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S. HRG. 111–1198 

IMPACTS OF EXPECTED HIGHWAY TRUST FUND 

INSOLVENCY 

HEARING 

BEFORE THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

JUNE 25, 2009 

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

( 

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

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

BARBARA BOXER, California, Chairman 

MAX BAUCUS, Montana 

THOMAS R. CARPER, Delaware 

FRANK R. LAUTENBERG, New Jersey 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

AMY KLOBUCHAR, Minnesota 

SHELDON WHITEHOUSE, Rhode Island 

TOM UDALL, New Mexico 

JEFF MERKLEY, Oregon 

KIRSTEN GILLIBRAND, New York 

ARLEN SPECTER, Pennsylvania 

JAMES M. INHOFE, Oklahoma 

GEORGE V. VOINOVICH, Ohio 

DAVID VITTER, Louisiana 

JOHN BARRASSO, Wyoming 

MIKE CRAPO, Idaho 

CHRISTOPHER S. BOND, Missouri 

LAMAR ALEXANDER, Tennessee 

BETTINA POIRIER, Staff Director 

RUTH VAN MARK, Minority Staff Director 
(III) 

C O N T E N T S 

Page 

JUNE 25, 2009 

OPENING STATEMENTS 

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

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma .................... 31 

Udall, Hon. Tom, U.S. Senator from the State of New Mexico ............................ 33 

Vitter, Hon. David, U.S. Senator from the State of Louisiana ............................ 33 

Lautenberg, Hon. Frank R., U.S. Senator from the State of New Jersey ........... 35 

Barrasso, Hon. John, U.S. Senator from the State of Wyoming .......................... 36 

Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland ................ 37 

Carper, Hon. Thomas R., U.S. Senator from the State of Delaware ................... 39 

Merkley, Hon. Jeff, U.S. Senator from the State of Oregon ................................ 40 

WITNESSES 

LaHood, Hon. Ray, Secretary, U.S. Department of Transportation .................... 41 

Prepared statement .......................................................................................... 43 

Responses to additional questions from Senator Boxer ................................ 49 

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

Ruffalo, Kathy, President, Ruffalo and Associates ............................................... 65 

Prepared statement .......................................................................................... 68 

Responses to additional questions from Senator Boxer ................................ 74 

Response to an additional question from Senator Voinovich ........................ 76 

James, Don, Chief Executive Officer, Vulcan Materials Company ...................... 77 

Prepared statement .......................................................................................... 79 

Response to an additional question from Senator Voinovich ........................ 87 

Responses to additional questions from Senator Boxer ................................ 87 

Basso, Jack, Director of Program Finance and Management, American Association of State Highway and Transportation Officials .................................... 89 

Prepared statement .......................................................................................... 91 

(1) 

IMPACTS OF EXPECTED HIGHWAY TRUST 

FUND INSOLVENCY 

THURSDAY, JUNE 25, 2009 

U.S. SENATE, 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, 

Washington, DC. 

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

406, Dirksen Senate Office Building, Hon. Barbara Boxer (chairman of the full Committee) presiding. 

Present: Senators Carper, Inhofe, Lautenberg, Cardin, 

Klobuchar, Udall, Merkley, Voinovich, Vitter, and Barrasso. 

OPENING STATEMENT OF HON. BARBARA BOXER, 

U.S. SENATOR FROM THE STATE OF CALIFORNIA 

Senator BOXER. The hearing will come to order. 

Thank you so much, Secretary LaHood and the rest of today’s 

witnesses for being here today to discuss such as important issue, 

the solvency of the Highway Trust Fund. 

I ask unanimous consent to place in the record a document that 

shows the 24 entities that are calling upon us to fix this Trust 

Fund before August. I will just read a couple of them: Alaska Department of Transportation, Arizona Department of Transportation, California, the Rural Transportation Advisory Council of Arizona, Kent County, Delaware, a lot of agencies in Florida, Georgia, 

Illinois, Missouri, Oregon, Indiana, Pennsylvania, Tennessee, 

Texas, Virginia, Washington State, Wisconsin, the American Highway Users Alliance, the American Society of Highway Engineers 

and the National Governors Association. 

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Senator BOXER. So, I think we all understand that the job before 

us is urgent. The good news is, I think we all do agree on that 

across party lines. I certainly know that Secretary LaHood made 

himself available to come to the Hill with a team from the Administration to discuss this matter, and I know that he is very bound 

and determined to work with us across party lines to solve this 

problem. 

Look, this is about jobs, it is about our economy. For every billion 

dollars in Federal funds invested in transportation and matched by 

State and locals, there are 34,779 jobs created and $6.1 billion of 

economic activity. I know all of us are focused on economic recovery. We cannot come forward with a plan that is a year. That does 

not do it. I like what the Administration did on an 18-month timeframe because that gives certainty to our people. 

I am open, personally, to many ways of filling the gap. I had suggested to the Administration using some of the unused stimulus 

funds. It is something that I know Senator Vitter has written a bill 

on. But, unfortunately, from my standpoint, it is a very short term. 

It expires right before the election, which may or may not have 

been his intent. I am not saying it is. But the fact is, we know 

where we are right before an election. It is hard to get the permanent fix done. 

I would prefer to see 18 months because it gets us past the politics and, in addition to that, and this is very, very key, it gives certainty to the people. And that is very, very important. 

We have a lot of issues on the table in terms of a long-term solution to our funding. So, I am going to ask for unanimous consent 

that my entire statement be placed in the record, and I will continue to read part of it. 

We know that we expect to encounter the sharp shortfall in the 

Highway Trust Fund as early as August. The Mass Transit Account of the Highway Trust Fund is also expected to run out of 

funds soon. The Highway Trust Fund provides Federal funding for 

highway, bridge and transit systems. 

I think that it is important to remember that the Federal Government provides about 40 percent of the capital expenditures for 

highway transportation nationwide. That spurs the States and 

locals to act. We then, putting all of our funding together, really 

stimulate this economy and do what we have to do to move people, 

to move products. It is very, very important. 

I am proud that the American Recovery Reinvestment Act provided $48 billion for transportation improvements. I have to say I 

stood shoulder to shoulder with my Ranking Member trying to get 

more funds in that particular—— 

Senator INHOFE. Yes, three times more. 

Senator BOXER. I will repeat. I stood shoulder to shoulder with 

my colleague trying to get three times more funding into the Stimulus Bill for highways and transportation. When we stand together, 

I think it sends a powerful signal. That is why some of us think 

that it would be good to go to the unused stimulus funds from 

other areas because we think that this particular use puts people 

to work, keep them working and keeps our economy moving. 

Let me just say that transportation investments have a positive 

impact on our communities, regardless of where we are from. We 
30 

must have continued investment. We must have continued job creation. 

Again, I want to thank Secretary LaHood. I think this is key. He 

answered our call. We sent a letter to him. He said we are going 

to fix this problem together. He said 18 months is what we want 

to do. I think that is an intelligent number of months to give the 

certainty to our people at home, and to give us enough time to really reform the way we do transportation. 

So, the time is short. I know that Secretary LaHood has offered 

to work with us, give us the technical assistance we need. But we 

intend to do this job and I think our date is what? To mark up a 

bill? The middle of July. We will get our work done. 

I thank you very much and I turn to my Ranking Member. 

[The prepared statement of Senator Boxer follows:] 

STATEMENT OF HON. BARBARA BOXER, U.S. SENATOR

FROM THE STATE OF CALIFORNIA

Thank you, Secretary LaHood and the rest of today’s witnesses for being here 

today to discuss such an important issue—the solvency of the Highway Trust Fund. 

This is about jobs and our economy. According to the U.S. Department of Transportation, for every $1 billion in Federal funds invested in transportation (and 

matched by States or locals), there are 34,779 jobs created and $6.1 billion in economic activity. That is why immediately addressing the anticipated insolvency of 

the Highway Trust Fund must be a top priority. 

We are facing a possible reduction in transportation spending because the Highway Trust Fund is expected to encounter a shortfall as early as August. According 

to Department of Transportation estimates, an additional $5 billion to $7 billion will 

be needed to keep the Federal-aid Highway Program running through the end of 

fiscal year 2009 and an additional $8 billion to $10 billion will be needed in fiscal 

year 2010. 

The Mass Transit Account of the Highway Trust Fund is also expected to run out 

of funds soon. 

The Highway Trust Fund provides Federal funding for our Nation’s highway, 

bridge and transit systems. Traditionally, the Federal Government provides about 

40 percent of the capital expenditures for highway transportation nationwide. Without this critical funding, State and local governments would be forced to dramatically cut spending on transportation. 

Earlier this year, Congress passed and the President signed into law the American Recovery and Reinvestment Act of 2009 (H.R. 1), which provided a total of $48 

billion for transportation improvements. 

Of that $48 billion about $27.5 billion was included for the highway program. 

These dollars are already putting people back to work, while at the same time making improvements to the transportation system that will help move people and 

goods more efficiently in the future. 

According to DOT data and an analysis by the American Road and Transportation 

Builders, by the end of May, State and local transportation agencies had invested 

more than $13 billion, almost half of the $26.8 billion in ARRA funds that had been 

apportioned or allocated, and much more than the $9.3 billion that was required to 

be obligated within 120 days of apportionment. 

These transportation investments provided in ARRA are having a positive impact 

today in communities nationwide. 

We must have continued investment from the highway trust fund to maintain 

these jobs, and to make additional, needed improvements to our transportation infrastructure. 

I recently sent a letter with several of my Senate colleagues who serve as Chairs 

and Ranking Members of the relevant authorizing committees requesting that the 

Administration come forward and work with us to find a solution to the immediate 

problem. I am pleased that the Administration is working with Congress to address 

this pending problem. 

Just last week, Secretary LaHood proposed that Congress pass an immediate 18- 

month extension of the current highway, transit and highway safety authorization, 

and that Congress immediately replenish the Highway Trust Fund to avoid a shortfall. 
31 

As I am sure Secretary LaHood will mention today, the Department of Transportation now estimates the Highway Trust Fund will require a cash infusion of about 

$20 billion to support both highway and transit programs for the next 18 months. 

I look forward to working with the Administration on this proposal, which would 

keep the recovery and job creation moving forward and give us the necessary time 

to pass a more comprehensive and transformational multi-year transportation authorization bill with stable and reliable funding sources. 

As we work our way out of this recession, the last thing we want to do is to drastically cut back on necessary transportation priorities. Spending on transportation 

means jobs and more efficient movement of people and goods, all of which benefit 

our economy. 

In order to help make sure transportation priorities are not cut, I ask the Secretary to ensure his department provides expedited technical assistance as we work 

to craft this extension. The time is short and we need the Department’s input to 

help ensure the legislation works as intended. 

Thanks again to the witnesses for appearing today. I look forward to your testimony. 

OPENING STATEMENT OF HON. JAMES M. INHOFE, 

U.S. SENATOR FROM THE STATE OF OKLAHOMA 

Senator INHOFE. Thank you very much, Madam Chairman. 

I am going to go ahead and submit my statement for the record. 

I will just highlight a couple of things. 

First of all, we did try. We made an effort back during the $789 

billion Stimulus Bill to get a much larger percentage of that, Mr. 

Secretary, into something that really is stimulus, and that is road 

construction. We had a lot of things that were ready to go and that 

would have worked very well. 

Now I know that in my State of Oklahoma, Gary Ridley, our 

Transportation Secretary, we would have to de-program somewhere 

between $50 million and $80 million worth of projects. These are 

programs that have already been let, contracts that have already 

been let. It is a very serious thing that we are facing. 

I can remember when we went through the crisis in September. 

At that time, I reminded everyone that we had a problem 10 years 

prior to that when then-President Clinton took $8 billion out of the 

Highway Trust Fund and put it into the General Fund in an attempt to balance the budget. I objected to it then and, for every 

year since then I have been trying to get it back. Well, we successfully did that. In fact, that was over a threatened veto by the President that we successfully did that last September. 

Now, we are going to have to have more money. One of the 

sources I want to look at is, if it is logical to have undone a wrong 

that was 10 years old last September, what is wrong with going 

back now and saying we need also to transfer the interest that has 

been earned over that 10-year period. That amounts to about $13 

billion. 

The other thing that we have been trying to go after, and I am 

sure that Senator Vitter is going to get into this, and I agree with 

his efforts that he is trying to do, to do it through some of the stimulus money that came originally out of the $700 billion plan. 

I regret that I was not able to talk to my Chairman about this 

earlier, but what I would attempt to do would be to not have 

projects included in this for the White House, the Executive Department, or us. I know this is right. When we were starting in to 

see if we could make this thing work. 
32 

We need to have an extension. To me, the 18-month extension 

makes sense. What I do not want to do is find ourselves in a position where we have to, the same position which we found ourselves 

in last September, but now, finding ourselves in that same position, 

where we have to renege on contracts, where we have to stop construction. I just do not want that to happen. 

So, I am still open to all possibilities here. Hopefully, perhaps 

Senator Vitter and some of the others have some ideas that might 

work, Mr. Secretary. 

[The prepared statement of Senator Inhofe follows:] 

STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR

FROM THE STATE OF OKLAHOMA

I’m very pleased we are having this hearing today. This is a critical issue. We 

recently learned that the Highway Trust Fund will run out of money sometime before August of this year, and will require an infusion of $5 billion to $7 billion to 

get through the rest of fiscal year 2009. In addition to the funds required for 2009, 

$8 billion to $10 billion will be required for 2010. This amount will be higher if an 

extension longer than 12 months is enacted. 

It is critical to fix this shortfall. Failing to do so will delay planned and ongoing 

road projects and result in people being laid off. This would be unacceptable anytime, but more so during today’s economic downturn. 

Oklahoma’s Secretary of Transportation, Gary Ridley, has notified me that if we 

fail to fix the Trust Fund Oklahoma and most other States will not have the cash 

to honor infrastructure projects that have already reached agreement. As a result, 

my State will be forced to deprogram between $50 million and $80 million in 

projects. This will be done by canceling new projects and existing contracts that 

have already been signed, in addition to slowing down projects that have already 

broken ground. Clearly this would have a detrimental effect on the economy and 

will negate any gains made by the stimulus which as I’ve said before, dramatically 

underinvested in infrastructure. 

