U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

85–519 PDF 2014

S. HRG. 110–1237 

A HEARING TO RECEIVE THE REPORT OF THE 

NATIONAL SURFACE TRANSPORTATION POLICY 

AND REVENUE STUDY COMMISSION 

HEARING 

BEFORE THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

JANUARY 31, 2008 

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

( 

Available via the World Wide Web: http://www.access.gpo.gov/congress.senate 

(II) 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS 

ONE HUNDRED TENTH CONGRESS 

FIRST SESSION 

BARBARA BOXER, California, Chairman 

MAX BAUCUS, Montana 

JOSEPH I. LIEBERMAN, Connecticut 

THOMAS R. CARPER, Delaware 

HILLARY RODHAM CLINTON, New York 

FRANK R. LAUTENBERG, New Jersey 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

AMY KLOBUCHAR, Minnesota 

SHELDON WHITEHOUSE, Rhode Island 

JAMES M. INHOFE, Oklahoma 

JOHN W. WARNER, Virginia 

GEORGE V. VOINOVICH, Ohio 

JOHNNY ISAKSON, Georgia 

DAVID VITTER, Louisiana 

JOHN BARRASSO, Wyoming 

LARRY E. CRAIG, Idaho 

LAMAR ALEXANDER, Tennessee 

CHRISTOPHER S. BOND, Missouri 

BETTINA POIRIER, Majority Staff Director and Chief Counsel 

ANDREW WHEELER, Minority Staff Director 

(III) 

C O N T E N T S 

Page 

JANUARY 31, 2008 

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 .................... 4 

Isakson, Hon. Johnny, U.S. Senator from the State of Georgia .......................... 6 

Alexander, Hon. Lamar, U.S. Senator from the State of Tennessee ................... 9 

Barrasso, Hon. John, U.S. Senator from the State of Wyoming .......................... 10 

Bond, Hon. Christopher, U.S. Senator from the State of Missouri ..................... 11 

Voinovich, Hon. George, U.S. Senator from the State of Ohio ............................. 13 

Craig, Hon. Larry, U.S. Senator from the State of Idaho .................................... 16 

Lieberman, Joseph, U.S. Senator from the State of Connecticut ........................ 79 

WITNESSES 

Schenendorf, Jack L., of Counsel, Covington and Burling, Llp ........................... 17 

Prepared statement .......................................................................................... 20 

Responses to additional questions from: 

Senator Lieberman .................................................................................... 30 

Senator Carper .......................................................................................... 31 

Senator Inhofe ........................................................................................... 33 

Senator Bond ............................................................................................. 33 

Senator Voinovich ..................................................................................... 34 

Busalacchi, Hon. Frank, Wisconsin Secretary of Transportation ........................ 38 

Responses to additional questions from: 

Senator Lieberman .................................................................................... 38 

Senator Carper .......................................................................................... 40 

Senator Bond ............................................................................................. 40 

Senator Voinovich ..................................................................................... 41 

Rose, Matthew K., Chairman, President and CEO, BNSF Railway Company .. 44 

Responses to additional questions from: 

Senator Inhofe ........................................................................................... 46 

Senator Bond ............................................................................................. 46 

Senator Voinovich ..................................................................................... 47 

Skancke, Tom, CEO, The Skancke Company ........................................................ 50 

Responses to additional questions from: 

Senator Lieberman .................................................................................... 52 

Senator Carper .......................................................................................... 52 

Senator Inhofe ........................................................................................... 54 

Senator Bond ............................................................................................. 55 

Senator Voinovich ..................................................................................... 57 

ADDITIONAL MATERIAL 

Joint Study Committee on Transportation Funding, Final Report ..................... 81 

(1) 

A HEARING TO RECEIVE THE REPORT OF 

THE NATIONAL SURFACE TRANSPORTATION 

POLICY AND REVENUE STUDY COMMISSION 

THURSDAY, JANUARY 31, 2008 

U.S. SENATE, 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, 

Washington, DC. 

The full committee met, pursuant to notice, at 10:35 a.m. in room 

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

Present: Senators Boxer, Inhofe, Carper, Cardin, Klobuchar, 

Warner, Voinovich, Isakson, Barrasso, Craig, Alexander 

OPENING STATEMENT OF HON. BARBARA BOXER, 

U.S. SENATOR FROM THE STATE OF CALIFORNIA 

Senator BOXER. I want to apologize for delaying this hearing. We 

had an urgent Democratic Caucus meeting about the stimulus 

package and FISA. So forgive me for pushing this back. 

