U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

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

81–370 PDF 2014

THE IMPORTANCE OF THE NORTHEAST 

CORRIDOR 

(113–23) 

FIELD HEARING 

BEFORE THE

SUBCOMMITTEE ON 

RAILROADS, PIPELINES, AND 

HAZARDOUS MATERIALS 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

JUNE 7, 2013 (New York, New York) 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

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

committee.action?chamber=house&committee=transportation 

(II) 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

BILL SHUSTER, Pennsylvania, Chairman 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee, 

Vice Chair 

JOHN L. MICA, Florida 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

SAM GRAVES, Missouri 

SHELLEY MOORE CAPITO, West Virginia 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

LOU BARLETTA, Pennsylvania 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

DANIEL WEBSTER, Florida 

STEVE SOUTHERLAND, II, Florida 

JEFF DENHAM, California 

REID J. RIBBLE, Wisconsin 

THOMAS MASSIE, Kentucky 

STEVE DAINES, Montana 

TOM RICE, South Carolina 

MARKWAYNE MULLIN, Oklahoma 

ROGER WILLIAMS, Texas 

TREY RADEL, Florida 

MARK MEADOWS, North Carolina 

SCOTT PERRY, Pennsylvania 

RODNEY DAVIS, Illinois 

VACANCY 

NICK J. RAHALL, II, West Virginia 

PETER A. DEFAZIO, Oregon 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

TIMOTHY J. WALZ, Minnesota 

STEVE COHEN, Tennessee 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

JOHN GARAMENDI, California 

ANDRE ́ CARSON, Indiana 

JANICE HAHN, California 

RICHARD M. NOLAN, Minnesota 

ANN KIRKPATRICK, Arizona 

DINA TITUS, Nevada 

SEAN PATRICK MALONEY, New York 

ELIZABETH H. ESTY, Connecticut 

LOIS FRANKEL, Florida 

CHERI BUSTOS, Illinois 

SUBCOMMITTEE ON RAILROADS, PIPELINES, AND HAZARDOUS MATERIALS

JEFF DENHAM, California, Chairman 

JOHN J. DUNCAN, JR., Tennessee 

JOHN L. MICA, Florida 

GARY G. MILLER, California 

SAM GRAVES, Missouri 

SHELLEY MOORE CAPITO, West Virginia 

CANDICE S. MILLER, Michigan 

LOU BARLETTA, Pennsylvania 

LARRY BUCSHON, Indiana 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York, Vice Chair 

DANIEL WEBSTER, Florida 

THOMAS MASSIE, Kentucky 

ROGER WILLIAMS, Texas 

TREY RADEL, Florida 

SCOTT PERRY, Pennsylvania 

BILL SHUSTER, Pennsylvania (Ex Officio) 

CORRINE BROWN, Florida 

DANIEL LIPINSKI, Illinois 

JERROLD NADLER, New York 

ELIJAH E. CUMMINGS, Maryland 

MICHAEL H. MICHAUD, Maine 

GRACE F. NAPOLITANO, California 

TIMOTHY J. WALZ, Minnesota 

ALBIO SIRES, New Jersey 

ELIZABETH H. ESTY, Connecticut 

PETER A. DEFAZIO, Oregon 

MICHAEL E. CAPUANO, Massachusetts 

STEVE COHEN, Tennessee 

DINA TITUS, Nevada 

NICK J. RAHALL, II, West Virginia 

(Ex Officio) 

(III) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... iv 

TESTIMONY 

John A. Fry, President, Drexel University ............................................................ 7 

Robert D. Yaro, President, Regional Plan Association ......................................... 7 

Hon. Joan McDonald, Commissioner, New York State Department of Transportation ................................................................................................................ 7 

Hon. Joseph H. Boardman, President and Chief Executive Officer, Amtrak ..... 7 

PREPARED STATEMENTS AND ANSWERS TO QUESTIONS FOR THE 

RECORD SUBMITTED BY WITNESSES 

John A. Fry, prepared statement ........................................................................... 35 

Robert D. Yaro, prepared statement ...................................................................... 41 

Hon. Joan McDonald: 

Prepared statement .......................................................................................... 45 

Answers to questions for the record from Hon. Bill Shuster, a Representative in Congress from the State of Pennsylvania ....................................... 48 

Hon. Joseph H. Boardman: 

Prepared statement .......................................................................................... 51 

Answer to a question for the record from Hon. Jeff Denham, a Representative in Congress from the State of California ........................................... 57 

iv 


Insert offset folio 1 here 81370.001
v 


Insert offset folio 2 here 81370.002
vi 


Insert offset folio 3 here 81370.003
vii 


Insert offset folio 4 here 81370.004
viii 


Insert offset folio 5 here 81370.005
(1) 

THE IMPORTANCE OF THE NORTHEAST 

CORRIDOR 

FRIDAY, JUNE 7, 2013 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON RAILROADS, PIPELINES, AND

HAZARDOUS MATERIALS, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, Washington, DC. 

The subcommittee met, pursuant to call, at 9:43 a.m., in Room 

4500, Moynihan Station, New York, New York, Hon. Jeff Denham 

(Chairman of the subcommittee) presiding. 

Mr. DENHAM. The subcommittee will come to order. 

Let me also thank Congressman Nadler for welcoming us to his 

district. Thank you. 

This hearing continues our informal roundtable discussion yesterday on Amtrak and will hopefully reinforce the idea that investment in the Northeast Corridor is a priority. 

Last week in California, we learned a lot about the California 

high-speed rail program. We also learned how the first $6 billion 

in State and Federal funding the project received will go to upgrade current Amtrak service in the valley. 

The Northeast Corridor is the most highly trafficked rail corridor 

in the country and Amtrak’s sole money-making enterprise. Infrastructure upgrades in this corridor are essential to serve a proven 

and dedicated ridership that continues to expand. I believe the $6 billion that was given to California high-speed 

rail could be better spent on such upgrades as these projects where 

they are both clearly identified and necessary beyond dispute. To place $6 billion in perspective, this amount of money is 

enough to replace the Baltimore and Potomac Tunnels, which costs 

$1.5 billion; build a new Portal South Bridge with a four-track 

alignment into New York costing $1 billion with 150,000 daily riders. We could replace the century-old Susquehanna River Bridge, 

$800 million, and replace the Gunpowder River Bridge, $600 million, with $2 billion left over. We saw all these projects yesterday, 

and obviously they are a challenge to deal with and they certainly 

slow down the commute time. 

These are just a few examples on a list of over $30 billion in 

identified projects. Each would substantially decrease trip times 

along the corridor by eliminating significant bottlenecks. 

Given that there are over 11.4 million Amtrak riders and over 

200 million commuters that use the Northeast Corridor every year, 

it would be an investment in an area where we have proven ridership. 

2 

Furthermore, there are still questions in California as to whether 

the improvements made by the Authority will even be used by Amtrak or even improve ridership as stations move from city centers 

to the outskirts. Simply put, this money would have been better 

spent here on the Northeast Corridor which continues to surpass 

ridership and revenue records for Amtrak. Also, unlike most other 

Amtrak services, the Northeast Corridor consistently turns an operating profit. 

I believe more investment must be made in the Northeast Corridor for continued success in the future, but when there was funding available, it was spent elsewhere. Indeed, the Northeast Corridor did not receive any of the President’s high-speed rail money 

until after the States returned theirs. Clearly this was not a priority. 

We have got to prioritize, fix it first, and address known problems, and our current policy structure does not encourage this. 

Finally, with years of trillion-dollar deficits, Federal resources 

are scarce and we have got to continue to work within existing 

funding levels. We have got to find ways to work with the private 

sector as well. 

Let me again thank our witnesses for being here today. We are 

open to all discussions, all suggestions, and I look forward to hearing from our witnesses. 

I would now like to recognize Ranking Member Corrine Brown 

from Florida for 5 minutes to make any opening statements she 

may have. 

Ms. BROWN. Thank you, Mr. Chairman, and thank you for having this hearing here at the Northeast Corridor, the backbone of 

our Nation’s passenger rail system. 

I want to thank Mr. Nadler for welcoming us to his district. We 

are physically in his district. 

And I want people to know who I am. I am Congresswoman Corrine Brown from Florida. I have already donated $500 million 

when my Governor sent $3 billion back, and I understand that you 

all have $500 million. So I am a contributor to the Northeast Corridor already. 

[Laughter.] 

Ms. BROWN. More than 2,200 trains travel the corridor daily, 

only 157 of which are Amtrak trains that transport about 16 million annual passengers. The commuters and freight railroads make 

up the rest of the trains on the corridor. I do not know if we have 

ever driven up I–95 to New York, but it is much better to do it by 

train. 

I am sure that many of you remember the Northeast Corridor 

improvement project in the early 1980s which modernized a number of facilities on the corridor. From 1990 to 2002, however, very 

little investment was made in the corridor. 

In 2003, things began to change with a new emphasis placed on 

bringing Amtrak equipment and infrastructure closer to a state of 

good repair. Amtrak began a process of ramping up a significant 

capital program and has since made substantial progress in addressing the backlog of capital needs throughout its system. 

In 2008, Congress charted a new course for passenger rail in the 

United States with the enactment of the bipartisan legislation, The 

3 

Passenger Rail Investment and Improvement Act. That law created 

a new national program for the development of high-speed rail and 

intercity passenger rail in the United States, which later led to a 

significant Federal investment in the corridor throughout the 

American Recovery and Reinvestment Act of 2009. Some of those 

funds enabled Amtrak to replace a 100-year-old bridge in Connecticut. The law also established the Northeast Corridor Infrastructure and Operational Advisory Commission to help develop a 

long-term vision and investment strategy for the corridor. The law 

also reenacted Amtrak through the end of this fiscal year. 

It is my hope that as we look forward to the reauthorization of 

Amtrak, that we build on the success of the act and continue to increase investment in Amtrak and the States. In fact, I support the 

President’s fiscal year 2014 budget proposed to create a dedicated 

funding source for Amtrak which would enable Amtrak to better 

budget its needs, including major infrastructure improvement. The 

fact is over the last 50 years, the Federal Government has invested 

nearly $1.3 trillion in our Nation’s highways and more than $484 

billion in aviation, but only since 1970, when Congress created Amtrak, did we begin to invest in passenger rail. Since that time, we 

have invested just $67 billion in passenger rail, a small fraction of 

what the European and Asian countries have invested. 

In closing, let me just say that I want to, particularly, give a special salute to Mr. Boardman for joining us and for helping to organize this hearing. And I am really pleased that they have extended 

your contract. You have done a superb job working with all of the 

elements that you have to work with. Thank you. 

And, Mr. Chairman, I look forward to hearing from the witnesses. 

Mr. DENHAM. Thank you. 

I now call on the full committee chairman, Mr. Shuster, for any 

opening statement he may have. 

Mr. SHUSTER. Thank you very much. It is great to be in New 

York City. I thank the witnesses for being here today and thank 

Chairman Denham and Ranking Member Brown for putting together this hearing. It is an important hearing in Mr. Nadler’s district. 

I was just talking to him about the size of his district. My district 

is about 180 miles across and about 70 or 80 miles deep. His district is a half a mile wide and 7 miles long. We were discussing 

one day where he was from. We were talking about his district. I 

said I come from a town of 2,000. He said I can shake 2,000 hands 

in 1 apartment building in a morning. So it tells you how different 

this country is. It is really amazing. 

It was great coming up here yesterday. Chairman Denham put 

together a rolling roundtable. So as we rolled up the Northeast 

Corridor, members from the different States’ DOTs were getting on 

board talking about their projects, their needs. It was really a day 

full of gathering a lot of good information. 