This must be prevented. The good news is the Administration announced yesterday they were committed to fixing this within the next 6 weeks. They also proposed 

an 18-month extension. I think the reality is that since we don’t have a way to pay 

for a long-term bill, an extension is probably in order. 

This Monday there was a meeting between the bipartisan leadership of the 3 authorizing committees in the Senate (EPW, Banking, and Commerce) and the Administration. The Senators at the meeting were unanimous in their desire to have a 

clean, long-term extension, which would include a Trust Fund fix. This is good news, 

because it cuts down the likelihood of it getting bogged down in policy fights. 

There are a number of ways to fix the Trust Fund shortfall. We fixed a similar 

shortfall last year by remedying a wrong that was done in 1998 when $8 billion paid 

by road users was transferred from the Trust Fund to the General Fund. 

But TEA–21 actually made 2 negative changes to the Trust Fund in 1998: the 

first being the $8 billion transfer from the Trust Fund to the general fund that was 

restored last September and the second ended the long-standing practice of crediting 

the Trust Fund with interest on its cash balances. 

Repaying the Trust Fund for lost interest would result in about $13 billion in 

cash. If interest were also paid on the $8 billion that should have been sitting in 

the Trust Fund, the lost interest would amount to about $17 billion. 

According to the Congressional Research Service, every other major trust fund is 

credited with interest on cash balances: from Social Security to the Airports and 

Airways Trust Fund. In fact, I am not aware of any other trust fund that is not 

credited with interest on cash balances. 

It was wrong to stop crediting the Trust Fund with interest. Correcting this 

wrong would be sufficient to prevent Trust Fund insolvency. 

The bottom line is that I’m confident that Congress will fix the Highway Trust 

Fund shortfall. How we do it is yet to be determined—the interest approach is just 

my preference. 

Senator BOXER. Senator Udall. 
33 

OPENING STATEMENT OF HON. TOM UDALL, 

U.S. SENATOR FROM THE STATE OF NEW MEXICO 

Senator UDALL. Thank you very much, Chairman Boxer. 

Secretary LaHood, it is great to have you here today. 

I am not going to put any statement in the record, but I would 

just like to briefly say that I think the Highway Trust Fund is very 

important to our transportation system and we know that it needs 

additional revenue. 

There are a number of proposals that are on the table. Raising 

the gas tax, which I understand the Administration does not want 

to do. Create some kind of new fee or tax or something along the 

line based on vehicle miles traveled, which would be another way 

to look at that. Toll roads and congestion pricing. 

I know that the National Surface Transportation Infrastructure 

Financing Commission has talked about increasing fees on freight 

movers. I think at a time of reform that what we should be looking 

at are the folks that are using the roads. Are they using them and 

paying their fair share? I think we have heard for years and years 

and years that freight movers do not necessarily pay their fair 

share, so I think we need to look at that. 

So, I am happy to have you here today, Secretary LaHood, and 

I look forward to your and the Administration’s suggestion to us as 

to how we move forward. I know one of your suggestions is that 

we delay the Transportation Bill and I think that is something that 

we need to discuss and take a look at. 

So, thank you for being here. And Chairman Boxer, it is great 

to be here with you today. 

Senator BOXER. Thank you so much. We will go to Senator—— 

Senator INHOFE. Before we move on, let me mention that I have 

the same problem that we always have. We are making up the Defense Authorization Bill, so I am going to have to be going in and 

out of this thing right now. 

Senator BOXER. Well, we will miss you for sure. 

[Laughter.] 

Senator BOXER. I mean it. I am not kidding. I mean it. This is 

my ally on this. 

So, we are going to go to Senator Vitter, then we are going to 

go to Senator Lautenberg. 

OPENING STATEMENT OF HON. DAVID VITTER, 

U.S. SENATOR FROM THE STATE OF LOUISIANA 

Senator VITTER. Thank you, Madam Chair. 

Thank you, Mr. Secretary, for being here and, more importantly, 

for all of your leadership and all of your work. I really appreciate 

it. 

I feel strongly with regard to this issue in support of two principles. No. 1, we need to continue the highway program and continue that vital work. No. 2, we should not borrow more money on 

top of everything we have borrowed over the last several months 

and the last several years to do it. 

Because of that, I have introduced a bill that Chair Boxer has 

referred to, and it would extend the Highway Trust Fund and backfill the program exactly as the Administration has talked about for 
34 

the same time period, but do it from already appropriated stimulus 

funds. Let me make some important points in that regard. 

First of all, we would adopt exactly the same timeframe and the 

same extension as the Administration, I believe, has talked about, 

which is 18 months. So, whatever timeframe you all would envision, it would be the same timeframe. 

No. 2, it would backfill the fund with stimulus funds and, in 

doing so, give maximum flexibility to the White House and the Administration in determining how best to do that. We would not 

micromanage where to take it, or how to move the money around. 

We would suggest maximum flexibility to the President and the 

White House. And I think that is important, to give the Administration all of those options. 

No. 3, under language actually contained in the bill, if we were 

to come up with a new highway bill, a more permanent fix, a more 

permanent extension, this legislation would immediately sunset 

and would be replaced with the provisions of that highway bill. 

So, if we can come together and pass a highway bill next year, 

and it would take effect before those 18 months are passed, then 

my bill would sunset, that would end, and whatever provisions of 

the new highway bill that are applicable, those would apply. 

I think this is the right way to go for three reasons. No. 1, we 

have enormous exploding debt and we should not add to it. No. 2, 

this is exactly the sort of shovel-ready infrastructure spending for 

which there is a broad bipartisan consensus in the Congress and, 

in fact, a lot of us wanted a heck of a lot more of this than the 

3.5 percent in the stimulus bill. And No. 3, this does give maximum 

flexibility to the Administration in order to figure out how to do it. 

At the end of the day, by the time the stimulus bill is completely 

worked through, I am personally confident that we are going to 

have more than that $20 billion that cannot be spent for various 

reasons, or has not been accepted by the States. 

Now, we do not have that identified yet. But I believe that at the 

end of the duration of the stimulus bill, we will have more than 

that. So, let us give the Administration maximum flexibility to 

identify how to do that in the meantime, and take these funds from 

the stimulus. 

In our private conversation before the hearing, you mentioned 

that economic advisors at the White House, including Larry Summers, are looking at ways to pay for this backfill outside the stimulus. My only comment would be, if those exist in the budget, those 

should be used to pay down debt and pay down spending, and we 

should still use stimulus funds to backfill the Highway Trust Fund 

in this manner for the next 18 months. 

So, I look forward to working with you, and the Administration, 

and other members. This proposal has got a lot of early interest. 

It has only been circulated a couple of days and it has got a lot of 

early interest, including bipartisan interest, so I look forward to 

following up on that. 

Thank you, Madam Chair. Thank you, Mr. Secretary. 

Senator BOXER. Thank you, Senator Vitter. I am glad you talked 

about 18 months. I think that is really key for me, too, because otherwise I think that it is too short an extension. 

OK, we have Senator Lautenberg, Cardin and Carper. 
35 

OPENING STATEMENT OF HON. FRANK R. LAUTENBERG, 

U.S. SENATOR FROM THE STATE OF NEW JERSEY 

Senator LAUTENBERG. Thank you, Madam Chairman. 

Welcome, Mr. Secretary. We obviously hope that you bring, that 

you are the bearer of, good news. Now, the only question is, how 

much of news is good news? It has got to be a pretty big package, 

as you know, because we are working against all kinds of odds and 

becoming more impatient, less abusive of the environment, and 

more dependent, relatively speaking, on foreign oil. 

We see, by the end of the summer, the Highway Trust Fund is 

likely to run dry, delaying essential repair and construction 

projects from coast to coast and costing hardworking Americans 

their jobs. At a time when we need more investment in our transportation infrastructure, we cannot afford to go belly up in August. 

We cannot afford to go belly up anytime. When you think of what 

the needs are and what is being proposed, the two do not exactly 

meet. 

I salute a recommendation that says, look, let us just make sure 

that we keep this traffic moving by having a reasonable time extension on the current bill, and give us a chance to think through the 

problems that we have to work through in order to make the whole 

program more efficient. 

It has been more than 2 years, for example, since the tragic 

bridge collapse in Minneapolis. Two years, and still more than 25 

percent of our Nation’s bridges are classified as deficient. In my 

home State of New Jersey, 34 percent of our bridges are classified 

as deficient. 

We look at the funds coming to us from the Federal Government. 

I know how hard the Administration is trying and how hard it is 

on all of us to look at the bumps in the road, the delays in traffic, 

the foul air, all of those things, and not be looking at a plan that 

says we are really going to grab hold of this. 

My State, for instance, ends up being a thoroughfare State. Our 

traffic, not just from New Jersey people, but from people who are 

doing their traveling through our State and across our State, the 

load is so heavy it is almost impossible to carry. So, we need to invest and expand transit options because they are more convenient 

and more energy efficient and in this economy, with today’s endless 

traffic, people are looking to both use less time on the road away 

from their families and away from their jobs, and looking to save 

money as well. 

In 2008, Americans took nearly 11 billion trips on public transportation. The highest ridership level in 52 years. And this record 

ridership establishes that people will choose transit if the option is 

there. 

President Obama and Secretary LaHood have offered a plan to 

keep the Highway Trust Fund solvent on a short-term basis. I commend you for it. But I cannot believe that we can do anything that 

is less than a single year extension to the current law and be able 

to give us the time necessary to write a comprehensive authorization bill that meets all of our transportation needs. 

I look forward to working with you and the Administration to 

quickly pass an extension that protects our transportation prior-
36 

ities. And, as we finalize this short-term solution, we have got to 

get to work on the longer term solution. 

Senator Rockefeller and I have introduced a bill that would take 

a long-term and large-scale approach to transportation planning. It 

would set a national transportation policy that puts on a track to 

repair, maintain and modernize our Nation’s infrastructure. 

And I look forward to working with our Chairman, who is really 

energized about this, sees the crisis that we face and reality. And 

with you, Mr. Secretary, and President Obama, as we look to improve these important benchmarks in the next surface transportation bill. 

Just to summarize, it looks to me like the only option we have 

now is an extension of the current bill long enough to give us a 

chance to catch our breath, catch up to our planning, deal with 

other problems that are of an emergency nature, and get on with 

repairing a system that has been a long time broken down. 

Thank you. 

Senator BOXER. Senator Lautenberg, I just want to associate myself with what you said about the need for a transformational policy. It is essential. And that is why I, too, favor, this short-term extension, this 18 months, because we have so much work to do 

across party lines, with the Administration, so that we get it right. 

I think that your statement was quite eloquent and I just wanted 

to congratulate you on it. 

Senator Barrasso. 

OPENING STATEMENT OF HON. JOHN BARRASSO, 

U.S. SENATOR FROM THE STATE OF WYOMING 

Senator BARRASSO. Thank you very much, Madam Chairman. I 

do have a statement that I will include in the record. 

I want to thank the Secretary for being here today to share your 

thoughts and your ideas. 

Wyoming is a State of big geography, long miles and Interstate 

80 running through the State gets a significant amount of truck 

traffic that does not either originate or end in Wyoming. So, we 

have specific needs. 

I agree with Senator Lautenberg. We do need a short-term strategy. We need a long-term strategy. The question is, how are we 

going to pay for it? People talk about either cutting spending or increasing revenue. This is not a time when I think we should be 

looking at increasing gasoline taxes for the people of America. 

What I would like to see is using money that is already part of 

the stimulus plan for projects that are ready to go and use that 

money to deal with our short-term immediate needs. 

With that, Madam Chairman, I will just submit my statement 

for the record and look forward to hearing from the Secretary. 

[The prepared statement of Senator Barrasso follows:] 

STATEMENT OF HON. JOHN BARRASSO, 

U.S. SENATOR FROM THE STATE OF WYOMING

Thank you, Madam Chairman and Senator Inhofe, for holding this hearing. We 

would not be here today addressing the Highway Trust Fund issue without your 

leadership. 

Thank you, Secretary LaHood, for taking the time to testify this morning. 
37 

Wyoming is a bridge State that allows the flow of commerce to move from coast 

to coast. I–80 captures over 60 percent of truck traffic, most of which does not originate or terminate in Wyoming. 

Wyoming’s short construction season cannot afford to be cut short. Our construction contracts cannot afford to be suspended. 

Last year we were put in the same position. Fix the trust fund or stop highway 

construction across the Country. 

For months now we have known that the trust fund is going to run out of money 

again. And here we are today. The trust fund needs another bailout. But we have 

not seen a plan yet. 

We all agree that something must be done. But how are we going to pay for it? 

In order to pay for something we either need to cut spending or raise the revenue. 

I can tell you now raising the gas tax is a not an option. 

There is plenty of wasteful Washington spending we can cut to pay for the trust 

fund bailout. Or we could use unobligated stimulus funding since there is still a lot 

of that to go around. 

There is not a question of available money to fix the problem. The question before 

us is how do accomplish this in a responsible manner. We must protect the taxpayer 

and ensure our States can continue to execute their transportation plans. 

The trust fund uncertainty we face today leads to the question What happens if 

we don’t have a bill by October 1st? 

If we are going to take up a long-term highway bill extension it needs to be clean, 

reliable and responsible. The highway program is already complicated enough. 

As we work through these issues we must keep in mind this is not all about congestion. Congress must not lose sight of the importance of a national, interconnected 

system of highways that includes access for rural America. 

Thank you, Madam Chairman, for your leadership in holding this hearing. 

Senator BOXER. Thank you, Senator, very much. 

Senator Cardin. 

OPENING STATEMENT OF HON. BENJAMIN L. CARDIN, 

U.S. SENATOR FROM THE STATE OF MARYLAND 

Senator CARDIN. Madam Chairman, thank you for conducting 

this hearing. 

