```

[Senate Hearing 112-825]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 112-825
 
       THE PRESIDENT'S PROPOSED FHWA BUDGET FOR FISCAL YEAR 2012 

=======================================================================

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 9, 2011

                               __________

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

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

                               __________

                         U.S. GOVERNMENT PRINTING OFFICE 

85-230 PDF                       WASHINGTON : 2014 

  For sale by the Superintendent of Documents, U.S. Government Printing 
   Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
        DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
                          Washington, DC 20402-0001 

               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                      ONE HUNDRED TWELFTH CONGRESS
                             FIRST SESSION

                  BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana                  JAMES M. INHOFE, Oklahoma
THOMAS R. CARPER, Delaware           DAVID VITTER, Louisiana
FRANK R. LAUTENBERG, New Jersey      JOHN BARRASSO, Wyoming
BENJAMIN L. CARDIN, Maryland         JEFF SESSIONS, Alabama
BERNARD SANDERS, Vermont             MIKE CRAPO, Idaho
SHELDON WHITEHOUSE, Rhode Island     LAMAR ALEXANDER, Tennessee
TOM UDALL, New Mexico                MIKE JOHANNS, Nebraska
JEFF MERKLEY, Oregon                 JOHN BOOZMAN, Arkansas
KIRSTEN GILLIBRAND, New York

       Bettina Poirier, Majority Staff Director and Chief Counsel
                 Ruth Van Mark, Minority Staff Director

                            C O N T E N T S

                              ----------                              
                                                                   Page

                             MARCH 9, 2011
                           OPENING STATEMENTS

Boxer, Hon. Barbara, U.S. Senator from the State of California...     1
Inhofe, Hon. James M, U.S. Senator from the State of Oklahoma....     1
Lautenberg, Hon. Frank R., U.S. Senator from the State of New 
  Jersey.........................................................    11

                                WITNESS

LaHood, Hon. Ray, Secretary, U.S. Department of Transportation...     2
    Prepared statement...........................................     3

       THE PRESIDENT'S PROPOSED FHWA BUDGET FOR FISCAL YEAR 2012

                              ----------                              

                        WEDNESDAY, MARCH 9, 2011

                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2:15 p.m. in room 
406, Dirksen Senate Office Building, Hon. Barbara Boxer 
(chairman of the committee) presiding.
    Present: Senators Boxer, Inhofe, Carper, Lautenberg and 
Boozman.

STATEMENT OF HON. BARBARA BOXER, U.S. SENATOR FROM THE STATE OF 
                           CALIFORNIA

    Senator Boxer. The Committee will come to order. We are 
going to do something different. Senator Inhofe and I have 
decided to waive all opening statements so we can get right to 
our wonderful witness, Hon. Ray LaHood, Secretary, U.S. 
Department of Transportation.
    We have a vote that starts at 3 o'clock. That means we can 
be done in an hour, and then if we get all our questions in, 
you are free to go. So we are going to aim to finish this in 
about an hour.
    So with that, unless my friend wants to say something, 
anything?

STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM THE STATE 
                          OF OKLAHOMA

    Senator Inhofe. No.
    [The prepared statement of Senator Inhofe follows:]
       Statement of Hon. James M. Inhofe, U.S. Senator from the 
                           State of Oklahoma
    In my 20 plus years of service in Congress, this is the most 
unusual budget request for the Federal Highway Administration I have 
reviewed. What is unusual is not the amount requested, although 
significant, nor is it that it overstates the need; some may argue it 
is not enough. What is unusual is that it ignores the fact that there 
is no money to fund it. Because the Highway Trust Fund (HTF) is all but 
insolvent, we cannot proceed with a bill unless we have a serious 
discussion about where the money is coming from. Unfortunately, the 
President's budget chooses to ignore that.
    The budget includes $70.4 billion for highways in 2012, which 
represents a 71 percent increase above the current funding of $41 
billion. $27.7 billion of this request is considered a one-time 
frontloading of the bill ($50 billion spread across all modes of 
transportation). Funding drops down to $47.4 billion in 2013 then grows 
from there.
    While it is good to see an increased interest in our Nation's roads 
and bridges, the truth is that the funding levels requested in this 
budget and in the reauthorization proposal are reckless when one 
considers we have a national debt of over $14 trillion. The President's 
failure to specify how he would pay for his $556 billion proposal makes 
me wonder how seriously he wants Congress to consider it. Instead of 
punting and including a placeholder tax increase of $231 billion over 6 
years ($435 billion over 10 years), I think it would have been more 
useful to provide suggestions on how to achieve his goal along with 
legislative language that lays out the specifics of his proposal. This 
is an enormous amount of money to simply assume can be raised. To put 
it in perspective, it would mean more than doubling the gas and diesel 
taxes. That is a staggering hole.
    The whole purpose of a budget is to make tough choices. This budget 
proposal does neither. It doubles spending, but does not pay for it. 
This is irresponsible--especially given the fact that this year's 
budget deficit will be over $1.6 trillion. Putting aside the lack of 
attention to the funding shortfalls, from what I am able to tell about 
the reauthorization proposal, there are some good ideas that I wish we 
had more information on.
    The proposed elimination of 55 programs within the overall Federal-
aid Highway Program is a much-needed and appreciated move. These 
programs are replaced with greater flexibility, allowing states and 
localities to better address their individual and unique needs. This 
consolidation is politically difficult to do, and we in Congress will 
have to follow your example of leadership on this.
    Summary documents indicate your proposal moves the program from 
being focused on bureaucratic processes to focusing on outcomes and 
ensuring our motorists' tax dollars are well spent. This is obviously a 
major change, but one that is needed.
    The President's budget also proposes rebasing spending from the 
Highway Trust Fund as 100 percent mandatory. Currently, it is accounted 
for as both mandatory and discretionary. Rebasing the program to the 
mandatory side of the budget would provide a great deal of added 
certainty to State DOTs and contractors. This certainty would increase 
the likelihood that large, multi-year projects would make it off the 
drawing board and actually get built.
    In addition to a lack of a funding mechanism, I'm concerned about 
another aspect of your reauthorization proposal. It's not a surprise by 
any means, but the budget proposes a new livability program funded at 
$4.1 billion in 2012 going up to $5.1 billion by the end of the bill 
(in 2017). To put this in perspective, this is almost 10 percent of the 
total program and over 60 percent larger than the dedicated safety 
program. This is far too much of the program to spend on things that 
have little or no impact on Americans' mobility.
    I can honestly say that I'm very interested to see the policies you 
have included in your reauthorization proposal. The budget request 
reflects this to some degree, but my enthusiasm is overshadowed by the 
lack of a funding proposal.

  STATEMENT OF HON. RAY LaHOOD, SECRETARY, U.S. DEPARTMENT OF 
                         TRANSPORTATION

    Secretary LaHood. Madam Chair, my statement is in the 
record so I am prepared to answer questions.
    Senator Boxer. Oh, well, I think you should do a little 
summary for us. Without reading it, just talk to us.
    Secretary LaHood. The picture on our budget tells the 
story. It is a picture of a bridge that is over the Hoover Dam. 
It connects Nevada and Arizona. The reason that we put it on 
here is because this is what our predecessors did. They thought 
big. They thought about how to put people to work and thought 
about big projects, and this is an example.
    This illustrates what the President's budget illustrates, 
which is a big bold vision for transportation and putting 
people to work and the fact that a transportation bill can be a 
jobs bill and can continue to build America. That is what we 
are here to talk about.
    [The prepared statement of Secretary LaHood follows:]
      Statement of Hon. Ray LaHood, Secretary, U.S. Department of 
                             Transportation
                              Introduction
    Chairman Boxer, Ranking Member Inhofe, and Members of the 
Committee, thank you for the opportunity to appear before you today to 
discuss the Administration's Fiscal Year (FY) 2012 budget request for 
the U.S. Department of Transportation. The President is requesting $129 
billion for Transportation in Fiscal Year 2012. This includes the 
first-year of a bold new 6-year $556 billion reauthorization proposal 
that will transform the way we manage surface transportation for the 
future.
