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35–030 PDF 2007

FY 2008 PRESIDENT’S BUDGET REQUEST FOR THE DEPARTMENT OF

TRANSPORTATION AND ENVIRONMENTAL PROTECTION AGENCY

(110–6)

HEARING

BEFORE THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

FEBRUARY 8, 2007

Printed for the use of the 

Committee on Transportation and Infrastructure

(

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JAMES L. OBERSTAR, Minnesota, Chairman 

NICK J. RAHALL, II, West Virginia 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

GENE TAYLOR, Mississippi 

JUANITA MILLENDER-MCDONALD, 

California 

ELIJAH E. CUMMINGS, Maryland 

ELLEN O. TAUSCHER, California 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

BRIAN BAIRD, Washington 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

JULIA CARSON, Indiana 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

BRIAN HIGGINS, New York 

RUSS CARNAHAN, Missouri 

JOHN T. SALAZAR, Colorado 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

DORIS O. MATSUI, California 

NICK LAMPSON, Texas 

ZACHARY T. SPACE, Ohio 

MAZIE K. HIRONO, Hawaii 

BRUCE L. BRALEY, Iowa 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A. ACURI, New York 

HARRY E. MITCHELL, Arizona 

CHRISTOPHER P. CARNEY, Pennsylvania 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

JERRY MCNERNEY, California 

JOHN L. MICA, Florida 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

WAYNE T. GILCHREST, Maryland 

VERNON J. EHLERS, Michigan 

STEVEN C. LATOURETTE, Ohio 

RICHARD H. BAKER, Louisiana 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

ROBIN HAYES, North Carolina 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

TODD RUSSELL PLATTS, Pennsylvania 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

TED POE, Texas 

DAVID G. REICHERT, Washington 

CONNIE MACK, Florida 

JOHN R. ‘RANDY’ KUHL, JR., New York 

LYNN A WESTMORELAND, Georgia 

CHARLES W. BOUSTANY, JR., Louisiana 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

THELMA D. DRAKE, Virginia 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

(II)

SUBCOMMITTEE ON WATER RESOURCES AND ENVIRONMENT

EDDIE BERNICE JOHNSON, Texas, Chairwoman 

GENE TAYLOR, Mississippi 

BRIAN BAIRD, Washington 

DORIS O. MATSUI, California 

JERRY F. COSTELLO, Illinois 

TIMOTHY H. BISHOP, New York 

BRIAN HIGGINS, New York 

RUSS CARNAHAN, Missouri 

JOHN T. SALAZAR, Colorado 

MAZIE K. HIRONO, Hawaii 

HEATH SHULER, North Carolina 

HARRY E. MITCHELL, Arizaon 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

JERRY MCNERNEY, California 

ELEANOR HOLMES NORTON, District of 

Columbia 

BOB FILNER, California 

ELLEN O. TAUSCHER, California 

MICHAEL E. CAPUANO, Massachusetts 

GRACE F. NAPOLITANO, California 

MICHAEL A ARCURI, New York 

JAMES L. OBERSTAR, Minnesota 

(Ex Officio) 

RICHARD H. BAKER, Louisiana 

JOHN J. DUNCAN, JR., Tennessee 

WAYNE T. GILCHREST, Maryland 

VERNON J. EHLERS, Michigan 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

ROBIN HAYES, North Carolina 

HENRY E. BROWN, JR., South Carolina 

TODD RUSSELL PLATTS, Pennsylvania 

BILL SHUSTER, Pennsylvania 

JOHN BOOZMAN, Arkansas 

CONNIE MACK, Florida 

JOHN R. ‘RANDY’ KUHL, JR., New York 

CHARLES W. BOUSTANY, JR., Louisiana 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

THELMA D. DRAKE, Virginia 

JOHN L. MICA, Florida 

(Ex Officio) 

(III)

(V)

CONTENTS Page 

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

TESTIMONY 

Peters, Hon. Mary E., Secretary of Transportation, U.S. Department of Transportation ................................................................................................................ 2

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Altmire, Hon. Jason, of Pennsylvania .................................................................... 25

Brown, Hon. Henry E., Jr., of South Carolina ...................................................... 28

Costello, Hon. Jerry F., of Illinois .......................................................................... 29

Mica, John L., of Florida ......................................................................................... 34

Mitchell, Hon. Harry, of Arizona ............................................................................ 42

Oberstar, James L., of Minnesota .......................................................................... 55

Walz, Timothy J., of Minnesota .............................................................................. 62

PREPARED STATEMENT SUBMITTED BY THE WITNESSES 

Peters, Hon. Mary E. ............................................................................................... 64

SUBMISSIONS FOR THE RECORD 

Peters, Hon. Mary E., Secretary of Transportation, U.S. Department of Transportation:

Responses to questions from Rep. Oberstar ....................................................... 67

Responses to questions from Rep. Carney ......................................................... 70

Responses to questions from Rep. Hall .............................................................. 75

Responses to questions from Rep. Brown .......................................................... 79

(v) 

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(1)

FISCAL YEAR 2008 PRESIDENT’S BUDGET REQUEST FOR THE DEPARTMENT OF TRANSPORTATION AND ENVIRONMENTAL PROTECTION AGENCY 

Thursday, February 8, 2007

HOUSE OF REPRESENTATIVES, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, WASHINGTON, DC. 

The committee met, pursuant to call, at 2:00 p.m., in room 2167, 

Rayburn House Office Building, the Honorable James L. Oberstar 

[Chairman of the committee] presiding. 

Mr. OBERSTAR. The Committee of Transportation and Infrastructure will please come to order. 

Regrettably, I have just been notified from the floor that there 

will be a series of floor votes that could take as much as 25 minutes. I would hope that we would be able to get on with the Secretary’s testimony right at the outset. I know all members have 

statements and pronouncements and points they want to make and 

flags they want to lay down, but we can do that in the course of 

the questioning. 

We are here to hear the Secretary’s presentation, her first presentation before the full Committee, on the Administration’s Transportation Budget, which for some of us is a great disappointment 

in many regards. There are other bright spots in it, but overall I 

have some real concerns about the short funding for transit, short 

funding for AIP, the under-funding of Amtrak. There are a number 

of other areas that others have concerns about. 

We also will have from EPA, Ben Grumbles and Susan Bodine, 

whom I welcome as former Transportation and Infrastructure Committee staff members, and they are always dangerous when they 

go over to the other side. They know how the legislative side works, 

and then they take that expertise and go over to the executive 

branch. 

That will conclude my statement to welcome the Secretary. We 

really appreciate your time spent with us. 

I will yield to the Ranking Member, Mr. Mica, for comments that 

he might make. 

Mr. MICA. Well, thank you, and I will try to be brief too and welcome Madam Secretary. 

I too did receive the President’s budget. Hopefully, it is a good 

framework in which to start. Both Mr. Oberstar and I have questions and concerns. We have already discussed some of them. 

As you know, I am a big fan of mass transit, and I am concerned 

about some of the cuts that have been proposed. We want to keep 

2

the trust fund whole, and I think we are committed to that and try 

to get as many dollars as we can in there to get distributed to our 

States. Amtrak, while you have a lowball figure, I continue to encourage elimination of waste and hopefully better management, 

and we will look at that. 

There are other things that we will have questions about, the 

State revolving fund and some of the investments that you have in 

fact proposed and then also looking at some of the EPA funding 

provisions. 

I do have a lengthy statement, Mr. Chairman. I ask unanimous 

consent that we put the entire, every morsel of choice words into 

the record. 

Mr. OBERSTAR. Every thoughtful comment by the Ranking Member will be included in the record, without objection, and my statement and those of other members. 

Mr. MICA. Thank you. 

Mr. OBERSTAR. Madam Secretary, the microphone is yours. 

TESTIMONY OF THE HONORABLE MARY E. PETERS, SECRETARY OF TRANSPORTATION, U.S. DEPARTMENT OF 

TRANSPORTATION 

Secretary PETERS. Mr. Chairman and members of the Committee, I want to thank you for this opportunity to be here with 

you today to share the highlights of President Bush’s fiscal year 

2008 budget plan for our Nation’s transportation programs. 

Transportation lies at the core of the freedom that we enjoy as 

Americans, the freedom to go where we want, when we want, freedom to live and work where we choose and freedom to spend time 

with our families. 