Always when we are doing a Northeast Corridor hearing, I have 

to have full disclosure. I am from Pennsylvania, and everybody 

says, well, he is for the Northeast Corridor because he is from 

Pennsylvania. I do not live on the Northeast Corridor. My district 

4 

is not on the Northeast Corridor. I am western Pennsylvania. So 

I am the other part of the State. 

But I believe that the Northeast Corridor is extremely important. 

As Chairman Denham talked about the density of population here, 

when you look at the density of population, 18 percent of the Nation’s population on 3 percent of our land mass, this is the perfect 

place to look at investing and making sure that passenger rail is 

viable. Again, you have got 4 of the 10 most populous metro regions 

in the Nation on the Northeast Corridor. 

When we look at the United States of America, it took us 65 

years to go from 200 million people to 300 million. In 2005, we 

crossed that 300 million person threshold, and they projected in 

2005 that it would take 32 years to go from 300 million to 400 million. We are 7 years into it. Not everybody is moving from the 

Northeast Corridor to Ms. Brown’s State or Arizona. The density 

continues to grow and expand, and we need to make sure that the 

Northeast Corridor, which is our most productive region in the 

country because of the population and the economic activity that 

goes on here—we have got to make sure we can move people 

around. So making sure the Northeast Corridor—we pay attention 

to it and make sure it is reliable, it is efficient, that is what we 

need to do. 

Again, when you talk about what this administration has proposed, we recognize we do not have unlimited funds. So we need 

to make sure we focus on what makes sense and prioritize that investment in the infrastructure. And again, I believe the Northeast 

Corridor is one we have to pay attention to. And it is not highspeed rail, but higher speed rail, and we can make those investments here in the Northeast Corridor. 

High-speed rail is great in theory, but with the limited resources 

we have, as Mr. Denham pointed out, we need to make sure we are 

focusing those dollars in places where we can have a significant impact and not think of pie in the sky type investments that really 

are not going to give us the kind of benefits that we need. 

Responsible governing involves choices, and while this administration in its budget wants to fund everything, we really need to, 

again, focus like a laser on those things that are smart investments. All you have to do is look to Pennsylvania, from Harrisburg 

to Philadelphia, the investment that Amtrak and the State of 

Pennsylvania made in the Keystoner about 5 years ago. Since that 

time, they have reduced the travel time from Harrisburg to Philadelphia by about 20 minutes, and ridership the last I checked, 

which was months ago, was up 60 percent. It is probably higher 

than that now. 

And, in fact, I tell people often, I should be the poster child for 

passenger rail because when my father chaired this committee and 

even before, when he was trying to reform Amtrak, I used to say 

to him as a 20-year-old that did not know a whole lot—I thought 

I knew a lot—I would never get out of my car and go to rail. I 

needed that freedom to leave, come and go as I pleased. But now 

today, I do not drive to Philadelphia or New York. I get on the 

train. I do not drive, whether it is from Harrisburg or Washington, 

DC, because it just makes so much sense. You can be so much 

more productive. 

5 

So again, focusing on the Northeast Corridor, getting the investment from the private sector. I think we have to look at ways to 

do that to incentivize them to get in the game here in the Northeast Corridor. 

And I look forward to working with all of you trying to figure this 

out as we go. 

Again, thank you, Chairman Denham and Ranking Member 

Brown, for holding this hearing. Thank you. 

Mr. DENHAM. Thank you. 

I now call on Mr. Nadler for any opening comments he may have. 

Mr. NADLER. Thank you, Mr. Chairman. I want to thank you and 

Ranking Member Brown for holding this hearing today on the importance of the Northeast Corridor. 

I would like to welcome everybody to my district, although that 

has been commented on already, and thank everyone for taking 

such an interest in passenger rail which is so vital to New York 

and to other cities along the east coast. 

I ride Amtrak every week from New York to Washington and 

back again. Rail is the most reliable form of transportation, and it 

should be an option for all travelers within a 500-mile radius of 

any major city. 

But the 11.4 million people who ride the Northeast Corridor each 

year and the residents and businesses of the region do not need 

convincing. The importance of the Northeast Corridor goes without 

saying. The real question is how best can we improve the Northeast Corridor and institute true high-speed rail service. 

We all know that there is at least a $52 billion backlog just to 

reach a state of good repair and to accommodate future growth. 

The system is old. Much of it was constructed in the 19th or early 

20th centuries. Bridges, tunnels, tracks, and signals all need to be 

upgraded just to keep up with demand on the current system. And 

the main reason for this backlog is chronic underfunding by the 

Federal Government. We place requirements on Amtrak and then 

we provide the bare minimum possible for the railroad to function. 

In the fiscal year 2012 transportation appropriations bill, DOT 

received $71 billion, but of that, Amtrak only received $1.4 billion. 

That is about 2 percent of Federal transportation appropriations 

for Amtrak nationally, never mind the Northeast Corridor. 

And then we hold hearings to ponder how we are going to develop the Northeast Corridor. Well, one answer is to invest orders 

of magnitude more than we currently do in passenger and highspeed rail. 

Every major transportation system has been created with federally funded capital investments. Every mode of transportation, 

highways, transit, and aviation, relies on some form of public subsidy. Rail is no different. If we want to develop true high-speed rail 

in this country, it is going to take a much greater public effort. 

Unfortunately, the current budget situation in Washington 

makes it highly unlikely that we will be able to increase funding 

for critical transportation programs in the near future. We should 

but I doubt we will. 

I hope the situation changes and I will continue to work to undo 

the sequester and to increase investment in jobs and economic deVerDate Aug 31 2005 13:49 Jul 02, 2014 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\RR\2013\6-7-13~1\81370.TXT JEAN
6 

velopment. Everyone here who cares about high-speed rail should 

do the same. 

In the meantime, a constrained Federal budget is going to give 

people even more an incentive to turn to the private sector, and 

that is fine to a point. I think everyone here supports involving the 

private sector to some extent. Amtrak partners with the private 

sector now and is exploring opportunities to do so more in the future. But what we should not do is use private financing as an excuse to eliminate or reduce Federal investment in passenger rail. 

In fact, only with a strong Federal role will we be able to properly 

leverage private sector funds. And whatever we do, we must maintain proper Federal oversight and control, preserve good paying 

jobs and protect the public interest. 

The good news is that despite the strain on the Federal budget, 

a lot is actually happening on the corridor. The NEC Advisory 

Commission is developing its vision for the Northeast Corridor. 

This includes not just coordination among the States in identifying 

critical needs for future growth, but also advancing a long-term regional investment strategy. FRA is currently conducting an EIS for 

corridorwide development and a service development plan, which 

should be completed in 2015. 

I hope that we will build upon these efforts when we reauthorize 

PRIIA, the Passenger Rail Investment and Improvement Act, hopefully later this year. Amtrak provides an essential and valuable 

service. Amtrak and the development of high-speed rail is a critical 

part of any rational transportation policy. 

I look forward to hearing from the witnesses and to working with 

my colleagues to build a competitive and visionary passenger rail 

system. 

Thank you. I yield back. 

Mr. DENHAM. Thank you. 

Again, I would like to welcome our witnesses here today. Let me 

just go over some quick ground rules. We have got a 5-minute 

timer up here. We are going to go through a couple of rounds of 

questioning, but just like a stop light: green light, keep going; yellow light, it is time to start hitting the brakes; and red light, your 

time is up. 

Our panel this morning includes John Fry, president of Drexel 

University; Robert Yaro, president of the Regional Plan Association; the Honorable Joan McDonald, commissioner of New York 

State Department of Transportation; and the Honorable Joe 

Boardman, president and CEO of Amtrak. 

I ask unanimous consent that our witnesses’ full statements be 

included in the record. Without objection, so ordered. 

Since your written testimony has been made part of the record, 

the subcommittee would request that you limit your oral testimony 

to 5 minutes. 

Mr. Fry, you are first this morning. 

7 

TESTIMONY OF JOHN A. FRY, PRESIDENT, DREXEL UNIVERSITY; ROBERT D. YARO, PRESIDENT, REGIONAL PLAN ASSOCIATION; HON. JOAN McDONALD, COMMISSIONER, NEW 

YORK STATE DEPARTMENT OF TRANSPORTATION; AND HON. 

JOSEPH H. BOARDMAN, PRESIDENT AND CHIEF EXECUTIVE 

OFFICER, AMTRAK 

Mr. FRY. Thank you, Representative Denham. Good morning. I 

am John Fry, the president of Drexel University, which is located 

in Philadelphia. It is next to Philadelphia’s 30th Street Station on 

the Northeast Corridor in University City. 

When I was the executive vice president of the University of 

Pennsylvania, which is right next door to 30th Station as well, I 

founded the University City District which promotes economic development throughout West Philadelphia. 

In between, I was president of Franklin & Marshall College in 

Lancaster, Pennsylvania, where I led the Northwest Gateway 

Project, a brownfield transformation that relocated a Norfolk 

Southern railyard in order to connect the Amtrak station in Lancaster to an approximately 60-acre educational and medical district. 

So I have a deep interest in how urban economic development 

and transportation intersect. 

Thank you for the opportunity to testify on the importance of the 

Northeast Corridor. 

America’s 3 busiest train stations and 7 of the top 10 are on the 

corridor. Seventeen percent of the American population and 20 percent of the GDP come from the Northeast, with 15 million new 

residents expected in the next decades. 

So the Northeast Corridor is the epicenter of American rail travel. And today, we are witnessing the incredible redevelopment of 

the urban cores that it connects. 

The millennial generation shows a strong preference to work and 

live in urban environments. Aging baby boomers are relocating to 

cities for convenience, culture, and overall social environment. 

These trends are creating new demand for commercial and residential real estate development. Some employers are relocating to access young talent and retain senior personnel, and retail and service firms are ramping up significant urban offerings. 

At the same time, highway and air travel in the Northeast are 

stretching beyond capacity. Fortunately, the Northeast Corridor 

rail service is a largely untapped asset that can be leveraged to 

take advantage of these trends. With reasonable investment, the 

corridor can produce considerable returns: not just improved transportation, but the development and long-term growth in its anchor 

cities like New York, Philadelphia, and Washington. 

There are great new ideas gathering around the urban stations 

at the core of the system. Each neighborhood has unique characteristics that can inform the best fit development for the regional 

economy. Here in New York at Hudson Yards, it is a mixed-use 

project on the river, an entirely new neighborhood built over a 

railyard. In Philadelphia, we are capitalizing on our educational, 

medical, and research concentrations to develop a new high-tech, 

transit-oriented neighborhood around 30th Street Station, and 

similar opportunities exist throughout the Northeast Corridor. 

8 

Amtrak, to its credit, is studying how their stations can complement these urban neighborhoods. Amtrak’s flagship study is the 

Washington Union Station master plan for Washington, and others 

are happening in Baltimore, Boston, here in New York, and in 

Philadelphia where Drexel is proud to be Amtrak’s lead partner. 

Significant value can be created by developing air rights on adjacent land and improving station experiences, and that in turn will 

drive urban development and lead to reinvestment in Northeast 

Corridor operations. 

But the gains are hard to realize given the limited resources of 

rail operators and Government, and the solution is public-private 

partnerships either with corporate partners or with anchor institutions, particularly research universities and health care systems. 

And that is the model for Drexel’s partnership with Amtrak and 

other Philadelphia stakeholders. 

Between our campus and 30th Street Station sits about 12 acres 

of very underutilized land with the potential to yield 6.4 million 

square feet of development next to the station. Even when commercial interests lagged, it was clear that these were incredibly important parcels. So our university has assembled these parcels at considerable cost to Drexel. Now we have undertaken a mixed-use development called the Innovation Neighborhood built on several 

principles. 