    America is at a transportation crossroads. To compete for the jobs 
and industries of the future, we must out-innovate and out-build the 
rest of the world. That is why President Obama called on the Nation to 
repair our existing roadways, bridges, railways, and runways and to 
build new transportation systems--including a national high-speed 
intercity rail network--which will safely and efficiently move people 
and goods. The Administration's Surface Transportation Reauthorization 
proposal is designed to accomplish precisely this, and is the 
centerpiece of the President's Fiscal Year 2012 budget.
    It proposes four broad goals: (i) building for the future, (ii) 
spurring innovation, (iii) ensuring safety, and (iv) reforming 
government and exercising responsibility.
    The Fiscal Year 2012 proposal includes a $50 billion ``Up-Front'' 
economic boost that is designed to jump-start job creation while laying 
the foundation for future prosperity. This initial funding would 
finance improvements to the Nation's highway, rail, transit, and 
aviation systems.
                       i. building for the future
    America's aging roads, bridges, and transit systems must be 
addressed. For too long we have put off the improvements needed to keep 
pace with today's transportation needs. By 2050, the United States will 
be home to 100 million additional people--the equivalent of another 
California, Texas, New York, and Florida. More than 80 percent of them 
will live in urban areas. Concerns about the need for livable 
communities will increase as communities tackle the need for 
transportation choices and access to transportation services. If we 
settle for the status quo, our next generation of entrepreneurs will 
find America's arteries of commerce impassably clogged and our families 
and neighbors will fight paralyzing congestion. So the Administration's 
proposal addresses this challenge in three ways:
    (1) Creating a National High-Speed Rail Network: First, the 
proposal provides $53 billion over 6 years to continue construction of 
a national high-speed rail network. It will place high-speed rail on 
equal footing with other surface transportation programs; include 
funding for both Amtrak and new ``core express,'' ``regional,'' and 
``emerging'' corridors; and keep the country on track toward achieving 
a goal of providing 80 percent of Americans with access to an intercity 
passenger rail network, featuring high-speed rail within 25 years.
    (2) Rebuilding America's Roads and Bridges: Second, the 
Administration's proposal will provide a 48 percent funding increase--
to $336 billion over 6 years for road and bridge improvements and 
construction. A key element expands the current National Highway System 
to include an additional 220,000 miles of critical arterials. It will 
also simplify the highway program structure, accelerate project 
delivery to realize the benefits of highway and bridge investments for 
the public sooner, and underscore the importance of maintaining 
existing highway infrastructure in good condition. These investments 
and reforms will modernize our highway system while creating much-
needed jobs.
    (3) Investing in Accessible, Affordable Transit Options: Third, the 
proposal will provide a 128 percent increase in funding--to $119 
billion over 6 years--for affordable, efficient, and sustainable 
transit options. It will prioritize projects that rebuild and 
rehabilitate existing transit systems, including an important new 
transit safety program, and allow transit authorities (in urbanized 
areas of 200,000 or more in population) to temporarily use formula 
funds to cover operating costs.
                        ii. spurring innovation
    The Administration's Surface Transportation Authorization proposal 
acknowledges the important role that innovation and modern business 
tools play in putting our transportation dollars to work wisely. We can 
no longer afford to continue operating our systems the same way we did 
50 years ago, with outdated processes and financial tools that were 
made for yesterday's economy. Our proposal and the President's Fiscal 
Year 2012 request responds to this challenge in several ways.
    It establishes an Infrastructure Bank to finance projects of 
national or regional significance. By working with credit markets and 
private-sector investors, the Infrastructure Bank will leverage limited 
resources to achieve maximum return on Federal transportation dollars. 
The bank will initially receive $30 billion over 6 years, will reside 
within the U.S. Department of Transportation, and will be managed by an 
executive director with a board of officials drawn from other Federal 
agencies.
    Recognizing that competition often drives innovation, the 
Administration's proposal and the President's Fiscal Year 2012 budget 
also includes a $32 billion competitive grant program called the 
Transportation Leadership Awards. This program's goal is to reward 
States and local governments that demonstrate transformational policy 
solutions. Examples include the use of innovative multimodal planning 
and funding methods, pricing and revenue options, land use guidelines, 
environmental stewardship measures, economic development strategies, 
innovation of project delivery, and deployment of technology--just to 
name a few possibilities.
    These new and innovative tools will help us to better meet the 
transportation needs of America's small towns and rural communities. 
Increased highway funding will expand access to jobs, education, and 
health care. Innovative policy solutions will ensure that people can 
more easily connect with regional and local transit options--and from 
one mode of transportation to another.
    At the same time, our proposal will bolster State and metropolitan 
planning; award funds to high performing communities; and empower the 
most capable communities and planning organizations to determine which 
projects deserve funding.
    Innovation must span beyond surface transportation. This is why the 
President's budget request also includes $3.4 billion for aviation in 
the $50 billion up-front investment. The budget requests $3.1 billion 
for airport improvements for runway construction and other airport 
projects such as Runway Safety Area improvement projects as well as 
noise mitigation projects. Modernizing our air traffic control systems 
is critical if we are to meet the needs of the future. The President's 
Fiscal Year 2012 budget addresses this by providing $1.24 billion for 
the Federal Aviation Administration's (FAA) efforts to transition to 
the Next Generation (NextGen) of Air Traffic Control. This funding will 
help the FAA move from a ground-based radar surveillance system to a 
more accurate satellite-based surveillance system--the backbone of a 
broader effort to reduce delays for passengers and increase fuel 
efficiency for carriers.
                          iii. ensuring safety
    Keeping travelers on our transportation systems safe is my top 
priority. That is why preventing roadway crashes continues to be a 
major focus at DOT. The Administration's Surface Transportation 
Reauthorization proposal will provide $330 million for the ongoing 
campaign against America's distracted driving epidemic. It will also 
commit $7 billion to promote seatbelt use, get drunk drivers off the 
road, and ensure that traffic fatality numbers continue falling from 
current historic lows. In addition, it almost doubles the investment in 
highway safety, providing $17.5 billion to Federal Highway 
Administration (FHWA) safety programs. The Department is also taking a 
fresh approach to interstate bus and truck safety. Compliance, Safety, 
Accountability (CSA) is a new initiative that will improve safety and 
use resources more efficiently. The Administration's Surface 
Transportation Reauthorization Proposal will dedicate $4.9 billion to 
the Federal Motor Carrier Safety Administration (FMCSA), and give the 
Department of Transportation new authority to set tougher safety 
performance goals for states.
    Transit safety is another important priority. Our proposal will, 
for the first time, entrust the Federal Transit Administration with the 
authority to oversee rail transit safety across America. In light of 
recent transit-related accidents, I believe this is critical to 
ensuring the oversight and accountability our transit riders deserve.
    Our safety focus must also include the transportation of hazardous 
materials and our network of pipelines. The Administration's Surface 
Transportation Reauthorization Proposal will fund the safety programs 
of the Pipelines and Hazardous Materials Safety Administration (PHMSA) 
and will enhance its authorities to close regulatory loopholes and 
improve its safety oversight. The President's Fiscal Year 2012 budget 
requests $221 million for PHMSA to help ensure that families, 
communities, and the environment are unharmed by the transport of 
chemicals and fuels on which our economy relies.
         iv. reforming government and exercising responsibility
    As we move forward together to plan for America's transportation 
needs, we must also keep in mind the responsibility we all share for 
using taxpayer dollars wisely. The Administration's Surface 
Transportation Reauthorization Proposal will cut waste, inefficiency, 
and bureaucracy so that projects can move forward quickly, while still 
protecting public safety and the environment.
    Our proposal consolidates and streamlines our current Highway and 
Transit Programs in a major way. The current system of over 55 separate 
highway programs will be folded into five new categories. Similarly, 
six transit programs are merged into one ``State of good repair'' 
program and one ``specialized transportation'' program. As a result of 
these changes, we expect to shorten project delivery and accelerate the 
deployment of new technologies.