Our goal is to deliver a transportation system that frees people 

to make daily decisions, confident that they can reach their destination safely, without worrying about how they will get there or 

even if they can make it on time. To reach that goal, the President’s budget requests $67 billion for America’s transportation network. 

Nearly one-third of the Department’s resources will be devoted to 

transportation safety. There is no acceptable fatality rate when our 

loved ones, our communities, our friends are at risk. The President’s fiscal year 2008 budget proposes resources for equipping our 

Nation’s airports and roadways with new safety technologies for 

targeting growing problems like motorcycle crashes, something I 

have had personal experience with, and for supporting aggressive 

inspections of trucks, tracks, and pipelines to ensure the safest 

standards are met. 

In addition to supporting our efforts to raise the bar on safety, 

the President’s budget will help cut congestion and bring our transportation system into the 21st Century. 

For those who use our aviation system, it provides the framework for reforming our approach to paying for safety and technology improvements needed to keep air travelers, freight and pilots on schedule. We have put together a package that will tie what 

users pay to what it costs the Federal Aviation Administration to 

provide them with air traffic control and other services. Our plan 

puts incentives in place that will make the system more efficient, 

3

as well as more responsive to the needs of the aviation community. 

Without reform, we can all expect to spend more time waiting in 

airports or strapped in an airplane seat, sitting at the end of a runway. 

We will announce the full details of our aviation proposal soon. 

I can tell you that the budget targets almost $175 million for a 21st 

Century satellite navigation system that will replace the current 

dated air traffic control architecture and over $900 million for additional capital projects that will support this move to the Next Generation system. 

For travelers, this system is going to bring greater convenience 

and reliability, thanks to state of the art technology that can safely 

handle dramatic increases in the number and type of aircraft using 

our skies without being overwhelmed by congestion. 

For drivers stuck in traffic, the budget proposes a record $42 billion in funding for highway and highway safety programs. Our 

budget proposes resources to help move traffic on clogged highways 

and city streets, directing $175 million to support the comprehensive Department-wide congestion relief initiative that Secretary Mineta announced last year. 

This funding will help growing metropolitan areas that want to 

test leading edge solutions. It will help commuters get real-time 

traffic information, so they will know in advance if roads are congested and be able to make alternative transportation plans, and 

it will allow us to accelerate the development of travel corridors 

that will be key to moving freight and people without congestion 

in the future. 

Accessible and cost-effective transit projects also help fight congestion, and our budget provides $9.4 billion for transit programs. 

This funding includes $1.3 billion for major projects that will help 

provide commuter rail and other travel options in large urban 

areas, and another $100 million will support transit alternatives 

through the Small Starts program. 

Even as we make these investments, we realize that a businessas-usual approach to funding these programs is simply not going 

to work much longer. There is and will continue to be money coming into the Highway Trust Fund from gasoline taxes, and the revenues are growing every year, but so is spending and even at a 

higher rate. The bottom line is that we are spending more than we 

take in, and we have nearly run through the balances that had 

built up in the fund. The highway funding problem is not going to 

go away, nor can we put it off until the last minute. 

As we go through this budget process, I look forward to working 

with Congress on solutions to these issues. In the long term, we 

need serious reform of our approaches to both financing and managing our transportation network to win the battle against congestion. Serious reform must include reform of the legislative process 

itself. 

The explosive growth of earmarks in recent years has hit transportation programs especially hard. I support President’s call for 

transparency and a 50 percent reduction in earmarks in the coming 

year. As a former State Department of Transportation Director, I 

strongly support giving States freedom to set priorities and use 

4

Federal dollars where they know they will provide the maximum 

benefits. 

Mr. Chairman and members of the Committee, thank you for the 

opportunity to testify before you today. I look forward to working 

with each of you and the transportation community to ensure a 

safe transportation system and to begin to break free of the stifling 

congestion. I also look forward to answering any questions you may 

have. 

Mr. Chairman, if I may, I would like to introduce our Assistant 

Secretary, Phyllis Scheinberg, who is here with me today. Thank 

you, sir. 

Mr. OBERSTAR. Ms. Scheinberg, welcome. Thank you for being 

here. 

Ms. SCHEINBERG. Thank you. 

Mr. OBERSTAR. Thank you, Madam Secretary. It was a very succinct statement, remarkable. 

Ms. Scheinberg, you have no statement? No, OK, thank you. 

One question, your aviation user fee proposal, such as we know 

of it, by our calculations—we spent some time working over this—

would raise $600 million less than the ticket tax is now raising and 

the other user fees. How can that be consistent with the Administration’s argument that a user fee system is needed because there 

is a revenue crisis? 

Secretary PETERS. Mr. Chairman, the $600 million difference 

that you refer to was based on the 2008 budget year. We would not 

begin collecting that tax until 2009, so it was a hypothetical example. The Assistant Secretary could certainly provide more details if 

that would be helpful. 

Mr. OBERSTAR. I yield the balance of my time to the gentleman 

from Oregon, Mr. DeFazio. 

Mr. DEFAZIO. Thank you, Mr. Chairman. I appreciate the opportunity. 

Madam Secretary, it is good to see you again. Thank you for 

being here. 

We are concerned. I am concerned, and I believe other members 

of the Committee would share my concern about cuts proposed in 

the Small Starts program. Can you explain the rationale for these 

cuts, New Starts and Small Starts? 

Secretary PETERS. Mr DeFazio, yes, I would be happy to explain those. The overall FTA budget for the year is $9.4 billion as I indicated, and it is a reduction of $309 million below the fiscal year 

2008 levels authorized in SAFETEA-LU. The problem is, sir, that 

we had difficult budget choices to make. 

We have made a choice to provide historic levels of transit funding and in this budget we have proposed funding every project that 

is ready to go. There are no projects that are sacrificed in our budget. That includes 11 existing full-funding grant agreements, two 

pending agreements and two proposed agreements. We have also 

set aside $72 million in funding for 6 projects that are not yet 

ready to be funded. 

We have also included $100 million for the Small Starts program. We believe that the new regulations will not be finalized 

until early 2008 which would make it difficult to award more 

projects. 

5

Mr. DEFAZIO. I guess if I could, I appreciate that, but it has been 

quite some time since we passed the legislation. Why can’t we have 

the regulations for Small Starts sooner than that? Why would it 

take another year to get the bureaucratic regulations published? 

Congress expressed its will. We will be near the end of this highway bill before we get to that. Couldn’t we move that up a little 

bit? 

Secretary PETERS. Congressman DeFazio, I understand your concern, and I will do everything in our power to get those regulations 

moved up sooner. 

Mr. DEFAZIO. There are some in the transportation community 

that think the Administration doesn’t like the idea of Small Starts 

and New Starts, and I would hope that that is not true. The $275 million you are saving, where is that going? Is that 

going to your new congestion whatever program, the one you are 

pushing communities to do? 

I have heard from communities saying well, gee, DOT has been 

out here. They have all this new money. They have got these new 

programs they want us to do for congestion mitigation. They want 

us to do time of day tolling and other things. Is that where that 

money is being moved to? 

Secretary PETERS. Sir, that is not where that money is being 

moved. The money that we are using for the congestion initiative 

is money that came from inactive projects, projects that were as old 

as the 1991 Intermodal Surface Transportation Efficiency Act. 

Mr. DEFAZIO. OK. Then where did the $275 million from transit 

go? What are we dong with that? 

Secretary PETERS. Sir, that is within the balance of our overall 

budget which includes some small portion of general fund monies. 

Mr. DEFAZIO. We are cutting an authorized program paid for by 

user fees in order to offset some of your administrative overhead 

costs that are reimbursed out of the general fund in order to provide the illusion of moving toward a balanced budget, is that correct? 

We are foregoing real investments in transportation in order to 

satisfy the green eyeshade trolls over at OMB who want to pretend 

they are providing us with a fiscally responsible budget. 

Secretary PETERS. Sir, the reduction in the transit program 

comes from the general fund portion. 

Mr. DEFAZIO. So, again, we are cutting real programs that could 

provide transit alternatives for Americans at a time of escalating 

fuel prices, a time of concern over our dependency on imported oil, 

and we are doing all that to offset this general fund contribution 

in order again just to try and provide the illusion of fiscal responsibility. 

Secretary PETERS. Congressman, the President has asked us to 

keep non-defense discretionary spending at or below 1 percent. We 

have actually allocated more money than that to the surface transportation and transit programs, but the need to have budget discipline this year is what led us to this level. 

