairman. 

Senator BOXER. Senator Inhofe, what you said was really music 

to my ears. Because this is a non-ideological issue. If we can’t move 

people and goods, our economy isn’t going to keep up with the rest 

of the world. I think in the Chamber of Commerce explanation they 

said that Canada is moving the goods so much more efficiently 

than we are, we have work to do. And I look forward to continuing 

our work, along with the ranking member and Senator Barrasso. 

And how we will hear from Senator Whitehouse, followed by Senator Carper, if we don’t have a Republican present at the time. 

Senator WHITEHOUSE. Thank you, Chairman. 

I wanted to follow up on the question that Senator Vitter raised 

about the gas tax. Correct me if I am wrong, but it strikes me that 

our vehicles are going to become increasingly more fuel-efficient. So 

for the same amount of miles that they roll over our highways, the 

gas tax will generate less and less and less revenue. That is the 

direction of technology, it only makes sense. I think we can foresee 

considerable growth in both the electric and the hybrid vehicle 

markets for a whole variety of reasons. 

So given that, I share his worry that if we go back to just a gas 

tax, we are putting ourselves on a glide slope that ends back in a 

bad place all over again. I know Mike mentioned the possibilities 

of finding other ways to generate revenue for use of the highways 

from different types of vehicles that burn less gas or no gas or 

whatever. 

But I am wondering, we are going to have to be looking at this 

pretty quickly. Is there anything out there that is pretty well developed about how one might go about doing this? Are we going to 

have to do a lot of original research in this Committee to try to sort 

these questions out? So two questions, and I will start with Greg 

Cohen, because I see his head up, and I will go to Ray Poupore 

after that, because he was nodding energetically. Is this a real 

problem about the declining and vanishing gas tax? And if so, what 

are the best sources to go to to look at alternatives that have been 

pretty well developed and had their consequences and their economics thought through? Mr. Cohen. 

Mr. COHEN. Thank you for the question. We have in the tax code 

a number of different equivalents to the gasoline tax for E85, CNG, 

LNG, ethanol. Basically almost any form of fuel can be taxed an 

equivalent energy rate. 

The one exception I think at this point, and maybe there is a way 

to do it, is the battery electric vehicle. And some States have experimented with ideas, and I think we should continue to look at 

that. 

Senator WHITEHOUSE. Let’s just stick with gas. There is the tax. 

Even if you don’t move anything on it, as whatever the fuel is, as 

cars become more efficient, which they are naturally going to do, 

the amount of whatever fuel it is that they consume is going to be 

reduced, and that means that the revenues would fall. I don’t see 
141 

our maintenance costs falling in line with that. So you end up with 

the two lines crossing again and there you are at the point of crisis. 

Mr. COHEN. AASHTO I believe has done a chart that shows if 

we get to 54 miles per gallon, at that point I think we lose about 

22 percent in revenue from the gas tax. So it is a valid concern. 

That is why what I am suggesting is that we look at all the variables to index to, so that we don’t lose purchasing power. 

Senator WHITEHOUSE. So the answer is, using the existing methods, but index them up? 

Mr. COHEN. Right, index to all of them, yes. 

Senator WHITEHOUSE. Mr. Poupore, then Mr. DiLoreto. 

Mr. POUPORE. Senator Whitehouse, I really don’t have a good answer for you except that no matter how much more fuel efficient 

the cars get, they still wear out the roads. That is what we have 

to look for, a revenue source to maintain and fix and expand. We 

have some good suggestions out there, I believe, and I know Senator Boxer has been supportive of the vehicle miles traveled. I believe Oregon is using that, so I will turn it over to Greg. 

Senator WHITEHOUSE. OK, Mr. DiLoreto. I have 1 minute left, so 

you will wrap up for us. 

Mr. DILORETO. Chairman Boxer, Senator Whitehouse, I am from 

the State of Oregon . As you may know, several years ago the State 

did do a vehicle miles traveled research project on whether or not 

we could generate revenue from vehicle miles traveled as opposed 

to a gas tax. We showed actually we could. 

Now, part of the issue is reconfiguring the cars so you can do 

that. So it doesn’t happen overnight. It is not a device that is going 

to happen overnight. 

Senator WHITEHOUSE. A GPS-type technology? 

Mr. DILORETO. It is a module under the car, when you go to the 

gas station, it reads off the number of miles. It doesn’t read where 

you went, it doesn’t know that you went to the store 10 times. It 

just knows how many miles you traveled and then it gets added on 

to the price you pay, so it gets collected. 

This last legislative session in the State of Oregon they did authorize the State to expand it. It has an opt-out program, where 

you would pay a higher flat fee, and people don’t want to do that. 

It is certainly a technology that can be added to everything else 

that we have. I think ASCE’s position is there are lots of solutions, 

we probably shouldn’t settle on just one, but we ought to put together a whole bunch of them, so when one does have a problem, 

the other one steps up and fills the void. 

If you are interested in more information, Oregon can certainly 

provide that to you. 

Senator WHITEHOUSE. Thank you. Thank you, Chairman. 

Senator BOXER. Thank you. Senator Fischer. 

Senator FISCHER. Thank you, Chairman Boxer. Mr. DiLoreto, you 

just said you were from Oregon and you have the VMT there. 

When I was a State legislator, I met a representative in your legislature, Bruce Starr, who worked on the VMT. How many vehicles 

did you have involved in that, do you know? 

Mr. DILORETO. No. 

Senator FISCHER. You said you were looking to expand it. Do you 

know how many are there? 
142 

Mr. DILORETO. I do not. 

Senator FISCHER. Do you know what the cost of the program 

was? 

Mr. DILORETO. No, but I can get you all that information. I am 

not an expert in it. I can get you everything you need on that. 

Senator FISCHER. Do you know how long it would take to set it 

up? 

Mr. DILORETO. I would estimate, if you were to do it fully, you 

are looking at probably 10 years or more, because you are going to 

have to either retrofit existing vehicles or you are going to have to 

wait until you turn over your entire fleet. 

Senator FISCHER. Thank you. As a civil engineer, I know that 

Senator Inhofe, I was told, asked a question about planning, I believe, to Mr. Lewis when I had stepped out. For you, sir, as a civil 

engineer, on planning, and the uncertainty of planning when you 

don’t know what the funding is, can you tell us a little bit about 

how you deal with that when you are looking at double digit percentage increases in construction costs and how that kind of throws 

a wrench in things, plus then dealing with red tape of government 

to move forward on planning? 

Mr. LEWIS. It is certainly difficult when we don’t have a funding 

source to know how we are going to plan projects in the future. 

There is no question about that. Now, we did benefit over the last 

few years from the economic recovery program. We were able to 

take advantage of that and do a number of projects that we probably couldn’t have done otherwise. But those days are over, and we 

are seeing that now in our construction bids. They are starting to 

come in a little bit higher. 

So if you don’t have a revenue source, you cannot plan long-term, 

as was stated by my colleague at the table here. And he will stop 

making those kinds of plans until he knows that he has the money 

to do it. Otherwise, as he mentioned, he is really wasting his 

money. If you hire engineers to come in and design it, it costs 

money. Then to put the project on the shelf doesn’t make really any 

sense. 

Senator FISCHER. Thank you. Mr. Lewis, did you have anything 

you wanted to add on that? I guess I am interested in knowing if 

you think the current gas tax that we have now, does that provide 

you with certainty? I see the math is back up where we look at how 

the big division on how the revenue from a Federal gas tax is sent 

back to States. 