    The Administration's Surface Transportation Reauthorization 
proposal also includes important reforms that change the way we manage 
our transportation spending. Consistent with the recommendations of the 
Fiscal Commission, for the first time, the Budget proposes to subject 
surface transportation spending to ``paygo'' provisions to make certain 
that spending does not exceed dedicated revenue. This approach is 
designed to ensure that our surface transportation program is paid for 
fully without increasing the deficit. The proposal will also expand the 
current Highway Trust Fund into a new Transportation Trust Fund with 
four accounts--one for highways, one for transit, one for high-speed 
passenger rail, and one for the National Infrastructure Bank.
                               conclusion
    Thank you for the opportunity to appear before you to present the 
President's Fiscal Year 2012 budget proposal for the Department of 
Transportation and our Surface Transportation Reauthorization proposal 
that will help transform transportation programs over the next 6-years 
in ways that will benefit all Americans for years to come. I look 
forward to working with the Congress to ensure the success of this 
request.
    I will be happy to respond to your questions.

    Senator Boxer. Well, Mr. Secretary, I will start my 5 
minutes of questions. I am not going to read them. I am just 
going to talk to you.
    I think we have an opportunity here to work across party 
lines, and you represent that bipartisanship, and the two of us 
do on this issue, to really do something for this country to 
put all those unemployed construction workers to work, to 
figure this out.
    But recognizing that the Highway Trust Fund, the funds in 
there are dwindling, we have to figure out how to leverage the 
funds that we have; how to do a lot more with a lot less. The 
good news is there are a couple of ways to get there. My idea, 
which I am working with Senator Inhofe and his staff and my 
staff have been meeting on, one idea is to expand the TIFIA 
Program.
    Congressman Mica and I have held hearings together in Los 
Angeles. He wants to embrace a much more robust TIFIA program.
    Now, in your budget, you call for a very large 6-year bill, 
but you really don't. You say you look forward to working with 
us on how to fund it. I would respectfully suggest, and this is 
just me speaking, just for myself, that this TIFIA program 
could be of enormous consequence.
    My understanding is that we are funding it at a very low 
level and the requests far surpass what we have been funding 
TIFIA at. The reason I am so drawn to TIFIA is because it is 
almost 100 percent risk-free for our government. For example, 
the projects through the TIGER grant that you funded, for which 
we are so grateful in Los Angeles, the Crenshaw Project, $500 
million project only scores at $20 million for the Federal 
Government. We are going to put people to work, and we are 
going to take a project that was going to take 30 years to 
build, built it in 10 years, put all the people to work, and it 
is a win-win in every way.
    So we have been looking at the letters of interest on TIFIA 
to see what the traffic will bear. My staff tells me that you 
have identified $48 billion worth of projects, and obviously 
that would take $14 billion, and TIFIA is budgeted at a very 
low level. But just this letter of interest from all over the 
country, from all over the country, $48 billion of work. It 
would score at $14 billion.
    So I guess my opening question for you is I was 
disappointed that your TIFIA budget was so low. It doesn't make 
sense to me, and I am just wondering if we decided that we feel 
this is an area that we could greatly expand because it costs 
so little for the Federal Government, because it is so much 
risk-free, because, and I think Jim Inhofe and I agree on this, 
the priorities are set by the local people. They are the ones 
who are coming up with it, not us, not us here.
    Would you be willing to work with us and would you support 
us if we went for a larger TIFIA program, without saying 
exactly how much?
    Secretary LaHood. We like the TIFIA Program very much. It 
is a very innovative, creative financing program. We know there 
is a lot of interest in it. The answer to your specific 
question is of course we would be willing to work with you.
    One of the reasons that the President created the 
Infrastructure Bank was to leverage TIFIA against the 
Infrastructure Bank, along with other funding sources. If you 
look at projects, you can look at many different sources of 
funding.
    We would have no complaints about working very closely with 
you on TIFIA, but we think the Infrastructure Bank also offers 
opportunities for creative, innovative approaches. In 
Transportation there are funding options such as, the 
Infrastructure Bank, TIFIA, tolling, Highway Trust Funds, State 
funds, or a combination of these programs.
    Senator Boxer. Right.
    Secretary LaHood. We like TIFIA.
    Senator Boxer. Good.
    Now, I wanted to say to my colleague that I just made a 
mistake when I said $48 billion would cost us $14 billion. It 
would cost us $1.4 billion. That is the actual score. So if we 
were to go in that direction, theoretically $1.4 billion could 
support $48 billion in projects. I just think it is an exciting 
option for us, and I will turn to my friend.
    Senator Inhofe. We are just doing to do this jointly, I 
think, Madam Chairman.
    Yes, the problem, and we have been talking to Mr. Bertram 
about this. First of all, when you have these exhibits, you 
have a specific percentage we are using, but they are not all 
the same. You have some that would be 2 percent, some 10 
percent. So I assume that we are striking some.
    My question would be, and my concern is, and I am 100 
percent in agreement with this, but it is my feeling that we 
can't get a high enough figure to really put much of a dent in 
this thing. That is my concern. Your loans have to be ready. 
The projects have to qualify.
    So maybe, Mr. Secretary, maybe Mr. Bertram could respond, 
too, because we have had some conversations with him.
    Secretary LaHood. Sure.
    Senator Inhofe. What would, in your estimate, would be a 
maximum, let's say, over a 2-year period that we could do 
through the TIFIA, which I very much support?
    Mr. Bertram. Senator, in the budget for 2012, we propose a 
total TIFIA Program of $450 million, which is almost four times 
more than the amount that is authorized in SAFETEA-LU. That 
would translate into about $4.5 billion worth of loans. We 
think that would be the first year.
    The real problem with the way these projects work is that 
it requires a lot of commitment by either the State or local 
government to actually put these projects together. We think we 
could at least do about $450 million worth of subsidy in the 
first year, and then the Infrastructure Bank would take over 
that. We think over the next couple of years it would probably 
be close to $9 billion worth of projects.
    Senator Boxer. Well, my friend, we are not going to use any 
time here. Now, you are so on point because we want to do what 
makes sense. We don't want to just put a number in there and 
feel good about it.
    In recent years, the number of applications for TIFIA have 
greatly exceeded the available funding. In 2010 alone, you 
received 39 letters of interest, that is from our local 
governments, seeking $13 billion in credit assistance to enable 
over $41 billion in total combined Federal and non-Federal 
investments.
    So the point I would like to make is it looks like our 
communities understand this program and they are moving. Now, 
out of these 39 letters or 34 letters, maybe there were some 
that were just not good. We are not sure of that. But what I 
know Congressman Mica is doing over on the House side, he would 
love to greatly increase this program and he is also looking at 
what is feasible.
    So let me just ask this question. I will yield back. Would 
you work with us to kind of take apart this information we got 
from you on these letters?
    Secretary LaHood. Sure.
    Senator Boxer. Just giving us a sense of how many of these 
were ready for prime time.
    Secretary LaHood. Sure.
    Senator Boxer. Because I think this point is well taken. If 
we put too big a number in there and it gives false 
expectations, false hopes, that is foolish. I do feel something 
between what you suggested and a larger number is right. I 
think you are way lower than what the interest on the ground 
is.
    The other point I would make is it sends a signal to the 
local people. It empowers them to take the lead and move 
forward.
    Anyway, I yield back.
    Senator Inhofe. Well, no, that is fine. We will just keep 
this. Why don't you go ahead and finish what you started there 
because you talked about what may be a reasonable expectation 
in a year. You might kind of expand that out what you think in 
years following that.
    Mr. Bertram. Yes, like I said, we requested $450 million. 
As you pointed out, the subsidy percentage varies on the 
specific project, but that would be about $4.5 billion worth of 
TIFIA loans. The current rules are that TIFIA is one-third of 
the overall project, which would be about $13 billion worth of 
projects that we think could happen in Fiscal Year 2012.