Mr. DEFAZIO. Right, but again this is something authorized by 

the Congress and authorized to be paid for by a trust fund tax paid 

by the American people for a dedicated purpose, a purpose for 

which there is no shortage of demand out there in America, and 

6

we are cutting it. Bottom line, is that it is because the President 

says, well, we just can’t. We don’t have that money, and we are 

going to spend it somewhere else or we are going to use it for tax 

cuts for rich people. 

Secretary PETERS. From the general fund portion, sir. 

Mr. DEFAZIO. My time is about expired, but I guess I have one 

other quick question about the fuel tax. 

I just had a State legislator in, a Republican State legislator. 

There is a big conference at the White House tomorrow to push privatization projects. I am concerned, and I raised this with you privately and I have raised it publicly, about the push toward privatization. It can be appropriate in some instances. In others, it might 

not be. But overall we have to protect the integrity of the national 

transportation infrastructure and its interconnected nature. We 

need to protect the public interest. 

I fear that, particularly that you have got a fellow from the Reason Foundation and you have got a staff person who has produced 

a one-sided document on this issue. I looked at the panel members. 

There is no balance. You are not talking about the fact that there 

is a way to do it right and another way that may not be in the public interest. I am very concerned about that, Madam Secretary. 

Secretary PETERS. Sir, I understand your concerns. 

Mr. DEFAZIO. Thank you, Madam Secretary. 

Mr. OBERSTAR. Mr. Mica? 

Mr. MICA. Thank you. Again, welcome, Secretary Peters. 

We find ourselves, and I guess we have done this before, in one 

of our more unique funding situations and budget situations in 

that the fiscal year that started in October of last year, we have 

not resolved financing, at least Congress has not finished it with 

a CR. I have a question about the impact of the CR, the 2006–2007 

CR, that we should be financing Government with now as far as 

your Department-wide responsibilities, are you going to be able to 

meet your goals as far as safety and programs? 

Secretary PETERS. Congressman Mica, if the H.J. Resolution 20 

includes some 2007 fiscal year levels of funding, we will be able to 

do so. If it is flatlined at 2006 levels, it would require drastic action 

in the Agency, particularly with regard to our FAA air traffic controllers as well as safety inspectors and other positions. 

What we would ask, in those areas that are held to the 2006 levels, is that we would have the flexibility to reprogram so that we 

may ensure that the highest priority needs are met. 

Mr. MICA. Because I think they are going to play a game of 

chicken at the end here for folks to try, from what I heard, to eliminate some amendments in the Senate and messing with it. 

You just testified the Administration doesn’t want to see a lot of 

earmarks. This may be the biggest earmark in history, and you will 

also have discretion in how to distribute those funds if there are 

not specific earmarks, isn’t that correct? 

Secretary PETERS. Yes, sir, that would be correct. We would, 

however, follow Congressional guidance in establishing the programs. 

Mr. MICA. OK, because we did have a discussion, the Chairman 

and I, earlier about procedures, and I think that is going to be important. 

7

We don’t have your whole FAA financing plan. If you can’t tell 

us the plan, can you tell us the rollout schedule? 

Secretary PETERS. Congressman Mica, we expect to roll out that 

proposal next week. 

Mr. MICA. Is that everything? Is that the PFCs? We got a little 

glimpse in here, and some of this does possibly look at user fees. 

Secretary PETERS. It does. 

Mr. MICA. Do you want to talk about that for a minute? 

Secretary PETERS. I would, Congressman, and if I may take just 

a moment to talk about the need for the change in system because 

that has been the subject of some discussion. 

The current funding structure for FAA has significant limitations. These limitations have resulted in less than optimal service. 

Many of us saw an article in the Washington Post this morning 

about significant delays in aviation travel. Safety of the program 

is and remains our highest priority, but there have been delays and 

a lack of reliability due to the capacity and the capability of the 

current 20th Century system, and these are only going to get worse 

as demand on the system increases. 

In just less than 10 years, the Nation’s air space will be 30 percent more crowded than it is today, and by just 2012, FAA projects 

23 percent more passengers will be flying. By 2025, commercial 

carriers will be carrying 1.4 billion passengers, which is an 87 percent increase. By 2012, FAA projects that aircraft handled by FAA 

en route centers will be 17.6 percent higher than in 2006. By 2025, 

demand will increase to 86.5 million aircraft, which is an 87 percent increase over 2006. 

Our current funding structure is largely based on the price of a 

ticket, and bears no direct relationship between the taxes paid by 

users and the air traffic services provided by FAA. In order to meet 

the future demand as well as some of the current demand, we need 

to transition to a dynamic 21st Century structure that ties use of 

the system to costs, a system that is equitable and a system that 

is responsive to growing demand. 

Sir, we have talked about user fees, but there are a number of 

policy considerations that will be addressed in the reauthorization 

proposal itself. I understand that people are concerned, and I understand the general aviation community is concerned. But I would 

ask that we have that discussion after the proposal is released so 

that we can look at the policy implications and decisions together. 

Mr. MICA. OK. Final question, to actually get us to deal with the 

aviation congestion, we have got to go to the next generation of air 

traffic control. For the new members, the acronym, and you will 

lots of these, is NGATS, Next Generation Air Traffic Control. 

The schedule for NGATS and then our preliminary discussions to 

date, we are looking at about a billion dollars additional per year 

in financing that for 18 to 20 years to keep up with it because you 

can never hire enough air traffic controllers to keep up with that 

as per the MITRE. I strongly recommend if you get a chance, and 

I think they are coming up here with a little display, you should 

see the MITRE study on NGATS. Could you respond quickly? 

Secretary PETERS. Congressman, I think you make a valid point. 

Today’s system is largely dependent on ground-based radar, and so 

as planes fly across the Country, they are tracked from one system 

8

to another based on the ground towers. The new system, which we 

call Next Generation, will be based on satellite technology and will 

allow planes to fly closer together, and land closer together without 

compromising the safety of the system. This system will require not 

only changes with the infrastructure within the air traffic control 

system, but also within the airplanes and the architecture that is 

part of that system today. 

So, as Congressman Mica said, this is a long-term, highly capitalintensive investment. We are developing a business plan for that 

investment, and we will be able to share it with you in the reauthorization proposal. But, as the Congressman said, this is a very 

significant investment that will move us into the 21st Century and 

allow us to be able to handle the type of aircraft traffic increases 

that I spoke to earlier. 

Thank you, sir. 

Mr. OBERSTAR. Ms. Johnson? 

Ms. JOHNSON. Thank you very much, Mr. Chairman. 

I think most of my questions might be for the second panel, but 

I will ask if by chance you are recommending user fees anywhere 

else because of the shortness of the budget. 

Secretary PETERS. Congresswoman, we are not recommending 

user fees at any other part of our budget at this time. 

Ms. JOHNSON. Well, do you think you are going to have enough 

money to deal with the New Starts and all the projects that are 

ongoing considering the fact that the gas tax fund will, run out in 

2009? 

Secretary PETERS. Congresswoman, you make a valid point. In 

fact, the Congressional Budget Office (CBO) has projected already 

a $3.62 billion deficit in the highway account of the Highway Trust 

Fund for 2009. The Administration is recommending several steps 

to help mitigate that and protect the solvency of the trust fund. 

However, we still anticipate that a projected $238 million shortfall 

will occur in 2009. 

The two steps that we are taking: Our first, a new accounting 

procedure that transfers cash to the flex funding from the highway 

account to the mass transit account (MTA) when the money is 

needed for outlays as opposed to when the actual contract authority 

and obligation limitation are transferred it doesn’t hurt the MTA 

because these outlays go out at a slower rate. The second, and 

probably the bigger recommendation that we are making is that 

the President’s 2008 budget proposes not spending $631 million in 

revenue-aligned budget authority. These two mechanisms will reduce the anticipated shortfall to $238 million anticipated. 

But, as you said, Congresswoman, we really need to talk about 

what we are going to do for the transportation funding well before 

2009. 

Ms. JOHNSON. Thank you very much. 

Thank you, Mr. Chairman. 

Mr. OBERSTAR. Mr. Petri? 

Mr. PETRI. Thank you. 

Madam Secretary, there are a lot of areas that I would like to 

ask about, but there is one that my colleague, Mr. Duncan, who is 

not here right now, and I think you might want to expand on. It 

is kind of plowing new ground in a way, and that is the area of 

9

congestion pricing. What is the Administration’s proposal and what 

are the implications of that? The ideas to get greater utilization out 

of infrastructure, something that the transportation professors talk 

about all the time but the people where the rubber hits the road, 

so to speak, and have to manage the system have trouble implementing. Could you talk about that and what the merits and problems are associated with what you are doing in the area of congestion pricing? 