Mr. LEWIS. I think the certainty is that with the existing level 

of revenues going into the Highway Trust Fund, the certainty is 

that the Highway Trust Fund is going to go bankrupt a year from 

now. That is a certainty. We won’t have the money to obligate 

funds for new programs. When it does rebound, it will rebound to 

a point that is considerably less, maybe two-thirds of what we are 

used to. So it is a certainty that we will have less to invest in 

transportation. 

Senator FISCHER. It might be due to your position, maybe. 

[Laughter.] 

Mr. LEWIS. It is a challenge that the level of Federal investment 

overall for the States is actually, on a percentage basis, on average, 

dropping, and more States are stepping up to raise revenue and fill 
143 

the void. But all States cannot. Speaking for Rhode Island, we just 

don’t have the opportunity to raise revenues, because of the size of 

the State, in order to fill that void. Our State gas tax is already 

10 cents higher than our neighbors’ in Massachusetts, and a big 

percentage of our population lives within a few miles of the Massachusetts border. You don’t have to buy gas in Rhode Island. 

Senator FISCHER. In Nebraska, we have a variable portion of a 

gas tax, too. We are kind of unique in that, where it moves, it fluctuates due to budgeting and how we handle that in our legislature. 

Do you know if that has ever been looked at by other States or 

by the Federal Government? 

Mr. LEWIS. Others may have a comment on that. I do know that 

Virginia, for example, and Maryland reformed how they collect 

their gas tax. Rather than a flat excise tax, they changed to a percentage basis sales tax. I think that is the kind of reform that can 

address perhaps some of these issues we have talked about and the 

variability. 

Senator FISCHER. Did you want to speak to that, Janet? 

Ms. KAVINOKY. I am not able to recall a serious discussion at the 

Federal level where we actually tie the rate of taxation or the level 

of taxation to needs. However, that would certainly get us closer 

to figuring out how to address those needs, rather than attempting 

to address or take some of the needs off the table based on what 

the available revenue would be. 

Senator FISCHER. If you went through a prioritization process on 

needs for each State on the Federal projects and then tie a variable 

to that, do you think that would be something your group might 

be interested in looking at? 

Ms. KAVINOKY. Actually, I think that is a very interesting comment. I certainly can’t comment on what the Chamber policy would 

be in terms of that. However, I think that a clear understanding 

of what the Federal priorities, national interest level projects are 

in States, then could help drive where we need to be with revenues. 

If you look back to when the interstate system itself was created, 

it was actually designed to be on a cost to complete basis, here is 

what we need to build, here is what it is going to cost, and we 

move forward. 

So I think that that is, from a planning concept and from a financing concept, something that is worthy of further consideration. 

Senator FISCHER. OK. Thank you so much. 

Thank you, Madam Chair. 

Senator BOXER. Thank you. 

We are going to turn to Senator Carper, followed by Senator 

Baucus, and we are thrilled that he has joined us, because he will 

be in that seat making these decisions. Senator Carper, who is also 

on the Finance Committee. 

Senator CARPER. And we will be looking forward to making these 

decisions with you, Mr. Chairman. 

[Laughter.] 

Senator CARPER. I want to come back to what you mentioned, the 

VMT, as one of the user fees that we should consider. Before I do 

that, though, let me just ask for a show of hands, how many of you 

think that part, not necessarily all of the solution here to making 

sure that our resources meet the needs, how many of you believe 
144 

that it is not a gasoline tax, some kind of user fee that relates to 

motor or fuel taxes is part of the solution, would you raise your 

hand? 

[Show of hands.] 

Senator CARPER. All right, thank you very much. 

I have been interested for a while in the VMT proposal, in fact, 

when we considered MAP–21, I proposed a suggestion that we 

might create a research program to explore how we might structure 

a VMT fee. Unfortunately, the provision that was included in the 

Senate bill was taken out in conference. 

I’d like to ask Mr. Lewis, and Mr. DiLoreto, tell us how you think 

USDOT could help us support a long-term transition to a VMT fee? 

Take a shot at that. 

Mr. LEWIS. I think the States would certainly support a very robust study on how we could transition to a vehicle miles traveled 

tax. I think there are some technical issues involved, and there are 

social issues involved. These are issues that need to have some 

light put on them. Then we really need a quantified assessment of 

how and when a VMT tax could be implemented over time. What 

about the fleet turnover? What about privacy issues? What about 

the way it gets collected? 

One thing about the gas tax today is we have a very well-established means of collection. Does the VMT tax change that? 

But those are solvable issues. They just have to be identified. Put 

some good, smart people behind them and then air them publicly. 

Senator CARPER. Mr. DiLoreto. 

Mr. DILORETO. I think my colleague said it absolutely right. 

Those were the issues that Oregon faced when it went through its 

experimental project with the Federal Highway Administration 

several years ago. So he is absolutely right, it is solvable. But it 

would take time. 

Senator CARPER. One of the pieces of legislation I worked on 

quite a bit was the 2007 CAFE legislation with Senator Feinstein 

and a number of others. During that discussion we talked a bit 

about all-electric vehicles, they are going to use the roads, highways, bridges. And if they never are going to use any gasoline, then 

are they really contributing to the upkeep. So there is a fairness 

for an equity question here that I think needs to be addressed. 

Others have suggested that by the time we get to 2025 we will 

have a lot of new vehicles coming onto the road that are even more 

energy efficient than the ones today. For somebody who is driving 

25,000 miles a year on a vehicle that gets 50 miles per gallon and 

somebody who is driving a vehicle that gets 20 miles per gallon, 

there are a number of miles there, there is a fairness and equity 

issue there. 

Anybody else have some thoughts for us on a VMT fee? Anybody 

else, just some thoughts you think are appropriate for us to keep 

in mind? Mr. Cohen. 

Mr. COHEN. I always take an opportunity to speak if it is open 

to everyone. I think the Oregon example is worth continuing to 

look at, and that the States are really the best laboratories right 

now for studying it. Oregon is not the only State. Right now their 

pilot is 5,000 vehicles. I think it is worth looking at that. I think 
145 

there are three different ways of collecting revenue that they are 

looking at. 

And it may be that in time, this is an interesting way to go, 

there are positives and negatives, the point of collection is a very 

good point. Right now we have about 1,100 terminal racks that pay 

the gas tax, 250 million vehicles paying individually would be an 

interesting difference in terms of enforcement and administrative 

costs. 

But on the other hand, it is a more direct user fee. Potentially 

it could obviate the need for toll roads, because you are basically 

collecting from everybody, so you don’t have to collect twice on certain roads. So it is something we might want to continue to study. 

Senator CARPER. Thank you. A quick note, I used to be Governor, 

used to be the Chair of the National Governors Association for a 

while. One of the things we had was a center for best practices, 

clearinghouse for good ideas that worked. And we used to share 

those ideas. One of the great things about States, there are 50 of 

them, 50 laboratories of democracy. And we have the opportunity 

to test a lot of ideas and to see what works and what works best 

and try to incorporate that in our own plans going forward. 

Thank you all very, very much. Thank you, Madam Chair. 

Senator BOXER. Thank you. Chairman Baucus. 

Senator BAUCUS. I thank you, Madam Chair. 