    Senator Inhofe. That is just in 1 year?
    Mr. Bertram. In 1 year. One of the nice things about having 
a multi-year highway bill is we would actually know how much 
money is available each of the years. States could actually be 
able to plan when they would need the financial help.
    Senator Inhofe. I really think that we are now talking in 
terms of something that could be somewhat meaningful.
    Go ahead.
    Senator Boxer. Yes, my question, a lot of my folks have 
said, well, could you look at reforming TIFIA. What do you 
mean? Well, right now, TIFIA can loan up to one-third, is that 
it?
    Mr. Bertram. That is correct.
    Senator Boxer. Well, if we took it up to one-half, what do 
you think the pros and cons are of that?
    Mr. Bertram. Well, the cons are that the amount of the 
Federal subsidy doesn't go as far. We only get 50 percent 
private match as opposed to 66 percent. However, it might make 
TIFIA loans available to projects that would have a harder time 
getting the 66 percent. I think it is something worth 
discussing.
    Senator Boxer. OK.
    Anything else?
    Senator Inhofe. No, not on that.
    Senator Boxer. Go ahead. You can ask whatever.
    Senator Inhofe. At one time, Mr. Secretary, I did want to 
get into this BARR Program. I know that it is not even an NPRM 
yet, but there is some discussion in terms of what is going to 
come from that program. I at least want to use this to weigh in 
on this because I believe that there are a lot of security 
concerns that we haven't had a chance to talk about. Some would 
not be appropriate in an open session, but I do believe that 
the capacity to maintain a position where you are not 
identified in that system, and I can actually talk about that 
personally, is something that is worthy of discussion.
    It probably isn't appropriate to bring up in this Committee 
hearing.
    Secretary LaHood. Senator, I would like to come by and talk 
to you about this because I have looked into this. We are going 
to put the program in the Federal Register and ask for comments 
from people. I know you are a pilot and I know you know the 
value of this program and we should talk about it.
    Senator Inhofe. That is fair.
    Senator Boxer. Mr. Secretary, I know that you have 
drastically streamlined the Highway Program and transportation 
programs. That is something we are working very hard on to make 
sure that this happens.
    Could you just briefly explain how many programs you took 
and what you whittled it down to?
    Secretary LaHood. We collapsed 50 programs into 5, and we 
think that all of these things that have been created over a 
period of time and transportation bills, it is not that we have 
really eliminated anything, but people are going to compete for 
these dollars in a competitive way and people are talking about 
streamlining. Well, this is our way of streamlining. This is 
our way of compressing a bunch of programs into five and 
hopefully eliminating some bureaucracy, but not eliminating the 
opportunity for creative people around the country to apply for 
these funds.
    Senator Boxer. Well, what I like about it, and I am sure my 
colleague agrees, is that all these set-asides are so complex, 
and sometimes some programs get funded higher than they should 
be and the money isn't used, and others are shorted. So if we 
streamline it down, I don't know if we get down to five here, 
but we are working with the staffs on both sides to come up 
with a plan, I think it is going to help us quite a bit. I 
think at the end of the day, we will save funding and we will 
certainly have I think better results. Because we are not 
forcing the Department to say you must fund X, and if you don't 
think there is anything valuable there, and you can give to 
another program.
    I wanted to talk about an unpleasant subject, H.R. 1, 
unpleasant for me, unpleasant for you. I don't know, maybe a 
little pleasant to my friend. I don't know.
    See, he is not listening to this.
    H.R. 1 includes several provisions that would rescind 
funding from transportation programs such as the TIGER II 
grants and high-speed rail. I am very concerned about it 
because, as we said, construction is at such a low level in 
this country since the housing crisis, and transportation 
infrastructure will create jobs.
    So what impact have you quantified, I'm talking about H.R. 
1 that cuts the TIGER grants, have you put together the impact 
you think these reductions in the TIGER grants and high-speed 
rail will have on our national transportation network and on 
jobs?
    Secretary LaHood. We have looked at that, and I can submit 
this for the record, but billions of dollars would be rescinded 
because of language that is in H.R. 1, including some TIGER 
money, ARRA grants, high-speed rail money. These are 
investments that have been made with the idea that they create 
jobs. This is a job creation program and for people who are in 
the Congress that want to create jobs, rescinding money is not 
the way to do it.
    These projects were provided to communities and to grantees 
and to high-speed rail corridors because they create jobs and 
they also solve problems and create opportunities in America.
    [The information referred to follows:]

    The terminations and reductions proposed in H.R. 1 would have 
negatively impacted State and local economies and the State of 
infrastructure across the country. H.R. 1's proposed termination of the 
TIGER II grants that were awarded in Fiscal Year 2010 alone would have 
affected 41 projects in 34 States for a total of $556.6 M. Of these, 17 
projects, a total of $140 M, are in rural areas.
    Both large and small projects have a huge impact on their regions. 
Investments in the freight rail system can move thousands of truckloads 
of goods off the roads and onto rail, relieving road congestion, 
decreasing road maintenance costs, increasing highway safety, and 
improving speed and safety on existing rail lines. Transit investments 
will spur economic development well beyond the Federal investment, 
bringing jobs and business to undeveloped areas. In rural areas, 
transit investment will improve access for local communities and 
connect cities with each other in more efficient ways. Across the 
Nation, replacing aging bridges and correcting highway and street 
safety issues will reduce accidents and congestion.
    Below are a few examples of the impact this funding will have on 
communities, nationwide:
      The Federal investment of $47.6 M in Atlanta Streetcar 
project will serve 1 million passengers per year and could the 
potentially bring $500 M of economic development to underdeveloped 
areas.
      Tower 55 in Ft. Worth, TX will cost the Federal 
Government $34 M, but improving the signaling and crossings at the 
Nation's most congested freight rail intersection will save $900 M in 
supply chain costs.
      Connecting the Port of Miami, FL to the Hialeah Rail Yard 
will eliminate 102 million truck miles from the highway system, saving 
fuel, reducing carbon emissions and traffic congestion and lowering the 
cost of road maintenance.
      Replacing two aging bridges that connect Ann Arbor with 
the University of Michigan will reduce delays and congestion for the 
48,000 vehicles that cross over using just one lane of traffic in each 
direction every day.
      The Northwest Tennessee Port in Lake County is the 
biggest economic development initiative in that region in decades. It 
will bring 2,300 additional jobs to the region and make cargo loading 
and unloading easier and provide a more efficient access to the rail 
system.
      The Great Plains Freight Rail project improves over 150 
miles of track between Kansas and Oklahoma, which will increase speed, 
reduce congestion and increase at-grade safety.
      Reconstructing South Dakota's branch line between 
Mitchell and Chamberlain, SD will take 7,000 truckloads of grain off 
the roads and on to rail, increasing capacity and efficiency.
      The Moline Multimodal Station will improve transit 
connectivity and access for the citizens of Moline as well as restore a 
vital link for passenger rail between Chicago and Iowa City.

    Senator Boxer. Well, today it is no great secret that both 
plans are not going to get enough votes, but I have to say as 
we work together to find an answer to this problem, and we have 
a serious problem, we need to look at these transportation 
grants because I have one in my State. Everybody expected it 
was made, but the money isn't obligated. It takes a little 
longer. They just cut the legs out from under these TIGER 
grants.
    Secretary LaHood. People are expecting this money and some 
of them are starting to realize now that if H.R. 1 were to pass 
in the Senate, this money would go back to the Federal 
treasury. Their dreams and aspirations and projects for high-
speed rail, transit, light rail projects, streetcars and roads 
and bridges, would go back to the treasury.
    Senator Boxer. Well, I just want to note that Los Angeles 
is a case in point where, as I said, for a $20 million score, 
that is what it cost the Federal Government, they rewarded a 
$500 million grant, and $500 million to begin this very 
important project that the local people voted for. This is just 
a pathetic situation because for a $20 million score, we are 
going to lose $500 million worth of jobs. That is a lot of 
jobs. That is more than 10,000 jobs.