Secretary PETERS. Congressman Petri, I would be glad. Congestion pricing, or dynamic pricing as it is sometimes is known, is the 

differential pricing based on time of day and use of a system. Probably the longest going project in the United States today that uses 

congestion pricing is State Route 91, Riverside County in California. Their sytem does dynamically prices the system to keep the 

traffic free flowing at all times. On several projects in Southern 

California, we have seen a 40 percent greater through-put by using 

this congestion or dynamic pricing than we do with the same lane 

configurations on adjacent so-called free lanes. 

Congestion pricing can help us get more throughput out of our 

transportation infrastructure but also can keep that transportation 

infrastructure safer because it keeps most of the traffic moving at 

relatively the same speed of travel which is always safer than the 

dangerous stop and go that you sometimes see in congested areas. 

Mr. PETRI. Could you explain it a little bit more concretely? How 

would people pay more at different times of day as mainly it would 

be commuters, I assume, going into and out of congested areas? 

Secretary PETERS. Yes, in most cases, it is commuters. The way 

the system works is the tolls or the fees are charged electronically 

through a transponder that is mounted in the car. Signs approaching the entrance to these lanes would state what the price is at 

that time so people could make a conscious choice whether or not 

to get on those lanes. If they choose to get on the lanes, the price 

does not change during the time that they are on the lanes. The 

price only changes at the onset of the facility not during the time 

that you are on the facility. 

Mr. PETRI. You would be using, in effect, HOV lanes for congestion pricing? 

Secretary PETERS. Congressman Petri, that is where it works extremely well. Converting an existing high occupancy vehicle or 

HOV lane to what is sometimes called a high-occupancy toll lane 

uses the available capacity that is already there on an existing 

HOV lane. In many cases it can capitalize on existing infrastructure so that single-occupant drivers can use those lanes by paying 

the fees. The pricing structure helps keep the traffic moving or free 

flowing for the entire facility. 

Mr. PETRI. Thank you. 

You may have mentioned this—I was distracted for a minute—

the Next Generation Air Traffic Control System. I realize it is not 

a turning off one system and turning on a new system. The technology will be deployed in a sequential way and layered into the 

system, and a lot of people are working on it. Do you have some 

idea going forward the next 5 years and 10 years what the cost implications are? 

10

Is it going to be manageable within the budgets or will there be 

a surge? Can you give us some sense of what you are thinking in 

terms of the cost of the new system? 

Secretary PETERS. Congressman Petri, we are looking at a variety of ways to pay for this system right now as well as developing 

a budget. We are looking at a variety of ways where we might be 

able to access funding, including possibly the private sector, to 

build and operate the system. That is all part of a business plan 

that we are developing and should get to you in the next few 

weeks, or the next few months rather, as well. 

A very important part of what you said, Congressman Petri, is 

the fact that this system has to migrate in over time. It isn’t just 

flipping a switch and changing from the existing system today to 

the Next Generation system. As I mentioned earlier, it will involve 

changes not only to air traffic control infrastructure but to the 

aviation equipment itself. The airplanes, airports, et cetera will 

also have to be retrofitted with this equipment. 

We believe, sir, that this will indeed cost several billion dollars. 

As I said, we are in the process of developing a business plan and 

should have more firm information to you in the coming months. 

Mr. PETRI. Thank you. 

I think the benefit is that it will improve safety and expand the 

capacity of the system enormously. 

Secretary PETERS. Sir, it absolutely will. The truth is the existing 

system simply cannot handle the growth in aviation traffic that we 

are going to be seeing in the future. 

Thank you. 

Mr. OBERSTAR. Mr. Costello? 

Mr. COSTELLO. Mr. Chairman, thank you. Madam Secretary, welcome to the hearing here today. 

I share what I expect what many of my colleagues expressed, and 

that is I am concerned that the fiscal year 2008 Administration 

budget does not adequately meet the needs of our Nation for the 

expectation of investment in critical infrastructure, and specifically 

let me address a couple of issues concerning aviation. 

For the past several years, the Administration has proposed massive cuts in the AIP program. I have opposed those cuts for obvious 

reasons. When we look at airports, much of the attention is put on 

security. However, we have a capacity issue that we have to address to avoid costly delays in the future. 

My question has just a few concerns about the proposed budget 

for aviation. We have a hearing next week which will get into specifics, but I understand from an earlier question that you noted 

that your 2008 comparison for the proposal to the current tax 

structure was, you indicated, hypothetical, that it was hypothetical 

because the user fee structure would not be in place. 

We did a preliminary analysis of the analytical perspective accompanying the budget, and it indicates that the Administration 

user fee proposal will actually generate $900 million less in revenue than the current tax structure between the years 2009 and 

2012. I just ask you, is that correct? 

Secretary PETERS. Congressman Costello, I don’t know if that is 

correct. I would be happy to look at the numbers with you and see 

11

if we could reconcile that, but I don’t have that number with me 

today. 

Mr. COSTELLO. My understanding is in response to Chairman 

Oberstar’s question, you had indicated that it was hypothetical because the user fees would not be in existence in 2008. They will be 

if your proposal is enacted by Congress in that period of time. You 

have not run the numbers for 2009 through 2012? 

Secretary PETERS. Yes, we have. If I may, I will ask the Assistant Secretary for Budget and Programs to answer that question. 

Mr. COSTELLO. The question is our analysis shows it is about 

$900 million less during that period of time with the user fee system than the current tax structure, and I just want to know if that 

is correct. 

Ms. SCHEINBERG. I won’t disagree with those numbers, but I 

wanted to say that the user fees in the future are now just estimates. Our user fee proposal will be directly tied to the needs and 

costs of the system. As the needs and costs go up, the user fees 

would go up. So, right now, we are not showing what would probably be the accurate numbers. Those numbers would be adjusted 

the closer we get to 2012. This is pretty much an estimate at this 

point. 

Mr. COSTELLO. But you would not disagree. You would not quarrel with the numbers if your preliminary analysis says it is $900 

million less than the current tax structure. You wouldn’t have reason to doubt that. 

Ms. SCHEINBERG. I don’t have the numbers in front of me, but 

I wouldn’t disagree if you say so, yes. 

Mr. COSTELLO. Let me also ask, Madam Secretary. The issue of 

the general fund contribution, in the Administration, we have seen 

a reduction over a period of time now. I happen to believe in a robust general fund contribution because I believe it benefits everyone, the system does, and an efficient air transportation system 

benefits the economy. 

Let me ask your feeling about a general fund contribution. It 

went from about in the high twenties to 25 percent down to 21 percent and now I believe down to 19 percent. What is your feeling 

about a general fund contribution to support the system and the 

modernization program? 

Secretary PETERS. Congressman Costello, we believe that a general fund contribution is important to fund those things that are 

inherently governmental functions, or those things that are in the 

interest of the public as a whole. Some of those things would include defense uses of the air traffic control system. We believe the 

general fund contribution ought to be equitable to inherently governmental or public use functions. 

Mr. COSTELLO. The current projections that I have seen for the 

AIP program, and if these are correct in front of me, the President’s proposal is $2.75 billion. You know and I know that under 

the current entitlement program for airports, when the figure falls 

below about $3.2 billion, then the primary airports that are entitled 

to a minimum of $1 million, that would drop down to about 

$650,000 and the non-primary airports would be cut out of the 

process, the entitlement process altogether. I wonder if you might 

12

comment as to how the FAA intends to address that if the President’s AIP budget proposal is adopted by the Congress? 

Secretary PETERS. Congressman Costello, our reauthorization 

proposal will contain changes to the Airport Improvement Program 

(AIP) formula and passenger facility charges. Today we support a level, as you said, of $2.75 billion. This 

amount, based on our projections, will provide enough funds for us 

to meet the high-priority airport capacity, environmental, safety 

and security needs of the airport system. The proposed changes 

that will be contained in our reauthorization proposal will ensure 

that funds flow to projects that further National goals and airports 

that depend heavily on AIP to meet their capital financing needs. 