The first principle is to co-locate our vibrant translational research enterprise with corporate partners who can help us commercialize our research and work with us to transform the 30th Street 

Station area. Translational research thrives when commercial entities are deeply involved with an eye to licensing and eventually 

starting up new ventures. So we are in discussions with a number 

of companies, and I do not think it is farfetched to envision a hightech business environment like Cambridge or Research Triangle 

Park with all the new jobs and economic growth that that implies 

locating next to 30th Street Station. 

Our second principle is to use the Northeast Corridor as a competitive advantage for our university, and the impact for Philadelphia when visitors disembark into a brand new neighborhood dedicated to learning, innovation, and entrepreneurship is just an incredible vision. 

But as exciting an opportunity as the Innovation Neighborhood 

is, the true transformational opportunity around 30th Street Station is the development of the air rights over the 100-acre Penn 

Coach Yards owned by Amtrak and SEPTA. It is Philadelphia’s 

own Hudson Yards, and it is a key dimension of the master planning process led by Amtrak and Drexel. It is a project measured 

in decades rather than years, but it is the right time to start this 

work and explore similar ideas along the Northeast Corridor and 

that is what we are doing now as we speak. 

So let us not fail to utilize these incredible assets, and let us be 

seen as the generation that invested in and leveraged the rail system to its full potential. 

Thank you. 

Mr. DENHAM. Thank you, Mr. Fry. 

Mr. Yaro? 

9 

Mr. YARO. Thank you very much for the opportunity to testify 

this morning. I am Bob Yaro. I am president of Regional Plan Association, which is a not-for-profit research group here in New York 

that for a century has done strategic—— 

Mr. DENHAM. Can you pull the microphone closer? 

Mr. YARO. Oh, sure. 

I am Bob Yaro. I am president of Regional Plan Association. For 

nearly a century, RPA has done strategic planning for the New 

York metropolitan region, infrastructure, environment, business development, and so forth. 

Several years ago, we began to look at the Northeast Corridor as 

one of the keys to New York’s mobility and economic future, and 

again through my work at the University of Pennsylvania, I have 

led several research teams that have looked at the opportunities to 

develop and redevelop the corridor. 

Today we submitted testimony to you that outlines a proposed 

program that we are calling ‘‘NEC Now,’’ which would be a priority 

investment program. Many of the rogues gallery of failing bridges 

or antique bridges and tunnels that you saw yesterday—all of 

them, I guess, are on your list. We have got this problem of century-old infrastructure which is being held together by Amtrak 

with Band-Aids and bailing wire at this point. We learned with 

Sandy just how vulnerable it is to catastrophic damage with the 

flooding that we had in the Hudson River tunnels, which virtually 

shut down the mobility system of the Northeast for a week. 

This is a really expensive hobby. We have a $1.5 trillion economy 

here in New York. The Northeast has a nearly $3 trillion economy. 

It is driven by accessibility. That is one of the reasons why people 

locate here and stay here. It is why talented people come here. It 

is why the Northeast has for 230 or 240 years been the engine of 

the national economy and continues to be. Close to a quarter of the 

national economy is here in the Northeast. 

We virtually shut it down with Sandy and the loss of the Amtrak 

service and the intercity service. 

And by the way, it is not just Amtrak’s service that we depend 

on. You know, it is about 11 million passengers a year. It is a total 

of 260 million passengers a year that use the commuter rail services in the Northeast. This is really the lifeblood of our economy. 

These tend to be the highly skilled people that drive the innovation 

economy of the Northeast: financial services, business services, 

science, technology, and so forth. And the reason, as President Fry 

mentioned, that we can think about having innovation districts 

around stations is that this mobility system, the Northeast Corridor, is critical to both the present and future economy of the 

Northeast. 

So we believe that the very first thing, of course, that has to happen—I was going to open—and you will see in the testimony that 

I opened with this bit of history. Fifty-one years ago this year, two 

New England politicians proposed long-range visions for the United 

States, and one of them, of course, was President Kennedy’s call for 

reaching the moon within a decade. The other was Senator Claiborne Pell’s proposal for a high-speed rail corridor in the Northeast 

between Boston and Washington, which would have been the 

10 

world’s first. Of course, we did get to the moon. We did not quite 

get to Boston with the Northeast Corridor improvements. 

So elected officials have been kicking this one down the road for 

two generations, and we believe that it really is time to begin work 

not just in attaining a state of good repair, but actually creating 

improvements, expansion in capacity, reliability, travel time savings, and so forth. 

So in the testimony that we have submitted, you will see that we 

have outlined what we call the ‘‘Northeast Corridor Now’’ program, 

and this is not to in any way undercut the important work that the 

Federal Railroad Administration is doing with its NEC Future program, the long-range master plan for the corridor, which is urgently needed. But we have got a set of bridges and tunnels and 

interlockings, and so forth that are prone to failure. It is kind of 

like I have had back trouble, and there are times that people ask 

me how I am doing. And I said, well, I feel like a 90-year-old man. 

I am feeling really good today, but you do not know what is going 

to happen tomorrow. And many of these facilities really fall into 

that category. 

I think you will hear from President Boardman that Amtrak very 

often on the Susquehanna Bridge or some of the Connecticut movable bridges very often will have to have people out there with 

crowbars to get these things closed once they have been opened. 

You know, we really ought to secure some of these things for the 

Smithsonian Institution when we are done building their replacements because they really are industrial archaeology at this point. So the $39 billion program that we are recommending would be funded under this proposal, $10 billion in grants, $30 billion in 

RRIF loans that would be repaid by the States and by Amtrak over 

an extended period of time. And we believe that there are real opportunities for private investment as well. And we believe that the 

Northeast Corridor division of Amtrak is well positioned to do that 

and could use some additional authority to enter into P3s and design/build projects to deliver this thing within a 10- or 15-year period. 

Thank you very much. 

Mr. DENHAM. Thank you. 

Ms. McDonald? 

Ms. MCDONALD. Good morning and welcome to Moynihan Station. I am Joan McDonald, commissioner of the New York State 

Department of Transportation. I am pleased to have the opportunity to discuss with you today the efforts of Governor Cuomo and 

New York State DOT as they relate to mutual cooperation, planning, and investment. 

We are all aware that realizing a bolder vision for the future requires unprecedented collaboration among States. New York State 

DOT is working through the Northeast Corridor Commission on 

comprehensive corridor planning. This is a daunting task for a corridor that spans eight States and the District of Columbia, supports nine passenger rail operations, including four of the five largest commuter rail services in North America, serves four freight 

railroads, and has four separate infrastructure owners. 

We have risen to this challenge and made the most of the resources available and the expertise of the professionals who are 

11 

dedicated to realizing our mission. Our goals are varied, but they 

are all crucial components of what we are ultimately striving for: 

economic growth, connectivity, improved service reliability, and improved travel time. 

While more resources are always needed to continue the good 

work we have already begun, the Northeast Corridor has benefitted 

from the $1.3 billion in capital funds appropriated to Amtrak in the 

ARRA act and another approximately $1 billion in high-speed rail 

program grants from the Federal Railroad Administration. On top 

of that, Northeast States have received almost $700 million in 

grants for connecting rail corridors, as Congressman Shuster said 

in Pennsylvania, as we have experienced here in New York between Albany and New York City. 

In New York, under the leadership of Governor Andrew Cuomo, 

construction is underway on a new grade-separated flyover at Harold Interlocking where Amtrak, New Jersey Transit, and Long Island Rail Road trains, 783 per day, converge north of Penn Station 

at the busiest junction in North America. The $368 million removal 

of this bottleneck is funded in part with a recently awarded $295 

million grant from FRA, but here in New York, we believe locals 

must also participate. So the MTA contributed a healthy $73 million in State funds towards that project. 

In addition, with the support of $83 million in Federal TIGER 

grant funds and $30 million in FRA funding, New York, in partnership with Amtrak and private developers right here at Moynihan 

Station, have begun construction on $297 million of improvements 

for passenger access under what is planned to be a new station on 

the site of the former Farley Post Office building where we are sitting adjacent to the existing Penn Station. 

As we look further ahead, much more is on the horizon. The 

Gateway project to expand capacity across the Hudson River and 

within Penn Station is in the preliminary design, as is phase II of 

the Moynihan Station project to construct the new train hall in this 

building. It is clear that ‘‘New York Works.’’ 

And while we take pride in the accomplishments of my home 

State, my work as the former chair of the Northeast Corridor Commission for the past 2 years has been focused on the much bigger 

picture that the vast needs of the corridor entail, as well as the 

necessary and fulfilling task of strengthening existing partnerships 

and building new ones. I am proud of the way all of the States and 

DC committed to and endorsed each other’s projects while never 

losing sight of our individual State core mission and goals. 

Connectivity is a key element of what we are working to improve 

in transportation and economic development, and connectivity is 

what we have achieved in this collaborative relationship. 

We know the Northeast Corridor must balance critical investment needs just to maintain the safety and reliability of current 

services with the concurrent need to address consistently growing 

passenger service demands. The fact that commuter services and 

Amtrak services interconnect at common facilities and on common 

trackage creates a situation where delays to any one service will 

quickly cascade and adversely affect the on-time performance of the 

other rail services. Without significant and sustained levels of inVerDate Aug 31 2005 13:49 Jul 02, 2014 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\RR\2013\6-7-13~1\81370.TXT JEAN
12 

frastructure investment, rail operations on the corridor will suffer, 

as will the economic benefits of the corridor. 

The reality is that deferred maintenance of key components in 

the corridor is no longer an option. Infrastructure inherited from 

past generations can no longer provide the mobility needed to support continued, robust economic growth. New investment in state 

of good repair is essential. We often think what might happen if 

we lost this invaluable resource, and Hurricane Sandy brought that 

home. 

The PRIIA act which created this commission is about improvements, and this work is well underway. But PRIIA is also about 

investing. 

The Northeast Corridor is a national resource, and we look forward to working with you on the future. Thank you. 

Mr. DENHAM. Thank you, Ms. McDonald. 

Mr. Boardman? 

Mr. BOARDMAN. Chairman Denham, Ranking Member Brown, 

Chairman Shuster, and Member Nadler, thanks for the invitation 

to testify this morning. 

Given that we have had an opportunity to see the Northeast Corridor firsthand, I think it probably will be more useful if I discuss 

this asset in the context of reauthorization and funding concerns 

rather than reviewing the plans and programs we discussed on our 

trip up to New York. 

As you probably know, Amtrak took the Northeast Corridor over 

from the privately owned Penn Central Railroad in 1976. Penn 

Central was then in bankruptcy, and the transfer of the Northeast 

Corridor to Amtrak was part of a much larger Federal plan involving Conrail. The Northeast Corridor passed to Amtrak, which implemented several significant repair and improvement programs in 

partnership with the FRA, transforming a dilapidated, midcentury 

rail operation into the high-speed and high-capacity rail route we 

have today. 

We have done a lot with that route, but today we face a lot of 

challenges. We have mapped out an investment plan to build capacity on the existing Northeast Corridor, but the limits of the existing infrastructure are the results of the limited investments that 

have been made available. We share the route with eight commuter 

operations, and several of the most important segments such as the 

New York tunnels are at capacity. 

Demand for intercity and commuter passenger rail is growing. 

The Federal Government must act now with this reauthorization 

opportunity to take the lead in funding a major program that will 

build out the rail infrastructure we are going to need in the next 

coming century. 