I am just curious, does anyone on the panel disagree with the 

proposition that the highway reauthorization, highway program 

has to be a national program? That is, a lot of States, some States 

are donee States, some are donor States. And some of the donor 

States get a little upset because they are donor States. A lot of 

donee States say hey, we wouldn’t exist if we weren’t a donee 

State. That chart, the map over there makes that point. If you look 

at the States over there that are yellow, where 70 percent of highway funding is Federal, it is not State, but it is Federal, those are 

States that are donee States. Those are States where there aren’t 

very many people. 

My State of Montana, for example, used to be first, maybe it is 

second in the Nation in the number of highway miles per capita. 

We have a very high State gasoline tax to try to contribute our 

match to the Federal. 

And General Eisenhower, as you know, when he put together the 

interstate system, recognized right off the top, we need a national 

system, not a sectional, but national. Some States say, let us forget 

this, let our State take care of it. Those are States that tend to be 

wealthier States, they have a lot more people. They are so-called 

donor States, they don’t like being donor States. 

Is there anybody who disagrees with the proposition that we 

need a national program and not a sectorial or regional program 

if we are going to have the highway system that we need? Raise 

your hand if you disagree with that, or disagree with anything I 

said. 

[Laughter.] 

Mr. LEWIS. Senator, I am certainly not going to disagree with 

that. I just want to add a point. I had an opportunity this year as 

president of AASHTO to visit many States around the country and 

talk with all my colleagues. To a person, that is an issue that we 
146 

talk about as a group. It matters to Florida that Wyoming has I– 

80 in good condition, because it has to get its orange juice to Seattle. It matters to Boston that we don’t have posted bridges on I– 

95 in Rhode Island because of the commerce between Washington, 

New York and Boston. 

Senator BAUCUS. What about Montana and 90? 

Mr. LEWIS. I was saving the best for last, but I ran out of time. 

[Laughter.] 

Senator BAUCUS. That does come up, frequently. And that point 

is well understood. 

Mr. RUANE. Senator, in our statement is a chart from the Census 

Bureau on the actual shipments between States that shows the dependency of one State to the adjacent State or several States away 

for the flow of goods. It is something that they put out every 5 

years, and it makes a convincing case of the importance of every 

State to have a strong interstate system. 

Senator BAUCUS. Good. I have no more questions. Thank you. 

[The prepared statement of Senator Baucus follows:] 

STATEMENT OF HON. MAX BAUCUS, U.S. SENATOR FROM THE STATE OF MONTANA

Thank you, Madam Chair. You are a strong advocate for our Nation’s infrastructure. This hearing is an important step forward in addressing one of our country’s 

biggest challenges. 

As President Eisenhower once said, ‘‘Together, the united forces of our communication and transportation systems are dynamic elements in the very name we 

bear—United States. Without them, we would be a mere alliance of many separate 

parts.’’ 

If we do not make a national commitment to our infrastructure, America will fall 

behind. 

We need a national system of highways. 

Rural highways are crucial to our Nation’s economy. Nearly 70 percent of federally supported highway lane miles are in rural areas. 

Earlier this month I brought the top diplomats from Canada, China, Germany, 

Japan and Peru to Montana. They met with ranchers, farmers, workers and businesses. Seeing five cities in 4 days, these Ambassadors traveled on 675 miles of 

Montana’s highways. Driving along Flathead Lake, down through the Blackfoot Valley, and ending in the heart of the Rockies, let me tell you, they appreciated Montana’s strong network of rural highways. 

Make no mistake, American jobs depend on a strong, reliable highway system. 

And nowhere is that more evident than Montana. 

Montana has nearly 4,000 miles of National Highway System. Every year these highways transport more than $10 billion of Montana goods. And more than 10 million visitors will use Montana highways this year to enjoy our great State and spend 

tourist dollars Montana jobs depend on. 

Our infrastructure system drives the economy. Domestic commerce, job growth, 

and international trade simply cannot progress without a strong, national infrastructure system. 

How do we ensure that we make the investments we need in the future? The 

Highway Trust Fund is projected to be near a zero balance in fiscal year 2015. 

The Trust Fund is primarily funded by fuel taxes. 

But vehicles today are becoming more fuel efficient, miles traveled are down, and 

over the past 20 years, the gas tax has lost more than a third of its purchasing 

power to inflation. In recent years, we have only been able to maintain necessary 

investments through transfers from the General Fund. We’re robbing Peter to pay 

Paul. 

In the last Highway Bill we came together and found bipartisan consensus around 

responsible offsets to fund the Highway Bill without adding one dime to the deficit. 

Once again we must join together to responsibly fund future transportation investments. The Highway Trust Fund needs sustainable funding so State and local 

transportation officials will have the certainty they need to engage in long-term 

planning. We cannot continue to kick the can down the road. American jobs depend 

on it. 
147 

The Finance Committee has begun this process. Earlier this year, as part of a 

plan to overhaul the Nation’s tax code, we published a white paper on transportation funding options. We are moving toward a markup on tax reform this fall. As 

part of this process, we’ll be ensuring that our Nation’s infrastructure is sustainably 

financed. 

A fairer tax code will create a better environment for American competitiveness, 

innovation, and opportunity. 

Ensuring the long-term solvency of the Highway Trust Fund will require input 

and collaboration from both sides of the aisle, from both urban and rural States, 

from East to West and North to South. President Eisenhower was right to emphasize that these are the United States of America. We have a responsibility to get 

this right for the entire country. 

Senator BOXER. OK. I just want to say, while Senator Baucus is 

here, that this panel, representing a very broad brush of American 

thought on this, I would say the whole political spectrum and the 

rest, they have told us that we are just getting to grips with this 

problem out there, that there will be no money in the trust fund 

by 2015. It is just zero. 

Senator BAUCUS. That is right. 

Senator BOXER. So we have to act. And they also make the point 

that we need to solve this problem for the long term. And so we 

have an opportunity to do that. If it is not solved, we are really 

talking about, as Mr. Poupore pointed out, millions of jobs, and as 

Janet pointed out, and actually Pete as well, literally hundreds and 

thousands of businesses. So the country is counting on us, and Senator Baucus, I know that you have a lot on your shoulders. But we 

are going to share with you our ideas, so that we give you all of 

them, and then you and Mr. Camp and Senator Hatch and I guess, 

who is Camp’s ranking, Sander Levin, will have the benefit of this 

Committee’s work, of which you have been a part, and your staff 

has been a part. And all the people here have been so extremely 

helpful. They are not just saying, it is up to you, we are out of here. 

Each of them has come forward with a way to handle this, for 

which we are all very grateful. 

So thank you, panel one. We thank you very much. 

Senator BAUCUS. I would like to back up, if I might. 

Senator BOXER. Go ahead, please. 

Senator BAUCUS. Is there a prevailing view on how to address 

the deficit? Is there a prevailing view? Is there a tendency toward 

consensus on what we have to do? Not dotting the Is or crossing 

the Ts. 

Senator BOXER. Let me try to answer what they told us through 

this thing. 

Senator BAUCUS. Sure. 

Senator BOXER. Tell me if I have misstated it. They want to see 

a user fee. They don’t want to see, although there was one exception, maybe you can patch a small amount with the General Fund. 

That is not the consensus of the group. 

The consensus of the group is, we need a user fee, we need a 

long-term solution, and it should be pretty much related to oil and 

gas, that fee, whether it is collected the way it is now and we increase the gas tax, or as I understand it, follow the lead of a State 

like Virginia which is looking at a tax, but it is at a different level, 

it is wholesale, it would be at the refinery level and as a percentage 

of the cost. 
148 

Senator BAUCUS. I appreciate that. Anybody want to add a little 

texture to Chairman Boxer’s statement, add a little context? 