I want to welcome Secretary LaHood and thank him for his continued service. We very much appreciate your leadership within 

the Department of Transportation and the aggressive way that you 

are going after trying to find solutions to our Nation’s infrastructure needs. 

I think we all understand the practical problems of a temporary 

or short-term extension. It allows for the infrastructure improvements to continue to be made and to search for long-term solutions 

that will be adequately funded so that we can invest in America’s 

future. 

I think we have to be honest about it. We are going to have to 

take a look, make some hard decisions. I would hope that it would 

be a given that we need to advance the infrastructures of America. 

We know the dire needs that are out there. We understand the economic impact of this. So, we need to make sure that we get it done 

right. 

Madam Chair, I just really want to underscore what is at stake 

here by mentioning what happened Monday night in a WMATA 

train that was heading between Maryland and the District and in 

which several people lost their lives, the worst tragedy in 

WMATA’s history. Our prayers go out to the families, the victims, 

those whose lives were forever changed as a result of that tragedy. 

Now, we do not know what happened. The National Transportation Safety Board is conducting an investigation and they will 

have our complete support. It will take at least several months be-
38 

fore the conclusions from that investigation and we need to make 

sure that goes forward. 

But one thing is clear. The WMATA system is stretched. It is 

strained. It is old. Last year, I visited the Shady Grove Station and 

took a look at the platforms there. They are literally being held up 

by wooden planks. They need help. This is an old system. This is 

America’s system. Almost half of the ridership on WMATA is individuals going to and from Federal facilities as workers. Ten percent 

is in the Capital Complex and the Pentagon alone. So, we have a 

direct responsibility here. 

Last year, I was proud that we did pass, at long last, a game 

plan for adequately funding this transit system, the second busiest 

in America, which does not have a dedicated revenue source. And 

we did pass a framework to get that done where the District, Maryland and Virginia have agreed to match Federal participation. 

The difficulty here, Madam Chairman, and I just want to point 

this out because the Appropriations Committee will be meeting 

shortly and going over the transportation appropriation for next 

year. They are going to have a lot of conflicting needs. I understand 

that. It is a very tough budget. 

Last year, we authorized $1.5 billion of Federal funds over 10 

years for the WMATA system. That passed this Congress by overwhelming support. Now, the first installment is due this year of 

$150 million. It is not in the President’s budget. 

I understand that the budget was put together in a difficult moment. And I appreciate Secretary LaHood’s commitment to work 

with us to try to find adequate funding for the WMATA system. We 

need to do that, working with this Committee, working with the 

Appropriations Committee, because literally the safety of the ridership is at stake here. We know the trains are too old and need to 

be replaced. And, by the way, Congress came up with over $100 

million to help replace some of those trains. We need to be more 

aggressive at it. 

So, Madam Chair, as we are looking for ways of short-term extension of our current surface transportation program so that we 

can make sure that our roads and our bridges and our transit systems around the Nation are advanced and maintain, I just want 

people to understand how urgent this need is. Look what happened 

Monday night right in this community and know that we have to 

make a stronger commitment toward our Nation’s infrastructure. 

[The prepared statement of Senator Cardin follows:] 

STATEMENT OF HON. BENJAMIN L. CARDIN, U.S. SENATOR

FROM THE STATE OF MARYLAND

Madam Chairman, thank you for holding this hearing, and I very much appreciate Secretary LaHood and our distinguished panel taking the time to come before 

us to talk about this other pending financial crisis. 

Before we start, I want to once again extend my sincerest condolences to the families, friends and others who suffered losses during Monday’s tragic Metrorail accident. It is also a reminder of how important our transportation infrastructure is to 

the fabric of our lives every day. In that sense, today’s hearing couldn’t be more 

timely. 

As the causes of this accident continue to unfold I would encourage this committee 

to look into the safety measures that can be taken to prevent such tragedies in the 

future. 
39 

Our Nation’s transportation infrastructure is something we largely take for granted. We may wonder about how we may get some place but we hardly ever worry 

about if we can get there. 

America’s transportation system is incredibly reliable. But that reliability relies 

on adequate funding. It is no coincidence that both our transportation and energy 

systems are simultaneously at a crossroads. They are connected to each other by 

what drives them both—fossil fuels. 

It is on the issue of fuel where these intersecting infrastructure systems, and the 

Federal policies on energy and transportation, diverge from one another. 

Americans are encouraged to use less energy as a means of saving money, reducing our reliance on foreign oil and reducing carbon emissions—all of which I support. To many people this means driving less, purchasing fuel efficient vehicles and 

using public transportation to get around. Unfortunately, our transportation funding 

system relies on sustained, if not increased fuel consumption. Clearly, reconciliation 

between these two policies must be made. 

My State’s Department of Transportation has informed me that if Congress does 

not address the projected negative balance in the Highway Trust Fund this summer, 

the Federal Highway Administration will not be in a position to reimburse Maryland for Federal eligible expenses that FHWA has committed to funding. 

That means MDOT will be in a fiscal situation where they will have to ‘‘float’’ 

as much as $30 million in expenses if a 3-week delay occurs—this deficit will only 

grow as Federal funding is further delayed. 

Maryland, like most States, may not have sufficient cash balances to float expenses without adversely impacting project schedules. 

At MDOT, some contracts would have to be delayed and in some cases work under 

contract will have to be stopped. It is important to note that this slow down would 

be counter to our overall stimulus efforts. 

We cannot continue to write checks without the funds to back them up. All options must be on the table. The Administration has said it would not support an 

increase in the gas tax. Where then will the needed revenues come from? We can 

and should be more efficient, but we also have to be frank that we need additional 

revenues. 

This means considering expansion of the Vehicle Miles Travelled pilot program. 

I have advocated using revenues from the Cap and Trade system to support public 

transportation systems—which would free up more funds for roads from the Gas 

Tax funded Trust Fund. 

Others have suggested a fee system based on parking. Still other concepts have 

been advanced. What we need is some candid and specific suggestions from the Administration about how it intends to meet our funding needs. 

I look forward to hearing your ideas for addressing this problem and working with 

you and your Department to finding solutions. 

Senator BOXER. Very well said, Senator. 

Senator Carper followed by Senator Merkley. 

OPENING STATEMENT OF HON. THOMAS R. CARPER, 

U.S. SENATOR FROM THE STATE OF DELAWARE 

Senator CARPER. Thank you, Madam Chair. 

Secretary LaHood, welcome. It is very nice to see you. I wonder 

what it is like sitting on that side of the table as opposed to this 

side. You look pretty comfortable, at least so far. 

[Laughter.] 

Senator CARPER. This is an important issue, as we all know, a 

rather serious problem. We appreciate very much your thoughts as 

to how we might address this problem. 

I have, we have, a simultaneous meeting going on in the Finance 

Committee on Health Care Reform and I need to slip over there, 

so I will not be able to stay for as long as I would like. But we are 

grateful for this opportunity to have some conversation and look 

forward to more in the months to come. 

I want to applaud the Administration’s proposal for an 18-month 

extension of SAFETEA-LU. Though we would all prefer a full au-
40 

thorization bill now, I do not believe that is practical given our current economic environment and our funding uncertainties. 

But when we do pass a full authorization though, I believe that 

we must increase our Nation’s investment in transportation. When 

the economy begins to improve, and I see growing signs that at 

least we are bottoming out and I am encouraged by that, but when 

the economy improves I think some increase in the Federal gasoline tax would be an important component of that investment. 

However, we cannot expect the American people to pay more 

until we refocus the existing transportation system that we have. 

The looming insolvency of the Highway Trust Fund and the expiration of SAFETEA-LU in September provide this Committee, and I 

think, the Congress and the Administration, with an important opportunity to set the stage for transportation reforms. 

We can start now by instructing the Department of Transportation to study performance objections. And we can enhance the 

data collection and modeling capabilities of the Department as 

well. 

I do appreciate your willingness to serve in this capacity. I really 

appreciate your leadership on this issue and we look forward to 

hearing the Administration’s suggestions on how we can use this 

opportunity to set the stage for greater reforms to come later. 

Good luck. Thanks again for joining us. 

Senator BOXER. Thank you very much, Senator. 

Senator Merkley. 

OPENING STATEMENT OF HON. JEFF MERKLEY, 

U.S. SENATOR FROM THE STATE OF OREGON 

Senator MERKLEY. Thank you very much, Madam Chair. 

Thank you, Mr. Secretary, for being here to watch this process 

of wrestling with our transportation bill. I am very glad to see that 

you are going to be out in Oregon next week. I believe that I am 

going to have a chance to meet with you, briefly, on the morning 

of July 1st. It looks like I will not be able to escort you on the 

streetcar ride, which I had hoped to do, but I know you are going 

to be well taken care of out there. 

This bill, obviously, is going to be very important to Oregon as 

to the other 50 States. I know you are engaged in dialog with my 

colleague on the House side from Oregon, Congressman DeFazio, 

about structure and strategy. I will certainly be engaged in the 

substance of the issues and appreciate the challenges that come to 

bear on meeting this shortfall in the Trust Fund and continuing 

the development of multitudinous goals within our transportation 

system. 

So, thank you. And, like my colleague, I have to go to the Health 

Committee, so I also apologize. I cannot be here for the duration 

of the hearing. 

Thank you. 

Senator BOXER. Thank you, Senator. 

Senator Voinovich. No? 

Senator VOINOVICH. During the question period? 

Senator BOXER. Excellent. 

Senator VOINOVICH. OK. 

Senator BOXER. Well, it looks as if we are—yes? 
41 

Senator INHOFE. We have not heard his opening statement yet. 

Senator VOINOVICH. Oh, we have not? 

Senator BOXER. No, we have not. 

Senator VOINOVICH. Well, I will hold my powder until the questions. How is that? 

Senator BOXER. Sounds very fair. 

Well, Secretary LaHood, welcome, and the floor is yours. I think 

we should say 7 minutes for a secretary. Seven minutes, yes. 

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

DEPARTMENT OF TRANSPORTATION 

Secretary LAHOOD. Thank you. 

Before I begin my formal testimony, I want the Committee to 

know that the thoughts and prayers of all of us at DOT are with 

the families who lost loved ones in the Metro crash on Monday. I 

met this morning with the General Manager of WMATA, John 

Catoe, and he and I had a lengthy discussion about what we can 

do to assist with the way forward. There are opportunities to improve safety in the Metro system and we will continue to work with 

Mr. Catoe’s staff along the way. 

I know this is not under the jurisdiction of this Committee, but 

as the Secretary of Transportation, I agree with Senator Cardin 

that this is America’s metro system. And when you look at the 

enormous number of people who were delivered around this region 

during the Inauguration, and so many tourists who use this system, I felt it important that I express these thoughts. 

I appreciate the opportunity to discuss the state of the Highway 

Trust Fund and its impact on Federal surface transportation programs. I want to begin by updating the Committee on the department’s progress in implementing the American Recovery and Reinvestment Act. As of today, we have obligated $19 billion, roughly 

40 percent of the total appropriated to the Department of Transportation. We have made these funds available for more than 5,300 

approved transportation projects in all 50 States and 3 Territories, 

and over 1,900 projects are underway. 

I am proud to report that the department has met every statutory deadline imposed by Congress and that every State has obligated 50 percent of its highway related recovery funds within the 

first 120 days as the law required. 

Traveling around the Country with the Vice President, I have 

seen firsthand the positive impact this program has had on workers and their communities. Through the Recovery Act, we are putting people back to work while revitalizing our roads, bridges, rails, 

airports, transit systems and seaports. 

We must solve our long-term infrastructure financing challenges 

so we can show the American people that we will build on this momentum and continue to invest in our transportation needs for the 

future. 

As you know, we anticipate that the Highway Trust Fund will 

be unable to sustain current spending levels into 2010. We have 

shared with appropriate committees in the House and Senate our 

estimate that an additional $5 billion to $7 billion will be needed 

through the end of this fiscal year, and another $8 billion to $10 

billion through fiscal year 2010. 
42 

Clearly, this situation cannot continue. We have inherited a system that can no longer pay for itself. Let me assure the Committee 

that we are monitoring the situation very closely. We are ready to 

take proactive steps to manage the cash-flow balance in the account. 

Last week, I proposed an immediate 18-month highway reauthor- ization that calls for a $20 billion cash infusion into the Highway 

Trust Fund to cover our needs through March 2011. We look forward to working with Congress on a full reauthorization measure 

for surface transportation programs, but we do not believe this important legislation should be rushed. In the interim, we must keep 

the Trust Fund solvent, and we will work closely with the White 

House and Congress to identify appropriate funding and offsets. 

Critical reforms are needed as a part of this effort to help us better make investment decisions focused on smarter investments in 

metropolitan areas and promote the concept of livability to more 

closely link home and work. 

As we move forward, several key principles and priorities should 

be our guide. First, we need transportation funding mechanisms 

that are both sustainable and flexible. Tying revenues to an unpredictable source like the fuel tax is simply inadequate to our needs. 

We need access to resources that will enable us to plan for and execute far-reaching transportation programs that meet our goals for 

safety, mobility, economic competitiveness, environmental stewardship and livability. Therefore, we must diversify sources for transportation funding. 

The Treasury’s General Fund, the national infrastructure bank, 

public-private partnerships, and, in some instances, user fees, are 

just some of the mechanisms we must consider over and above our 

current financing approach. In addition to ensuring we must invest 

adequately in new transportation needs for the future, we must 

also bring our current transportation system into a state of good 

repair. We must get a much better handle on this issue and step 

up efforts to assess the capital needs across all modes. 

Other priorities that require sustainable funding include reducing energy consumption all across modes, investing in intelligent 

transportation technologies, and making public transportation even 

more accessible to suburban, rural and transit-dependent populations. 

The new Surface Authorization Program offers all of us an opportunity to refocus our investments so that all Americans have access 

to the safe and efficient transportation systems they need and deserve. We must approach this task with a renewed sense of accountability and discipline by ensuring that we invest our limited 

resources wisely so that we can measure the results. 