These are questions any reauthorization must deal with, but 

there is a more pressing and immediate question and that is the 

decapitalization of Amtrak’s assets. Decapitalization occurs when 

the total annual capital allocation is insufficient to meet both the 

ongoing normalized replacement and the backlog capital requirements. And that means today we are eating our assets alive. That 

leads to rapidly increasing degradation of ride quality, reliability, 

and ability to support major projects like those discussed on our 

trip here and those being discussed this morning. 

13 

On the way up, Chairman, I said to you that when Amtrak installed concrete ties, they were expected to last 40 to 50 years. The 

average life was only 10 to 15 years. This premature failure has 

taken funding for replacement that would have gone to other work 

like interlocking replacement, ballast maintenance, and cleaning or 

the removal and replacement of the subsoil and ballast to stop the 

mud pumping. These things create a rough ride that may cause us 

to begin to slow down our speeds. 

Decapitalization is increasing the number of disruption incidents 

on electric traction and communication and signal systems that reduce reliability. These issues must be addressed and thought 

through for any reauthorization. 

Amtrak completed a comprehensive state of good repair plan in 

2005, vetted it with appropriate parties, including Congress, the 

administration, the oversight agencies, and then Amtrak updated 

it every 2 years. The most recent update was in 2011. 

The present backlog is $6 billion. I need $386 million every year 

for normalized maintenance and I need $396 million every year for 

the backlog work, and I need it for the next 15 years. I need $782 

million every year for the next 15 years. That will not address capacity improvements or trip time reductions or other new initiatives, but it will allow Amtrak to run a safe railroad at maximum 

allowed track speed, maintain an excellent on-time performance, 

and meet the basic needs of those who want to develop real estate 

and fill their development with people who they expect to come by 

train: by Amtrak, New Jersey Transit, Long Island Rail Road, 

Metro North, SEPTA, MARC, MBTA, Shoreline East, and VRE. 

The reduced level of investment has resulted in a cumulative degradation of its components, nearing the loss of asset functionality 

and decreased reliability of the system that threatens the successful continuity of Amtrak’s passenger operation. 

Thank you very much. 

Mr. DENHAM. Thank you, Mr. Boardman and thank you to all of 

our witnesses. 

Let me just say that this committee is very focused on getting 

the passenger reauthorization bill done this year. It does expire in 

the fall, and we certainly want to work with all of you, as well as 

the stakeholders up and down the Northeast Corridor and across 

the Nation. You all have been very willing partners. It makes the 

job a lot easier to see the Northeast Corridor come together and 

prioritize working together. We have had meetings in DC. We have 

had our rolling roundtable now here, and we will continue to travel 

across the Nation looking at all rail projects, both long- and shorthaul, State-supported routes. We will be in Chicago next week and 

Springfield taking a look at the projects that are going there. So 

we are very committed to this and we certainly appreciate your 

partnership. 

Let me start with the questioning this morning. First, Mr. Fry. 

One of the things that we continue to talk about both in the challenges with California and its high-speed rail and the lack of a private investor there to be able to complete that plan. We are looking 

at private investment, public-private partnerships. And I wanted to 

start the questioning with you. 

14 

Can you explain how you are funding your Innovation Neighborhood project? Explain a little more in detail how that is working. 

Mr. FRY. Thank you. 

So to date, Drexel has spent approximately $30 million to assemble the 12.5 acres that I mentioned earlier, which would yield the 

6.5 million feet. So that has been our primary investment today. 

And in working with President Boardman, we have created a 

joint venture between Amtrak and Drexel to now study the feasibility of developing the air rights over the 100-acre Penn Coach 

Yards, which are owned and utilized by Amtrak and SEPTA. That 

study will be between $2 million and $3 million, and the university 

will fund that study because we believe, since we have initiated 

this and Amtrak obviously has its resource constraints, that the 

private sector, in this case Drexel, will step in and fund that study. 

Mr. DENHAM. $2 million for the study? 

Mr. FRY. Between $2 million and $3 million. Probably, let us say, 

$3 million. 

Mr. DENHAM. And $32 million was what Drexel—— 

Mr. FRY. $30 million for the assemblage of the property around 

30th Street Station, and we spent that over the last decade. So we 

are already really invested in just sort of assembling the ground 

and beginning to think about the development of the ground. 

In the meantime, what we are doing is now beginning to construct university buildings in that area, and so we are just about 

to open in September a $90 million business school located at 32nd 

and Market, which is in this Innovation Neighborhood, and we are 

now also getting prepared to put out a series of RFP’s to begin to 

take a look at other parcels within that 12.5 acres to see if they 

can be developed for commercial, residential, and retail purposes. 

And we will do that all with private sector dollars. 

And so between the university and private sector developer partners, we intend to begin the orderly development of the 12.5 acres 

that we control as we are studying the air rights development over 

the Amtrak and SEPTA properties. We think all of that will come 

together into a probably decades-long development, which again I 

think would be largely funded by the private sector. 

Of course, the key to taking this and bringing it to the next level 

is the high-speed rail which would bring us under 40 minutes to 

New York and about an hour to Washington. I think if that occurs 

over time, that takes what we are doing, which is a pretty significant thing, and drives it to the next level in terms of its potential. 

Mr. DENHAM. And did you initially do an analysis to determine 

what spending levels you would need, what resources would be 

available to improvements? 

Mr. FRY. That is what this study—this $3 million study we are 

engaging in will basically be a technical study to take a look at the 

air rights development to understand what is the feasibility of that, 

first of all, technically because the big issue, of course, is to not impact in any negative way rail travel through 30th Street Station. 

That is sort of job one. And then job two is to figure out, if it is 

technically feasible, what is the financial investment, and how 

would that be made, and how would that be financed over time. 

15 

Mr. DENHAM. Thank you. And since we are at the ground level 

of development without any additional funding, how can Federal 

policymakers encourage more developments like your project? 

Mr. FRY. We would like to see as many tax incentive programs 

as possible for rail development around major train stations like 

30th Street Station. The incentive programs really work well. We 

have something called the Keystone Opportunity Zone in Philadelphia which has really been a pretty brilliant incentive for development in Philadelphia. It is sort of a 10-year tax abatement. Ten of 

our sites within the 12.5 acres have this Keystone Opportunity 

Zone designation. If there could be other Federal programs that 

would help stimulate development around stations like 30th Street, 

that would be enormously helpful. I would say that is the first 

thing. And, of course, funding for high-speed rail would be the 

other thing. 

Mr. DENHAM. Thank you. 

Ms. Brown? 

Ms. BROWN. Thank you, Mr. Chairman. 

I guess I am really smiling because for once, I think we are all 

on the same page. And, Mr. Chairman, we have you on tape saying 

that we want more speed. And the question is how are we going 

to get there. 

There are a couple of questions. The RRIF loan. We all supported 

it. I do not care whether it was the Bush administration or the 

present administration. There is some reason why we cannot get 

that program to work, and I would like to know what are the 

things that we could do to get the improvements in that program. 

We have bonding capacity for how much money? 

Mr. YARO. $30 billion. 

Ms. BROWN. $30 billion, and you say you want it all? 

But just tell me how can we improve that program? And also you 

mentioned it is 53 miles—I think it is in the New York area that 

the train has to go a certain speed? What is the speed that they 

can go? 

Mr. BOARDMAN. It is the territory north of New York to New 

Haven, Connecticut. 

Ms. BROWN. Yes. And so that is one of the reasons why we cannot speed it up. So can you discuss those two things? 

Mr. BOARDMAN. I can talk about it a little bit, Congresswoman. 

We have a commuter operation that owns the piece of the property after you go into New York and on to Connecticut that only 

has a need of a speed of about 70 miles an hour. It is an area that 

we believe we could do 110 miles an hour and reduce the amount 

of time traveled because it is a 50- to 60-mile piece of railroad. And 

it is something that means that all of that would need to be upgraded, which would take investment, either transit investment or 

Amtrak or—— 

Ms. BROWN. What is the cost on that? 

Mr. BOARDMAN. I do not have it here. I think we have an estimate that that could be identified. I do not think that is in the critical infrastructure. Is it, Joan? 

VOICE. No. 

Mr. BOARDMAN. That did not get put in there. 

16 

Ms. BROWN. That is something that we need to know how could 

we—— 

Mr. BOARDMAN. Yes, we can do that, and we can follow up with 

a response on that. 

Ms. BROWN. But the RRIF loan, because that has been a sticking 

point, and I think all of the members support improving the program because that is one way that we could fund the system. 

Mr. YARO. I can comment on that. I think what we need to do 

is to modify the program so that it works more like the TIFIA program which does wok on bridges and highways well. 

I think one of the issues is the extreme requirement for collateral 

upfront. Amtrak, for example, cannot use its budget as collateral 

towards RRIF loans. What we would suggest is that in fact any 

Federal grants that are made to Amtrak or to the States along the 

corridor, that they be able to use their Federal funds as collateral 

towards the RRIF loans. I mean, they have pretty good credit— 

these States. And in fact, you know, it is a publicly owned asset. 

And I think part of the problem is that the RRIF loan program 

was written with private freight railroads in mind. Here we are 

talking about a publicly owned asset. It is a federally owned asset 

for the most part. States own pieces of it and so forth. It is not 

going away. It is a public responsibility. And so I think it is probably safe to assume that this is a safe credit risk if in fact we make 

loans and made those modifications. So that is really essential and 

that would be something that we would hope would be included in 

the new PRIIA legislation. 

Ms. BROWN. Mr. Boardman? 

Mr. BOARDMAN. Bob is right in many ways, but the difference 

with TIFIA and with highway is you have contract authority, and 

year after year, you receive a funding on the highway side, whereas 

with Amtrak it is year to year. So the way OMB or the risk folks 

would really look at this is you may not have an appropriation the 

following year, which means there is no money there to pay back 

the loan. That is the reason that occurred that way. 

Ms. BROWN. Mr. Fry, having gone to Europe, everywhere there 

is a high-speed station, there is development around those stations. 

And even, let us say, Crystal City where I lived for 10 years, every 

place that you have a development like that, all kinds of opportunities develop whether it is daycare, hair salons, drugstores, or coffeeshops. So that is the key to get those developments around those 

stations. 

Mr. FRY. I could not agree more, and I think that in addition to 

the things that you outlined, in University City, home to the University of Pennsylvania, Drexel University, Children’s Hospital of 

Philadelphia, Hospital of the University of Pennsylvania, there is 

over $1 billion of sponsored research being conducted within a half 

a dozen blocks of each other. And so the idea of taking this area 

and devoting it to the purposes of innovation and entrepreneurship 

and new business formation, in addition to building strong neighborhoods next to the station, is a really exciting type of thing. 

Ms. BROWN. Yes, sir. 

Mr. DENHAM. Mr. Shuster? 

Mr. SHUSTER. Thank you. 

17 

Ms. McDonald, I know you are the former chairwoman of the 

Northeast Corridor, and if you would, can you tell us some of the 

concerns States have when they are asked to invest their money 

into Amtrak? 

Ms. MCDONALD. Sure. You know, we have been in existence for 

2 years, created as a result of the PRIIA legislation. And I think, 

as I mentioned in my testimony, one of the key areas is, you know, 

States are very proud of their home States, and when the funding 

became available from Florida and other States and got reallocated, we made the decision to endorse each other’s projects. And 

that was a huge first step because it really demonstrated to each 

of us that we were not only committed to our home State but to 

the corridor. 