    So I hope after we get these votes out of the way today, 
maybe we can have some bipartisan discussion about the next one 
that we agree on where we spare these kinds of investments that 
really do create jobs.
    Senator Inhofe, and then I'll go to Senator Lautenberg.
    Senator Inhofe. I know that Senator Lautenberg wants to 
talk about this.
    I think we are making some headway in talking about, as we 
started off with TIFIA. Now, on the streamlining comments that 
the Chairman talked about, I agree, although I think we can 
even go further talking about some of the problems we are 
facing in the Endangered Species Act and others, they limit the 
amount that can be done with the same amount of money.
    I also agree with your statement about, I kind of wish that 
we had made that statement a little bit louder back when 
Senator Boxer and I were trying to increase the amount of money 
out of the $800 billion stimulus that would go to roads, 
highways and bridges. If we had done that, I think things would 
be a lot better off today and our job would be a lot easier.
    Secretary LaHood. I know we are pressed for time here and 
we want to get to Senator Lautenberg. Let me just tell you 
this, we got $48 billion out of the stimulus bill. It created 
15,000 projects, roads, bridges, runways, a number of projects, 
and put 65,000 people to work over a 2-year period that would 
not have happened if Congress had not done that.
    Our stimulus worked, you have not read any bad stories 
about boondoggles, earmarks, sweetheart deals, none of it. It 
was all spent correctly the way you told us to do it. We know 
that our money works to put people to work. The idea that 
billions of dollars are going to be rescinded does not help put 
Americans back to work.
    Senator Inhofe. Mr. Secretary, I agree with you, except if 
that had been instead of $48 billion, $200 billion, then we 
would be in a lot better shape.
    Secretary LaHood. Well, Senator, I didn't write the bill. 
If you and I had written the bill----
    Senator Inhofe. I didn't even vote for it.
    Senator Boxer. Well, Senator Inhofe and I were working 
really hard behind the scenes and we did manage to get that 
number up from $28 billion or something to the $48 billion 
number, but we both were very distressed and our staffs were 
working behind the scenes, but let us move on.
    Senator Lautenberg, I am going to give you 6 minutes and 
you can work in your opening statement and questions.

 STATEMENT OF HON. FRANK R. LAUTENBERG, U.S. SENATOR FROM THE 
                      STATE OF NEW JERSEY

    Senator Lautenberg. There is an interesting thing here, and 
the Chairman knows that I like to play with words. So when I 
see the two of you working together, I say this is where the 
twains meet.
    Senator Boxer. The twains meet.
    Senator Lautenberg. Forgive me.
    Anyway, our colleagues on the other side of the aisle are 
fond of saying that we need to run government more like a 
business. Well, I had experience there and I co-founded a 
successful company, led it for many years, and that company 
that three of us started now has 45,000 employees. It is one of 
America's top companies in terms of records of success.
    That is because we constantly reinvested in the business. 
Unfortunately, the House Members, Republicans, seem to think 
that investment is a dirty word and they want to slash funds as 
we have all agreed here thus far that are a requisite for our 
country's future. The sledge hammer approach to managing the 
economy would send hundreds of thousands of Americans on 
unemployment lines. That includes almost 3,500 workers in New 
Jersey's construction industry.
    So the Republican plan does not prepare us for the future. 
It leaves our roads clogged, our bridges crumbling, our rail 
lines congested and our air foul.
    So fortunately, President Obama and Secretary LaHood, we 
thank you, Mr. Secretary, have outlined a bold vision for the 
future of transportation, investing and repairing, expanding 
existing infrastructure, as well as building much-needed new 
projects like high-speed rail.
    I would just add that there is a very important safety 
factor here, and every day nearly 100 people are killed on our 
highways. That is not just a statistic. There are lives lost, 
someone's child, someone's parent, 100 times a day. That is why 
I am continuing to push to curb super-size trucks, make 
motorcycles safer and keeping drunk drivers from getting behind 
the wheel.
    So we know that the majority of Americans, 71 percent, said 
they want us to find common ground on improving roads, rail and 
bridges. They recognize that transportation is a key to 
economic success.
    With that, Madam Chairman, I ask that the balance of my 
opening statement be included in the record.
    Senator Boxer. Without objection.
    [The prepared statement of Senator Lautenberg follows:]

     Statement of Hon. Frank R. Lautenberg, U.S. Senator from the 
                          State of New Jersey
    Madam Chairman,
    Our colleagues on the other side of the aisle are fond of saying we 
need to run the government more like a business. Well, I co-founded a 
successful business and led it for many years--so I know that if the 
other side brought their governing philosophy to a private company, 
that company wouldn't last very long. That's because to succeed in 
business, you must constantly re-invest in it.
    Unfortunately, House Republicans seem to think ``investment'' is a 
dirty word. They want to slash funding for our country's future, which 
would stifle economic growth. Their sledgehammer approach to managing 
the economy would send hundreds of thousands of Americans to the 
unemployment line--including almost thirty-five hundred (3,500) workers 
in New Jersey's construction industry. The Republican plan does not 
prepare us for the future--it leaves our roads clogged, our bridges 
crumbling and our rail lines congested.
    Fortunately, President Obama and Secretary LaHood have outlined a 
bold vision for the future of transportation--investing in repairing 
and expanding existing infrastructure as well as building much-needed 
new projects like high-speed rail. The Administration's budget also 
doubles funding for transportation safety.
    Every day, nearly one hundred (100) people are killed on our 
highways. That's not just a statistic; these are lives lost--someone's 
child or parent. One hundred (100) times a day. That's why I'm 
continuing my push to curb super-sized trucks, make motorcycles safer 
and keep drunk drivers from getting behind the wheel.
    This focus--on strengthening our transportation infrastructure and 
making our roads safer--reflects the will of the American people. In a 
survey just last month, an overwhelming bipartisan majority of 
Americans--seventy-one (71) percent--said they want us to find common 
ground on improving roads, rail and bridges.
    They recognize transportation is a key to economic success. It is 
smart investments that will bring that success--not short-sighted cuts.
    Our friends on the other side of the aisle say we can't afford 
these kinds of projects right now. But as any successful business 
person will tell you, if you want to be prosperous tomorrow, you must 
make wise investments today. We can't forget that the history of our 
country is told through great public works projects like the George 
Washington Bridge--which was built during the Great Depression--and the 
interstate highway system, which was built over a forty- (40) year 
span, even when the country was in a recession. The bottom line is that 
this isn't the time to stop investing in the future of our country.
    So I look forward to hearing from you, Secretary LaHood, about how 
we can work together to make transportation a national priority and 
keep our country moving forward.
    Thank you.

    Senator Lautenberg. I would like to ask the Secretary, and 
I heard you say it, Mr. Secretary, we want to confirm. House 
Republicans are attempting to take back funding that was 
already awarded for transportation projects across the country, 
like a project in Jersey City to redevelop an old industrial 
site into a thriving neighborhood. Now, what might be the 
effect be on economic development and job growth if funding for 
these projects is eliminated?
    Secretary LaHood. It would be billions of dollars. H.R. 1 
rescinds about $7.4 billion in DOT resources; $3.6 billion is 
rescinded in the regular DOT ARRA Program. It amounts to 
billions of dollars. The opportunity for those that have been 
awarded these funds create jobs will be lost.
    Senator Lautenberg. Well, we have to do what we can to make 
sure that these things don't happen. I am not sure whether we 
have the ability to do that.
    Now, Federal law prohibits large trucks weighing more than 
80,000 pounds from using InterState highways. Some have 
proposed eliminating that ban. Now, what happens with heavier 
trucks? What does it do to the safety of drivers and passengers 
on our highways and our already-stressed infrastructure? So 
what happens if we eliminate that ban, Mr. Secretary?
    Secretary LaHood. We know this is a very controversial 
issue. It is obviously a big safety issue and it is one that we 
are seriously looking at the Department of Transportation. We 
will work with Congress as you all work through a 
transportation bill.