I will be happy to answer any questions. Thank you for the opportunity, Madam Chair. 

[The prepared statement of Secretary LaHood follows:] 
43 
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46 
47 
48 
49 
50 
51 
52 

Senator BOXER. Thank you, Mr. Secretary. 

We will have 5-minute rounds and go around to people until they 

feel they have asked enough questions. 

Mr. Secretary, after we solve this current funding crisis, and I 

do want to thank you for stepping up to the plate instead of just 

walking away and saying it is your problem, Congress, you came 

forward and we appreciate that. I certainly want to work with you 

on a comprehensive and transformational multi-year authorization 

that will improve all the modes of our Nation’s transportation system and their impacts on our environment. 

I know you have been doing some thinking on this and, as a matter fact, I have some view into it, but if you could, for the record, 

tell us some of the things that you would like to tackle in the long 

term to really transform our transportation system. 

Secretary LAHOOD. My priorities are priorities that I really have 

worked on in collaboration with President Obama. There is no 

question that, when you look at $8 billion for high-speed rail, that 

is the President’s priority. 

We do not have high-speed rail in America. Folks from your 

State, Madam Chair, have been working, as you know, decades to 

get to high-speed rail. They are in a very good position, and we are 

going to be helpful, and we are going to work with them. But 

where are other regions in the Country on high-speed rail? That is 

a new initiative. That is President Obama’s initiative. 

We also believe that people are tired of being in traffic jams for 

90 minutes trying to get to a grocery store or get to work. We believe in the concept of livable communities where you create modes 

of transportation, whether it is transit, bus, streetcars or light rail, 

so that people do not have to drive an automobile everywhere they 

go. 

You can do this in urbanized areas by creating livable neighborhoods, or you can do it in communities. Portland, Oregon is a very 

good model for this. So, the concept of livable communities is part 

of what we believe should be the transformational aspect of this, 

placing more emphasis on transit. 

I met with a number of port officials from your State yesterday, 

Madam Chair. We believe that ports can be the economic engine 

now for many parts of the Country, not only in creating jobs. So 

we will put a good deal of emphasis on the marine highway. We have $1.5 billion in discretionary money. We are looking at 

some very strong applications from ports around the Country to enhance their ability to create more capacity. We are being out-competed by our friends north and south of our Country. So, we want 

to work on opportunities to really enhance our ports. 

We believe in enhancing transit and other modes, and we are always going to sustain our highways. We have a state-of-the-art 

interstate system. It is second to none anywhere in the world. We 

are not going to give up on that. We have to have the resources 

to make sure we take care of it. We know that it is the lifeline for 

many rural parts of the Country. It is the only way that many people can get around. 

But we need to think also outside of the box on how we pay for 

these things. And that is why we have talked about tolling, publicprivate partnerships, and an infrastructure bank, which I know 
53 

some people on this committee like and others do not. But we need 

to think outside the box. The Highway Trust Fund is insufficient 

right now to meet all the things that we want to do. 

So, those are probably three or four things that we thinking 

about out of the ordinary traditional way of thinking about an authorization bill. Some of this comes from people that we have met 

with in the Senate and House that want to implement these things, 

and some of it comes from people in our department, too. 

Senator BOXER. Well, thank you. I met with my port people. I 

think it was right before they met with you. I am glad that you 

had a good meeting with them. 

I think there is no question, I guess a few of us here have ports, 

and we know what engines they are for growth, moving the goods 

in and out. In Los Angeles, we bring in 40 percent of the imports 

and then we move them across, through Senator Barrasso’s State, 

and he has impacts from that as all my colleagues do, as the goods 

move through on these heavy trucks. So, we all are bound together 

on with what happens at our ports. 

I would say that I really agree with you because, at this point 

in time, my ports cannot expand because the air is so polluted. The 

trucks sit there and they are belching out all of these terrible toxins into the air. We still have, unfortunately, these big ships that 

are still using bunker fuel. We are making progress on getting rid 

of this. And if you look, and we have had hearings on this, at the 

incidences of cancer, they are clustered around our ports. 

So, for reasons of health and reasons of economic growth, we 

need to figure this out. So, I am very glad you raised the issue of 

our ports. 

My State bonded itself. The people voted to bond themselves up to $9 billion for high-speed rail. So I am glad you mentioned that. 

We see it as a way to be able to jump on a train and go between 

San Francisco and Los Angeles, instead of taking your car or even 

a bus or even a metro to the airport. It just saves time. It is a 

cleaner way to go and a very pleasant way to go. 

That is why I very much want to get to the 5-year bill. I want 

to get to that transformational bill. But I recognize, and again Senator Lautenberg spoke for me with the very words he used, that 

at the moment, with the Trust Fund so depleted, we have to figure 

out a way to replenish it. I will tell you that there is a lot of push 

back on an infrastructure bank. I do not need to get into that with 

you. 

A lot of us on this Committee want to find a way to fill the Highway Trust Fund and do it in a way that makes sense. That the 

users pay. We already see truckers stepping up to the plate to help 

us. We want you to keep your mind open, in the Administration, 

because we think that the Highway Trust Fund works. 

And with that, I will turn it over to my friend and partner. 

Senator INHOFE. Thank you, Madam Chairman. 

I know the title of this meeting goes beyond just the 18-month 

extension, but that is, frankly, all I am concerned about right now 

because that is the immediate problem that we have. I alluded to 

this, Mr. Secretary, in my opening statement. 

Last September, and I do not recall the exact date, when the crisis hit us, and at that time you were not in the position that you 
54 

are in now but I was, we had what I felt was an equitable solution. 

My own President, President Bush at that time, objected to it. I 

went to him, and he even said if you try to do that, I will veto it. 

Well, the idea was, and it was back in 1998, then-President Clinton took $8 billion out of the Trust Fund and put it in the General 

Fund. There was a reason for doing that at the time, it was to 

make the deficit look smaller and all that. I objected to it at the 

time. In fact, I think that everyone on this panel who was serving 

at that time objected to it, because there was an honesty issue 

there. 

I know I am taking too long on this, but I think it is important 

because I am coming up with a solution that I would like to have 

you give serious consideration to. 

The moral issue there was that we have a Trust Fund, people 

put money into that as they are using it. It is a user fee. They do 

not really object to that. It is a popular tax, if there is such a thing. 

But then, that is under the assumption that the money they put 

in goes to fixing roads, highways and its intended purpose. 

Now, when they took $8 billion out, that was a violation of that 

confidence in that tax. So, I went to them, at that time, and they 

said that if we would take that back out and undo the damage that 

was done 10 years before and put it back into the Trust Fund, it 

would, No. 1, fix the crisis we had at that time, and No. 2, it would 

correct something that should not happened 10 years before So 

that happened and the President did not veto it. In fact, it was 

scored at zero, as budget neutral. 

Now, I would only say that, if that was the right thing to do 

then, and I think it was the right thing to do then and we did it 

then, what is wrong with going back and then recouping the interest, which is about $13 billion? If it was right to recoup the principal, then it would be right, equally, to recoup the interest. 

So that is my first question. Where are you going to be on that 

when we try to propose that? 

Secretary LAHOOD. Well, Senator, I need to really see if there is 

any interest that has accrued on this money and look at that. 

Senator INHOFE. OK. Let us just go under the assumption that 

I am right, because I have already checked into it. 

[Laughter.] 

Secretary LAHOOD. My feeling, Senator, is that you all need to 

know that I had a meeting with Larry Summers yesterday, and we 

talked about this issue. And I want you to know, and I want the 

entire Committee to know, that the folks at OMB are trying to find 

the money to get us to $20 billion through March 2011. That is our 

goal. There are a lot of people working on this. 

I will be happy to take your suggestion back to these folks. I had 

a discussion with Senator Vitter about his bill, as well as the suggestion that he is making in the bill. 

Senator INHOFE. Which I agree with. I want to say that I agree 

with Senator Vitter. Well, he is not here now. I am just saying that 

we have some choices here. 

Secretary LAHOOD. The thing that I want you to know, and I 

want every Committee member to know, there are a lot of people 

putting their heads together right now to figure out how to, where 
55 

to get $20 billion and how to pay for it. I will take your suggestions 

back to them. 

Senator INHOFE. Well, first of all, we are talking about on an 18- 

month extension. What figure would you like to use for the 18- 

month extension, forgetting about—— 

Secretary LAHOOD. Twenty billion. 

Senator INHOFE. Well, it is my understanding that it is not that 

great. But we can go back and look at other—— 

Secretary LAHOOD. Well, Senator, I mean we have some very 

smart people in the department. And they—— 

Senator INHOFE. Well, I know we are not very smart up here, but 

we, I have heard—— 

Secretary LAHOOD. My statement did not imply that you were 

not smart because I know you are. I am just saying, all of the 

smart people at the department put their heads together, and we 

figured out that it is about $20 billion through March 2011. 

Senator INHOFE. OK, I am just asking, in a very friendly way, 

and you and I have been friends for a very long time, that there 

are ways of doing this, and that was something that was done to 

everyone. Then, afterwards, even though they were opposed to it in 

the beginning, thought it was the right thing to do. 

The second question I want to ask you, because I think this is 

very important, if we do an extension, an 18-month extension, that 

will take us out of this crisis in time. But, in my opinion, and the 

initial understanding that I had, not from you directly to me but 

just from things that I heard, was that it would be a clean extension. I know a clean extension is something that the Republicans 

want. I think that I would like to know where you are and where 

the Administration will come down on a clean extension. I mean, 

none of the reforms, none of the other stuff. 

Secretary LAHOOD. I was in the same meeting that you were, 

and it was pretty clear in that meeting that the folks around here 

are not very keen about talking about anything other than a clean 

extension. I got the message on that and I delivered the message 

yesterday to our friends at the White House about it. They would 

still like to have, as part of the discussion and the debate on this, 

some of these reforms. But I know where you are on this. You want 

a clean bill. 

Senator INHOFE. OK, that is good. By the way, my time has expired, but I had a nice evening last night with your old boss. I enjoyed it. 

Secretary LAHOOD. Oh, thank you. He is doing well. 

Senator BOXER. Senator Lautenberg. 

Senator LAUTENBERG. Thank you, Madam Chairman. 

I look at the situation that we are in, and I think that what we 

see is a house on fire. We hear now that an upgrade is critical for 

WMATA. That it should have been done. What future disasters 

might fall upon us? How much more wear and tear is going to take 

place before we start seeing serious improvements in our transportation system? 

We need more of national leadership. I do not know why this is 

not seen as a crisis of major proportion, described that way. I do 

not diminish other things. I do not diminish the war efforts that 
56 

we are involved with, making sure those troops are amply taken 

care of. But this is a crisis. And we are facing several of these. 

We have the crisis with foul air and the declining quality in our 

environmental condition. Why are not things like some of those 

used in the past identified as emergency actions to be taken now? 

Maybe we ought to just, say, go back a little bit. I do not want to 

use a time line because mine goes further than anybody else in this 

room. But the fact of the matter is, that maybe things like an analysis of whether slower driving is going to reduce the amount of pollution in the air, or is going to reduce the amount of fuel that we 

have to import. Perhaps other things that are not obvious. 

We cannot grow money. That is the problem. And we need it desperately because of neglect. We did not take care of the functions 

of our transportation system, the functioning parts. When you described, and I read carefully, Mr. Secretary, with respect to what 

you said, 53 percent of our highway miles traveled are on roads 

less than in good condition, 30 percent of our bridges are structurally deficient, 22 percent of our transit buses and 32 percent of 

our transit rail cars, are all over age. I know, personally, that 

things over age can be effective—— 

[Laughter.] 

Senator LAUTENBERG. But why are not these things in emergency conditions? Mr. Secretary, would it not be wise to put more 

money immediately into transit programs to make sure that the 

places there are shovel and pick ready to go in lots of places 

throughout the Country? You get people back to work. That is one 

of the critical issues that the Country is facing and that President 

Obama is committed to reducing. 

And yet, I would like to see more clean air for my asthmatic 

grandchild and, therefore cleaner air for all asthmatic grandchildren. We can do those things if we invest in mass transit and 

reduce the pollution that is thrown at us because of our consumption of fossil fuel. 

So, Mr. Secretary, does that strike a note with you that says, yes, 

this is some place where we have got to go? 

Secretary LAHOOD. Senator, we at the department are committed to all modes of transportation. I will tell you this. The $8 billion 

that was in the Recovery Act for transit is being well spent. It truly 

is. On some very, very important—— 

Senator LAUTENBERG. Is being immediately spent? 

Secretary LAHOOD. Yes, sir. We have complied with every provision that Congress put in the bill for spending this money. And this 

money is going to be going out the door here very quickly. We are 

committed to transit. There is no question about it. If Congress decides they want to step up more funding for transit, we will find 

plenty of ways to spend it. 

Senator LAUTENBERG. Well, the thing that I am really pleading 

for here is, I am pleading for a message that says the transportation system is one of the critical parts of our functioning as a society. And that leadership in our Country says, look, do the things 

that you can do. Use cars, buy cars that have more efficient mileage. Drive less if you can do it. Drive slower. Ask the States to look 

at what are the consequences of higher and higher speeds on the 

highways. 
57 

It is an emergency condition, as I said earlier. The fire is in the 

cellar. Do we want to wait until the fire is up to the second floor 

before pouring lots of water on it? 

Thank you. 

Senator BOXER. Thank you, Senator. 

Senator Barrasso. We are going in order of arrival. 

Senator BARRASSO. Thank you, Madam Chairman. Thank you, 

Mr. Secretary. 

In your written testimony, you had mentioned that you would 

like to reform the highway program using kind of a long-term extension to make better use of what you called cost benefit analysis. 

About 70 percent of the entire Federal aid highway network is 

located outside of metro areas. And I express the same concerns 

that Senator Boxer did when she talks about the ports and the 

goods coming in to those communities and then getting sent across 

the States to get to a place like Chicago and how we use this cost 

benefit analysis. 