Mr. RUANE. Senator, I think moving it up the food chain in terms 

of some of the States who have looked at this and collection points, 

you can go further up instead of the individuals paying this, at the 

refinery or at the whole sale level. Some States have looked at that 

very closely. 

I think there is an efficiency argument there from a collection 

standpoint. So with most of us, I think it is all of the above. And 

whatever combination is obviously, work can be done both economically and politically and everything else. 

But one of the points we want to underscore, and it is a little 

redundant here, is let’s not throw the baby out with the bath 

water. There is a reliable source already there, and if you are going 

to change that, that is fine, but keep the buying of that source and 

whatever new method the Congress might come up with. 

Senator BAUCUS. Thank you. Mr. Cohen, did you raise your 

hand? 

Mr. COHEN. Let me just add that the sustainability issue is I 

think something that we all also talked about. This last bill, we ran 

out of money, so we wrote a bill that can only be funded for 2 

years. What would be nice and what would be preferable, so that 

Congress doesn’t have to deal with this every few years, is to chart 

a course that includes an index so that reauthorizations can be 

done for 6 years at a time so that the States can do their plans, 

projects can be done and we can achieve greatness again and not 

just try to get the point where we run out in, say, 2020 or 2021. 

Senator BAUCUS. How do you deal with the anti-tax crowd that 

raises its voice around here? 

Mr. COHEN. I represent the highway users. And as I mentioned 

in my testimony, the users pay and we have not always been in 

favor of raising the tax. 

Two things I think have changed. One is MAP–21. Tremendous 

reforms, and I didn’t stress this, but the streamlining provisions, 

and this certainly came up at least week’s hearing, are absolutely 

critical to taxpayers’ support for paying more. We are going to have 

to look at them, because they haven’t been fully implemented, obviously. 

And second, just the dire nature of the situation right now. It is 

not like the old days when we had a big balance and we could simply draw from the balance. So we represent the users, AAAs, truckers, bus companies, and we all agree that we have to pay more. 

Senator BAUCUS. Your goal is to sustain current levels of construction and repair, or do you want to boost? What is the prevalent view here? 

Mr. LEWIS. I defer to ASCE on this. But I think sustaining is the 

absolute floor. I think the country does need to think and talk and 

debate additional investment. I think we are falling behind, as 

Janet has pointed out. Other countries are investing more on a percentage basis than we are. But perhaps the enemy of good is better. We need to get to where we can at least maintain a level funding. 

Mr. RUANE. Senator, I would say that we have to do both and 

we have to do them simultaneously. That may seem like a huge 
149 

leap for some, but this Congress is more than capable of doing that. 

And what you showed in MAP–21, the bipartisan nature of the 

vote, proved it can be done. Getting financing is obviously a bigger 

lift. 

But the Nation is growing by 3 million people a year, 2 million 

new users, new drivers on our Nation’s roads in a year. We are 

growing, we are a growing country. And to accommodate that 

growth, we have to not only take care of our existing system, we 

have to enhance our system to accommodate that growth alone. 

Senator BAUCUS. You are right. 

Mr. DILORETO. Let me just follow up. The American Society of 

Civil Engineers gave roads a grade of D. We estimate you need 

$1.7 trillion over the next 8 years to get it into good condition. We 

have about half of that, assuming the Highway Trust Fund was to 

maintain current funding levels. 

So the question of do we need more, well, if our goal is to get 

our transportation system into good condition, meet capacity needs, 

meet the condition needs, then we are going to have spend more 

as Americans on it. 

Senator BOXER. Mr. Chairman, I am going to give you more time 

to do your opening statement. And I wanted to make a point here. 

Senator BAUCUS. You may regret that. 

[Laughter.] 

Senator BOXER. No, I don’t. I don’t regret it at all. 

But I just want to say this point. Your question is important, 

sustaining the current levels for actually moving forward. I wanted 

to point out, because of our work together, all of us, on TIFIA, we 

had a way that was able to dramatically leverage existing funds. 

So for example, just by using a billion dollars for TIFIA, which we 

agreed upon, is going to stimulate the economy up to $30 billion, 

there were other proposals, I think, that your committee will look 

at. 

So one idea is to do the basic funding and then look for ways that 

we can leverage the Federal investment, it is just a thought, without putting so much pressure on the user fee. 

In any case, you have the floor for 5 minutes. 

Senator BAUCUS. I am fine. 

Senator BOXER. OK. Thank you very much. And we will call up 

panel two. 

Senator WHITEHOUSE. Madam Chair. 

Senator BOXER. Yes. 

Senator WHITEHOUSE. While the panels are changing, I just 

wanted to emphasize the point that Mike Lewis was making very 

well to Senator Baucus’ question that a lot of places have big 

projects that are out there that are looming because of the surge 

of infrastructure that was built 50 years ago and is now sort of 

reaching the end of its natural life. Those have never been in any 

baseline. Because they have always been unmanageable, because 

we have always been just scraping by with basic maintenance. 

At some point, those become things that we absolutely have to 

do. In Rhode Island, Route 10, Route 6 and Route 95 all come together in the center of our capital city. If the Route 10 and Route 

6 connectors fail, we have a problem that is going to affect the entire eastern seaboard. Never got into the budget of the Rhode Is-
150 

land Department of Transportation, it was too big to fit in a year’s 

budget. There has always been the hope that someday. 

Well, I think there is a lot of that out there. We need to make 

sure we have the scope in this to take on those big projects that 

are coming due. 

Senator BOXER. All right. 

First of all, thank you to our second panel, a very distinguished 

panel. Thank you for waiting around here. It is my pleasure to 

start it off with Jack Basso. I know it is Peter J., but I call you 

Jack. Principal, Peter J. Basso and Associates, a very important 

part of my world in advising me. So please go right ahead, sir. 

STATEMENT OF PETER J. ‘‘JACK’’ BASSO, PRINCIPAL, PETER J. 

BASSO AND ASSOCIATES, LLC 

Mr. BASSO. Thank you, Madam Chairman, for those kind comments. Thank the Committee, Senator Baucus and Senator 

Whitehouse and other members of the Committee. 

I am going to be brief but hit on what I think are some important points. While others on the panel will discuss in some detail 

what might be considered to address the funding crisis, and I think 

it has been discussed heavily with the first panel, what I want to 

do is discuss first what is the magnitude of the problem. I think 

it has been stated, it is a 100 percent reduction in fiscal year 2015 

in the highway program. And also, for that matter, the transit programs. 

I want to talk a little bit about the evolution of that problem and 

contrast traditional funding grants and direct funding with the financing tools, such as the TIFIA program, and how those in combination are critical to infrastructure investment. The Highway 

Trust Fund, and in my written testimony I show, faces a dramatic 

shortfall. In fact, the fund has been spending about $50 billion per 

year while the revenue averages about $35 billion a year. Through 

the good offices of the Congress, we have been able to put in the 

$4 billion from the General Fund that has kept, so to speak, bankruptcy staved off. 

Thus, in fiscal year 2015, if the programs receive no new revenue, we are literally out of business. I think the impacts are dramatic and very bad for the country. 

The reduction in capital programs, of which the Federal funding 

averages 45 percent in the States, is devastating to both capital investment and jobs. In fact, for every billion dollars of investment, 

about 28,000 jobs are supported. So we are talking about hundreds 

of thousands of jobs lost in fiscal year 2015 on the back of an already dramatic decline in construction employment. 