    Senator Lautenberg. CDC found that re-arrest rates are 67 
percent lower per drunk driving offenders when they have 
ignition interlocks than for just those who had their license 
suspended. Are interlocks important enough to be mandatory, do 
you think, for all convicted drunk driving offenders?
    Secretary LaHood. We know that over 20 years of research 
has shown that ignition interlocks can reduce recidivism by 50 
to 90 percent. We have value at our Department when we base our 
decisions on good data. We know we have credibility and we will 
continue to work on the research and continue to work with you, 
Senator.
    Senator Lautenberg. Thank you.
    One last thing, Madam Chairman. Since the Federal 
motorcycle helmet law was repealed in 1995, motorcycle 
fatalities have more than doubled. In November, the National 
Transportation Safety Board added motorcycle helmet laws to its 
most-wanted list.
    Do you agree with NTSB? Or do you have enough information 
to say that it is time to require helmets to be worn by all 
motorcycle operators and passengers?
    Secretary LaHood. Senator, we believe that it is up to the 
States to decide helmet law issues.
    Senator Lautenberg. Well, we hope that we can induce States 
to use good judgment and help save money and save lives in 
their States. It was on the books for some time, and 
unfortunately we lost it along the way.
    Thanks very much, Madam Chairman. I appreciate it.
    I thank the Secretary.
    Senator Boxer. Thank you, Senator.
    Secretary LaHood. Thank you.
    Senator Boxer. Senator Lautenberg, thank you for all your 
years you have put into safety because that has got to be a key 
element of our bill as we move forward.
    Senator Inhofe, please go ahead.
    Senator Inhofe. Let me mention something first. This is 
very unusual to do this in this Committee, but I am going to do 
it because we have Cindy Babbitt, who is a County Commissioner 
in Oklahoma, and some of her people came up with her. I said, 
you need to be watching, come in and see what we are up 
against.
    Stand up, Cindy, so they know who you are. She is 
beautiful. All right.
    Senator Boxer. Cindy.
    Senator Inhofe. She is very, very conscious about what we 
are trying to do, trying to get some roads and highways and the 
problems. I actually worked with her back when we were doing 
the previous reauthorization.
    Now, two things, if you would, Mr. Secretary. First of all, 
when we did our bill in 2005, $286.4 billion, I believe it was, 
something right now I think most people realized at that time 
that that really just barely maintained what we had. There are 
several of us who wanted to do a lot better. That was the best 
we could do and that was good.
    Now, we are looking at the big issue and that is what are 
we going to do for a 6-year bill, if it happens to be a 6-year 
bill. So I wanted to ask two things. The first one is if you 
look on, and I will give this to you because it is CRS-4, the 
congressional Research Service. What they have done, this is a 
table that has all the laws and regulations and executive 
orders potentially applicable to the NEPA process for 
transportation projects.
    I know you guys have seen this before, but what I would 
like to ask you to do is get one of your staff to go through 
each one of these items and see what would we have to do to 
either eliminate or moderate in some way, because this is 
something that directly relates to the number of miles that we 
can pave out there, the number of bridges that we can build.
    Is that all right?
    Secretary LaHood. Absolutely, and we will work with you on 
this to streamline. We have streamlined in our proposal and the 
President's budget. We have streamlined and compressed a lot of 
programs.
    Senator Inhofe. Yes, I think primarily what you have done 
is consolidation and that is good. I am all for it.
    Secretary LaHood. Right.
    Senator Inhofe. But this is another area where specifically 
I requested that they put this table together talking about all 
these things that we might be able to address.
    Now, the second thing is, and I think the figure you came 
out with was $556 billion, and I would like to have you tell me 
where that figure came from and any ideas on how we could reach 
and achieve that figure.
    Secretary LaHood. We know that the Highway Trust Fund is 
deficient. We know it has been a great resource over the years. 
Obviously, we would continue to use the Highway Trust Fund and 
some of our other opportunities that we have had in our 
programs. We talked about TIFIA. We need to work with Congress 
on finding the way to pay for a plan that really becomes a jobs 
bill, we want to work with Congress on the path forward to 
finding a way to pay for it.
    Senator Inhofe. I agree with you on a jobs bill, but it is 
also a life-and-death bill. We had a young lady drive under a 
bridge in Oklahoma City, a clump of concrete killed her. She 
was the mother of two small children. I mean, this is really 
critical.
    People used to say in Oklahoma that, well, that's a newer 
State; you don't have the crumbling infrastructure that we have 
in New York and Pennsylvania and other places. That is not true 
anymore because in some of the more mature parts of the 
country, they have already replaced a lot of that stuff, and 
ours is just reaching the point where it is a crisis in my 
State of Oklahoma.
    We go back and forth with Missouri as to which State has 
the worst bridges. That is not something I am real proud of. 
Having the position that I have and the position that Senator 
Boxer has, we have a little more of a responsibility I think 
than some of the others.
    So we have spent hours and hours trying to see what we 
could do to augment just the deteriorating Highway Trust Fund 
and we talked to you probably several hours also. Some things 
are not on the table, and I understand that. In fact, the 
President and I both agree as far as the tax increase is 
concerned.
    But that is the big problem. We can talk about all these 
other things, but we just really need to get a reauthorization 
bill. It has to be robust, and the figure that you use, I would 
buy in a heartbeat if we could figure out a way to pay for it.
    Secretary LaHood. We will work with you on it.
    Senator Inhofe. We do have Senator Baucus who has an 
interest and several others that are working with us.
    Secretary LaHood. We will work with you on the pay-for. The 
increase in the President's budget for roads and bridges, is a 
48 percent increase over 6 years, with $338 billion just for 
roads and bridges because we know there are a lot of roads that 
need repair and we know there are a lot of bridges that need 
repair or replaced.
    Senator Inhofe. I agree, but again it is easy to put that 
in a budget, but you still have to pay for it.
    Secretary LaHood. Yes, sir.
    Senator Boxer. Well, Mr. Secretary, I echo my colleague on 
this. We need to work together. He is very honest with me. When 
I say over and over again that with the Highway Trust Fund 
dwindling because it is a good news-bad news story. It is good 
news because people are getting better fuel economy. It is bad 
news because the Highway Trust Fund is slipping. I am looking 
for ways to get more money in there, but it is hard to come by. 
My feeling is, because I drive a hybrid, I am not paying my 
fair share and I would be very willing when I get----
    Senator Inhofe. That is all right. You ought to see what I 
am driving. We average out.
    Senator Boxer. I am sure we average out, but you are paying 
more for the roads than I am. I may be on the road as long as 
you are, but I am getting 50 miles to the gallon. OK? So I am 
not filling up the car and you are paying more than I am.
    So my point is it is not fair to him. I mean, I think I am 
wise to do this, but if he wants to do what he wants to do, it 
is fine. But we all should pay our fair share.
    So I think vehicle miles traveled is the way to go, but I 
don't seem to get much excitement when I mention it. I think we 
could do it easily when you re-up your registration, honor 
system, just how many miles I had now. But I don't have any 
takers.
    Indexing the gas tax, indexing it, not raising it, I could 
do that. I wouldn't raise it, but I could index it. We have a 
little support, not that much, but I think Senator Inhofe is 
being honest about that. I don't know that we get anywhere with 
it. We don't even know if the President would go that far with 
us.
    So we are coming down to one word: leverage. We have got to 
leverage. The good news the people in my State and I think in 
most States, they really want to have a decent transportation 
system. They want to be able to go on the highway and have a 
smooth ride and not be practically thrown out of their vehicle 
because of the bumps in the road. It really happens here in 
this area. You sit in the back of a car, you are hitting the 
ceiling even with a seatbelt on.
    So we are going to have to leverage. That is all. You have 
already said, you and Chris Bertram, that you are willing to 
work with us. I come back to TIFIA because I see the broad 
support it has. So you are open to talking with us and seeing 
if there is a way.
    I don't want to just put a number in there to feel good 
about it. I want to make sure we can handle it and see what 
other reforms to the program that my colleagues think are 
worthwhile, if any. So that is one.