Mr. COSTELLO. Last question, the Administration has been promising to deliver their proposal for the reauthorization of the FAA 

since last summer, and I have heard it was going to be June and 

then the fall and then the first of the year and now we are hearing 

next week. Will we get the Administration’s proposed reauthorization plan next week and, secondly, will it be in one part or will it 

be divided up into three parts as we have heard? 

Secretary PETERS. Congressman Costello, I do apologize. I can’t 

speak for the past, but since I have been at the Department, it has 

been our target to get that proposal to you right after budget rollout which would be next week, and it is my expectation that we 

will do that. 

Mr. COSTELLO. In one package or in parts? 

Secretary PETERS. One package, sir. 

Mr. COSTELLO. Thank you. 

Secretary PETERS. Thank you. 

Mr. OBERSTAR. Mr. Hayes? 

Mr. HAYES. Thank you, Mr. Chairman. 

Madam Secretary, welcome. 

Secretary PETERS. Thank you. 

Mr. HAYES. We appreciate the challenge and opportunity before 

you. The Department of Transportation is a tremendous contributor to commerce and employment and jobs and the overall health 

and well-being of the Nation, whether it is highways, rails, ships. 

Aviation is a particular area of interest to me, and I am sure you 

will get a couple of other questions about that going forward. Looking at aviation, and let me say up front that I think the idea of 

user fees is just very, very frightening and damaging to the potential for maintaining and increasing the aviation community’s contribution to the whole process. Talk about increased congestion, 

that is a problem in the air and on the ground, but in the air it 

is three-dimensional as opposed to one on the ground. The FAA, in 

modernization, has almost doubled the air space with the advent 

of RVSM equipment and some other things that the community is 

paying for. 

My question becomes then as well look forward, we want to make 

sure that these tax dollars are getting the maximum effect. Now 

on increasing capacity, there are a number of obsolete systems. 

When I say obsolete, they still work but very few people use them, 

VORs and NDBs, those types of things. I hope and I would assume 

that going forward you all will look very carefully at the savings 

generated, kind of like cleaning out your closet, as we move into 

13

more technology-driven areas. Is that a big part of your planning 

process when it comes to what the FAA will ask for in the reauthorization? 

Secretary PETERS. Congressman Hayes, it is. I think you make 

a valid point that some of these systems will no longer need to be 

used. 

The only difference, I would say, is the transition period. As Congressman Petri pointed out, we can’t simply turn off one system 

and turn on another. So it will be a migration over time. But yes, 

we are calculating the cost savings from the systems that will no 

longer be used. 

Mr. HAYES. I appreciate that, and I will look forward with Mr. 

Costello and others to sitting down and talking about that in detail. If I fly from here to Concord—and under the rules, that is now 

questionable—there is only one VOR involved in that. The other 

one is still out there. There are a lot of things that could happen. 

The FAA has had some issues with recent audits. It is a big 

agency and has a lot going on. I hope we would make sure, particularly under the threat of huge tax increases on fuel and potential 

user fees, that we get that cleared up. I want the folks, particularly 

in the name of safety, to have everything that they need but making sure that those dollars are well spent and that we do not put 

undue strain, particularly on that segment of industry where hundreds of thousands of people are employed in building airliners and 

all the way from 747s all the way down to unmanned aerial vehicles. 

Any thought or is it premature since the final document is coming out next week, where is the whole user fee issue? Chairman 

Mica mentioned it earlier. What is the latest and greatest on that 

and can you give us a preview of what proposed tax increases on 

fuel there are and kind of how that is going to shake out? 

Secretary PETERS. Congressman, I am at a bit of a disadvantage 

due to the fact that we don’t have the reauthorization proposal out 

yet, and because some of those issues are being decided, I would 

not be comfortable talking about what the components of charges 

would be. I would be happy to talk with you next week. 

You obviously have much greater knowledge about the technical 

aspects of this than I. In fact, I think I have just about exhausted 

my technical capability here, but I do understand your concern 

about the audit and about responsibility for public funds. I think 

the issue is a very important one. 

Air traffic modernization has been on the Government Accountability Office’s (GAO) high risk list for years. Administrator Blakey 

and I take these issues very seriously, and we have been giving the 

programs and accountability for the programs very careful attention. Ninety-seven percent of FAA’s major capital programs were 

on time and on budget in 2006, and that number will be even higher for 2007. Both GAO and the Department’s Inspector General 

have noted FAA’s improvement in major project management. 

Now in terms of calculating the fee, sir, it is intended that an 

advisory group would be structured and would work with Congress 

in determining what the actual fees would be. 

Mr. HAYES. We certainly, again, welcome you to the Hill and appreciate your efforts. If I have more knowledge that you do, it is 

14

got to be in very limited areas. So, again, thank you and we look 

forward to working with you and make sure that everybody wins 

at the end of the day. 

Thank you, Mr. Chairman. I yield back. 

Secretary PETERS. Thank you. 

Mr. OBERSTAR. Thank you, Mr. Hayes. 

Ms. Norton? No questions. 

Mr. Cummings? 

Mr. CUMMINGS. Thank you very much, Mr. Chairman. 

Madam Secretary, welcome. Madam Secretary, I wanted to ask 

you about two areas, water and Amtrak. 

The President has proposed significant cuts in the Environmental Protection Agency’s budget for wastewater infrastructure. 

Cuts are also proposed for the Clean Water State Revolving Loan 

Fund programs to mitigate runoff and programs to restore 

brownfields. The Targeted Watershed Grant program is proposed to 

be zeroed out. Obviously, these are also cuts that would target the 

safety of our water supply and cut the meager environmental protection programs we currently have in place. I just wanted to know 

what was the thinking behind those cuts? 

Secretary PETERS. Congressman Cummings, I unfortunately am 

not qualified to answer those questions. I believe the witnesses on 

the second panel from EPA would be able to do so. 

Mr. CUMMINGS. No problem. 

Let us go to Amtrak. You believe Amtrak ought to be privatized? 

Secretary PETERS. Sir, I believe that the Nation needs an intercity passenger rail service, but we need one that operates on a 

business model that is sustainable. 

Mr. CUMMINGS. So I take it that, as you probably know, in the 

last few Congresses, there seems to have been an effort afoot by 

the Administration to move towards privatization, but even the Republican Congress has repelled that. You know that, right? 

Secretary PETERS. Sir, I do. Having fairly recently come through 

the confirmation process, it became abundantly clear to me that 

there is support for the Amtrak program in Congress, albeit for the 

funding to be used responsibly. 

I have had the opportunity to meet with the Amtrak board, the 

chairman, as well as the new head of Amtrak, Alex Kummant, to 

talk about what they are doing. We have seen some progress in the 

last year by the Amtrak board and by management to control costs 

and to raise revenues. The President’s 2008 budget for Amtrak recognizes that the corporation has made some necessary budget reforms, and we have included $900 million in our budget just as we 

did last year. 

We also are aware of the fact that Amtrak has some substantial 

resources in addition to the amount proposed in the President’s 

budget. Those resources include approximately $2 billion in normal 

operating revenue as well as $250 million in State subsidies. 

One of the reasons we structured our proposal the way we did, allowing for $100 million for proposed inter-city passenger rail 

grant programs, is that it could be matched with State funds to 

gain another $100 million for the Amtrak program. The reason we 

feel that those State partnerships are so important is that over the 

last 10 years, ridership on inter-city passenger rail routes that benVerDate 0ct 09 2002 14:04 Aug 08, 2007 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 P:\DOCS\35030.TXT HTRANS1 PsN: JASON
15

efit from State support and State involvement has grown by 73 

percent. Ridership on Amtrak routes that are not supported by 

States has increased by only 7 percent. 

Mr. CUMMINGS. Now you realize that both Republican and Democratic governors are looking for resources—and my governor, the 

Republican that was in there and now the Democrat in Maryland—

are just screaming, just trying to figure out how they are going to 

deal with the responsibilities they have presently. Basically, what 

you are saying is that you want to put more, the President wants 

to put more responsibility on the States to give more to Amtrak, 

is that an accurate statement? 

Secretary PETERS. Congressman, we believe that where States 

choose to do so and can provide money, which is then matched at 

a 50 percent level by this program, it can have very positive results. For example, Washington State, California, and a number of 

other States who already put money into commuter rail programs 

are putting money into Amtrak programs and seeing significant increases in ridership. 

Mr. CUMMINGS. You have the belief that the Northeast corridor 

should be separated from the Amtrak system? 