So how do we get there? A combination of factors created that 

situation. Let’s give a little credit to the great recession, because 

it did impact it. For the first time in 50 years, vehicle miles traveled dropped in 2008. They had been growing at a rate of 2 to 3 

percent a year for 50 years. 

That translated into a dramatic decline in revenue, combined 

with another factor, heavy truck taxes from the sales tax on trucks 

took a nose dive during that same period. Thus the fund approach 

to deficit and potential similar program reductions in 2008. The 

Congress responded, as I said, by making a series of General Fund 
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transfers that have been critical and much appreciated by those of 

us in the transportation community. 

However, the real problem lies in the fact that no rate adjustment has been made since 1993, 20 years. And I might note, that 

adjustment was made actually in the incomprehensive balanced 

budget agreement in 1993 as to how this got addressed. So I think 

that is important to note. 

A quick word about financing. Early 1993, the Federal Government began promoting a series of tools to allow financing for programs with revenue streams, garvee bonds, State infrastructure 

banks and in particular, Madam Chair, I want to note your role in 

the dramatic 20-fold expansion of the TIFIA program, which is 

hugely important and hugely useful. Also Build America bonds, at 

one time the program was useful and very helpful to our infrastructure investments. 

But these things alone cannot substitute for direct funding. So 

the time has come, and causes me to conclude, as we approach reauthorization programs and address funding and to continue the 

successful financing programs such as TIFIA and so forth is absolutely imperative to the Nation’s well-being and to the improvements that can be made in our infrastructure investment. And are 

as important to maintain our international competitive position. 

Thank you. 

[The prepared statement of Mr. Basso follows:] 
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Senator BOXER. And we turn to Kathy Ruffalo, President, Ruffalo 

and Associates. Welcome. 

STATEMENT OF KATHY RUFFALO, PRESIDENT, RUFFALO AND 

ASSOCIATES, LLC 

Ms. RUFFALO. Thank you, Chairman Boxer, Chairman Baucus 

and Senator Whitehouse, for the opportunity to address you today 

regarding the shortfall in the Federal Highway Trust Fund and 

possible solutions to this transportation funding crisis. 

As a former staff member to this Committee, I fully understand 

the challenges that you face regarding reauthorization and the 

need to fill the current funding gap. I applaud your leadership and 

that of the other committees to address this situation. 

Before I begin, I want to let you know that any opinions I express are mine and mine only and not any group or entity. Jack 

has done a good job of telling you and the other panel about the 

trust fund shortfall, what that picture looks like. So I am not going 

to go over it again, except to reiterate that the crisis is fast approaching and it is important for Congress to find the appropriate 

vehicle to address it through tax reform or a broader agreement on 

spending and taxes, which recent history has shown to be a good 

option or through other appropriate legislation. 

I am going to cover two areas in my oral statement, an overview 

of the types of funding options that Congress can consider. I am 

also going to end with some questions that I believe are key policy 

and implementation questions for Congress as well. 

If Congress agrees that we need to find additional revenue, there 

are three general ways in which to do so. My written testimony includes some specific examples of each. 

No. 1, raising the rate of taxation or fees of existing Federal revenue streams into the trust fund. No. 2, identifying and creating 

new Federal revenue sources into the trust fund. And No. 3, diverting current revenues and possibly increasing the rates from other 

Federal sources into the trust fund. 

As Congress looks at individual funding options, of which there 

are many, you may wish to evaluate each option based upon how 

much money could realistically be raised, how much would it cost 

and how long would it take to put in place the structure to collect 

revenue in a new way, and what administrative, legal and enforcement issues would need to be addressed, what is the impact to 

urban and rural users of the system, and what is the applicability 

to other levels of government. If finding the revenue for transportation were easy, it would have been done already. Each funding 

option has supporters, opponents and each has policy considerations. 

So given that, here are my key questions for you today. No. 1, 

with the Highway Trust Fund balances nearing zero in early 2015, 

which funding options can be implemented most quickly? If Congress wants to prevent dramatic cuts to State DOTs, transit agencies and other transportation partners, the time necessary to collect 

revenue from any option becomes critical. 

You can’t forget the new revenue has to be collected prior to 

2015, while possibly another General Fund transfer would have to 

take place. In other words, the time to implement any funding op-
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tion has to be considered. As you explore any list of options, you 

may want to categorize them into short-term, intermediate term 

and long-term in order to accurately calculate the time necessary 

for any new funding scenario to be fully implemented. 

Question two, how might any new Federal revenue option impact 

our State and local funding partners? Several possible funding solutions are currently used by States, local governments and transit 

agencies to collect revenue. If the Federal Government would add 

a new fee onto this existing non-Federal funding sources, the Federal Government might crowd out the ability of transportation 

partners to raise revenue from these sources in the future. 

Question three, should we retain the user fee concept? We had 

some discussion about that on the previous panel. Do we see the 

benefit of having the funding source tied in some way to the users 

of beneficiaries of the transportation system? Or is it now the case 

that funding from anywhere is what matters most? What would the 

lack of a user fee basis mean in retaining contract authority? Of 

course, as has been talked about, contract authority is what makes 

this program unique, and it allows the States and local governments to plan and construct transportation projects with limited 

funds on a long-term basis. 

Finally, what is the public appetite for multiple funding sources? 

Given how controversial and difficult it is to raise almost any tax 

or fee, you may wish to consider the implications of choosing multiple sources of revenue and the level of opposition that may entail. 

Some funding options raise very little revenue and others would 

necessitate new collection, administrative and enforcement systems. 

At the end of the day, we are all trying to do what is best for 

this country. We need to remember there are real men and women 

behind all the numbers and statistics that we use. Thousands of 

jobs depend upon Federal transportation funding, not just direct 

jobs but indirect ones as well, whether it is to get to work, to move 

goods across this country to maintain our quality of life, the Federal Government is an important partner in transportation investments. 

I know that with your leadership, Madam Chairman, Senator 

Baucus’ leadership on the Finance Committee and other committees, Congress will resolve the insolvency of the Highway Trust 

Fund and provide the funding necessary to continue valuable Federal transportation investments. 

Thank you again for holding this hearing and for providing me 

with the opportunity to share my thoughts and perspectives with 

you today. 

[The prepared statement of Ms. Ruffalo follows:] 
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Senator BOXER. I think it was very helpful. 

Our next speaker is Jack Schenendorf, Of Counsel, Covington 

and Burling, LLP. Welcome, sir. 

STATEMENT OF JACK SCHENENDORF, OF COUNSEL, 

COVINGTON AND BURLING, LLP 

Mr. SCHENENDORF. Thank you, Madam Chairman. You have already heard from a number of witnesses today, so I will be brief. 

It is a special honor to appear before this Committee. Almost 60 

years ago, it was the leaders of this Committee, Democrats and Republicans, together with President Eisenhower, who had the vision, 

the wisdom and the political will to make a major investment in 

America’s future by creating the interstate system. 

If there was ever a time to take a similarly daring look at our 

Nation’s surface transportation system, it is now. In recent decades 

the United States has under-invested in the national surface transportation network. As a result, the aging, congested network is in 

need of repair and does not have adequate capacity to accommodate future population and economic growth. 

How did we get from having one of the world’s preeminent transportation systems to an overburdened system that is steadily falling into a state of disrepair? The heart of the problem is this: while 

we have been benefiting from the expenditures of the generation 

that helped build the interstate highway system, we have failed to 

make adequate investments of our own. It is time for Republicans 

and Democrats to come together again and put in place a vision for 

the next 50 years that will ensure U.S. prosperity and global preeminence for generations to come. 