    The other thing is Senator Kerry is working on a broad 
Infrastructure Bank that deals with a whole lot of things: 
water, sewer, broadband, transportation, transit. I don't know 
where he gets the $10 billion. We haven't really gone that far 
to give seed money to it. I would like to ask you where you 
would go to get that, No. 1.
    The other idea was discussed with Ron Wyden. I don't know 
if he has spoken to you yet, but he has this plan for just 
transportation bonds. It would just strictly be for 
transportation. I don't know if he has spoken with you about 
it. Could you just comment broadly on the Kerry proposal?
    Secretary LaHood. Buy America bonds have been very, very 
successful all over the country. I am going to see if Chris can 
find the numbers, but they have been very successful and they 
have allowed for the ability to do some very important 
projects. I have committed to Senator Wyden and Senator Thune, 
who is his cosponsor on this, and Senator Snowe and others to 
help on Buy America bonds.
    Senator Boxer. Yes, well, could you ask Chris? Would you 
help me out here? I know they have been hugely successful.
    Secretary LaHood. Right.
    Senator Boxer. My State has probably taken tremendous 
advantage of it. But would you explain to me again how they 
work?
    Mr. Bertram. The Buy America bonds are basically a 
different form.
    Senator Boxer. Is it Buy America or Build America?
    Mr. Bertram. It is Build America. Sorry. It is basically 
another form of financing for State and local governments, and 
rather than it being tax exempt, it is a matter of the 
government paying a subsidy to the bondholder.
    Senator Boxer. OK. So for example, let's say I am going to 
use Senator Inhofe's State. If they decide, the local people, 
that their priority was rebuilding a bridge and they came to 
this program, they would borrow the money from the Federal 
Government.
    Mr. Bertram. No, no. They would issue bonds.
    Senator Boxer. They would issue bonds and we back them?
    Mr. Bertram. No, we don't back the bonds. We would just pay 
a certain amount of the interest to the bondholder.
    Senator Boxer. OK. So the cost to us is the interest on the 
bond.
    Mr. Bertram. Yes.
    Senator Boxer. We pay it to the State? For example, in this 
case, or the local people? Or we pay it to the bondholders?
    Mr. Bertram. I believe we pay it to the bondholders.
    Senator Boxer. We pay it to the bondholders. So an 
individual anywhere in the country who felt that was a good buy 
would buy, let's say, a $5,000 bond and then the Federal 
Government would pay that individual the interest.
    Mr. Bertram. I believe so, but we can get you the details.
    Senator Boxer. Would you do that?
    Mr. Bertram. Yes.
    [The information referred to follows:]

    The American Recovery and Reinvestment Act of 2009 (``ARRA''), 
authorized State and local governments to issue two general types of 
Build America Bonds as taxable governmental bonds with Federal 
subsidies for a portion of their borrowing costs. The subsidies take 
the form of either tax credits provided to holders of the bonds or 
refundable tax credits paid to State and local governmental issuers of 
the bonds. Build America Bonds have different levels of Federal 
subsidies and program requirements depending on the particular type of 
bond.
    The first type of Build America Bond provides a Federal subsidy 
through Federal tax credits to investors in the bonds in an amount 
equal to 35 percent of the total coupon interest payable by the issuer 
on taxable governmental bonds which represents a Federal subsidy to the 
State or local governmental issuer equal to approximately 25 percent of 
the total return to the investor (including the coupon interest paid by 
the issuer and the tax credit). This type is referred to in this 
response as ``Build America Bonds (Tax Credit).''
    The second type of Build America Bond provides a Federal subsidy 
through a refundable tax credit paid to State or local governmental 
issuers by the Treasury Department and the Internal Revenue Service in 
an amount equal to 35 percent of the total coupon interest payable to 
investors in these taxable bonds. This type is referred to in this 
response as ``Build America Bonds (Direct Payment).'' The level of the 
35 percent Federal interest subsidy on Build America Bonds (Direct 
Payment) is deeper than the corresponding approximately 25 percent 
Federal interest subsidy on Build America Bonds (Tax Credit). 
Additionally, ARRA provided for a third type of Build America Bond 
known as ``Recovery Zone Economic Development Bonds,'' which provided 
for a deeper Federal subsidy through a refundable tax credit paid to 
State or local governmental issuers in an amount equal to 45 percent of 
the total coupon interest payable to investors in these taxable bonds.
    In general, Build America Bonds (Tax Credit) could have been issued 
to finance any governmental purpose for which tax-exempt governmental 
bonds could be issued under and must comply with all requirements 
applicable to the issuance of tax-exempt governmental bonds. 
Accordingly, Build America Bonds (Tax Credit) could have been issued to 
finance the same kinds of expenditures (e.g., capital expenditures and 
working capital expenditures) and could have involved the same kinds of 
financings (e.g., original new money financings, current refundings, 
and one advance refunding) as tax-exempt governmental bonds.
    The eligible uses of proceeds and types of financing for Build 
America Bonds (Direct Payment) were more limited than for Build America 
Bonds (Tax Credit). In general, Build America Bonds (Direct Payment) 
could have been issued to finance governmental purposes for which tax-
exempt governmental bonds could be issued but could have been used to 
finance only capital expenditures as contrasted with working capital 
expenditures. Build America Bonds (Direct Payment) generally were not 
to be issued to refinance capital expenditures in ``refunding issues''. 
The Department of the Treasury shall pay to the issuer of such bond 35 
percent of the interest payable under such bond on such date.

    Senator Boxer. So that is the Ron Wyden-John Thune 
proposal. Did you say Olympia Snowe is on it?
    Secretary LaHood. She has been active in supporting that 
program. What happens is they take that money and leverage 
against TIFIA and leverage against State money and leverage 
against other things and put their whole package together. It 
is a way to leverage some money.
    Senator Boxer. For sure.
    Mr. Bertram. We did about $48 billion worth of 
transportation projects with those bonds before the program 
expired at the end of last year.
    Senator Boxer. OK.
    Senator Boozman.
    Senator Boozman. Thank you, Madam Chair.
    Thank you for being here. We appreciate your service to our 
country in so many different ways and all that you have done.
    One of the things that there is a lot of bipartisan 
agreement here in Congress, I think, is about the need to 
address the doubling of freight tonnage over the next 25 years. 
Your proposal creates a new freight office, but there is not an 
actual freight program. Can you talk to us a little bit about 
that?
    The reality is that our truckers are contributing a 
tremendous amount into the Trust Fund and I guess, like I say, 
if you could kind of elaborate on that, that would be real 
helpful.
    Secretary LaHood. Are you talking about truck freight?
    Senator Boozman. Yes, sir.
    Secretary LaHood. Yes, we have a good relationship with our 
friends in the truck freight business and we work with them on 
a regular basis. The program, I am going to let Chris talk 
about the program for a minute, but I would say over the 2 
years that I have been in this job, we have worked closely with 
our friends in the trucking business.
    Mr. Bertram. The main benefit of the budget proposal is the 
investment in highways and bridges, which would benefit the 
trucking industry, as well as the Infrastructure Bank, which 
would do large multi-modal projects and get rid of bottlenecks.
    Senator Boozman. OK. So that is what the freight office is 
going to do is perform that function?
    Mr. Bertram. The freight office would coordinate between 
the Federal Railroad Administration, the Federal Highway 
Administration, the Infrastructure Bank in terms of planning 
for, identifying bottlenecks and how to address those.
    Senator Boozman. There is a lot of controversy over the 
budget and things like that, and we are talking a lot about 
that. One of the things I would like to comment on and just ask 
your opinion, in the last Highway Reauthorization, we spent a 
lot of money and people spent a lot of time doing a study as to 
what we needed to do to make our transit more effective in the 
future.
    So one of the things I would like for somebody to do is 
search through there and tell me, not now but in the future, 
how we have addressed some of their proposals. One of their 
major proposals, and I get so frustrated with this, is the 
bottlenecks that we see in getting things authorized. I don't 
know how long it takes. I think they cited 10 years or 
something like that for a major road construction program to 
get up and running and finished and things.