Could you talk a little bit about what your plan is for using cost 

benefit analysis to reform the highway program and how that is 

going to impact on rural areas? Because, if you do something along 

the lines of the number of cars per hour or cars per mile, there are 

clearly areas that are getting overused in terms of our highway 

system and with repairs and expenses, across Wyoming, Nebraska, 

Utah and similar states, where the actual total volume is down but 

the one truck equals that of 4,000 cars. 

Secretary LAHOOD. We want to make sure that every dollar that 

we spend, that we can say to the taxpayers, this is the best use 

of this money. All of you have been around long enough to know 

that people are tired of reading about transportation projects that 

are funded because of some sweetheart deal or some earmark or 

something like that. 

We want to get to a place where we can say to Congress, this 

is the best use of these dollars, and develop metrics to show that 

the infrastructure dollars are being spent as wisely as possible. 

There are metrics there for us to judge a transit project or a highway project so that, when somebody says, this was done because 

so and so wanted it done, we can say, no, the answer is it was done 

because the cost-effective metrics that we put in place said it was 

so. And it was needed. 

That is the place that we want to be, so we can justify every 

project using metrics that everybody understands. 

Senator BARRASSO. Well, I appreciate your comments, specifically 

about the sweetheart deals and the earmarks. We read now, in the 

last week, about the airport that nobody uses that is getting all of 

this money. So, I am encouraged by your comments that you are 

actually going to use cost benefit and point out and hold the people 

accountable for the sort of things that are being listed, that do not 

seem to be the best use of it. 

Secretary LAHOOD. Yes, Senator, that is where we need to get. 

That is what we want to do in working with Congress on an authorization bill so that there can be no criticism of Congress and 

no criticism of DOT, that we are all on the same page. These 

projects are worth funding, whether at an airport or somewhere 
58 

else, because of the metrics that we use that prove that it has a 

cost benefit to the taxpayer. 

Senator BARRASSO. It also talked a little bit about livable communities, if I could visit about that. Certainly, in Wyoming, we 

could have significant reservations about Washington, with its wisdom, coming in and telling the people of Wyoming what is a livable 

community and what is not a livable community in terms of how 

the Federal Government in Washington decides to spend its money, 

the one size fits all approach. I do not know if you wanted to comment a little on that. 

Secretary LAHOOD. Yes. No, this is not Washington speaking. 

This is people like Earl Blumenauer and Peter DeFazio, who come 

from Portland, OR, and who have, over a period of time, worked 

with their local elected officials, developed a streetcar system, and 

worked to develop housing along the streetcar system, so everybody 

in Portland does not have to get in automobiles in order to go 

where they want to go. 

This is not something that Ray LaHood dreamed up. This is the 

dream of Members of Congress who have seen it by working with 

their mayors, and their Governors, and their city councils for communities where people do not have to use an automobile to go everywhere. You do not have to have a three-car garage. You might 

have a car, but you might also have an opportunity to get on a 

streetcar, a light rail, a walking path, a bike path in order to get 

to work or get to the drug store. Look, Senator, I got this idea from 

being around here. 

Secretary BARRASSO. Thank you, Mr. Secretary. Thank you, 

Madam Chairman. 

Senator BOXER. Thank you. 

Senator Voinovich. 

Senator VOINOVICH. Hello? Does anybody hear us? Does this Administration hear from the folks out there that are in the business, 

that have all come together and said, we need a robust highway 

bill now? There is an urgency to it. It is good for our environment, 

good for our competitive position in terms of our economy, good for 

jobs. Good for jobs. 

You are talking about finding some money to keep us going at 

the level we are at. The $285 million we passed in 2005 was inadequate. It is way below what that is today. We are going to continue that? We have a $2 trillion deficit and you are going to have 

to find some money so that you can take care of us during the next 

year or 18 months? The way to get the job done is to pass a bill 

now. Urgent. Get it done. 

Madam Chairman, I would like you to know that this bill we 

passed in 1985 did not get the job done. No. 2, we have got stimulus money out on the street and that is going to evaporate. What 

the Country needs is to know that within the next 5-year period 

we are going to make a comprehensive commitment to the infrastructure, including high-speed rail, highways, ports and the rest 

of it, to get it done to the tune of about $450 billion. Can you imagine what that will mean in terms of our economy and giving some 

people confidence in where we are going? 

Is anybody listening when you have got every group in this 

Country that says we want this done now, we need it? I am going 
59 

to be doing some studies, Madam Chairman, about the impact that 

this is going to have on the reduction of jobs. It is going to take 

a balloon that has a little air it and looking forward to having a 

whole lot more air, and the balloon is just going to subside and 

there will not be anything there. And that would be awful for our 

economy. 

Does anybody know how bad it is out on the street? Does anybody know how many businesses have gone out? Do you know how 

many businesses are on the fringe, right now? They have got to 

have some kind of confidence that we are going someplace, at least 

one part of our economy. 

And by the way, we do not have to have an emergency spending. 

We do not have to borrow the money. We are going to pay for it. 

And the American people will pay for it if they know they have got 

a product. 

Now, Madam Chairman, I would to say to you that there is a 

man over on the House side named Jim Oberstar that has had over 

50 hearings and spent over 2 years on this. The stuff that has been 

talked about, livability and performance, it is a terrific piece of legislation. They are going to mark it up in the House. 

And, Madam Chairman, I think we should look at it. And I think 

that we ought to get it, and understand that this is important. The 

Chairman is always talking about the environment. We get this bill 

passed and get going, this is going to have a dramatic impact on 

reducing greenhouse emissions. 

You talk about how our highways are second to none. Give me 

a break. Have you been to Europe lately? We are way behind Asia, 

China, and India. We are behind. We have fallen behind. If we 

want to compete, we need to have these corridors working. We need 

to get rid of congestion. And we need the jobs badly. We need them. 

I would say to you, and I thank you very much, sir, for the job 

that you are trying to do and you are representing the Administration, but I do not think they get it right now about what this is. 

There is going to be a bunch of us, in the next couple of months, 

that are going to the American people and we are going to talk 

about the situation as it is and the impact that not going forward 

with this bill is going to have on our economy and our environment 

and our competitiveness in the global marketplace. 

It is time to do it. We should not wait for 18 months and try to 

fiddle-faddle it around and try to figure out how to rob Peter to pay 

Paul. You know there is no money here. You either have to make 

an emergency and borrow the money, or figure another way to borrow the money, or go through Jim Inhofe’s suggestion about the interest. The interest? We will calculate the interest. There is no 

money there. Where are you going to get the money for the interest? It is just not there. 

So, my message to you is to go back to the President and start 

talking about where we are. Because I am going to tell you something. There is going to be one large crescendo in this Country during the next couple of months to let the people of America know 

just exactly where we are today and what we need to do. 

Senator BOXER. Well, Senator, I share your passion for doing a 

transformational bill. I have been here for a very long time in Con-
60 

gress and I have always pushed hard for change and transformation. And sometimes I have won it, and sometimes I have not. 

In this case, I feel that, as the Chairman of this Committee, until 

I know how I can tell the American people we are going to pay for 

this major change and major need, I am not ready to find that solution. 

I know that Chairman Oberstar and you and others have talked 

about a big increase in the gas tax. I will tell you, if you go out 

to the people of America and you tell them that is the solution, I 

do not think they will buy it. They are struggling right now. I think 

we have to come up with other ways. 

I have talked to Secretary LaHood, and he has responded that 

the day after we pass this extension, and my goodness, we have 

done that before. There are moments when you need to have the 

time. If the Highway Trust Fund was not going broke, that would 

make this a very different conversation. 

So, we will have this debate in this Committee. I do not know 

of any others on the Committee who share your view at this particular time. I know James Oberstar does. He is a great man with 

a great vision and I share a lot of his vision. But it is timing. It 

is the timing. 

Secretary LaHood has stated that, in fact, we are going to work 

day in and day out. I hope that you will, despite your, I would say, 

extreme dismay and disappointment that most of us are moving toward this 18-month extension, in that period of time we are going 

to be meeting, probably daily, on how to pay for the kind of vision 

that you have exhibited. That is the fact. That is where it is. And 

I look forward to that debate. 

Senator VOINOVICH. Madam Chairman. 

Senator BOXER. Go ahead. 

Senator VOINOVICH. My theory is that if you put a package together that addresses the concerns of the American people, and 

they can see that they are going to get something out of it in terms 

of, as I mentioned, dramatic decreases in the release of greenhouse 

gases, a major improvement in the elimination of congestion in 

traffic corridors, and livability performance planning, and also the 

impact that it is going to have on the economy and the jobs, that 

I believe that they will support it. We know that we have to find 

other sources, but I believe they will support a gas tax. 

I was a mayor. I was a Governor. I have supported tax increases. 

I have gone to the people and I have explained to them what we 

are going to do with the money. And after they looked at it, they 

came out and supported it. It is a sales job. They have got to know 

what the product is. 

And I am saying that Jim Oberstar is going to vote a bill out of 

his committee that does it. It is a terrific piece of legislation. It gets 

at a lot of things that the American people are concerned about and 

I think there is going to be a tremendous receptivity to it. And I 

think if you have a product, Madam Chairman, where they can see 

it is going to really make a difference for our Country, that they 

will be supportive of it. 

I mean, when the truckers tell me that they are willing to have 

an increase, a big increase in taxes, and every group that is out 

there that in the past, Madam Chairman, we were only taking a 
61 

walk, they are there, and they understand how important it is. I 

just think, I want you to know that I am going to work my you 

know what off in the next couple of months with everybody out 

there to convince the American people that we do need to get this 

done now and that it is going to take some money and it means 

that we are going to have to pay more for our gas tax initially. 

That would take care of your problem in the next 18 months. You 

are going to be working right now, are you not, to try to find the 

money, to try to get us through this the first time? Then you have 

got to find the money for the next time, $20 billion. If we got the 

bill done on time, you would not have to do that because we would 

have increased the gas tax and it takes care of your problem. 

With all due respect, I would urge you to look at this again. 

Senator BOXER. Senator, if I could just say, this is a very important moment for us to send a strong signal that we are going to 

work together to, at the minimum, extend the highway bill so that 

it is seamless, and nobody is threatened, because all the programs 

will be going forward. We do have stimulus money out there. I do 

not think that should be overlooked, and which is also increasing, 

actually, the projects on the ground. 

So, by extending, you keep everything at the same level, plus the 

influx of the stimulus money, you are moving forward. There is no 

reason to frighten people that in the short term anything bad is 

going to happen. We are agreed, across this Committee, with 

maybe one or two exceptions, and I only know of one exception, 

that the short term, 18-month extension is the way to go. 

Now, my colleague is absolutely right. In the House, it is a different modus operandi. The Chairman, who I deeply respect and 

hold in high regard, has decided that it is his committee’s role to 

put this out there and then the Ways and Means is going to figure 

it out. But I want you to know that the level of spending in the 

Oberstar bill, there is only half the money in the Trust Fund to pay 

for it. In other words, it only pays for half of the Oberstar bill. 

I, in good conscience, as the Chairman of this Committee, do not 

feel that I can move forward at this time of fiscal stress and strain 

with that type of a bill without being able to pay for it. I have some 

really good ideas on how to pay for it. I want you to know I have 

been working constantly on that. 

And by the way, our Ranking Member and I have been talking 

about it because we, although we have not agreed upon a full package of funding, we are beginning to make some progress on things 

that we agree with. 

It is true that the truckers have stepped up, and I think you are 

right to single them out. They are the only ones who have stepped 

up. All of the others who have spoken to me have not put on the 

table what they will do. They want to do more, but they have not 

been specific. 

We need time. This is the moment, now, in the next year or two, 

that we have to transform the way we do this. I could not agree 

more with you on that point, and with Senator Lautenberg. 

I also wanted to say to my friend that greenhouse gas emissions, 

that is a major problem. And the Obama administration has taken 

moves which are fantastic to increase fuel economy. Tremendous 

strides. We looked at some modeling and it is extraordinary the 
62 

amount of greenhouse gases that will be taken out. And we will be 

working on a greenhouse gas reduction bill, which I hope my friend 

will help me on, to do even more. So, on that front, we have tremendous possibilities. 

I do not like to have a split with my friend from Ohio on this 

because he is on the right track of what we need to do. It is a question of timing. It is a question of pay forward. It is a question of 

sending a signal out today that we going to move quickly because 

the Highway Trust Fund is going broke and we need to replenish 

it. That adds another layer of uncertainty. I think the most certain 

way to proceed is this 18-month extension. 

I will tell my friend, we could write a bill, he and I, and it would 

be a tremendous bill. And I would guarantee my friend that it 

would have tremendous change in it. As he said, he has talked 

about many of the things that Secretary LaHood has spoken about. 

But let us be honest here. When it comes to going to the Senate 

floor, when you have that type of bill, this cannot be done quickly. 

It has to take time. And time is not on our side in terms of a Trust 

Fund that could be out of funds as early as August. We are hoping 

not July. That will put hundreds and thousands of jobs at risk and 

for me, the most important thing I think we can do is to do this 

extension as clean as it can be. Clean as a whistle. So we do not 

delay it, we do not run into trouble. And Senator Inhofe and his 

staff and mine are working to that end. 

So, we have a division. But I have to say, and I believe I speak 

for almost all the members of this Committee, I cannot say to a 

person, but I have discussed this with most of them and they have 

supported the 18-month extension. 

Secretary LaHood, I am sorry that you had to sit through a debate here within the Committee, but I am glad you did in a way. 

Because I think you can take back the message that while we, in 

the Senate, the majority of us here across party lines, agree to a 

clean 18-month extension, not with these policy changes because it 

will in fact jeopardize a quick passage of this extension. 

We also believe, as Senator Voinovich does, the difference I have 

with him is strictly on the timing, it is not on what he said. His 

passion, his concern, the issues he lays out, I have not got one bit 

of a quarrel with. So maybe if you could tell the President that we 

do have the short-term strategy in this Committee, and we have a 

long-term strategy that we want to begin as soon as we have taken 

care of our short-term problem. 