Some of the frustrations with any construction project is how 

quickly they get off the ground. And we have had this conversation 

with FRA, getting some of the funds out the door. The most difficult part of these construction projects is doing the work in active 

railroads, and it is not just the active Amtrak intercity passenger, 

but for almost every State, the commuter rail and making sure 

that the work gets done in very tight windows. You know, like Steven Gardner mentioned yesterday, the tunnel—the work that gets 

done on the weekends, which is one of the busiest ridership times. 

So there are frustrations, as with any capital construction project. 

Work takes too long. 

In New York, we just adopted, under Governor Cuomo’s leadership, design/build legislation which really gets the projects out the 

door much more quickly. So we want to make sure that both FRA 

and Amtrak are using all of the tools at their disposal also. 

Mr. SHUSTER. Well, I am a big fan of design/build. We ought to 

be pushing that everywhere we can. 

Ms. MCDONALD. It has helped tremendously. Tremendously. 

Mr. SHUSTER. Can you provide us information on the savings 

that you believe you have reaped or the time savings, the dollar 

savings? 

Ms. MCDONALD. Yes, I would be happy to do that. It is primarily 

with our road and bridge projects, but we can show where it has 

worked and how it is providing great benefits. 

Mr. SHUSTER. Mr. Yaro, in PRIIA, we passed the legislation that 

says the States going forward are going to pay their fair share. I 

do not know if they are paying enough, and I just wanted your 

view on the benefits that these commuter rails in communities receive from Amtrak. Do you believe it is the right thing to do in 

these communities to share in the maintenance? 

Mr. YARO. Yes. As you know, the PRIIA legislation called for the 

commission to develop a cost allocation formula essentially. And 

that analysis is being done. The negotiations are underway between the States. 

The challenge is that as Joe Boardman said, we have a depreciating asset here. We have an asset that is deteriorating. The 

backlog of deferred maintenance and normal replacement investments has gotten bigger, not smaller. And so basically what we are 

asking the States to do is to belly up to help fund a depreciating 

asset. So I describe it, it is kind of like going over here to Macy’s 

and saying we have got a great sale here. We are going to ask you 

18 

to pay more for less. You know, it is really a hard sale. And I think 

what we need to do is to change that so that in fact there is an 

upfront commitment by the Federal Government to finally restoring this corridor to a state of good repair. You add it up. What is 

it, Joe? It is close to 40 years now since the Federal Government 

took this thing over, and we just keep kicking this down the road. 

It is very interesting. I think, if you guys have not done it, take 

a look at the experience in the United Kingdom where they 

privatized the rail system without investing in it upfront. They had 

several disastrous train wrecks and so forth. They renationalized 

it, then dropped close to $100 billion into bringing the whole system back to a state of good repair. And then they were able to 

bring in private—you know, P3s and so forth to operate trains. 

They are now talking about privatizing it again. But this time they 

got a real opportunity to do it because it is a functioning asset. 

Mr. SHUSTER. Well, and also what we have learned in Europe is 

by 2014, the EU has passed a law that on any passenger rail line, 

there is going to be competition. So that is something else we can 

look at over there. 

And to my good friend from Florida, I do believe in higher speed. 

I am not so sure in my lifetime if we are going to see high speed. 

I think the example in England that I learned is it is not always 

about speed. It is about reliability and it is about frequency. 

Mr. YARO. And capacity, right. 

Mr. SHUSTER. Exactly. 

Virgin Rail told the story—I forget what line it was going into 

London. It was an hour and 15 minutes, and as any good company 

would do, they went and polled their customers and said we are 

going to take it from an hour and 15 down to 55 or 50 minutes. 

And it was overwhelmingly rejected. So they did focus groups and 

said why do you not want to get there quicker. And they said an 

hour and 15 minutes is perfect timing for me to get on the train, 

get a cup of coffee, boot up my computer, do some work, and when 

I get to work, I have been productive. But 50 minutes—they said 

by the time you get your coffee, boot up your computer, we are 

there. So it is not always about speed. 

Mr. YARO. But when you go back to the United Kingdom, they are now investing—it is about $60 billion in a high-speed service 

between London and Manchester. Eventually it will be extended to 

Scotland. And they are doing it to create the kind of economic 

transformations that John Fry was talking about to create real 

synergies between the economies of the cities in the Northeast. We 

do need to strive for that. We can move towards higher speed service, and that is really what the Acela service is. And that has proven that people will pay a premium. 

Mr. SHUSTER. I have violated my own rule. I have gone over the 

5-minute rule. The chairman is staring me down. So I yield back. 

Mr. DENHAM. Thank you. 

Mr. Nadler? 

Mr. NADLER. Thank you, Mr. Chairman. 

Commissioner McDonald, some have suggested mandating competition on the Northeast Corridor. We were just talking about 

that. The corridor is jam-packed. We know all the statistics. I think 

we should be focusing on addressing the backlog on the corridor 

19 

and needed infrastructure improvements. What are your views on 

that? 

Ms. MCDONALD. I agree with you. I think investments in the corridor are key. And as Bob just pointed out, that is what is going 

to make a successful railroad. And I was thinking, as he was discussing with Chairman Shuster, what Metro North and Long Island Rail Road have done over a 30-year period is they have invested $22 billion, almost all of it in state of good repair, and one 

of the reasons they have been able to do it is because they have 

known 5-year capital plans so they can make those state of good 

repair investments. And I think the investments has to be the top 

priority. 

Mr. NADLER. Thank you. 

Mr. Boardman, can you comment on the same thing? 

Mr. BOARDMAN. I would be happy with 5 years of capital investment that we could count on. Absolutely. 

Mr. NADLER. You do not have 5 years now. 

Mr. BOARDMAN. No, we do not. We have plans, but we have—— 

Mr. NADLER. No assurances. 

Mr. BOARDMAN. No assurances. 

Mr. NADLER. Thank you. 

Mr. Boardman, some in Congress have proposed separating Amtrak’s operations and maintenance into two separate businesses. 

Do you have any concerns with that? 

Mr. BOARDMAN. Yes. I think you have to have a system that operates for the safety of the public and for efficiency together, not 

separately. 

Mr. NADLER. Thank you. 

And also, do you believe the private sector would invest in the 

Northeast Corridor in its current state? And if not, what would it 

take to attract private investment? 

Mr. BOARDMAN. Actually—and I think John Fry talked about it— 

they are already investing in the Northeast Corridor from the 

standpoint of the real estate development. 

Mr. NADLER. I do not mean that. It is obvious to me that where 

you have assets, especially air rights or territory around rail hubs, 

that you should use those assets and you should have private sector partnerships, sell them, whatever, and develop exactly as Mr. 

Fry was talking about, and realize income for the railroads too. But 

I mean invest in the railroad itself. 

Mr. BOARDMAN. I think that Perry Offutt answered that in a couple previous—and he is an investor here in New York. There would 

have to be some availability payments. If the private sector was 

going to invest in anything, there would have to be a guarantee 

that the Federal Government would continue to provide a subsidy 

or investment, however you would look at it. If there was not 

enough revenue, then there would be availability payments from 

the Government. And that is how it has worked almost everywhere. 

Mr. NADLER. No Congress can bind its successor, as you know. 

So would a multiyear authorization be sufficient to provide such 

guarantees? 

Mr. BOARDMAN. I would have to ask the private sector to deal 

with that. But there are a lot of innovative ways today that the 

20 

Federal Government and others have looked at doing something 

like that. It does not mean that sitting here, as the president of 

Amtrak, that I am supportive of it. The fact is that there are a lot 

of creative ways today to do something different, but you do have 

to have contract authority to do it. 

Mr. NADLER. And some have recommended a new governance 

structure for the corridor. Do you have any views on that? 

Mr. BOARDMAN. We have one. We already have one. 

Mr. NADLER. And a sufficient one. OK. 

And finally, Congress has failed to provide the high-speed intercity passenger rail program with any Federal funding for the last 

2 fiscal years. With future funding still uncertain, can you explain 

why funding is so important and what is at risk in the Northeast 

Corridor if we fail to make adequate investments? 

Mr. BOARDMAN. Well, I think that a lot of people talked about 

that all the way around that this morning. I think that the financial community of this Nation, New York where we are sitting 

today, is at real risk without the investments that are going to be 

necessary to become competitive globally, and that includes faster 

railroads in the Northeast. 

Mr. NADLER. So we cannot depend on P3s or private sector investment for that. We have got to have substantial Federal investments. 

Mr. BOARDMAN. Absolutely. There are no really fast railroads 

today that have avoided having Government take a lead role. 

Mr. NADLER. Thank you. 

Finally, Mr. Yaro, you stated that the RPA recommends that the 

next Federal rail bill authorize funding to completely eliminate the 

$9 billion backlog of major state of good repair problems and make 

certain improvements and substantial additional funding to address major infrastructure needs in the corridor. 

Mr. YARO. Yes. 

Mr. NADLER. Do you believe that it should be financed by the 

Federal Government, and at what point would there be the greatest potential for private investment? 

Mr. YARO. Well, I think, you know, everywhere in the world, the 

Government investments have had to come first to essentially 

prime the pump. I think once that happens, there could be opportunities certainly for design/build, and that provides real efficiencies, 

shares some risk, and so forth. 

Mr. NADLER. But not until the Federal investment. 

Mr. YARO. Again, we have got this thoroughly depreciated asset. 

It has got to be a viable asset. And I think once that happens that, 

yes, indeed, there would be opportunities for public-private partnerships. 

One key thing to keep in mind is that when private investors put 

money into a project, they generally want to get their money back 

with interest. We have got 260 million passengers a year in the 

corridor. The projection is that if we make these investments, it 

will go up to 410 million over a 25-year period. So the potential is 

there for the passengers to help finance this thing, and that might 

be a way to do public-private partnerships. 

Mr. NADLER. Thank you. 

I yield back. 

21 

Mr. DENHAM. Thank you. 

Mr. Boardman, what is your definition of ‘‘fix it first’’ with regards to the Northeast Corridor? 

Mr. BOARDMAN. I think it is getting as close to the state of good 

repair as we possibly can along the corridor. 

Mr. DENHAM. And would you prioritize existing infrastructure replacement and improve ahead of your high-speed rail vision? 

Mr. BOARDMAN. Yes. 

Mr. DENHAM. So the $30 billion is fixing it first. We have got to 

fix the current situation. 

Mr. BOARDMAN. Yes. The $6 billion is what I am really talking 

about, Chairman, that absolutely needs to be done to the basic infrastructure on the corridor. When we get to $30 billion or the $52 

billion, or whatever you call it, in the critical infrastructure, that 

is more than state of good repair in terms of the basic infrastructure. It includes rebuilding other facilities at a much higher level. 

Mr. DENHAM. Thank you. 

And when you prioritize investment, is there a cost-benefit analysis conducted with ridership, economic benefits to local, State, and 

Federal entities? 

Mr. BOARDMAN. Well, there is some. I do not know if it has the 

detail that people would really be looking for, but we have done 

several studies that look at cost-benefit based on speed, reliability, 

on-time performance. All of those exist. It has not been broken 

down, I do not think, to every particular local jurisdiction, but for 

the corridor itself, yes. 

Mr. DENHAM. Thank you. 

And if you could provide that cost-benefit analysis to us. 

Mr. BOARDMAN. Sure. I think it has been provided to you but we 

will look and see whether the business plan that was put together 

for the high speed has been supplied. I think it has. 

Mr. DENHAM. Thank you. 

I think I have a little difference of opinion with the Chair. I do 

think that we will see high-speed rail in my lifetime. The question 

is what is it going to look like. And my concern with California is 

it was passed by voters as a $33 billion project. It was supposed 

to have a private investor that was going to pick up a third of that 

and buy the rolling stock. It had a pretty aggressive timeline. Now 

that timeline is much longer, and they have got a real shortfall in 

funding by their own numbers, which raises big questions about 

their own numbers. But by their own numbers, there is a $38 billion shortfall. So they are breaking ground in 2 months, going to 

spend the first $6 billion. They have a $38 billion shortfall. 