The rules today, each of us will have 5 minutes to open and the 

early bird rule going back and forth. Then as I understand it, the 

chair of the Commission will go a little bit longer than 5 minutes. 

So we will be happy to listen to your entire statement and we will 

hold everybody else to 5 minutes, and we look forward to that. 

So I will begin with my opening statement. On August 1st, 2007, 

the collapse of the I–35 West bridge in Minneapolis claimed the life 

of 13 and injured 145 people. This tragedy served as an urgent 

wake-up call that we can’t neglect our Nation’s crumbling infrastructure. The current highway, transit and highway safety programs of SAFETEA-LU expire at the end of 2009, as we all know. 

Today we begin our process of developing a new authorization for 

those programs. 

As we prepare for this new authorization, it is clear that continuing the current programs at their current funding levels is not 

sustainable and will not fix our Nation’s crumbling infrastructure, 

will not meet the needs of our growing economy and will not adequately address growing congestion. With increased investment, we 

can improve goods movement, reduce congestion, improve air quality and quality of life and provide the necessary infrastructure to 

support our growing economy. 

Today, we hear the recommendations of the National Surface 

Transportation Policy and Revenue Study Commission. Congress 

charged the Commission with examining and then developing recommendations on the current condition and future needs of the 

2 

surface transportation system, short-term funding sources and 

long-term alternatives to replace or supplement the gas tax as the 

principal source of revenue for the Highway Trust Fund. 

In reviewing the Commission’s recommendations, it is clear to 

me that there is no easy answer to the challenges we face. But 

without action by us, our infrastructure will further deteriorate, 

congestion will increase, additional lives will be lost and our economy will suffer. 

Let’s look at some examples. According to the Department of 

Transportation, the cost to our economy from traffic congestion 

alone is as high as $200 billion per year, $200 billion, traffic congestion. I know I have a lot of examples of that in my State. And 

the Census Bureau expects a 50 percent population increase over 

the next 50 years. So you put that together and you have one looming crisis. 

Freight movement is expected to nearly double over the next 30 

years. But traffic through West Coast ports could triple over the 

same period. We already have mayors coming to see me and Senator Feinstein just from our State saying, that as much as they 

want to increase the capacity at our ports, the air quality is so terrible that they would take a pass on that. And that is very, very 

dangerous. That is why we need to do more to clean up the air. 

If we don’t aggressively pursue safety improvements, more lives 

will be lost on U.S. roads. In 2006, almost 43,000 people died and 

2.6 million were injured. The consequences of inaction are not acceptable. We must meet our current and growing needs. If we act, 

the Commission’s report suggests that by 2025, we could cut fatalities in half and reduce per vehicle delay on major urban highways 

by 20 percent. 

The Commission determined that we need to invest at least $225 

billion annually from all levels of government and the private sector over the next 50 years to upgrade our surface transportation 

system. But this is not the only voice. Mayor Bloomberg, along with 

Governors Rendell and Schwarzenegger, recently announced they 

are forming a non-partisan coalition to push for Federal infrastructure investment. They, too, have recognized our Nation’s great 

need. 

The Commission’s report is a significant contribution to the debate of future needs. It clearly states the Commission’s view of why 

it is vital to invest in our transportation system. They offer us recommendations on how to proceed. 

Now, of course, identifying needs raises the question of who pays 

and how. Unfortunately, the media coverage of the report has focused upon the call for a significant increase in the gas tax. I think 

that this does a disservice to the findings and recommendations. I 

personally don’t think that is the route to go. 

The discussion on financing will explore a myriad of options, several of which are discussed in the report. While the gas tax continues to fund our program, we know it is not a sustainable, longterm source of funding. Options could include private sector investment, pricing through tolls and the like, charges for vehicle miles 

traveled. Global warming and other important environmental considerations need to be integrated into our transportation planning. 

3 

Senator Dodd has proposed a national infrastructure bank. He 

has a bipartisan bill on that would identify and help finance infrastructure projects with bonds. And Warren Buffett has identified 

facilitating the sale of municipal bonds as a viable investment option for our future. 

Our job on this Committee is to identify the needs of the Nation 

and develop an effective, efficient program to meet them. So I 

thank all the commissioners for the many hours they spent on developing this report. I appreciate so much those of you who are 

with us today for taking the time to share the Commission’s findings with the Senate. I look forward to the testimony. 