You have been so helpful and understanding. You know what it 

is to work around here. I just appreciate your leadership, your 

straightforward comments, and your patience. 

So, we thank you very much. I do not know if you want to—— 

Secretary LAHOOD. I appreciate your leadership, Madam Chair, 

and I would say to Senator Voinovich that, sir, I have been out 

around the Country. I just met with your Governor. I just met with 

your other colleague that serves in the Senate here. He came to my 

office and we talked about a lot of issues. 

I have had three meetings with the Governor of Pennsylvania, 

three meetings with the Governor of Michigan. These are States, 

your State, Michigan, Pennsylvania, Illinois, these are all States 

that are hurting really badly. We know the pain out there. 
63 

We think our portion of economic recovery is doing many, many 

good things. When I get out around the Country, I see a lot of people working as a result of the fact that our portion of the stimulus 

is working. We are getting the money out of the door the way Congress asked us to do. 

And I will tell you this. President Obama does have a vision for 

transportation. I tried to express it here in my statement. It is not 

something that he is going to ignore or turn a blind eye to at all. 

I just want you to know that we have listened, not only to you, sir, 

but to many other people around the Country as we get around. I 

have been to many States and I have talked to a lot of elected officials, including some who are serving in this body, and we will 

work with you. 

Your vision of transportation is very similar to President 

Obama’s vision of transportation. As the Chairwoman said, the 

timing is, I guess, where we part company. 

Senator BOXER. Senator, if you want to respond? 

Senator VOINOVICH. This will continue, I think that we pretty 

well all know that. 

All I can say to you is that if people that you have met with, 

probably when we get back from the break, you are going to see 

a tremendous number of people who you say are not willing to step 

to the table, who are willing to step to the table. I have met with 

them and they are a strong, united group. I am going to join with 

them and others and Jim Oberstar to try and convince you and 

others that we need to get on with this and we cannot wait 18 

months to do it. 

One bullet that we are going to have to bite in order to pay for 

this and not have to borrow the money or do all the other things 

that we always do around here when we don’t have the money, we 

finagle it, that one way that we are going to do that is that we are 

going to pay for it. The American people will understand that. 

The second thing they are most concerned about today, beyond 

jobs, is the fact that they know that where we are going, the way 

we are going, in terms of our deficit and national debt is not sustainable. They get it. The Europeans get it. The world gets it. We 

do not get it. 

We talk about, Secretary, you are going to try to find a little 

money someplace. It will be rob Peter to pay Paul. Something to 

get you through it. Then you have to find some more money. 

A much cleaner way would be to say to the American people, this 

is a really good highway bill, it is needed for our Country, and we 

know that, with the facts, you are going to be supportive of this because it is going to make a difference. And by the way, it is not 

emergency spending, it is not some of the other Mickey Mouse stuff 

that we do around here. We are going to pay for it. OK? We are 

going to pay for it. Would that not be wonderful for once? 

Senator BOXER. Yes, and I am very glad you are going to meet 

with the players, because I have met with all of them, and the only 

one of the group that has put forward a proposal has been the 

truckers. And I can tell you, I am very grateful to them. 

I want to say this. I could not agree with your more. The deficit 

and the national debt have got to be brought down. We had that 

under Bill Clinton, and we did it. We inherited from the first Presi-
64 

dent Bush an enormous debt and an enormous deficit. And we did 

it. Under Bill Clinton, we got a balanced budget, we got a surplus, 

and we got that debt going down. We are going to do it. 

That is the reason why I want the extension. I do not feel comfortable bringing forward the bill until I know how I am going to 

recommend paying for it. I cannot imagine why I would ever do 

that. I do not see it, in my view, as being fiscally responsible, just 

to put together a giant bill and send it off to some other committee 

and have them figure it out. 

I want to work with you, Senator Voinovich, so we can have the 

people at the ports say, this is what we are willing to do to pay 

for it. The railroads, this is what we are going to do to pay for it. 

I am not going to keep going back to the American people and a 

gas tax. Let the heavy users, like the truckers, step up to the plate. 

And we can work together. 

I have stated before, I am willing to see the gas tax indexed to 

inflation. I think that is a fair thing to do. So there are ways we 

can do that in a fair way. 

But again, it is chicken and egg. The theory of Chairman Oberstar seems to be, I am going to write this great bill, which he has 

done, and now it is going to force the way to pay for it. 

My view is, when I do the bill, I want to make sure we have that 

done. It is just my thinking. But is also Senator Inhofe’s thinking, 

it is also the vast majority of my colleagues, Senator Baucus and 

others, including the fact that I do not know of any other Republican that does not agree with that. 

Having said all of that, I hope that we can work together as you 

meet with these various groups, Senator, because if we have a 

breakthrough, nothing is going to stop us from writing our bill the 

minute we have our break through. For example, if we had a 

breakthrough in 3 months, I would sit with you, we are going to 

get a bill out there and we are going to move. 

So, this is a question of immediacy versus the long-term solution. 

That long-term solution is going to come. It could come in 3 

months. I think with your driving force, it could come in 2 months. 

I am very much open to that. 

So here is where we are. We are going to continue to work with 

you on this 18-month extension. Senator Voinovich is going to work 

hard to change our minds. I always am willing to hear his ideas 

on how we are going to pay for this big vision that I support at this 

time. We will get there. I do not know that we can get there in 3 

weeks when the Trust Fund is out of money. I should say maybe 

it is a little more than that, maybe 6 weeks or 8 weeks. 

I want to thank you, Mr. Secretary. This is tough. This hard. But 

we are getting there. Thank you very much. 

It is my privilege to call up our second panel: Kathy Ruffalo, 

President, Ruffalo and Associates, and she was a member of the 

National Surface Transportation Infrastructure Financing Commission; Dawn James, Chief Executive Officer, Vulcan Materials; and 

Jack Basso, Director of Program Finance and Management, American Association of State Highway and Transportation Officials. We 

welcome you and we look forward to your words of wisdom. 

So, if people could leave the room quietly, that would be very 

good. 
65 

We will start with you, Kathy Ruffalo. 

STATEMENT OF KATHY RUFFALO, PRESIDENT, RUFFALO AND 

ASSOCIATES 

Ms. RUFFALO. Thank you, Madam Chairman and members of the 

Committee. 

I appreciate the opportunity to address you today regarding the 

impending insolvency of the Highway Trust Fund. 

By way of background, I did spend 11 years as a staff member 

to this Committee and had the privilege to work on ISTEA, TEA– 

21 AND SAFETEA-LU. 

Senator BOXER. And you lived to tell the tale. 

[Laughter.] 

Ms. RUFFALO. And I am not sitting where you are now. So, yes, 

I learned a valuable lesson. 

[Laughter.] 

Ms. RUFFALO. I spent 6 years working in State government and 

I am a member of the Commission, as you mentioned. All that experience has certainly shaped my perspective on the situation that 

you find yourself in today and I have a very healthy respect for 

what you and your staff are trying to do in developing that multiyear proposal. 

Having said all this, I believe your task will be made more difficult if Congress were to allow the Highway Trust Fund to become 

insolvent, allow for a dramatic reduction in transportation funding 

next fiscal year, and possibly allow for the loss of contract authority as the basis for our transportation programs. 

I would like to briefly cover a couple of areas with you today. I 

was asked to talk about the history of the Highway Trust Fund, 

so that is in my written testimony if folks would like to refer to 

it. But what I would like to focus on is how did we get to where 

today and what are the impacts of the insolvency of the Trust 

Fund? 

As background, there are two major sources of revenue into the 

Trust Fund. It has been talked about a little bit today. They are 

the motor fuel taxes and then, of course, the vehicle and tire taxes. 

The motor fuel taxes account for about 90 percent of the revenue 

in the Trust Fund and the non-fuel taxes and fees are about 10 

percent. 

As we all know, the current economic situation has dramatically 

impacted the revenues collected from the motor fuel taxes and 

while increased fuel efficiency has had an impact, the fact that 

fewer people are choosing to drive and purchase fuel is a much 

larger factor. 

But there are two other issues I would like to bring to your attention. First, the non-fuel revenues continue to be extremely volatile. These are things like the truck trailer sales and tire taxes. It 

is the volatility in these non-fuel revenues that are impacting the 

balances in the Trust Fund. 

Again, while these non-fuel revenues are only 10 percent of the 

overall revenues in the Trust Fund, wild and dramatic swings in 

these taxes and fees can have a really dramatic impact on the balances of the Trust Fund. 
66 

The second issue I would like to bring up is that, in SAFETEALU, of course, we had to spend down the balances in the Trust 

Fund. We spent down the balances in the Trust Fund because we 

knew that the revenue coming in from the fuel taxes was not going 

to be enough to spend at levels that Congress wanted to spend at 

the time. So, over the life of SAFETEA-LU, we did spend down the 

Trust Fund balances and that is another reason why we find ourselves in the situation that we are in today. 

So, there are basically two choices facing Congress. You all have 

talked about them this morning. We need to develop a solution to 

either add additional revenues into the Trust Fund for this fiscal 

year, or do nothing and allow States and transportation agencies 

to experience a reduction in funding and slower reimbursement 

rates. We need to decide: are we going to break the promises of 

SAFETEA-LU or at least take care of this fiscal year? 

Madam Chairman, I know that you and others on the Committee 

are committed to finding a solution to our current insolvency problem, and also to finding intermediate and long-term funding solutions. It is my hope that the entire Congress will choose the same 

route and will take action and resolve the insolvency issue for fiscal 

year 2009. 

As has been discussed, Congress did pass the stimulus bill in 

February with the stated purpose of creating and sustaining jobs. 

It would not make sense to not provide additional infrastructure 

spending 6 months after that bill. It just seems counter-intuitive. 

So, as has been mentioned, again, the impact from any gap in 

Federal transportation funding will have a ripple effect across the 

transportation sector and certainly through the economy. Construction jobs will certainly be lost. 

But we have to keep in mind that, in addition, businesses in the 

transportation sector will continue to be reluctant to hire workers 

if there is no clear signal that Congress is committed to these jobs 

and the investments being made. And, in fact, some businesses 

may begin to slow down production of transportation-related features if it appears there will be a gap in Federal funding. 

Madam Chairman, I work every day with many of the stakeholders in the transportation community, businesses, States, local 

governments and various transportation associations. I can you 

there is real apprehension regarding the pending insolvency and 

the impact of inaction. 

I would like you and the members of the Committee to know that 

many in the transportation community stand ready to assist you in 

resolving this crisis and I hope you will tap these resources to help 

make the case on the importance for transportation investment to 

others in Congress and, just as importantly, the public. 

Madam Chairman and members of the Committee, at the end of 

the day, we are all trying to do the right thing for this Country. 

I believe that we all need to remember that there are real men and 

women behind all the numbers and the statistics that we tend to 

use up here. We cannot get caught up in national statistics and forget the impacts of the decisions being made. Thousands of jobs depend on Federal transportation funding and not just the direct 

jobs. 
67 

So, whether it is to get to work, move goods across this Country 

or maintain our quality of life, the Federal Government is, and 

should be, an important partner in transportation investments. 

With your leadership, Madam Chairman, and the leadership of 

this Committee, I hope Congress can quickly resolve this crisis. 

Thank you for holding this hearing and I am happy to take any 

questions. 

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

And now, Don James, Chief Executive Officer of Vulcan Materials. Please proceed, Mr. James. 

STATEMENT OF DON JAMES, CHIEF EXECUTIVE OFFICER, 

VULCAN MATERIALS COMPANY 

Mr. JAMES. Thank you, Chairman Boxer and members of the 

committee for the opportunity to testify here today. 

I am Don James, Chairman and CEO of Vulcan Materials Company. My goal is to bring to you the point of view of the business 

I run and our employees and our customers to bear on the issues 

of the importance of the Highway Trust Fund and of the sustained 

and significant funding for America’s transportation infrastructure 

that is needed. 

Vulcan is the largest producer of construction aggregates in the 

Nation, primarily crushed stone, sand and gravel. We are also a 

major producer of asphalt and concrete. Our products build highways, roads and bridges and other large infrastructure projects in 

America. 

We have been publicly traded on the New York Stock Exchange 

since our founding more than 50 years ago and we are a member 

of the S&P 500. Our employees at more than 350 operations serve 

customers here in the District of Columbia and in 23 States. 

We have been recognized twice in the last 7 years as one of the 

top 10 of all Fortune 1000 companies for social responsibility. During the same period, Vulcan has been named by Fortune to its Top 

10 List in two other categories, including use of corporate assets 

and as a long-term investment. 

We strongly supported this Committee’s efforts regarding the 

American Recovery and Reinvestment Act. We, and our industry 

association, stand ready to assist the Committee in its vital effort 

to support transportation infrastructure investment, investment 

that needs to be sustained and significant to meet the great and 

ever-growing transportation infrastructure needs of the Country. 

The business of successfully building and maintaining our national surface transportation infrastructure depends in large measure on the funding stability and the year over year predictability 

of the Federal aid highway programs funded by the Highway Trust 

Fund. These authorizations provide an important continuity that 

my company, our employees and our customers rely upon in order 

to meet the significant and growing needs of our transportation 

systems. 

Multi-year bills are particularly vital for the funding visibility 

and the related confidence they instill in State departments of 

transportation. When State DOTs know that the Federal aid highway program will apportion to them their Federal funding, yearover-year in an amount authorized, they have the confidence that 

their State expenditures will be reimbursed. The States then award 

contracts, and the process of building and maintaining our transportation infrastructure can proceed smoothly and efficiently. Confidence in the long-term stability of the program is a critical factor 

in ensuring its success. 

When there are doubts, as there clearly are today, awards for 

construction projects slow because States are not sure there will be 
78 

funding for reimbursement. As the pipeline for project awards 

slows, this inevitably leads to a loss of jobs in the construction and 

related support industries. 