I would assume that once the project starts, that there will be 

a push from my friends in Congress to finish that project. With 

limited funds, if you spend $38 billion in California, I would assume, because the project has started, that has some type of effect 

on the Northeast Corridor. I mean, we have a big problem with 

funds today. 

So do each of you have concerns with California high-speed rail 

and whether or not—you know, we can see, just riding yesterday, 

what needs to be done. My concern with the Northeast Corridor is 

we cannot afford to wait until something breaks or there is a safety 

issue before we fix it. I would like to have each of you comment 

22 

on the funding issue from a Federal perspective and whether you 

have concerns with the California high-speed rail project. 

Mr. Yaro? 

Mr. YARO. Well, if you are looking for somebody to do a hatchet 

job on California high-speed rail, I am not sure I want to do that. 

Mr. DENHAM. And I am not asking you to pick on California 

high-speed rail. I am asking specifically about the Federal funding. 

Mr. YARO. Well, let me put a different—— 

Mr. DENHAM. Because we have to prioritize. There is only so 

much money, and we are going to be looking at the entire Nation, 

different high-speed rail projects, different long-/short-haul routes, 

as well as the improvements on the Northeast Corridor, and hopefully some day soon, actually high-speed rail in the Northeast Corridor. But we have to figure out how to fund those projects. 

Mr. YARO. Well, as you and I were chatting before the hearing 

began, these are very different projects. We have the most densely 

used, heavily used transportation corridor in the United States 

here in the Northeast. The Central Valley piece of the California 

project, which is in your district, of course, there is no effective rail 

system now. There is, I guess, a very slow Amtrak line that uses 

an existing freight line and so forth. So it is very different. 

The challenge in the Northeast is to accommodate the next 20 

million people that we expect to have here in 30 years. And in California, it is virtually the same number. It is about a 15 million or 

20 million increase in the population of the State of California. 

Both places have enormous problems with the capacity of airspace 

and the aviation system and the roadway system to accommodate 

the projected growth in intercity travel demand. That is what we 

are dealing with. 

Mr. DENHAM. That is from a funding issue. I mean, we are going 

to deal with the same thing on the highway bill. There is a huge 

shortage of funds. We have got to fix the highways, but we only 

have about 2 years’ worth of funding for a 5-year bill. We are going 

to deal with the same thing on the rail as well. 

We want to improve the Northeast Corridor, but if you are trying to come up with a new $38 billion for California high-speed rail 

and that is somehow prioritized over the Northeast Corridor, does 

that concern you? 

Mr. YARO. I think it does, yes. 

One thing I would suggest—and I recommended that we pull down as much as the $30 billion in RRIF loans that are available 

for the Northeast. One thing to handle this thing is to say we are 

going to make loan funds available for high-speed and intercity 

transportation projects and allow for a competitive process. In the 

Northeast, I know that the capacity is there to pay back those 

loans because we have got the ridership now and the projected increases in ridership in the future to support that. That might be 

a way of handling it. 

Mr. DENHAM. Ms. McDonald? 

Ms. MCDONALD. Sure. I want to focus on a couple issues that you raised. First of all, you mentioned the potential of $38 billion in 

shortfall. And in my 20-plus years in transportation, one of the 

things that both Government, the construction industry, and elected officials all participate in is like you said. Once the shovel is in 

23 

the ground, nobody is going to stop construction. So how do we deal 

with cost overruns? And that is an issue that is confronting, like 

you said, both on the transit side and on the road and bridge side. 

And what we have adopted at New York State DOT is the preservation first, which speaks to Joe Boardman’s point of investing 

the $6 billion or $9 billion, whichever it was, in state of good repair. You start to get to that steady state and you have certainty 

as to what those costs are going to be over a 5- to÷-year horizon. 

You then have more discretion to do the capacity building projects, 

but it requires what I call small ‘‘p’’ political will which are all of 

us as managers to hold people’s feet to the fire and use the innovative contracting mechanisms, design/build, using guaranteed maximum price, using incentives and disincentives for contractors, and 

being forthright at the front end what the true cost of the project 

is. We cannot say it is a $1 billion project if it everybody around 

the table knows it is really a $4 billion project. And we have to 

make sure that those conversations happen. But it really is, I believe, using the different contracting mechanisms and having 

strong management and disincentives when costs overrun. 

Mr. DENHAM. Thank you. 

Mr. Fry? 

Mr. FRY. I cannot really comment on the funding situation, but 

I can say that it would be nice to be able to demonstrate to the 

American people that there is a project out there that actually 

could get done that would demonstrate in visible ways what highspeed rail can mean. And, of course, in a very self-centered way, 

I would love that project, the first one, to be from Philadelphia to 

New York. It is a reasonable distance. I think it would prove the 

concept to everyone who would take advantage of that right now. 

Again, that is obviously biased on my part. On the other hand, I 

think that is a relatively manageable distance. It is two very populated cities, and I think it then lends itself to phasing in other 

parts of the east coast. 

Mr. DENHAM. Thank you. 

Ms. Brown? 

Ms. BROWN. Thank you, Mr. Chairman. 

Let me just say that if you get on a train in downtown Paris, you 

can go from downtown Paris to downtown Brussels, 200 miles, in 

1 hour and 15 minutes. I mean, that is the world. Our competitors, 

like China, invest $350 billion in rail. And we are fighting about— 

well, let me just read the staff notes. The Northeast region essentially equates to the United Kingdom. It is worth noting that the 

UK spends billions more than the U.S. invests in the entire Nation. 

In fact, they spend $6.6 billion annually in maintenance and improvements. 

So, you know, I just feel like we need to get serious about rail 

like we are definitely serious about highways in the United States 

and airports and think outside the box. First of all, how can we 

harden the system so that we can protect the passengers from attack from the outside, whether it is a natural attack or whether it 

is from someone that is trying to infiltrate the system. I mean, we 

need to think how we can move the Northeast Corridor. And we all 

support that, and I support high speed or more speed in the Northeast Corridor. 

24 

When you think about what can we do, maybe it is a one-stop 

permitting process. You know, we say design/build, but there are 

other factors that increase how long it takes to develop a project. 

So if you want to respond to that. 

Mr. YARO. Well, I started out by talking about Claiborne Pell’s 

vision for the Northeast as the world’s first high-speed rail system. 

There are now 14 of these systems operating around the world, 12 

more being planned. All of our competitors are making these investments, and it is high speed and it is intercity rail and higher 

speed services. But the notion is creating balanced transportation 

systems so that you have got modes that get people where they 

need to get in the most efficient way possible. That is really what 

we are talking about here in the Northeast, and I think nationally 

that is what we need to be thinking about. 

You know, you opened up, Chairman Shuster, your comments 

about the growth in the population of this country. We have an 

enormous opportunity here to create new capacity in the economy 

of this country. It is something that the Europeans and the Japanese and the Chinese do not have where they have got stable or 

declining populations. We have got an increasing population. You 

know, there is another committee somewhere that is talking about 

what we need to do to educate people and do all that sort of thing. 

What we are talking about here is creating the physical infrastructure that is needed to make this economy in this century what 

it was in the last century, the most efficient place to move people 

and goods in the world, so that we can create an economy—you 

know, we have got a $15 trillion economy by midcentury. We ought 

to be looking at a $45 trillion or a $50 trillion economy, creating 

the capacity for that economy to occur. That is how you finance 

these improvements, and that is what the rest of the world is 

doing, is making those investments, creating new productive capacity. And then that creates the tax revenues and the private sector 

activity that you can use to support both public and private investments in these infrastructure systems. 

But what we have learned all over the world is that public 

money has to prime the pump, and once you have done that, then 

it is possible to attract the private investment. It is possible to create the ridership that you can use then to finance both public and 

private investments, repay private loans and public investments. 

Ms. BROWN. If each one of you could give us a recommendation 

as to what this committee needs to do, what would be your number 

one priority? 

Mr. YARO. Well, I think you heard it from all of us. First, let us 

invest in knocking off the backlog in state of good repair improvements in the Northeast Corridor. That is about $6 billion. 

We have got this project here in New York and New Jersey, the 

Gateway Tunnel project under the Hudson. It is the biggest single 

bottleneck in the corridor. There is another one across the street 

here at Penn Station that is part of this whole thing. If we can fix 

those two things, we can uncork the capacity of the whole Northeast Corridor, dramatically improve the reliability, frequency, capacity of the corridor and so forth. There are a set of investments 

that we have outlined that add up to about $39 billion. That actually came out of the Corridor Commission—the list, and a very 

25 

carefully vetted list of priority projects that essentially kind of unleash the potential of this system, again, to underpin the kind of 

expanded economic activity that we are all talking about here. 

In my testimony, you will see the list of projects. It is the same 

list of projects that the Northeast Corridor Commission has come 

up with. It is in the Amtrak master plan and so forth. We all agree 

on what needs to be done here. It will require an upfront Federal 

investment to make it happen. I think if we do that, you know, we 

have got to incentive the States to come forward and to do their 

share and so forth. I think there is the potential for riders to pay 

more, particularly the commuter rail passengers who want reliability—you have all said it—reliability, frequency, as much as 

travel time savings. 

Mr. DENHAM. Thank you. 

Mr. Shuster? 

Mr. SHUSTER. Thank you. 

First of all, I just want to remind my good friend from Florida 

that in Europe where they are making these investments, they use 

a cost-benefit analysis and it is brutal. If it does not make sense, 

they do not do it, and if they are going to do it for Brussels or for 

Berlin, they are going to make that city put forth a good chunk of 

the money. 

And the other thing is in China my understanding is if you bring 

a lawsuit in China, you show up with your attorney, they show up 

with a bulldozer. In essence, you are going to get crushed if you 

do not get out of the way. 

So we have very different systems. 

Again, as I mentioned earlier, passenger rail in Europe, there are 

going to be at least two competing lines or two competing operations on every line. 

So we have not learned with Europe still and we ought to take 

up some of those cost-benefit analyses, put competition in. You 

know, the States own these operations to a great extent and they 

are more capitalistic than we are. They are trying to be more free 

enterprise-driven than we are. So we need to look at that. 

Mr. Boardman, what is a bigger priority for Amtrak? The Northeast Corridor or the long-distance lines, long-distance services? 

Mr. BOARDMAN. The long-distance services. 

Mr. SHUSTER. Why would they be the priority? 

Mr. BOARDMAN. Because you would not have expected that answer, Chairman. 

[Laughter.] 

Mr. BOARDMAN. And I say that partly in humor, but I think that 

where the core of this company came from and the reason it was 

created in 1971 was to relieve what are now the freight railroads 

from a money-losing passenger operation. 

This Nation needs to be tied together on the surface of the 

United States from coast to coast, border to border. We feed a half 

a million riders a year into the Northeast Corridor. The Northeast 

Corridor is an extremely important asset, and I sat in Joan’s seat 

in the past and understand the necessity here to make sure that 

this is a high priority. It is a struggle. 

And let me go back to something. And I did not answer the question, and I will answer the question of high-speed rail in California. 

26 

And that is, your folks are in a very difficult position trying to figure out how to balance the funding in the United States for all the 

things that need to be done. And I appreciate that and understand 

that, and I appreciate the thoughtfulness in how you are trying to 

deal with this. 

It is not just high-speed rail in California. It is the next generation of air traffic control. It is what you are doing with the water 

system. It is how do we maintain the Interstate Highway System. 