MAP–21 took an important first step by modernizing our Nation’s surface transportation policies for the 21st century. My testimony today will focus on what MAP–21 left undone: ensuring an 

adequate level of investment in our national surface transportation 

network. 

I would like to make three points for your consideration today. 

Point one, fixing the Highway Trust Fund and increasing investment in our national surface transportation network must be a 

foundational element of any pro-growth economic agenda. 

According to a recent report by McKenzie Global Institute, our 

inadequate infrastructure imposes unnecessary additional costs on 

the U.S. economy and American taxpayers. They have estimated 

that increasing road congestion is costing the Nation $85 billion a 

year. On a per traveler basis that works out to a little over $1,000 

per traveler in urban areas and about $400 in suburban and rural 

areas. At a time of increasing global competition and uncertain economic growth, the United States can’t afford to undermine the benefits that a well-functioning transportation system provides or 

allow inaction to impose additional costs on U.S. travelers. U.S. 

jobs, the U.S. economy and this Nation’s position as a global economic leader are at stake. 

Point No. 2, I want to emphasize one of the principles I identified 

in my written testimony for evaluating appropriate solutions. That 

is the need for a truly national investment policy. Modernizing the 

233,000-mile national highway system which makes up just 5.7 

percent of the Nation’s road mileage but carries 55 percent of the 
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vehicle miles traveled annually will require significant sustained 

investment over a considerable period of time. The Highway Trust 

Fund is uniquely suited for this type of investment. 

The focus in creating the Federal aid highway system and the 

national highway system in particular was the concept of a country 

unified by a nationwide infrastructure. In today’s highly competitive global economy, this vision is more important than ever. Only 

a strong Federal role will help realize this unity, allowing for systemic improvements in both high traffic and low traffic States. 

Point three, we must not underestimate the magnitude of this 

problem. According to CBO, it will take the equivalent of a 10 cent 

gas tax increase just to close the hole in the Highway Trust Fund. 

The Policy and Revenue Study Commission that I served on as vice 

chair estimated that we should be spending about 25 to 40 cents 

additional on the gas tax in order to start meeting the needs of the 

Nation going forward, to rehabilitate the existing system and provide the additional capacity. 

In my written statement I have identified a number of options 

for raising these revenues. I subscribe to both what Jack and 

Kathy have said about the revenue options. I want to bring your 

attention particularly to the first page of the chart in Attachment 

A, which is a color chart which shows a lot of these options and 

the way that we evaluated them. I also want to call your attention 

to a paper that I have also attached that an associate at Covington 

and myself write on Federal user fees, an alternative way to raise 

funds if you are unable to raise any of these other taxes. 

Thank you. 

[The prepared statement of Mr. Schenendorf follows:] 
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Senator BOXER. Thank you very much. 

In closing, Hon. Sean Connaughton. We are very interested in 

hearing from you, because you have looked at a new way to fund 

your transportation in Virginia, you are the Secretary of Transportation. We are very pleased you are here. Thank you, sir. 

STATEMENT OF HON. SEAN T. CONNAUGHTON, SECRETARY OF 

TRANSPORTATION, COMMONWEALTH OF VIRGINIA 

Mr. CONNAUGHTON. Chairman Boxer, members of the Committee, thank you very much for opportunity to be here and tell 

you a little bit about what we have done in Virginia. 

First, I will preface it by saying, every State is a little bit different in their transportation programs and some of their challenges. But one thing that is the same for the States and for the 

Federal Government has been about what has happened to the gas 

tax. In Virginia, we have not raised the gas tax since 1986. The 

buying power of the gas tax had gone down 54 percent in that time 

period. We are seeing the impacts of much more fuel-efficient vehicles. In fact, we can actually track that we have in Virginia more 

cars registered, more vehicle miles being driven, yet our gas tax 

revenues are actually going down. 

Another thing is the increase in the cost of materials. Asphalt 

binder, which is a basic construction material, maintenance material that we use, has gone up alone 350 percent over the last 10 

years. Revenues are flat, costs are going up and we just saw, obviously, like everyone else, some major problems with our major 

source of revenue. 

Virginia is what we call a maintenance first State. By State law, 

we must use any of the revenues coming in to our transportation 

fund first for maintenance, then for construction. We have had to 

take, just in the last 10 years, $3.3 billion of construction money, 

move it over just to do basic maintenance. And so everyone knew 

that there was a problem in the State. 

And the legislature has been looking at this for almost 10 years. 

One of the challenges is, something that you are very familiar with, 

we had a House that had one position and the Senate had another. 

The House is very, very strongly conservative Republican and 

wanted to see more diversion of existing revenues to transportation. The Senate Democratic Majority, now it is tied, but essentially the position of the body was that they wanted to see additional revenues come in. 

So in other words, we didn’t have anything happen for almost 10 

years. We took office and, this is one of the things we really took 

on as an administration on how we were going to deal with transportation. The first thing is, we want to take all the excuses off the 

table. We have done everything that anybody has ever talked about 

regarding transportation funding and reform in our program. We 

have done audits, we load off people, we ended up becoming a 

model I think for the country for public-private partnerships. Last 

year we were the most projects closed in the country. In fact, if we 

were a country, we would have the second most projects closed in 

the world. 

We have ended up doing bonds, issued over $3.3 billion worth of 

bonds. We ended up establishing our own infrastructure bank to 
214 

lend money to our localities to help them move projects forward. 

We have done all types of IT and better traffic management including our express lanes you can see on 95 with dynamic tolling. We 

have even proposed a very controversial toll on 95. We also look for 

ways to maximize some of the revenues coming out of, well, everything from naming rights to sponsorships to everything else. 

We did all that over 3 years. And even with all that, we were 

able to show to our legislature that we were not going to have 

enough money even to do our Federal match by 2017. 

By taking essentially all these arguments off the table, showing 

that we were serious about reform, and as renewing public trust 

in our program, we came forward with a very, very bold program 

or legislative proposals here, and that was to essentially do away 

with the gas tax, move over to a revenue source that we see growing. In Virginia, that is the sales tax. That actually passed our 

House, the Senate took it, replaced it all with a big increase in the 

gas tax. The conference committee came together and we came to 

a compromise. And it was a compromise that ended up having, essentially we lowered our gas tax and switched over to a sales tax. 

We split off the diesel and actually increased the diesel tax and 

made that a sales tax. 

We ended up increasing the State’s sales tax statewide. We 

ended up putting in an alternative vehicle fee on all vehicles, 

whether electric or other alternative fuels. We took a little bit more 

general revenues and devoted it to transportation. And so we ended 

up a little bit of everything. It was a little piece of legislation I 

think that in many ways, no one was happy with the complete 

package, but it was a true compromise. And it ended up getting the 

majority of Democrats and Republicans to support it in the legislature. 

The bottom line is that this will mean about $1.5 billion a year 

more to our transportation modes in Virginia. That is everything 

from highways to transit to our airports to our ports and to passenger rail. We are actually putting in money and are dedicating 

these to passenger rail. 

So this is a piece of legislation that I think has become talked 

about throughout the country. And it is something that we think 

will solve our transportation problems out into the future. Thank 

you. 

[The prepared statement of Mr. Connaughton follows:] 
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Senator BOXER. Thank you. Thank you very much for that. 

Senator Baucus. 