As a materials supplier to highway contractors, we are the first 

to feel the impact of slowing rates of contract awards. The production of our products, and the private sector jobs that are created, 

precede by many months a State’s request for Federal reimbursement of its State funds used to pay for the construction. This 

means that well in advance of any technical definition of insolvency 

in the Highway Trust Fund, at the point when the perception of 

a lack of future Federal funding occurs, that lack of confidence impacts our employees and our customers. 

Our slowdown occurs at the first doubts about what Congress 

will do and when it will do it. We are already feeling the impact 

of these doubts. And with the end of the current multi-year authorization coinciding with a predicted shortfall of $5 billion to $7 billion in revenue just to cover 2009 budget authority, anxiety and 

doubt about the future of the Trust Fund continues to grow. 

When one adds concerns about 2010, there is an even more negative speculation, further reinforcing the perception of unpredictability for the Highway Trust Fund. 

There is another basic congressional dynamic that contributes to 

the perception of Trust Fund stability—timely, bipartisan action. 

Prolonged delays and disagreements, however, feed concerns that 

Congress is not poised to address either the Trust Fund shortfall 

or a multi-year reauthorization in a timely manner. 

From the vantage point of our company, our employees, our customers and the State DOTs that we work with, the optimal solution includes addressing both the Trust Fund crisis and the timely 

passage of a multi-year bill. 

Meanwhile, and ironically, in the absence of timely resolution of 

these matters, jobs in our industry and the construction trades that 

the stimulus legislation was intended to create or save, will continue to be lost. 

Transportation infrastructure investment is an investment in 

American jobs and the American economy. The stimulus was intended to save or create jobs in part by putting Americans back to 

work building and maintaining our transportation infrastructure, 

thereby creating a real, tangible value for our economy. However, 

temporary influxes of Federal funding are not as helpful in creating 

and maintaining goods jobs with good benefits as are stable multiyear funding streams. 

The best stimulant to the economy is a robust, multi-year highway bill which will be most important in putting the United States 

back on the road to infrastructure and economic recovery. 

Thank you for the opportunity to share with you today the impact on our company, our employees and customers from delay and 

uncertainty in the funding of our Nation’s highway infrastructure. 

[The prepared statement of Mr. James follows:] 
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Senator BOXER. OK. Now, Mr. Basso. 

STATEMENT OF JACK BASSO, DIRECTOR OF PROGRAM FINANCE AND MANAGEMENT, AMERICAN ASSOCIATION OF 

STATE HIGHWAY AND TRANSPORTATION OFFICIALS 

Mr. BASSO. Thank you, Madam Chairman and Members of the 

Committee, for holding this hearing here today. And we particularly thank you from AASHTO for giving us an opportunity to testify. 

The Highway Trust Fund has been the mainstay of stable, predictable funding for the highway and transit programs since 1956. 

That has changed. In fact, during the past 12 months, we faced two 

cash crises, one last September and now the latest that will occur 

in August. 

Let me focus on the critical impacts of such a funding distribution on the States, the economy, transportation infrastructure investment and jobs. 

First, let me address the immediate impact of curtailing payments to the States. That change will produce an immediate cashflow distribution issue, impacting negatively the already cashstrapped States. The highway program is a reimbursable program 

where the States execute contracts, make payments and are reimbursed by the Federal Government. States do not have the option 

to simply delay contractor payments, and thus must generate cash 

and wait for reimbursement. 

Years before modern electronic payment systems, this could take 

as much as a week and cause States to incur borrowing costs to 

make payments. That is not an acceptable, in this particular fiscal 

climate, environment. 

As we turn to fiscal year 2010, the Administration estimates that 

the Highway Account of the Trust Fund will only support about 

$5.7 billion, or an 86 percent reduction in program commitments. 

AASHTO surveyed our State members and also has identified at 

least 1,900 projects that would have to be delayed or eliminated, 

altogether, a combined value of which is over $8 billion. That is 

just based on a survey at a projected 35 percent reduction. Probably triple that amount would occur in this situation. 

Let me cite a few examples. North Carolina reported that some 

400 projects valued at $300 million would have to be cut and could 

affect adversely their Garvey bond program. New York reported an 

impact of over 100 projects valued at $468 million being reduced. 

Pennsylvania advised 115 projects valued at $528 million would be 

reduced, undermining the ARRA economic recovery effort. And 

Michigan, one of the hardest hit states economically, reported that 

it would drop some 215 projects valued at $414 million. When combined with the ARRA funding as it phases out, the reduction to 

Michigan would be some 67 percent. 

As important as the loss of programs is the negative job impacts 

from such a dramatic reduction. States are just hitting their stride 

on the economic recovery funding, and such a reduction would nullify the gains from the current investment program. The economy 

cannot afford this loss. Given the value of infrastructure investment to support and create jobs, it is clear that we must move to 
90 

address this crisis in the interests of the economy job creation supports. 

The Administration has included a placeholder in the 2010 budget and we certainly agree that we need to fix fiscal years 2009 and 

2010 funding wise. We agree the shortfall must be addressed, but 

do not support taking discretionary budget authority in the appropriations process to solve this problem. We think that it is more appropriate to continue the practice of a transfer to the Highway 

Trust Fund that will get us through this crisis. 

We also understand that the Administration stated it wants offsets. To that end, we have identified some areas, including interest, 

which has been mentioned, about a $13 billion amount. There is 

$22 billion that was not put into the Trust Fund from 1993 to 1997 

from the 4.3 cents that was collected for deficit reduction. Those 

are just but a couple of examples. 

The bottom line is, we need to sustain the program and the Trust 

Fund while Congress moves to enact long-term legislation. 

Again, thank you for the opportunity to provide testimony and I 

would be happy to answer any questions, Madam Chairman. 

[The prepared statement of Mr. Basso follows:] 
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Senator BOXER. I just to make sure, I think your last sentence 

was what I wanted to home in on. I went through Mr. James’ testimony and I want to make sure that Ms. Ruffalo agrees with this. 

I just want to make sure that the three of you have stated that 

your preference is that we, and this is quoting from Mr. James’ testimony, he said I am hopeful that Congress will pass legislation 

that brings financial stability to the Trust Fund for the remainder 

of fiscal year 2009 and fiscal year 2010, while also working on a 

multi-year bill prior to Highway Trust Fund insolvency. 

That is my view. That is Senator Inhofe’s view. That is Senator 

Baucus’ view. And I believe it is the view of the vast majority. And 

that is the White House view. Is that what I hear from you? And 

I will reiterate it again. That Congress passes legislation that 

brings financial stability to the Trust Fund for the remainder of 

2009 and 2010 while also working on a multi-year bill. Yes or no? 

Mr. BASSO. Yes, Madam Chairman, and I add one caveat. We 

support strongly the efforts in the House of Chairman Oberstar to 

move a bill. But we need stability in the Fund at this point in time. 

Senator BOXER. So, you support a two-track effort to make sure 

that the short-term problem is taken care of while we still work on 

the long term? 

Mr. BASSO. Yes. 

Senator BOXER. Does that speak for you, Mr. James? 

Mr. JAMES. Chairman Boxer, it does. I would emphasize that it 

is urgently important, we believe, that we get on with the multiyear reauthorization as soon as possible, because that is really the 

basis of stability. 

Senator BOXER. Well, it is my intent to work with the Administration the day after we resolve the short-term crisis. And, by the 

way, we will have many, many hearings starting in the fall. So, we 

will be calling you back for that purpose. 

Yes, Ms. Ruffalo. 

Ms. RUFFALO. Madam Chairman, I would certainly agree that we 

need to focus on fixing fiscal year 2009. As for 2010, if it appears 

that the October 1st deadline is going to come and go without the 

ability to enact a robust, multi-year transportation bill, then I 

would certainly ask Congress to take action to keep the programs 

continuing while Congress decides what is the appropriate length 

of time. I do not know what that length of time would necessarily 

be, but certainly seeing that continuity of the programs is very important. 

Senator BOXER. Well, my belief is that an 18-month extension 

shows our commitment to continuity. But a short-term extension 

raises a lot of doubts, at least in my State. They are concerned because they know that a lot of what Senator Voinovich said, most 

of it, practically all of it, I agree with. But I can tell you that there 

are people on both sides that do not agree with everything he said. 

So, it is not going to be the easiest thing to do. But we are going 

to do it. 

And then we have, of course, the Banking Committee that takes 

care of the transportation sector, and the Finance Committee that 

has to act. So, I guess my point is that the 18-month idea, coupled 

with working on this bigger vision immediately, starting in the fall 

for our Committee, it seems to me that sends a very strong signal 
98 

that we do not have to worry about the short-term problem and we 

are, in fact, resolving the longer term. 

How much would you have to raise the gas tax? I know Congressman Oberstar wants to raise the gas tax. How much would he 

have to raise it to achieve his $500 billion bill? Do you know? 

Ms. RUFFALO. Well, each penny raises about $1.8 billion. Each penny of gasoline and diesel tax coupled together is about $1.8 billion. So, if he needs roughly $250 billion, you know—— 

Senator BOXER. Plus the Fund is not making it on the current 

level. 

Ms. RUFFALO. Plus to meet the gap. I do not know the math off 

the top of my head, but it obviously going to be a sizable increase—— 

Senator BOXER. In the gas tax? 

Ms. RUFFALO. Gas and diesel, right, yes, Madam. 

Senator BOXER. Well, could we get out our calculators and figure 

that out, please? And also I would say, Ms. Ruffalo, you said that 

the tire and vehicle taxes were very unstable. Is that correct? 

Ms. RUFFALO. Yes. 

Senator BOXER. And you said it is responsible for 10 percent of 

the Fund and you said it was more responsible for the problem 

than the gas tax. I had not heard that from my staff? Does my staff 

agree with that? So, how much did that Fund go down? 

Ms. RUFFALO. Well, right now the decrease in the truck-trailer sales tax and tire taxes is about $2.5 billion. That has been the decrease right now. So, if you look at the gap that we are facing, that 

is one of the sizable reasons why we are seeing, for 2009, I am just 

talking about fiscal year 2009, it is that volatility. 

Senator BOXER. What is each of your suggestions for replenishing 

the Fund, not on the short term but in the long term? Starting 

with you, Ms. Ruffalo. 

Ms. RUFFALO. Mine might be one of the longer answers, Madam 

Chairman. 

Senator BOXER. Go ahead. 

Ms. RUFFALO. Just having been on the Financing Commission—— 

Senator BOXER. I know. 

Ms. RUFFALO. We put together a whole menu of options, as you 

all know. I can tell you, quite honestly, that given the makeup of 

our Commission, we probably spent the first year and a half of our 

2 years with members wanting to recommend anything but a fuel 

tax increase, given the political difficulties in doing so. 

But at the end of the day, when we looked at over 40 funding 

options, the option that kept coming to the top of the list as far as 

easy to administer, cost efficient to implement and could generate 

a sizable amount of revenue at the Federal level, was the fuel tax, 

both gasoline and diesel. 

So, we did recommend a 10 cents per gallon gasoline tax increase 

and a 15 cents per gallon diesel tax increase. And of that diesel tax 

increase, we proposed a portion of it be used for freight projects. 

Senator BOXER. Now, was that before you knew of the shortfall 

in the Fund? 

Ms. RUFFALO. Madam Chairman, we knew there was going to be 

a shortfall. We wrote our report over 6 months ago. So, we cer-
99 

tainly did not. As you know, these projections have been changing 

quite dramatically. We certainly would not be able to use our projections today. 

Senator BOXER. So, that 10 cent increase, would that cover 

Chairman Oberstar’s bill? 

Ms. RUFFALO. No, that would get us to where, that would reestablish the purchasing power from 1993, the last time the fuel tax 

was raised. It would help us sustain current funding levels in 2010. 

It would not fill the gap. 

Senator BOXER. OK. And he is increasing programs by how 

much? 

Ms. RUFFALO. Well, he has not put numbers in. But I believe he 

has spoken about $250 billion gap if it is a $500 billion bill. 

Senator BOXER. So, my understanding is that it is about a third 

increased, the Fund? More than that? So, you can see where, if you 

rely on the gas tax, you are talking huge increases in the gas tax. 

Any other ideas, Mr. James, on how we can fill the gap? 

Mr. JAMES. Well, certainly, we were disappointed, as I know you 

were, that the stimulus package had much less infrastructure 

spending, highway infrastructure spending, as a percent of the 

total. I believe, as Secretary LaHood pointed out this morning, the 

highway industry will be able to demonstrate that it is creating 

jobs faster and more quickly than perhaps other components of the 

stimulus spending. 

As I said in my remarks and in my written testimony, we create 

private sector jobs months and months and months before the Federal money is actually disbursed—— 

Senator BOXER. Let me just cut you off from this, Mr. James, because I agree with you when using the unspent stimulus money. 

But that is a short-term fix. I am not talking about that. I am talking about the long-term fix. What would your ideas be? 

Mr. JAMES. I think, and I agree with the commissions that have 

studied this and reported back to Congress, it will require a combination of user fees, which are, if they are dedicated to congestion 

relief and highway construction, I think we can get support. We 

know we have the support of the trucking association and hopefully 

the support of the Industry Coalition Alliance for that. I think 

being creative about tolling is another opportunity. 

Anytime the users of highways get the opportunity to pay for 

them, I think, and there is a direct, and taxpayers can see that 

every penny they are paying in gasoline tax and tolls is being reinvested in the transportation corridor they are driving on, I think 

you get very good support. Your State has certainly demonstrated 

that. 

Senator BOXER. We are using a lot of private sector-public sector 

agreements and tolling and so on and so forth. What about you, 

Mr. Basso, in terms of the long run, not the short run? 

Mr. BASSO. Yes, the long run. We proposed at AASHTO a matrix 

of funding, revenue sources that came up to $1.3 trillion. It included a range of things from gravitating from a fuel tax to a VMT 

fee collection system. It included from freight a whole series of potential freight charges that could be used to dedicate to the freight 

programs. It included a bonding program, a fairly complex bonding 

program using tax credit bonds to generate as much as $100 bil-
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lion. It also included some additional fees that could be collected 

from other sources and put into this program. Ultimately, I 

think—— 

Senator BOXER. Let me ask you—oh, I am sorry. 