    All of us, as Congressmen and Senators, deal with that all 
the time, trying to get things moving. I have a project that 
literally has been authorized, money allocated, and we are 10 
years into it and we are still studying.
    So I guess can you comment, are we making any improvements 
in our efforts to get things rolling? That is an effort that 
doesn't cost any money, not doing away with the process. I had 
the opportunity to be with Mr. Oberstar in Minnesota and saw 
the bridge that they completed in a year. That project would 
have taken forever in the conventional way. But the different 
agencies, OSHA, all of these agencies instead of being kind of 
the adversarial relationship, were helpful in getting the 
things done.
    Secretary LaHood. One of the things that we have talked 
about a great deal is streamlining the process. Senator Inhofe 
had asked me to look at a long list that was presented by the 
CRS, which lists a whole host of things that have to be done 
before anything can ever get off the ground.
    We intend to streamline the process. We think it takes too 
long also and that there are too many bureaucracies and 
bureaucratic red tape. We have a Highway Administrator who runs 
our Federal Highway Administration who's a former Secretary of 
Transportation in Arizona and he knows full well how long it 
takes to get something done.
    So between what he is doing and what we have as a goal, we 
intend to streamline because we think it does take too long for 
these projects.
    Senator Boozman. No, I guess, and again, I guess I would 
like to learn is it taking longer now than it was now since 
that report came out? That is kind of the frustrating thing 
that we are getting at.
    Secretary LaHood. I think what we will do, Senator, is come 
by and brief you on that and really give you our best 
information.
    Senator Boozman. OK. Thank you very much.
    Thank you, Madam Chair.
    Senator Inhofe. Let me just make a comment about something 
Senator Boozman said.
    Senator Boxer. Go ahead.
    Senator Inhofe. He is talking about the project that was 
done up in Minnesota. Because it had to be done immediately, it 
was done quickly. The same thing happened in Oklahoma with one 
of our bridges going over one of our canals, and down in Port 
Isabel, Texas, the same thing. It was something that was 
actually done. It was done in 4 months what would normally take 
10 years.
    So I haven't thought about that, looking at those and 
saying could that be used as a model? At least we did away with 
a lot of these things on this list that I gave you, and since 
that happened have there been any adverse results as a result 
of that? When you have to do something, you do it.
    Secretary Lahood. The other thing I would use as an 
example, what I stated before, is that Congress did provide $48 
billion in ARRA. Over the last 2 years, we put a team of people 
together, everybody at DOT working every day together to make 
sure that money was spent correctly, by the book and was spent 
within the time that was given to us.
    So we did build some roads and bridges and runways. We did 
it in a way that respected the laws, but also in a way that 
made sure that we could do it within the time provided, which 
was an 18-month period.
    So we can do it. We know how to do it. We put a team of 
people together every day and we got it done in the period of 
time that Congress told us to; $48 billion, 15,000 projects, 
65,000 people went to work.
    Senator Boxer. Do you want to take another round? It is 
fine with me if you do.
    Just talking about how we are going to speed things up, in 
California we had a special trial that was set up whereby our 
highway projects, as I understand it, had a very interesting 
oversight. We took NEPA and CEQA, because California has some 
tough environmental laws, and we said for purposes of these 
projects, we will work together with them rather than have a 
whole separate process, one for NEPA, one for CEQA, time delays 
and the rest.
    Could you report on that, Mr. LaHood or Mr. Bertram?
    Mr. Bertram. It was a delegation program in the last bill 
that basically said that if a project met CEQA, it also met the 
NEPA requirements.
    Senator Boxer. That is right.
    Mr. Bertram. It has been successful. We can get you 
details.
    [The information referred to follows:]

    California is the only State that is participating in the pilot 
program authorized by Section 6005 of SAFETEA-LU. The pilot program 
allows the California Department of Transportation (Caltrans) to assume 
FHWA responsibilities for the National Environmental Policy Act (NEPA) 
as well as for other Federal environmental laws for most highway 
projects in California. The pilot program allows Caltrans, which has 
waived its sovereign immunity as a prerequisite to entering the pilot 
program, to make the final NEPA decisions on State as well as local 
highway projects, thus eliminating the need for FHWA review and 
approval. In a January 2011 Report \1\ to the California Legislature, 
Caltrans stated ``the median time savings for approval of final 
Environmental Assessment on all Caltrans' projects was 17.9 months (and 
an average of 12.3 fewer months) under the Pilot Program as compared to 
prior to the Pilot. The median and average time savings are 
substantially greater for an Environmental Impact Statement (EISs) than 
for Environmental Assessments (EAs). However, due to the small sample 
size of EISs (six pre-Pilot Program and one Pilot Program final EISs), 
these savings are not statistically significant. It is also difficult 
to draw conclusions from this small sample size.'' FHWA believes it is 
too early in the process to determine, overall, what time savings have 
resulted from the pilot program for State administration of NEPA and 
other Federal environmental laws. More time is needed to gather 
information on the various projects that have been completed in 
California under the program, especially the more complex and 
controversial projects.
---------------------------------------------------------------------------
    \1\ http://www.dot.ca/gov/hq/env/nepa--pilot/pdf/
AB2650--jan2011.pdf

    Senator Boxer. My understanding is it has been. In the 
hearing that Congressman Mica and I had in Los Angeles, we had 
environmentalists tell us that they liked the way it worked. So 
I mention it because not all States have strong environmental 
laws like we do, but in States that have equivalencies, it 
seems to me you can substitute the State for the Federal or 
they work together. I just throw that out there. We are very 
happy with it in our State. We haven't had any complaints about 
it.
    Anybody else have any questions for the good Administrator, 
the good Secretary of Transportation?
    Yes, go.
    Senator Inhofe. Just one comment since you brought this up 
on the delegation. We were given that opportunity and we 
rejected it. We rejected it for a number of reasons, one of 
which is the liability that we could be incurring and some 
other things. So I am not sure who would, if that were a 
program, who all would want to participate in it.
    Senator Boxer. OK. Well, I mean it is States' rights. If it 
is optional and the State wants it, in our case it worked 
beautifully. We found that we had more streamlining. The people 
were happy with it. The local people were pleased with it.
    So I don't think we should force anyone to do it, but if it 
is available, I certainly think we ought to make it available. 
There is nothing that I heard that didn't work out.
    So, anybody else?
    Well, thank you.
    Secretary LaHood. Thank you very much.
    Senator Boxer. Do you have anything else you would like to 
say in closing?
    Secretary LaHood. No.
    Senator Boxer. We will leave the record open for a couple 
of days, but I just want to say, Mr. LaHood, first of all 
congratulations on your son's electoral victory.
    Secretary LaHood. Thank you. Thank you for changing the 
hearing.
    Senator Boxer. You wanted to be there at his swearing-in 
and we were thrilled to accommodate you.
    Secretary LaHood. Thank you.
    Senator Boxer. I guess like father, like son, like son, 
like father, but he is very fortunate to have you as a role 
model.
    Secretary LaHood. Thank you.
    Senator Boxer. We really are hopeful in a very tough 
atmosphere in the Senate, and we all admit that. A lot of us 
don't see eye to eye on a lot of things. We seem to be moving 
together on this. I think that is really crucial. So I, again, 
would ask you on the record: Will you be available to us? 
Because we are going to be putting together our bill in a 
bipartisan way. The big four hopefully can back it and we will 
move it forward. But will you be available?
    Secretary LaHood. I will be available whenever you need me.
    Senator Boxer. We are going to need you because we don't 
want to put together a bill that you don't like.
    Secretary LaHood. Absolutely.
    Senator Boxer. We want to do something that you feel 
comfortable with.
    Secretary LaHood. We will be here.
    Senator Boxer. OK.
    We stand adjourned and we thank you so much.
    Secretary LaHood. Thank you very much.
    [Whereupon, at 3:05 p.m. the committee was adjourned.]

                                 

```