Senator BAUCUS. Thank you, Madam Chair. 

I would like you all four to give us advice on how we proceed. 

I think everybody agrees, we have to fill up this hole. But the question is how, and how quickly. Ms. Ruffalo gave several criteria, one 

is how quickly, how it affects dates, move quickly to raise revenue 

and whether to unmorph the funding from users, what is the effect 

of that. 

But a deeper question is how we politically proceed. Some suggest that we are more likely to get the funding, which I think we 

all agree in this room, mostly in this room, agree is necessary, 

maybe through tax reform, maybe through an omnibus vehicle, 

some other vehicle, some larger legislation, rather than standalone, 

rather than straight highway legislation. The need to fill the gap 

in the trust fund is clear. But sometimes it is easier to address revenue questions in the context of larger legislation. 

Could any of you give us advice here, what is the history? My 

recollection is that increases in the gasoline tax in the past have 

been part of larger bills. It is not just straight highway. Could 

somebody else try a little bit? I don’t have a lot of time here. 

Senator BOXER. You can have more time. 

Senator BAUCUS. Jack, you go ahead, then Kathy, you can go 

next. 

Mr. BASSO. Thank you, Mr. Chairman. Yes, in fact, I can factually recollect in 1990 the Andrews Summit, which I worked on, the 

staff worked for, which actually increased the gas tax and addressed deficit reduction. In 1993, President Clinton and the Congress similarly addressed it. They came together and frankly, the 

last time we actually standalone raised the fuel tax was 1982 in 

the Reagan era at that point in time. 

So that is informative or instructive to me as to how one could 

move this forward. The thing that we face though I think, and here 

is the problem, we don’t have in front of us 2 or 3 years to deal 

with this. We have a situation where the opportunity presented 

itself and a comprehensive solution. To my mind, we ought to take 

that, and take it as quickly as possible. 

Beyond that, we run out of money at the end of fiscal year 2014 

to sustain the program. We are going to have to have a backup solution as well. But I commend to basically the Congress the question, what is the best way to take this on politically. And I am not 

unmindful how difficult this is. 

Senator BAUCUS. Ms. Ruffalo. 

Ms. RUFFALO. Mr. Chairman, I agree with what Jack said. Certainly recent history has shown that being able to use these revenues as part of a larger comprehensive package of spending and 

revenue discussions is what makes sense. I would agree, I totally 

defer to Congress as to which vehicle presents itself and when it 

presents itself. 

I would just say that as an industry, and I say myself as part 

of that industry, probably most people sitting behind me and the 

people who are at this table, we have done a really lousy job of explaining to the American people what they pay today at the Federal level for transportation. People think they are paying thou-
226 

sands and thousands of dollars each year in Federal fuel taxes to 

pay for transportation. And that is just not the case. I think the 

average is $250, maybe $300 a year for an average family of four. 

So when you look at what you are receiving for that amount of 

money, I just think we have not done a good job providing that 

push from the grass roots for this kind of investment. I do think 

as an industry we have to do a better job of providing you with that 

political cover at home when you do make some of these tough decisions, whether it is part of tax reform or some other vehicle that 

may present itself. I think that is the charge that you need to give 

all of us as we move forward, is to give you that grass roots support 

for this kind of investment. 

Senator BAUCUS. Mr. Schenendorf. 

Mr. SCHENENDORF. I want to add a couple of points on this. The 

first is, not only is it I think politically easier to include it in a larger, more comprehensive bill. But I do think that larger, more comprehensive bill allows you to do some other things which help, to 

the extent that you are raising revenues, which will need to be 

done in the transportation sector. You can do other things in the 

larger bill to help offset that and the impact that that would have 

on various classes by the business or individuals. 

So I think there is a real policy advantage to including it in that 

larger bill and it will make it easier to sell to some of your colleagues in the Senate. 

The only caveat I make is I don’t think anybody knows when 

that big bill is going to come. And if it doesn’t come before the end 

of next year, then something is going to have to be done for the 

trust fund in a standalone bill, because there won’t have been this 

mini-grand bargain or grand bargain or tax reform bill. So part of 

it is just going to depend on the timing. 

Senator BAUCUS. That is true. Chairman Dave Camp, chair of 

the House Ways and Means and I and many others here are working on tax reform and have been for a couple of years. It has not 

been on the radar screen, but a lot of staff work has been done, 

working with the Administration, the Treasury on technical details 

and how these various provisions work. 

It is my goal to have a markup this year on tax reform. I know 

Chairman Camp has the same goal. It is going to be difficult to 

pass tax reform this year, but I think it is quite possible to get tax 

reform passed in this Congress, next year. The last year was 1986, 

and that was an election year. So elections didn’t get in the way. 

In fact, it became quite popular to pass tax reform as a fall, maybe 

late summer or early fall of 1986 for an election. 

And certainly, the degree of tax reform does reduce complexity, 

does close a lot of loopholes. And also helps with growth and jobs 

in and of itself, makes America more competitive, and freight reduction and all that can become quite popular. 

Now, you make a good point: can we get all this wrapped up in 

time to fill the gap in the trust fund. Well, there are a lot of ways 

to skin a cat around here. For example, we could have another 

transfer, a temporary transfer. There are all kinds of things we can 

do pending final approval of tax reform. 

Other thoughts any of you have? Secretary. 
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Mr. CONNAUGHTON. Senator, we in Virginia have been fighting 

about this for 13 years, every session fighting about this. And a few 

things looking back on it, the first was, we had to take all the excuses off the table. People wanted toll facilities, everyone want toll 

facilities until we started putting toll booths up, and then everyone 

started saying, well, maybe gas tax increases or other increases 

might not be a bad thing. 

People were complaining about our program was too top heavy. 

We made those reforms. We took essentially all the excuses off the 

table. I think we did some very good things so the public had confidence that if we were to put more money into the system it was 

going to actually lead to transportation improvements. 

And then we were very clear from the executive branch that this 

problem, this problem, we were heading toward a cliff. I think if 

we did all these other things when we said that and we could show 

them numbers, people bought into it. It took an enormous amount 

of leadership. I think we had a lot of national groups coming in, 

getting very active and trying to stop this, our proposal, just basically because of the implications nationally. 

So it took leadership, it took some bold proposals, some different 

proposals. And it just really took getting all these excuses off and 

making sure people understood. I will tell you one thing that is a 

challenge for us all. You hear it when we talk about this issue, we 

talk about trillions of dollars’ worth of needs out there. It is very 

hard for the public to get their arms around that. When we could 

very much articulate what the immediate problems are, what we 

could raise, what we could do, it made a major difference in getting 

public acceptance. 

Senator BAUCUS. May I just ask one more question? 

Senator BOXER. Yes, Senator. 

Senator BAUCUS. So in Virginia, was transportation reform part 

of a larger effort or was it standalone in the State of Virginia? 

Mr. CONNAUGHTON. It was a standalone. We actually have a 

standalone special fund. 

Senator BAUCUS. It changes? That change in how you finance 

your transportation system? 

Mr. CONNAUGHTON. Yes, sir. 

Senator BAUCUS. That was just purely focused on transportation, 

nothing else? Was it part of a budget? Did the State have a budget 

and that was part of it? 

Mr. CONNAUGHTON. There was some discussion about making 

part of a bigger reform effort for tax reform in the State generally. 

We actually fought to keep it standalone, because we didn’t know 

where the broader tax reform would go. Whereas we felt very confident that once we could get the tax reform for transportation isolated, we could get it through. 