And the battles that occurred—and I was there for some of them. 

I am getting old now—of how we actually got some of the interstate 

highways funded, just like Interstate 88 and how your dad handled 

route 15, which was never really identified the way it needed to be 

to make improvements. 

But what we found in the end, as we got to the end of that, is 

that every one of those were important to the local communities or 

at least some segment of the local community and to the economy 

where it was actually invested in. And so for that reason, I support 

high-speed rail in California and I also support the high speed, to 

the extent they can get it, in Michigan and Illinois and in Texas 

and even in Florida if it happens. 

Mr. SHUSTER. But the reality of the world today—as you mentioned, we are struggling with financing. And as the head of the 

organization, it seems to me your biggest priority has to be that 

which makes you money to help us to go forward towards reforms, 

to help us be able to sell to our colleagues these reforms are in 

place. They are going to focus on them. They are going to make 

money and not eliminate, not stop forever, but maybe look at suspending some of these routes and saying, OK, we have got to turn 

the ship right. We have got to make sure we are focusing on the 

right things and move forward on the Northeast Corridor, making 

sure it is right, to provide those revenues, to help us then move 

out. And I believe if you get the 10 or 12 corridors right in this 

country, organically it will grow back to—continue to connect and 

be on the ground because we are connected on the ground from 

highways, parts of it in rail. But again, we have got to put the reforms in place if we are ever going to get to where you want to get, 

where I want to get, where all of want to get. We have got to do 

it in a measured way and a step-by-step way. And I think again 

focusing on where your profits are to me should be the priority. 

The other thing—you and I have had this conversation—the pricing that Amtrak does. On the Harrisburg to Philadelphia line—I 

have said this over and over—they do not charge enough. And look, 

nobody wants to pay more but at the end of the day, if you are getting value for it, you will pay more. For me to go from Harrisburg 

to Philadelphia, $29—I will pay more than that. 

I just sent my son from Harrisburg to New York City roundtrip, 

108 bucks. I mean, I was fully expecting to pay $200 because when 

I do the calculation of car, tolls, gas, headache, and traffic, $108, 

really the value is much more than that. 

And I am going to continue to talk about this, not only the State 

of Pennsylvania that determines what the price of a ticket is from 

Harrisburg to Philadelphia, but also the Northeast Corridor. We 

need to look at this pricing and value. 

Thank you, Mr. Chairman, for keeping me under control. 

27 

Mr. BOARDMAN. Thank you. 

Mr. DENHAM. Thank you. 

Mr. Nadler? 

Mr. NADLER. Thank you. 

We have largely been agreeing on everything today, and I am 

going to change that now. The chairman of the full committee just 

said we have to look at the reality of the world. We are struggling 

for funding. We are, indeed, struggling for funding, but that is entirely a political construct. The fact of the matter is we are spending on infrastructure a fraction of what we should be spending. We 

are sitting here talking about tough choices within a very limited 

framework and a framework that is limited in developing the economic potential of the country and that is going to help destroy our 

competitiveness with foreign countries. 

We can borrow money at negative interest rates right now. Negative interest rates. People are paying us to take their money. We 

ought to be borrowing a lot of money and spending it on infrastructure. We ought to be tripling and quadrupling and quintupling our 

investments here and spread our horizons. 

Thirty to forty years ago, we were spending about 3 3.5 percent 

of GDP on infrastructure. Now we are spending under 1 percent on 

infrastructure. China is spending 9 percent on infrastructure. And 

guess who is going to have a more efficient, competitive economy 

20 years from now. 

So, yes, for the moment until probably another couple of elections, we are in a rather foolish economic world in which we are 

not investing the money we ought to be investing—and I say ‘‘investing.’’ That is ‘‘funding’’—but investing the money that we ought 

to be investing in infrastructure. We ought to be doing the entire 

cost of high-speed rail in the Northeast Corridor, bringing the corridor up to snuff, and investing in high-speed rail and doing it in 

California and having a national system so that we can develop the 

economy of the country for its increasing population and for staying 

competitive with the Chinas of the world that we are not going to 

be competitive with if they keep investing 9 percent of GDP in infrastructure and we are investing under 1 percent of GDP. We cannot maintain the systems we have. 

Reference was made that in the 20th century or the early part 

of the 20th century, we had plenty of money. We were investing in 

infrastructure. Now we do not. Why did we have plenty of money? 

Simply because we had a positive feedback loop. We invested and 

the economy grew. We invested. Now we are going into a negative 

feedback loop. We are not investing. The economy is not growing 

nearly as fast. 

So we have to discuss much of what we have been spending our 

time discussing, namely how to prioritize within a very narrow, 

short-sighted economic vision. But we also ought to be discussing 

how to get out of that very narrow, short-signed economic vision 

and eliminate this nonsense with austerity and these budget cuts 

and start really investing again. 

Having said all that, let me ask Mr. Yaro. What is your view on 

developing a transportation trust fund or an infrastructure bank to 

provide dedicated funding from the Federal Government for AmVerDate Aug 31 2005 13:49 Jul 02, 2014 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\RR\2013\6-7-13~1\81370.TXT JEAN
28 

trak, for development of high-speed intercity passenger rail? How 

would that impact private investment? 

Mr. YARO. Well, I think we should do that, and I think—— 

Mr. NADLER. And how we fund such an infrastructure bank? 

Mr. YARO. Well, as I said earlier, you know, I have been a skeptic on P3s simply because, you know, it is actually cheaper to do 

tax exempt bonds and to finance projects that way. Private investors will want a return on their investment. They will be looking 

for 4, 5, at least 6 percent from pension funds, higher than that 

from other investors. 

But I am coming around to the idea—Felix Roland has been very 

helpful to me on this—is that even though it would cost more, if 

that is what it takes to develop the political will to move ahead 

with a—— 

Mr. NADLER. In other words, that extra cost is the price we pay 

for lack of proper political will? 

Mr. YARO. Well, you know, going back to your earlier statement, 

most of the infrastructure that we built in the 19th and 20th century was built with private investments. The Federal Government 

primed the pump. The Federal Government provided—usually in 

the West it was land grants. In your part of the country, it was 

land grants to get the railroads to make those investments, the 

Southern Pacific, Union Pacific, and the rest of them, and so forth. 

But in other parts of the country, we had other Federal incentives. 

It was mostly European investors who put money into, first, canals 

and then into railroads and so forth. 

And I think we can do that again and attract the kind of capital 

that you are talking about here. I understand that it is going to 

cost a little more to do it that way, but if that what it takes to 

make these investments, you get it all back if you create new, productive capacity and if we create the kind of economic growth that 

the country should have and that we need to provide to our kids. 

It more than makes up for the difference, I think, in the additional 

cost of capital. 

So one way or another, let us find the political will to make these 

investments. So I have come around to the notion that if we need 

to do P3s to build bipartisan support for making these investments, 

by God, let us go ahead and do it. 

Mr. DENHAM. Thank you. 

Well, Mr. Nadler is correct. We do have a disagreement on this one. I agreed with the President 5 years ago when he said a $9 trillion debt is un-American. Now we are double that. We have not 

had a budget in 5 years now. We have some big challenges ahead 

of us. 

But I think where we all agree is finding a dedicated funding 

stream to make sure that these ongoing projects happen every year 

so that we do not have this huge backlog like we have today where 

we are not only prioritizing projects but we are really in a situation 

where our bridges across the Nation—some of them are falling 

apart. And rail—we have got some very, very outdated rail that 

could leave us with safety concerns as well. And so we have got to 

have that dedicated revenue stream. We are looking at that with 

the highway bill, you know, evaluating the Highway Trust Fund 

and how you create greater revenues to be able to fully fulfill that. 

29 

We need to do the same thing on rail. We need to put the cost controls in to make sure that the projects happen not only on time but 

on budget, and then ultimately we have got to figure out how we 

are going to come up with this money so that we can continue to 

not only improve infrastructure but really build high-speed rail and 

do it in a right way where we have got these public-private partnerships. 

While we are talking about the contracts and making sure that 

these are happening, Mr. Boardman, have you seen the Tutor 

Perini contract? I am sorry. The California high-speed rail initial 

segment funding contract. 

Mr. BOARDMAN. I have not see the contract, no. 

Mr. DENHAM. When you put together a contract on a new asset 

improvement, when you do a contract with a public-private partnership or even a contract with a builder if you are doing a design/ 

build, do you not have the cost controls in place to make sure that 

it happens on time? If it does not happen on time, there are penalties, as well as making sure that there is a guarantee so that 

there are not a bunch of add-ons at the end. 

Mr. BOARDMAN. We generally have that, yes. 

Mr. DENHAM. Thank you. We could not get an answer on that 

last week on the California high-speed rail issue. So the contracting left me concerned about this first phase getting done on 

time and on budget. 

Ms. McDonald, as the former chairwoman of the Northeast Corridor Commission, what are some of the concerns that States have 

when being asked to invest their own funds in Amtrak infrastructure? 

Ms. MCDONALD. You know, I think as we have been talking this 

morning, first and foremost the collaboration between the States 

and DC is better than it has ever been. 

Second of all—— 

Mr. DENHAM. We appreciate that. 

Ms. MCDONALD. Thank you and we appreciate your support 

along those lines as well. 

You know, I think the point that you just highlighted with Joe 

is different States have different procurement policies, and it is 

really making sure that the dialogue is with Amtrak to make sure 

that we are using the best procurement method available to us. 

And when I say ‘‘us,’’ it is ‘‘us’’ collectively. And the hurdle of getting the work done, while not only Amtrak is operating trains but 

Metro North is operating trains, New Jersey Transit, MARC, everybody is operating trains, the windows to get the work done are 

very tight, and it is working through some of those to make sure 

we get the work done. 

Mr. DENHAM. And what are some of the steps that you take or 

have taken to mitigate those concerns? 

Ms. MCDONALD. Well, what we have done with Amtrak and with 

CSX on the Hudson Line, which is our equivalent of the Pennsylvania line, is we have several agreements and they are operating 

agreements, capital agreements. We have in place for that line a 

capital construction committee which consists of New York State 

DOT, Amtrak, and CSX. And we do prioritize and we very closely 

track how the projects are progressing and where the potential cost 

30 

overruns could be and what are the risk mitigation measures that 

we can put in place. 

Mr. DENHAM. Thank you. 

Ms. Brown? 

Ms. BROWN. Thank you, Mr. Chairman. 

The last time I was in a similar hearing, Mayor Bloomberg was 

here and former Pennsylvania Governor Ed Rendell was here. And 

the discussion was the same. You were here at that meeting. 

Let us just be clear. Without long distance, Amtrak would be a 

commuter rail. There would be no connectivity between the east 

coast and the west coast. And currently four States have no passenger rail service. Without long distance, 23 States, 4 million people will be without any service whatsoever. We are talking about 

air, passenger, bus service, air, or rail. So I mean, to discuss that 

we want to do away with long-distance service is like saying that 

we want to do away with, you know, the mail system. 

I mean, basically we have a lot of people that are not thinking 

forward. And transportation used to be the engine that put American people to work. We have not had a WRDA bill in 7 years. That 

is the bill that funds the ports and the Coast Guard. So, I mean, 

we are really—for the first time, I feel that we are beginning to 

move forward on some of the transportation issues that would actually put the American people to work. Sadly, for the first time, I 

have found people that I do not think believe in putting the American people to work. They are just very backward. No one here, I 

am sure. 

But I would like to know what will your recommendations be for 

the Passenger Rail Investment and Improvement Act, starting with 

Mr. Boardman. 

Mr. BOARDMAN. For the reauthorization of the act? 