Secretary PETERS. Sir, I have not arrived at that decision. The 

Northeast corridor is very important, and that is one of the reasons 

that we put $500 million for capital costs in our budget, to help the 

maintenance and repair of capital infrastructure across the system, 

but particularly in the Northeast corridor. 

Mr. CUMMINGS. Just very briefly, tell me about this. It seems like 

there has been built up this structure to plan basically to have private and public going against each other, I guess in some type of 

competition. Is that right? 

Secretary PETERS. Sir, I am not aware of that. In fact, what I 

would prefer to see is public and private contributions working together for the greater good. I am not aware of an effort to contract 

out Amtrak nor has that been mentioned to me by the CEO or the 

board members with whom I have spoken. 

Mr. CUMMINGS. You are not anxious to see it privatized, is that 

what you are saying? 

Secretary PETERS. Sir, I am not sure that that is on the table as 

an offer. If it is, I would certainly want to know what the parameters of that offer were and whether or not it was in the public interest at the end of the day. 

Mr. CUMMINGS. Thank you, Madam Secretary. 

Secretary PETERS. Thank you, sir. 

Mr. OBERSTAR. Mr. Graves? 

Mr. GRAVES. Thank you, Mr. Chairman, and thank you, Madam 

Secretary, for being here today and coming up and visiting with us. 

My biggest concern is with the FAA and with the new proposals, 

and I have got a real problem. We talk a whole lot about this funding proposal and how we are going to pay for this thing, but you 

stated yourself you are still working on the business plan for the 

Next Generation Air Traffic Control System. Is that going to be 

available next week with your funding proposal? 

Secretary PETERS. Sir, the business plan will not be available 

next week. What will be available next week is the product that 

came out of the Joint Program Development Office. That office inVerDate 0ct 09 2002 14:04 Aug 08, 2007 Jkt 000000 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 P:\DOCS\35030.TXT HTRANS1 PsN: JASON
16

cludes representatives not only from FAA, but from Department of 

Commerce, Department of Defense, Department of Homeland Security, NASA, as well as aviation stakeholders who have put together 

the parameters of the plan that will be included in our proposal. 

Mr. GRAVES. But we still don’t know what it is we are going to 

have. We still don’t know what the Next Generation Air Traffic 

Control System is going to be. 

Secretary PETERS. We do not, sir. 

Mr. GRAVES. We still don’t know what it is going to cost. We still 

don’t know. We really don’t know a whole lot about it except for 

a concept, but yet we are coming up with a funding proposal to pay 

for it. 

We talk all about congestion and how crowded the skies are 

going to be, but I am specifically talking to those GA pilots, those 

VFR pilots who are out there in Class D air space. They are not 

using this system, and if they are not using this system, then how 

can congestion be a problem? 

I have heard rumors of as much as a 300 percent increase in the 

gas tax in and the aviation fuel tax for these GA pilots. That is the 

word that I got, a 70 cent gas tax. Right now, what is it? It is about 

22 or something like that. Now that is a horrendous increase if 

that is what the case is, and that is for pilots that aren’t using the 

system. That is for pilots who aren’t a problem with the system. 

I know pilots out there that have got thousands of hours, and 

they are operating strictly in Class air space. They are not going 

into Class B air space. They seldom cross through Class C air 

space. They are just not a drain on the system, but yet they are 

going to be taxed to help pay for this. 

Now I understand through the Aviation Trust Fund, what this 

money goes to. Truly, the Aviation Trust Fund, and Mr. Oberstar, 

I know can surely speak to this because he has institutional knowledge about everything when it comes to transportation. The Aviation Trust Fund was developed to build runways and infrastructure, not pay for operating costs. I understand GA has a role in 

that, and we have the whole reliever airport system to get GA off 

of the big airports so that the airlines can get in there and we don’t 

have congestion. 

But now all of a sudden we are talking about safety in the system. We are talking about crowded skies. We are talking about a 

Next Generation Air Traffic Control System. That brings me to a 

whole other point, and that is new equipment. 

I can’t afford the equipment that is being put in some of these 

airplanes now. The equipment is worth more than the airplane is 

in many cases, and now you are talking about a whole new system 

that is going to require new equipment. Just through certification 

costs and everything that is associated with that, I can only imagine what that is going to cost, and it concerns me a great deal for 

those GA pilots out there. Those are the ones that I am worried 

about. They can’t afford a 300 percent increase in aviation fuel 

costs. I don’t what it is going to be, and I am sure you don’t know 

what it is going to be either. We will see next week what the proposal is going to be. 

More than anything else, I am venting, and I don’t expect you 

to necessarily respond to it because I have a whole lot of questions 

17

next week and I have got reams of questions that I have about this 

system that we still don’t know what it is and what it is going to 

cost and how we are going to use. 

Mr. OBERSTAR. Would the gentleman yield? 

Mr. GRAVES. Yes, yes. 

Mr. OBERSTAR. The gentleman is not venting. The gentleman is 

just making a very profound, compelling statement that reflects the 

views on both sides of the aisle about the Administration’s plan or 

non-plan or incomplete proposition. So when that proposal comes 

out next week, it better not just be a concept. It better be something very specific. 

Secretary PETERS. Mr. Chairman, I understand. 

Congressman Graves, we do understand the concerns of the general aviation community. There are a number of policy considerations that will have to be made by the Department, working together with Congress, as this reauthorization prospect goes forward 

in the coming months. Those policy considerations will have a great 

deal to do with some of the concerns that you have expressed by 

the general aviation community. 

Again, in terms of the concept of Next Generation, what we want 

to do is work with you and work with experts in the field so that 

together we identify the correct technology because sometimes Government is a little behind the curve when it comes to the best 

available technology. That is something that we want to work together with you on. 

I know that Administrator Blakey will be able to address those 

issues when she appears before this Committee next week . 

Mr. GRAVES. In closing, I do want to thank you for coming up 

here, and I appreciate your answering our questions or talking 

about them. 

Secretary PETERS. Thank you, sir. 

Mr. OBERSTAR. I thank the gentleman for this very perceptive 

and compelling statement. 

Mr. Holden? 

Mr. HOLDEN. Thank you, Mr. Chairman. 

Madam Secretary, I really don’t have a question. I have a comment, but I welcome your opportunity to respond to it when I am 

finished. 

On your comment that you believe that earmarks should be reduced by 50 percent, I couldn’t disagree with you more if I tried. 

Those of us on this Committee and particularly those of us from 

rural districts depend upon the opportunity to steer dollars to our 

districts for hazard mitigation, for congestion problems, for economic development, and quite frankly, our state DOTs do not have 

endless resources. We do not give them endless resources. The 

money naturally gravitates to the metropolitan areas. We need that 

opportunity to take care of those concerns that we have. 

The Chairman has been to my district two times. The former 

Ranking Member of the Subcommittee on Highways, Mr. Rahall, 

was there once looking at projects. While you are thinking about 

reducing earmarks, I am just going to give you three examples of 

projects, two complete, one in progress right now that would still 

be on PennDOT’s planning if it were not for my ability and Senator 

Specter’s ability to earmark funds for these projects. 

18

In my home county of Schuylkill, Route 61 was deemed one of 

the most dangerous highways in the Commonwealth of Pennsylvania. It was a four lane highway, not wide enough, no divider on 

it. Two highway bills ago, I earmarked $15 million. Senator Specter 

put a little bit on top of it. Now it is a four lane highway with jersey barriers, and there has not been a fatality there in six years. 

Route 222 in Berks County, one of the fastest growing counties 

in the Commonwealth of Pennsylvania, had the esteemed pleasure 

of being known as the Home of the Road to Nowhere. Route 222 

is a highway between Reading, Pennsylvania and Lancaster, Pennsylvania which was two lanes in two fast growing counties. It 

would still be a road to nowhere if we were not able to earmark 

a sufficient amount of funds to have that complete. They are open 

and operating and safe. 

Chairman Oberstar was in my district in Lebanon, Pennsylvania, 

the City of Lebanon. Norfolk Southern comes through a city of 

35,000 people 40 plus times a day. Since I have been representing 

that county, people have been killed by trains. The ambulance service, the fire service are separated when the trains are coming 

through from getting to the hospital, getting to the fire sight. As 

the result of an earmark, it is now a land acquisition. So earmarks 

are not a dirty word. It is an opportunity for us to help our districts, and I hope you will consider that. 