Mr. BASSO. Ultimately, I think—I am sorry. 

Senator BOXER. No, no, go ahead. 

Mr. BASSO. The one thing that I would beyond that is, we obviously have an eye on climate change and cap-and-trade legislation, 

given the fact that I think some money particularly for the transit 

program can be dedicated—— 

Senator BOXER. I agree with you completely. I think that a lot 

of our colleagues who are pushing for this do not understand the 

opportunities that they have with a cap-and-trade system to dedicate funding to transportation. 

Let me just, my last question. The VMT, Vehicle Miles Traveled 

issue. Have you looked at it? Clearly, you obviously have because 

you are recommending that we look at it. There are a couple of 

problems that some of us have. We do not want it to be intrusive. 

So, we are trying to figure out a way to do it so that it is not intrusive into a car, because that is dead on arrival. We are not going 

to do that. But there may be other ways to do it. 

My question is, because the truth is the more vehicle miles you 

travel the more stress you put on the roads, have you looked at a 

flat fee on that and what that would bring in? 

Mr. BASSO. We looked at flat fees and we looked at the equivalent of about what it would be just to equate what we have today 

from gas tax. It is somewhere in the range of 2 to 3 cents per mile 

is what would be required. 

Two other points that I would make, something that I think 

would interest you, Madam Chair. We have a report coming out 

here in about 2 weeks from the Transportation Research Board. We 

took to heart your comments to us several months ago: can you 

come up with something in the shorter term that might work? 

Senator BOXER. Yes. 

Mr. BASSO. And we have a report to deliver to you that I think 

you will find interesting. 

Senator BOXER. Well, I am very, very grateful to you. 

Senator Voinovich. 

Senator VOINOVICH. Thank you, Madam Chairman. 

I would like you to comment on the 2005 SAFETEA-LU piece of 

legislation and the fact that, because of the cost of gas, oil and 

steel, how that 285 has, in terms of today’s dollars, evaporated in 

terms of what it buys. Because many of the States who wanted to 

move forward with their programs, as you know, were not able to 

go forward with them, know in Ohio because the money did not 

buy as much as what they thought it would buy because of the cost 

of steel and because of the cost of oil. 

The point I made to Mr. LaHood today is that, in effect, what we 

are buying is below, I don’t know how much, a third or something, 

below what we had in 2005. So, if we continue that, we are at this 

lower level of spending. OK? 

Now, you have the stimulus bill which has come in and that has 

given us a little lift here. We are getting more money there. But, 

if we do not make it clear that we are going to provide the money 
101 

to pay for this year, does this not leave a large uncertainty out 

there among the States about where we are going? That is, if we 

are able to say look, we are going to take care of the extension, do 

not worry about it. But it is at this lower level. You have got your 

stimulus money coming in. And by the way, we are going to do everything we can to get this bill done. We will have new money coming in. This is the level it will be. This is the level it will buy. Do 

you not believe that, from a public policy point of view, would be 

the best way to go? 

And I just want to quote Mr. James. You said, I am hopeful that 

Congress will pass legislation that brings financial stability to the 

Trust Fund for remainder of fiscal year 2009 and 2010 while also 

working on a multi-year bill prior to Highway Trust Fund insolvency. But his will not mean that our company, our employees and 

our customers would have avoided the impact of the current perception that the Trust Fund might become insolvent without remedy or that a new multi-year bill might be delayed. 

Now, that is, that is getting at the planning. I was around when 

we passed ISTEA. I was a Governor at the time. I said we have 

got to go to multi-year spending so that the companies and the suppliers, everybody knows what the level is so that they can properly 

spend. And that brought a lot of logic and common sense to it and, 

by the way, I think was a lot cheaper way of doing it than this appropriate this year down and up and nobody ever knew what was 

going on. 

So, could all of three of you comment on that, in terms of what 

impact, psychologically, this is going to have if we do not say we 

will take care of this year and then people say well, we are going 

to delay the bill until after 18 months? You understand what I am 

getting at. 

Ms. RUFFALO. Well, Senator, there is no doubt that having some 

predictability and stability, not just of the States but for businesses 

as well, is going to be really important. One of the things that I 

hope Congress does not do is a number of very short extensions 

like we had under SAFETEA-LU, 3 weeks, a month, that kind of 

uncertainty just does nothing but give lack of confidence to people 

outside of Washington, DC. 

So, there are certainly impacts to not having a multi-year bill 

done on time on October 1st and you have certainly articulated 

what they would be, whether it was an 18-month extension or some 

other version of an extension. There is always an impact of not 

having the bill completed on time. 

Mr. JAMES. Senator Voinovich, I think the real key is to get the 

next multi-year highway bill done and in place. That is what is 

needed to get predictability and certainty that allows DOTs to 

move forward with significant projects and allows companies like 

Vulcan to gear up to provide the materials efficiently on projects 

like that. 

I am not a politician and I do not understand necessarily all that 

has to happen to get the bill done. I agree with Ms. Ruffalo that 

having a series of short-term extensions is very damaging to the 

whole system and the program. I do think getting to the multi-year 

bill as soon as possible, and eliminating the uncertainty about 

what is going to be in that bill, which seems to be an issue today 
102 

about the content of what is in the bill and how all of that is going 

to work, that uncertainty creates a great deal of difficulty for the 

transportation network, I think. 

Mr. BASSO. Senator, just two observations. I think the ultimate disaster would be a bill that drops the $5.7 billion because nothing 

is enacted. We at AASHTO see that. We need stability and predictability on the funding side. 

As to the extension, I think we think that an extension, assuming it will happen, needs to create some stability and predictability. 

But ultimately the point I made earlier about getting a multi-year 

bill in place, as soon as possible, is the critical piece to a capital 

program that can be actually put in place and sustained over the 

long term. 

Senator VOINOVICH. See, what I am worried about is that we are 

a lower level on the spending and we are going to fund that lower 

level. Then, the stimulus starts to tail off, and then we have a big, 

as I mentioned, you have a balloon and you have a little air in it, 

and then all of sudden it just evaporates. I think that whole concept, from a psychological point of view, is going to have a very, 

very negative impact on everybody, States in terms of what they 

are doing, businesses that are out there and what they can do to 

plan. 

You would all agree that the sooner we can get the multi-year 

bill done, the better off the Country is going to be. 

[Witnesses respond in the affirmative.] 

Mr. JAMES. Yes, I do agree. I was very encouraged by the comments from the Committee about the need for any extension to be 

a clean extension because, if there is an extension and it is not a 

‘‘clean extension’’ that is going to create a tremendous amount of 

uncertainty and the DOTs are going to tend to want to back up and 

wait and see, and the whole job creation benefit of the stimulus 

and the extension will get lost in the concern about the details of 

what new provisions are in the extension. 

Senator VOINOVICH. Thank you. 

Senator BOXER. Thank you, Senator Voinovich. 

Just to make it clear so that we do not send a mixed signal from 

the Chairman and the Ranking Member, we plan to mock up a 

clean extension, for 18 months, the week of the 20th of July. That 

is our plan and we are going to do it. I want to make that clear. 

Yes, Senator Klobuchar, welcome. 

Senator KLOBUCHAR. Thank you very much, Chairman Boxer. 

Thank you to our witnesses. 

Like everyone here, I would like to see this bill enacted as soon 

as possible, especially for the State of Minnesota, the home State 

of Representative Oberstar. And also, I understand the hazards of 

doing this month to month and on the short term. 

When you talk about, Mr. James, not having a clean bill, what 

do you mean by that exactly? Some of the things going through, or 

what? 

Mr. JAMES. I think that the programs that the State DOTs understand and can move forward with, and an extension, in my 

opinion, are very important. If there are programmatic changes 

that the House or the Senate wishes to have in a multi-year bill, 

that will have to be worked out. 
103 

But trying to do that in an extension, in whole or in part, I would 

have a great deal of concern that it is going to cause the State 

DOTs to go whoa, we do not know how that is going to work and 

we are going to back off on contract awards until we fully understand. And then we have destroyed probably the most important 

part of the reason for an extension, which is to keep the jobs—— 

Senator KLOBUCHAR. To keep the jobs going and the whole reason for the stimulus. Do you think that there are some transportation policy issues that Congress should be considering outside of 

the comprehensive authorization process of either the new bill or 

this extension? If you could pick some priorities. Secretary LaHood 

talked about better use of cost benefit analysis, improved mobility 

of goods and people promoting livable communities. What do you 

think we could be doing now outside of this extension? 

Mr. JAMES. Senator, let me just mention, I think outside of the 

extension, and in the long term, there is a lot of reform and a lot 

of things that we proposed at AASHTO and the Congress has proposed that need to be done. 

Given the short time, just being candid, that Congress has to 

deal with this extension, you may have been, or may not have 

been, informed, the DOT issued a letter last night saying payments 

will be curtailed to the States in August. 

Senator KLOBUCHAR. Right. I am aware of that. 

Mr. JAMES. So, there is not much time left to deal with this. We 

think a clean extension, from our point of view, is one that deals 

strictly with the shoring up and the money issue and does not try 

to enact major themes of reform, something that probably, candidly, cannot be done in the short time that we have forward, with 

the consequences of basically funding being cut off at a critical 

time. 

Senator KLOBUCHAR. All right. 

Ms. Ruffalo. 

Ms. RUFFALO. Senator, I would just add that, having gone 

through three of these transportation bills from the vantage point 

of a staffer on this Committee, given that there are only 5 weeks 

really in session in July and the first week in August to get some 

sort of extension to fix 2009, keeping it as clean as possible would 

certainly make it a little easier to get it through process given the 

busy calendar that the Senate has. 

I think one of the challenges will be, are there any reforms that 

could be done on an extension that would not be so controversial 

that people would not want to see this extension passed. I think 

one of the reasons why you hear concern about having an extension 

that is clean is just the need to get an extension done so quickly 

so that we do not see the States have a slower reimbursement date 

beginning the first week in August, potentially. 

Senator KLOBUCHAR. All right. Thank you very much. 

Senator BOXER. We are going to have to close this because of 

time. It is after noon. 

Let me say thank you to all my Committee members who came 

today. It is a very tough moment and we have to stand up and 

make sure we do the right thing for the American people, for the 

environment, for our future. 
104 

Now, I want to say for me, I hope people do not believe that I 

am supporting an 18-month extension because I have a full plate. 

That is not the reason. The reason is we have a crisis in the Highway Trust Fund and we have no consensus on how to fund a transformational bill that I want and the majority of us want. We do not 

have that consensus. Nowhere close. And, in this very delicate, 

slow economic turnaround, we cannot have a moment’s worth of 

hesitation on what we do. 

Now, for those who want to focus on transformation, I urge them 

to work with me on my global warming bill. That is going to have 

a section on transportation. We are not waiting on that front. Because one of the best ways we can move to really clean up the air, 

to get off foreign and all the rest, is to make sure that we move 

toward a transportation system that is viable, that is convenient, 

that is affordable, and all the rest. 

I hope that I have been clear here, for those that have been 

thinking that the reason we are not going into the 5 or 6 year bill 

is because our plate is full. No. If I had a consensus on how to fund 

this, and I could put it together in three or 4 weeks, I would be 

right there. 

But if you listen to our witnesses, and they all want a transformational bill, they all said they are recommending to us that we 

take a dual track. I think Ms. Ruffalo, her original idea was a 

shorter fix, but she is even open to a longer fix, and the others definitely feel an 18 month. 

I think that President Obama wants changes as much as any one 

of us. He wants change. And part of the change will be reflected 

in the five of 6 year reauthorization bill that we do pass. And it 

is also reflected, frankly, in Chairman Oberstar’s bill. 

I know it is hard to have a two-track strategy, but we must. Because if we do not, we send a mixed signal out there and that is 

the last thing I want to do because too many jobs are relying on 

this and too many hopes are relying on this. 

We will do both. We will solve our short-term crisis and we will 

have a long-term bill that everyone is going to be proud of. Our 

President is going to be part of drafting that. Senator Voinovich is 

going to be part of drafting that. Because we are not waiting for 

18 months or 12 months to start. The day after we fix the shortterm problem we will get started. And that is a commitment from 

me to the members of this Committee. 

Senator Voinovich. 

Senator VOINOVICH. Yes, I would just like to say this. From a 

psychological point of view, right now we have got to get people to 

believe that the glass is half full and things are going to get better, 

Madam Chairman. 

But maybe what we would be better off to do, and I know you 

do not agree with this, is that we guarantee that the problem this 

year will be taken care of so that the States will know that they 

have got the money and we will represent to them that we are 

going to be doing everything in our power to get the multi-year bill 

taken care of so that we do not have to go through another extension. 

I think that approach, from a psychological point of view, in 

terms of what Mr. James is concerned about, and Ms. Ruffalo and 
105 

Mr. Basso, would put us in a much better position that if we just 

do the 18-month extension. Well, everybody says an 18-month extension. After it is extended, how many more years is it going to 

be before we get a highway bill? That is what we are talking about 

today. We have to keep people like Mr. James and his customers 

confident that there is going to be money on the street so that they 

can keep going. 

Senator BOXER. Senator, except for the exact timing, we are in 

full agreement. I want a short-term fix. You are now suggesting a 

short-term fix, but your short-term fix is a little shorter than mine 

and a little shorter than the President’s. 

But we are moving closer. Let me just say that today, already, 

is this in the Wall Street Journal? It says, there is a warning that 

payments to the States could be delayed as we debate how to close 

the growing gap. That is a terrible signal. 

So again, I want to say to the Wall Street Journal or whoever 

is covering this, that this Committee is ready. We have agreement 

across party lines. We are going to move this the week of July 

20th. We are sending a signal that we are going to take care of this 

problem. 

I thank you very much and we stand adjourned. 

[Whereupon, at 12:10 p.m., the Committee was adjourned.] 

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