Ms. BROWN. Yes, yes. What would be your recommendation? 

Mr. BOARDMAN. We need funding to maintain our railroad, and 

we need it on a multiyear basis. 

Ms. BROWN. Dedicated funding. 

Mr. BOARDMAN. Yes. 

Ms. BROWN. All right. 

Mr. Fry? 

Mr. FRY. I would second that. I am not deep into this, but I think 

the way Joe has articulated all this in terms of first things first, 

I would support his position as well. 

Ms. BROWN. Ms. McDonald? 

Ms. MCDONALD. I would agree. And as I mentioned earlier, when 

I said that New York State has invested over a 30-year period $22 

billion in its commuter railroads, one of the issues that we are 

grappling with on the commission is how do we deal with States 

that have made prior investments and kept their state of good repair up to date and Amtrak has not. Is there a credit for that? Is 

there not a credit for that? 

So to answer your question and also to answer your question, 

Congressman Denham, the States have stepped up to the plate and 

we believe that the Federal Government and Amtrak also need to 

step up to the plate to make those deferred capital investments so 

that we can move forward and create jobs. 

31 

Ms. BROWN. What about those 53 miles—that I think go through 

New York—that if we could speed those up, that would improve the 

system? 

Mr. BOARDMAN. Connecticut. 

Ms. MCDONALD. Connecticut. 

Ms. BROWN. That is not you? 

Mr. BOARDMAN. It is mostly Connecticut. 

Ms. MCDONALD. It is mostly Connecticut, yes. 

Ms. BROWN. Yes, sir, Mr. Yaro? 

Mr. YARO. It is owned by Connecticut DOT. 

I guess I would add a couple of things. First, the notion of getting 

dedicated funding, getting Amtrak into a trust fund type of arrangement the way the rest of the system operates. 

Then I think there is an opportunity to here to be thinking 

about—I will call it high-speed rail version 2.0 where strategic investments in the Northeast, I think in California finding the right 

place for the Federal Government to invest in the California system, and then a series of others, Florida. There is a new generation 

of projects at All Aboard Florida in Florida which is going to require grade separations, some right-of-way acquisition to get to Orlando. The Dallas to Houston project, the same thing. There is a 

public role in getting—even though it is mostly private investment, 

there is public money that is required for grade separations and 

other investments. The same thing in the Midwest in Chicago to 

Milwaukee and on to Minneapolis and so forth, Desert Express. 

So I think there is an opportunity here for the committee to 

think about what an effective intercity and high-speed rail program 

could be across the entire country. Obviously, we are partisan 

about the Northeast and this is probably the greatest need right 

here in the Northeast just to make the investments that we have 

been talking about here today. But there are projects around the 

country, in fact, that make sense. In fact, there are opportunities 

for P3s in all of them. 

Thank you. 

Ms. BROWN. Florida would have been number one in high speed 

in the country if we had not—first of all, if we had not started with 

Jeb Bush sending the first money back and then with this present 

Governor, sending $3 billion back that the legislature had voted 

for, the taxpayers had voted for. When I went to Utah, they are 

riding with our money, and of course, you all are enjoying it here. 

Mr. YARO. We appreciate your contribution. 

Ms. BROWN. Yes, I know it. I know it. Yes, sir. 

Mr. DENHAM. Mr. Nadler? 

Mr. NADLER. Thank you. 

Let me ask the following question. Mr. Boardman first. Let us 

talk about the infrastructure bank. There is also the transportation 

trust fund that has been suggested. I am not sure what the difference is. Do you support the infrastructure bank proposal? How 

big should it be? The President proposed I think $60 billion at one 

point. And how should it be funded? 

Mr. BOARDMAN. Well, I got to tell you I am the worst guy in the 

world to be up here talking about what the policies ought to be for 

how we raise the funds and what we need to do. That is not my 

shtick. 

32 

But I’ve got to tell you that we need the money. We need it on 

a multiyear basis. And I think that is what we appeal to you to 

make a decision for. 

Mr. NADLER. I will ask the other members of the panel in a moment the same question, but let me ask you a specific question. 

In 1981, I think it was, the State legislature in New York passed something called ‘‘contract bonds,’’ in which we floated $800 million—which the MTA floated $800 million of bonds against a promise by the legislature to appropriate funding for debt service for the 

next 30 years. Is that a concept that you think would work on the 

Federal level? 

Mr. BOARDMAN. I honestly do not know. 

Mr. NADLER. Commissioner McDonald, for both the questions. 

Ms. MCDONALD. You know, I do think there needs to be a dedicated transportation fund/infrastructure bank. Part of what we 

have all gotten used to is pay as you go. We get the money and 

then we spend it on projects. The TIFIA loan program, the RRIF 

program allow us to look at it differently, and I think future Federal dollars should be allowable to pay back a RRIF or a TIF regardless of which mode you are in. I think every revenue option 

should be on the table. 

Congresswoman Brown mentioned Governor Rendell. And Monday or Tuesday morning on ‘‘Morning Joe,’’ there was a big discussion about the offshore assets of U.S. companies, and he said, you 

know, you change the Federal corporate tax code and then you get 

some of those offshore assets back and you put them into the infrastructure bank. And I think that would be worth exploring. 

Mr. NADLER. Let me just say that I am vehemently opposed to 

that proposal. 

Ms. MCDONALD. OK. 

Mr. NADLER. Because we should not be bribing our companies to 

pay their taxes. We should mandate that they do so and at their 

regular rate, not at 5 percent or whatever because they will just 

not pay their taxes for the next 20 years expecting another amnesty like that. There have got to be better ways of funding an infrastructure bank. 

Ms. MCDONALD. He was not talking about an amnesty. He was 

talking about a permanent change to the tax code. 

Mr. NADLER. Even worse. Go ahead. 

Ms. MCDONALD. But that is one example that needs—but here 

we have a difference of opinion, and we are generally on the same 

page on some of these things. But it is looking at every revenue option to put into the bank and into the trust fund. 

Mr. NADLER. How big should an infrastructure bank be, order of 

magnitude? 

Ms. MCDONALD. Back when President Obama proposed the 

ARRA program and I was in Connecticut, Dick Levin, who was the 

president of Yale, said that we needed to put over $100 billion into 

infrastructure investment, which is transportation, water waste, 

water utility. There is a huge need. 

Mr. NADLER. Mr. Yaro? 

Mr. YARO. I would just connect the dots between the different 

questions here. One is that PRIIA required that the Federal Railroad Administration complete a national rail plan. There was a 

33 

draft plan. They never finalized it. And I will not comment on why 

it was not finished, but it has not been finished. 

You know, what the Congress needs I think and what the country needs is an agreed upon vision for the systems of investments 

that we need to make in roads and rails, aviation, waterways, and 

so forth. We are all talking about a set of depreciating assets at 

the moment that will not sustain our standard of living, our competitiveness in coming decades. So let us see if we can agree on a 

plan—sorry, on a plan—on a map and so forth that shows where 

these improvements need to be and so forth. Then I think we need 

to tote up what it is going to cost, and then we need to find the 

political will, both public and private investments. States need to 

participate. The Federal Government needs to incentivize the 

States to participate and to invest in these things, as it always has. 

This is as old as the republic. You know, George Washington insisted on getting the Interstate Commerce Clause in the Constitution because before he became President, he put together the C&O 

Canal, could not get the States of Maryland and Virginia to cooperate, insisted that the Federal Government play a role in 

incentivizing, planning, leading on infrastructure investments. I 

think that is what is needed, and I think it would be a wonderful 

thing, in fact, if this committee could come forward with that kind 

of approach. 

Mr. DENHAM. Thank you. 

Ms. Brown? 

Ms. BROWN. Just the last thing. If you think about it, we have 

in WRDA the money there, but it is just sitting there and they just 

let it sit there and look at the deficit as opposed to using it. 

So one of the things, as we develop some infrastructure bank, we 

have got to make sure that we use it for the purpose we are talking 

about. It should be a direct user fee and some way to get it out in 

the system because we have billions of dollars in the harbor maintenance tax that we have collected, but we are not using it for that 

purpose. So it is not just setting up the funds, but we need a system that distributes the funds. 

And just like the—what is the fund? You know, we have the authority, but it just sits there, and we are not using it. RRIF, RRIF. 

It just sits there. It has $35 billion that we have the authority to 

use, and I do not think we have used $1 billion. 

And so I yield back the balance of my time. 

But thank you all so much for your presentations. We all know 

the problem. How can we work together to move the issue forward. 

Thank you again. 

Mr. DENHAM. Again, thank you, each of you, for your testimony. 

This has been a very educational trip. Coming from California, I 

do not always get a chance to come up to the Northeast Corridor 

and certainly do not get the opportunity to really see some of the 

challenges that you have to deal with every day from the S-turns 

to the horseshoe turns and a lot of the upgrades that need to happen. 

And we are committed as a committee not only to getting the 

passenger reauthorization bill done but to working with you to address all of these challenges. And that is going to be a commitment 

that we are going to have to share with the States, as well as pubVerDate Aug 31 2005 13:49 Jul 02, 2014 Jkt 000000 PO 00000 Frm 00041 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\RR\2013\6-7-13~1\81370.TXT JEAN
34 

lic-private partnerships, as we look at rail across the Nation. We 

need those public-private partnerships. If you are going to have an 

economic benefit by establishing businesses around a stop, then we 

want the private companies to be able to come in and help us with 

that as well, as well as the States. And we are only going to be 

able to get this plan if we not only work together, but also manage 

it together so we do not have cost overruns, so we do not have time 

delays, and we have good contracts negotiated. 

So we certainly want to work with you on all of that. We are 

looking forward to improving not only rail, but we are looking at 

the future vision of high-speed rail. But we have got to do it right, 

and we are committed to working together to make that happen. 

So, again, thank you for your testimony today. 

If there are no further questions, I would ask unanimous consent 

that the record of today’s hearing remain open until such time as 

our witnesses have provided answers to any questions that may be 

submitted to them in writing and unanimous consent that the 

record remain open for 15 days for any additional comments and 

information submitted by Members or witnesses to be included in 

the record of today’s hearing. Without objection, so ordered. 

Mr. DENHAM. I would like to thank our witnesses again today for 

their testimony. 

And if no other Members have anything to add, the committee 

stands adjourned. 

[Whereupon, at 11:27 a.m., the subcommittee was adjourned.] 

35 


Insert offset folio 6 here 81370.006
36 


Insert offset folio 7 here 81370.007
37 


Insert offset folio 8 here 81370.008
38 


Insert offset folio 9 here 81370.009
39 


Insert offset folio 10 here 81370.010
40 


Insert offset folio 11 here 81370.011
41 


Insert offset folio 12 here 81370.012
42 


Insert offset folio 13 here 81370.013
43 


Insert offset folio 14 here 81370.014
44 


Insert offset folio 15 here 81370.015
45 


Insert offset folio 16 here 81370.016
46 


Insert offset folio 17 here 81370.017
47 


Insert offset folio 18 here 81370.018
48 


Insert offset folio 19 here 81370.019
49 


Insert offset folio 20 here 81370.020
50 


Insert offset folio 21 here 81370.021
51 


Insert offset folio 22 here 81370.022
52 


Insert offset folio 23 here 81370.023
53 


Insert offset folio 24 here 81370.024
54 


Insert offset folio 25 here 81370.025
55 


Insert offset folio 26 here 81370.026
56 


Insert offset folio 27 here 81370.027
57 


Insert offset folio 28 here 81370.028
58 


Insert offset folio 29 here 81370.029
59 

Æ 


Insert offset folio 30 here 81370.030