Secretary PETERS. Congressman, if I may clarify, what the President is concerned about are earmarks that are not done in the light 

of day, those things that happen away from the decision-making 

part of Congress. We absolutely understand that while the Administration proposes, Congress disposes, and we will always follow 

the law. But what we ask is that those laws be made in the light 

of day so that your fellow members and the American people can 

know where those monies are going. 

I don’t question your judgment, sir. 

Mr. HOLDEN. Thank you, Madam Secretary. Believe me, they 

were transparent. We had six newsletters out on those projects. 

I yield back, Mr. Chairman. 

Mr. OBERSTAR. I thank the gentleman. He made a very powerful 

statement about the high priority member projects that are designated. 

Just for the Secretary’s edification, although she was Federal 

Highway Administrator during the process of SAFETEA-LU, we 

circulated, then Chairman Young and I circulated a 22 point questionnaire to all members that they had to fill out and sign to identify projects in their districts that they would like to have included 

in the Transportation Bill. All of that was included in the Committee report. Those submissions by members were all vetted. They 

had to be included in the STIP, that is, the long-term Surface 

Transportation Improvement Program of their State, and a whole 

host of other requirements. The specific geographical location of the 

project, and their identification by member were part of our Committee report and part of the bill that went to the House floor and 

through conference and in the conference report. 

There is no night time designation and no night time fly by night 

operation in this Committee. It is all done in the light of day. 

19

Secondly, in the aviation reauthorizations, we have never during 

the time that I was Chair, during the time that Mr. Duncan was 

Chair, during the time that Mr. Mica was Chair, allowed in the reauthorization of FAA, any airport designation. There were hundreds of requests from members to have a tower, a runway, a taxiway, terminal improvements, all that sort of stuff. We kept it out. 

It is the appropriation process that is bad, and I can guarantee, 

Madam Secretary, that if they cross our line in this Congress, this 

Chairman is going to be on the floor and raise points of order. 

Secretary PETERS. I understand, sir. 

Mr. OBERSTAR. Mr. Coble? 

Mr. COBLE. Thank you, Mr. Chairman. 

Madam Secretary, I arrived late because of another meeting, but 

I don’t think this question has been put to you. The 2008 budget 

does not include any funds for the new Department of Transportation building in Southeast D.C. Two questions, when are you 

moving into the new building, and do you have sufficient funds in 

the 2007 continuing resolution to make the move? 

Secretary PETERS. Congressman Coble, thank you for asking the 

question. If the 2007 H.J. Resolution 20 is enacted as it passed the 

House, we will have sufficient money to complete the new building, 

and we will be moving in beginning in approximately April of this 

year through the end of June of this year. In fact, I am very 

pleased to report that that project is coming in under budget and 

on time, should H.J. Resolution 20 pass both chambers of Congress. 

Mr. COBLE. Good news, we don’t hear that very often on this 

Hill, do we, Mr. Chairman? 

Secretary, let me ask you one final question. Do you believe that 

there are opportunities to move more cargo on our waterways as 

part of the intermodal transportation system, (a) and (b), what can 

be done to encourage greater or widespread use of our waterways 

as a means of addressing some of the congestion problems of other 

modes? 

Secretary PETERS. Congressman Coble, I think you make a valid 

point. We are looking at more than doubling the freight transportation of our Nation just within the next 10 years. Estimates are 

that there will be as much as two and a half times the trucks on 

the road that you see out there today than trains. So, absolutely, 

using our inland waterways, using a concept called short sea shipping is something that we absolutely should look at. It is something that I am talking to our maritime administration about to determine where and how we might propose to you to make better 

use of the waterways. 

Mr. COBLE. Thank you, Secretary Peters. 

Mr. Chairman, I yield back. 

Mr. OBERSTAR. I supplement the gentleman’s inquiry by saying 

that this Committee, the Coast Guard Subcommittee actually will 

have a hearing on short sea shipping for the purpose of exploring 

wider opportunities to use our maritime inland waterways and the 

salt water as well as the Great Lakes coastal system to move goods 

more efficiently and at least cost and least environmental impact. 

Short sea shipping has been in practice in other countries. We 

have not used it, I was going to say sufficiently. We have hardly 

20

used it at all in the United States. The purpose of the hearing is 

to explore exactly the point of the gentleman’s question. 

For example, containers that come into the United States from 

the West Coast to the Port of Vancouver by the Canadian Pacific 

Railway and the Canadian National Railway, the CN brings those 

containers, about a half million of them now, through International 

Falls on the U.S.-Canadian border in my district and then by rail 

down through the heartland of the United States. 

Those containers could be offloaded at Duluth, placed on a lakesize container vessel, moved past the choke point in Chicago where 

it takes as long for a container to move through Chicago seven 

miles as it does to move 1,800 miles from the West Coast to Chicago. Now we can relieve the congestion, reduce the cost and move 

containers more efficiently. We are going to explore that issue in 

the coastal regions, the salt coastal regions and the Great Lakes. 

Mr. Bishop? 

Mr. BISHOP. Thank you, Mr. Chairman. 

Madam Secretary, thank you for your testimony. 

One of the goals that this Committee has adopted on a bipartisan 

basis is to examine the connection that exists between transportation policy and energy policy. The President in his State of the 

Union message in 2006 said that we were addicted to oil. The 

President is now acknowledging that human activity contributes to 

global climate change. It is imperative on all of us obviously to 

bend our policies in a way that reduces our dependence on foreign 

oil, reduces carbon emissions and so on. 

My question to you is really very straightforward. Does the Administration believe that increased reliance on mass transit is a 

means by which we can reduce our consumption on foreign oil and 

in the process thereby reduce carbon emissions? 

Secretary PETERS. Congressman Bishop, mass transit certainly 

has a place in meeting the Nation’s transportation demand, and 

with the right systems in place, mass transit can relieve some of 

the congestion that we are experiencing on our roadways today. 

Mr. BISHOP. Then let me be more specific. How is it if the Administration shares that belief, how is it that the Administration 

can cut funding by $300 million below the level authorized in 

SAFETEA-LU? 

You made the point that what the Administration was trying to 

reach was historic levels of funding. I believe that is how you characterized it. 

Secretary PETERS. That is correct. 

Mr. BISHOP. I guess my question is: Is this the time that we can 

settle for historic levels of funding? 

We passed, on a bipartisan basis, a reauthorization bill that included a level of funding for mass transit that we thought was prudent. The Administration is now cutting that by $300 million. How 

can you justify that? 

Secretary PETERS. Congressman Bishop, we recognize the importance of mass transit. We have funded overall transportation programs well in excess of the 1 percent limitation that the President 

has asked us to meet for non-defense discretionary spending. In 

crafting our proposal for transit this year, while mindful of that 

goal, we funded every project that was ready to go, every project 

21

that has a full funding grant agreement, that is pending or we believe will be at that point during the year. 

When SAFETEA-LU was passed by the Congress and signed by 

the President in August of 2005, it was a very different picture in 

terms of the health of the Highway Trust Fund and the Highway 

Account. We have to make tough choices, and those were the 

choices we made, sir. 

Mr. BISHOP. I understand that. At the risk of being argumentative, the 1 percent cap that the President imposed clearly is an 

arbitrary number. I mean the Pentagon’s budget is going up by 11 

percent. We are spending more in that area because the President 

believes that that is a priority. The Nation believes that that is a 

priority. 

I guess what I and a number of us are struggling with is how 

are we going to move this issue, this issue of climate change and 

the way in which Government policy can impact our ability to bend 

that. How are we going to move that to a priority that eclipses 

some arbitrary 1 percent barrier? 

Secretary PETERS. We believe that those systems are a priority, 

and we have allocated more than the 1 percent to those programs. 

I certainly understand where you are coming from, and I believe 

that we share those concerns. We will work hard with you to resolve these issues. 

Mr. BISHOP. OK, thank you, Madam Secretary. 

I yield back, Mr. Chairman. 

Mr. OBERSTAR. I thank the gentleman. 

We have about 10 minutes remaining on this vote, and then we 

have 50 minutes of voting. I can’t ask the Secretary to stay for an 

hour. 

We will go to other members and ask them to fire one question 

off, and I hate to do this, but then we will negotiate with the Secretary about a return encounter. 

Mr. Duncan? 

Mr. DUNCAN. Mr. Chairman, in light of your statement, I will 

just go ahead and submit my questions for the record. Thank you. 

Mr. OBERSTAR. As the former Chairman of the Aviation Subcommittee, you are entitled to a question. 