Senator BAUCUS. One question, I know it is something that you 

have been interested in, Madam Chair, and that is these funds that 

are one-off. Everybody talks about, not everybody, a lot of people 

talk about trapped cash overseas. Very large multinationals have 

lots of trapped cash overseas, given our current tax estimate. 

And so the question is, shall we bring that back, tax at a lower 

rate, not current 35 percent, which is the current U.S. corporate 
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rate, bring it back to a lower rate and dedicate that to the Highway 

Trust Fund. What do you think of that? Anybody. 

Mr. CONNAUGHTON. We are trying to do that with supporting 

your Marketplace Fairness Act, just for internet sales taxes. 

Senator BAUCUS. That is a whole different subject. 

Mr. CONNAUGHTON. Yes, sir. But we are dedicated that any new 

revenues that come from, once we can start to collect those Internet sales taxes would all be dedicated to transportation? 

Senator BOXER. How much revenue from that? 

Senator BAUCUS. From the Marketplace Fairness Act? 

Senator BOXER. No, I am talking about repatriation. 

Senator BAUCUS. Well, it depends. I mean, there is $2 trillion 

overseas. So it depends on the rate. You can set any rate. In fact, 

the early repatriation rate is like five and a quarter, something like 

that. I don’t think that is going to fly right now. It might be a higher rate than that. But yes, it is a one-off, it is not continual. That 

is the real question here. 

But my time is expired. The point I am making is, we need to 

figure out politically how to get the revenue we need and clearly, 

we need to put the amount of revenue in that you are all talking 

about. I sense that the Highway Trust Fund could be an engine 

that pulls the train here. Because people do want to solve this. 

They know it has to be solved. 

Madam Chairman, you saw this article. I was just stunned when 

I saw this article 4 or 5 days ago. Stunned. It is surface transportation, not highway, but surface. How China is building, and has, 

is up and running now, these massive high speed passenger train 

systems that go 180 miles an hour, connecting China. More people 

have traveled trains in China than by air. You go to China, as you 

know, oh, my God, all the airlines around and all the planes and 

so forth. It has done what many of you said, their highways have 

helped create growth. People get on a train, go 2 hours, go someplace, different business set up. It is efficiency and speed, top notch 

passenger transportation system. 

So if we can get our highways going here, clearly it is going to 

have a big impact, second and third degree, on growth in jobs. We 

have to break the gridlock around here and figure out how best to 

do it. 

Senator BOXER. Senator, I want to thank you for being here. I 

don’t have any questions for the panel, but I want to kind of wrap 

up that way. Senator Inhofe was here, and he was just a very 

strong proponent of doing something here. And you may be right, 

maybe this pulls the train. But if it doesn’t pull the train, I think 

we have to be prepared to separate it out. Because what is at stake 

here, as you know, well, in your State particularly, the rural 

States, everything is at stake in terms of roads. 

The other aspect of all this too is with the extreme weather conditions, it is even putting more stress on our roads than we ever 

used to have. We have to get this done. 

Now, what I want to say is, we are so fortunate to have Senator 

Baucus here, because he is the chairman of the subcommittee that 

deals with highways, plus he is the chairman of the Finance Committee. So it is a very important thing. I am going to do my part 

as Chairman of this Committee to just give as many ideas as I can 
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over to Senators Baucus and Camp, Levin and Hatch. And I just 

want to thank all of you, you have been terrific, I wanted to look 

at your paper to see the other ideas that you have come up with. 

But we are meeting and we are going to do everything we can. 

To me, failure is not an option, period. This is on our backs. This 

is our responsibility. We have to be here at this particular time. 

And I would say, Mr. Schenendorf, I would take exception with 

a tiny bit of your critique. You made it sound like we haven’t done 

anything since President Eisenhower, and I do think we have 

picked this up. I do think we have kept it going. I do think despite 

all odds we were able to keep this going. 

So I am feeling certainly part of that segment of the Congress 

that believes that this is an absolute obligation. But this is a no 

turning back point, and we have to come through. 

I would love to see a part of a big package, I say to my colleague, 

it would be wonderful. Because there are lots of other reforms that 

are important. But I think we have to be prepared, as you said, if 

we have to go a separate route. 

And on repatriation, count me in. Thank you very much everybody, we stand adjourned. 

Senator BAUCUS. If you don’t mind, may I just make one comment? 

Senator BOXER. Yes, you can. 

Senator BAUCUS. We don’t have any more low-hanging fruit to 

backfill the General Fund to reimburse the trust fund. 

Senator BOXER. I made that point, for sure. We are struggling. 

Senator BAUCUS. We have run out of stuff. 

Senator BOXER. You can’t pull out that magic trick that you did 

the last time. Remember? 

Senator BAUCUS. That was just smoothing, that did it. 

Senator BOXER. Smoothing and all these things I thought I 

would never hear of. Thank you all for being here. You have all 

been very helpful. Be prepared, because we are going to work together as never before. And thank you to Virginia for setting an example on how to move forward. 

We stand adjourned. 

[Whereupon, at 12:35 p.m., the Committee was adjourned.] 

[An additional statement for the record follows:] 

STATEMENT OF HON. JOHN BOOZMAN, 

U.S. SENATOR FROM THE STATE OF ARKANSAS

Chairwoman Boxer and Ranking Member Vitter, thank you for holding today’s 

hearing on highway and infrastructure funding issues. We have broad bipartisan 

support for smart spending on infrastructure. Senator Inhofe often points out that 

he is one of the most conservative members of the Senate, but he supports investments in our national defense and spending on infrastructure. I agree that these 

must be priorities. I compliment both of you for your work on WRDA earlier this 

year. The bill passed the Senate, with over 80 votes. In the last Congress, MAP– 

21 passed the Senate, with well over 70 votes, thanks to the work of our Chair and 

then-Ranking Member Inhofe. I think we can build on this progress, but there is 

a cautionary tale here. 

After decades of growth, the level of revenue coming into the Highway Trust Fund 

has begun to decline. This is due to good news and bad news. The good news is that 

all of our vehicles, from tractor-trailers to passenger vehicles, have become significantly more fuel efficient. People are also changing their driving patterns, and driving less. The bad news is that our sluggish economy has also contributed to declining revenues over the last 5 years. 
230 

We’ve used General Fund transfers to supplement highway spending, but that 

practice cannot continue. Again, I was proud to support MAP–21, and our Committee leadership did a remarkable job putting that bill together, but when MAP– 

21 expires, we will still continue to rely on ‘‘pay-fors’’ in the bill for another 8 years. 

In other words, it was a 2-year bill, with 10 years of ‘‘pay-fors.’’ This practice of borrowing from the future is simply unsustainable. That’s why today’s hearing is so 

critical. 

We really are coming to a major turning point in the way that highway and infrastructure projects are financed. It’s time to carefully reevaluate our programs in a 

serious and comprehensive way. In order to sustain the support of the public and 

of fiscally conservative members—like me—we must continue to make progress on 

accelerated project delivery, State and local control, programmatic reforms, and the 

elimination of costly and counter-productive bureaucracy. The highway program 

should supplement the work of States and encourage local and State investment. 

Our infrastructure really sets our country apart. It helps American factories and 

farms to compete on the global stage. We need to maintain this competitive advantage. To do this, we must reevaluate how programs designed in the mid-20th century can be reformed for the 21st century. 

I am very encouraged that we are getting started now, and I appreciate the testimony of our witnesses. Thank you. 

Æ