[Laughter.] 

Mr. DUNCAN. Well I am curious. I am curious about two things. 

One, the recission of these almost $8 billion in highway funds and 

what we are going to do about that and also are you making any 

recommendations about new ways to finance the aviation system? 

I am interested in both of those things, but that is two questions. 

Mr. OBERSTAR. All right, she can answer. She talks fast. 

Secretary PETERS. Congressman, I am going to ask our Assistant 

Secretary to discuss the recisions. 

In terms of new ways to fund aviation, we are looking at new 

ways to fund aviation and trying to find ways to meet the increasing demand without putting any undue burdens on our aviation 

community, as Congressman Graves mentioned. When we get our 

proposal out next week, we will talk to you in more detail about 

those. 

Mr. DUNCAN. All right. 

22

Ms. SCHEINBERG. Sir, there are four proposed cancellations, as 

we call them. Two of them are from the Miscellaneous Appropriations Account, one is contract authority that correlates with the 

Revenue Aligned Budget Authority (RABA), that we are proposing 

not be instituted in fiscal year 2008, and the fourth one is unobligated balances of contract authority, similar to what the Congress 

did last year and is doing in H.J. Res. 20. Our level is at $1.4 billion compared to the $3.5 billion that the 

Congress is proposing. These are similar to what has been done in 

the past, but we have four different pieces from the Highway Account. 

Mr. DUNCAN. I am concerned about that because our vehicle 

miles traveled keeps going up at three or four times the rate of the 

increase in population. 

Mr. OBERSTAR. Exactly. 

Mr. DUNCAN. At any rate, I could say a lot more, but I will let 

it go. 

Thank you very much for being here with us. 

Secretary PETERS. Thank you, sir. 

Mr. OBERSTAR. That last point is so vital. 

Mrs. Napolitano? 

Mrs. NAPOLITANO. Thank you, Mr. Chair. I will make mine very 

brief also. 

We have been searching with great interest any of the increase 

in dealing with some of the transportation issues in Southern California which is where I am from, and I would like to submit a letter to you. It is not a question. 

It is rather we need congestion relief in California on that bottleneck of I–5, the Santa Ana freeway and also on the Alameda corridor east simply because that brings the economy to the rest of the 

Nation, and it is heavily impacting my district, not only because of 

the pollution but because of the building of the third rail and also 

add to that, out of 54 grade separations, only 20 are being geared 

for building or for setting up. The funding is not there, not even 

for those 20. Never mind the other 34. 

That is going to create not only a health hazard, a pollution hazard, more trains derailments because we have had five in my district in about a span of less than a year. I will give credit to Union 

Pacific, they are going through and putting down concrete ties and 

longer rails and upgrading which we have been having a big battle 

over because of those derailments. Those are the things I would 

like to submit to you. 

Also, I understand that you will be in Los Angeles. I invite you 

to my district to have a bird’s eye of what we have. 

With that, Mr. Chair, I yield back the balance of my time. I will 

submit the letter to the young lady. 

Secretary PETERS. Thank you, Congresswoman, and I look forward to the visit to your district. 

Ms. NAPOLITANO. Thank you. 

Mr. OBERSTAR. Mr. Boozman? 

Mr. BOOZMAN. Thank you, Mr. Chairman. 

I would just like to reiterate that I am very, very concerned 

about the Highway Trust Fund. We have got a situation where if 

you look at the tremendous inflation in our highway projects with 

23

the cost of steel, the shortage of concrete and things and you look 

at the last time we had an increase and you look at the purchasing 

power of those dollars, we have lost tremendous purchasing power 

and have not kept up that way. Earlier we had some of our truckers come in, and they were telling about how they had reduced fuel 

consumption by up to 25 percent in the last year by going 

straighter routes and things like that. 

We are looking at increasing the standards on fuel efficiency and 

things. We have got the strongest economy that we have ever had 

and not keeping up now when that dips back down. 

I guess really what I would like to know from you is you said 

that we need to get with you and work this out. Do we have a plan 

to get where we need to go and specifically what is that plan? 

Secretary PETERS. Congressman Boozman, I also am very concerned, and I know the Chairman is as well. 

Right now we have a commission that was authorized by the 

SAFETEA-LU legislation, which I have the privilege of chairing, 

that is working very hard to come up with recommendations for 

you. Those recommendations are due in December of this year. Because of the very urgent nature of this situation with the Highway 

Trust Fund I am working within the Department, and within the 

Administration. We will work with you to try to come forward with 

recommendations even sooner if we can do that. You make a valid 

point about the cost of construction materials, sometimes approaching 13 percent growth in the cost of those materials, well in excess 

of the rate of inflation. 

Mr. BOOZMAN. Mr. Chairman, do you think we possibly could 

have that group over to give us some preliminary as to what is 

going on with them, the commission? 

Mr. OBERSTAR. Oh, yes, we will. We have periodically in the past 

had a briefing with the executive director of the commission, and 

with Mr. Mica’s participation, we will schedule another one. 

Mr. BOOZMAN. Thank you very much. 

Thank you, Madam Secretary. 

Mr. OBERSTAR. Mr. Lipinski? 

I would just say that while there are 4 minutes remaining on the 

vote, 338 have not yet voted, and it is a 2 minute and 38 second 

hike from here to the House floor. 

Mr. LIPINSKI. We have plenty of time there. 

I just want to quickly say I also have concerns, Madam Secretary, about Amtrak, rail infrastructure funding, transit funding. 

Focusing specifically on Chicagoland which I represent part of it, 

there are massive congestion problems in aviation, rail, highways. 

I certainly would invite you to come out there and see some of 

these and discuss more that we can do. 

On aviation right now, we are working on a remodernization 

project and rail, the CREATE project which I have been the leader 

on to reduce rail congestion. In terms of highway congestion, we 

have groups like Metropolis 2020, Metropolitan Planning Council. 

These are civil organizations, think tanks working on innovative 

ways to address highway congestion. I am just wondering what you 

could quickly say about the highway congestion initiative and how 

that may be able to help in Chicago. 

24

Secretary PETERS. Congressman Lipinski, the congestion initiative can help you. Secretary Mineta established the Department’s 

National Strategy to Reduce Congestion on America’s Transportation Network last May before he left the Agency. I think that is 

a wonderful idea and have picked up on that. Accordingly our 

budget proposes $175 million to be devoted to this initiative. The 

money supports four programs that are consistent with the 

SAFETEA-LU legislation: $100 million for the value pricing pilot 

program, which complements the $12 million that was already in 

SAFETEA-LU for that program; $25 million to Corridors of the Future; $25 million for real time traffic information systems; and $25 

million for intelligent transportation systems (ITS) and research 

and development which will disseminate technology more quickly. 

Certainly, we are very interested in working with Chicago, and 

I have had the opportunity to be there. By the way, the commission 

will be there this spring to see firsthand some of the challenges. 

When I was in the private sector, one of our main offices was in 

Chicago, I spent much time in the City and can understand what 

you are saying about congestion. 

Mr. LIPINSKI. Thank you, Madam Secretary. I look forward to 

working with you and seeing you in Chicago. 

Secretary PETERS. Thank you, sir. 

Mr. LIPINSKI. I yield back. 

Mr. OBERSTAR. Thank you. 

Ms. Hirono? 

Ms. HIRONO. Thank you. 

Madam Secretary, is it your Department’s position to support 

New Starts mass transit programs’ systems especially where the localities have made a commitment to the system by passing tax increases to pay for their share? 

Secretary PETERS. Congresswoman, yes, it is. 

Ms. HIRONO. Good, thank you. 

Thank you, Mr. Chair. 

Mr. OBERSTAR. The Committee will stand in recess, pending the 

seven votes, and we will reconvene within five minutes after the 

last vote for which I cannot set a specific time. 

Mr. Hayes, did you have a question at all that you wanted to 

ask? You are going to talk individually, all right. 

Thank you very much for being with us today. We will see if 

there is interest among members in having you come back at another time that would be convenient, but we thank you very much 

for the time you have given us today. 

Secretary PETERS. Thank you, Mr. Chairman. I appreciate the 

opportunity. 

Mr. OBERSTAR. We hold you excused. 

We will ask our water panel to be patient. You can have a free 

cup of coffee over here in the lounge and make yourself at home. 

The Committee stands in recess. 

[Recess.] 

[Whereupon, at 3:20 p.m., the committee stands adjourned.]

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