I also wanted to mention that Secretary Peters, who chaired the 

Commission, could not be with us today, but I ask unanimous consent that her statement be placed into the hearing record. 

[The prepared statement of Secretary Mary Peters follows:] 

STATEMENT OF HON. MARY E. PETERS, SECRETARY OF TRANSPORTATION

Chairman Boxer, Ranking Minority Member Inhofe and members of the Committee, I thank you for the opportunity to submit my statement for the record today. 

Let me begin by saying, over the last 20 months, this Commission has met on 

numerous occasions and has engaged in wide ranging discussion in a serious effort 

to address the Nation’s current and future transportation needs. I believe this time 

has been well spent and I value and appreciate the contributions by all of my fellow 

Commissioners. Although I fundamentally disagree with a number of central elements of the Commission’s Report, that disagreement in no way detracts from my 

respect for my colleagues on the Commission. They are to be commended for their 

hard work and dedication in the production of the report. 

While I am attaching the Minority Views Statement to my statement for the 

record, I would like to highlight the key reasons why I was ultimately unable to 

sign on to this report. As most are aware, America’s transportation system has a 

serious and growing problem. The most important challenge we face is the consistent decline in transportation system performance and a fundamentally flawed 

investment strategy. Our surface transportation economic model is fundamentally 

broken and this failure is impacting our families, business productivity, distorting 

real eState markets and degrading our environment. 

I was pleased that the Report recognizes the importance of the transportation system to our Nation’s economic growth. The Report does identify that there is a need 

and opportunity to simplify, consolidate and streamline Federal programs and funding categories. I believe and the Report acknowledges more focused programs will 

deliver better results for the Federal taxpayer. I would also like to commend the 

Report for identifying there is a need for greater accountability and rationality in 

investment decisions. I strongly support recommendations to improve the targeting 

of investments through a greater emphasis on performance and outcomes. 

Unfortunately, the Commission Report maintains a strong emphasis on status quo 

solutions at a time when I strongly believe that the country needs an entirely new 

transportation policy. A key recommendation of this Report is a massive 40 cent per 

gallon Federal gasoline tax over the next 5 years, with automatic increases every 

year thereafter tied to inflation that would more than triple Federal fuel taxes from 

current levels by 2018. I have testified before this Committee previously and have 

stated for the record the Country’s transportation problems do not stem from lack 

of spending or from insufficient tax levels. In fact, it is precisely the ineffectiveness 

of traditional taxes and the politicized nature of transportation spending decisions 

that are themselves the problem. 

In addition, I was also extremely troubled by several other recommendations in 

the Report. Among the most troubling proposals, the Report recommends: creating 

a new Federal bureaucracy outside the executive branch and legislative branch that 

will assume various central planning responsibilities; new Federal regulation limiting States’ ability to attract the growing volume of private sector capital available 

to invest in the country’s transportation infrastructure; a sustained Federal role 

that is not justified by any analysis of a legitimate national interest; and new Federal taxes on public transportation and intercity passenger rail trips. As I have stated before, Federal centric policy will not solve our transportation problems. 

4 

I truly believe there has never been a more exciting time in the history of surface 

transportation. We are at a point where meaningful change is not only conceivable, 

but actually being implemented in various parts of the U.S. In order to ensure that 

the pace and scale of this bottom-up reform movement increases, Federal transportation programs should be re-focused on two basic objectives. First, we should reward, not constrain, State and local leaders that are willing to stand up, acknowledge failure and pursue fundamentally different strategies to financing and managing their transportation systems. Second, the Federal Government’s investment 

strategy should emphasize the interState system and other truly nationally significant transportation investments based on clear, quantitative parameters, not politically contrived ones. 

Ultimately, the Commission Report chooses to take the path of higher taxes, more 

wasteful spending, more congestion and greater pollution. I believe there is a better 

path to take and wiser decisions to make. Again, I thank this Committee for allowing me to submit my testimony and I look forward to working with you. 

Senator BOXER. With that, I will call on Senator Inhofe. 

OPENING STATEMENT OF HON. JAMES M. INHOFE, 

U.S. SENATOR FROM THE STATE OF OKLAHOMA 

Senator INHOFE. Thank you, Madam Chairman. I did have a 

chance to talk to Secretary Peters, so I think she has very significant things to add to this. 

It is safe to say that the anticipation of the Commission report 

has been very high. We recognize that we need to give critical 

thought to our transportation policy as we move into the reauthorization in 2009. The results of the Commission’s study will be an 

important part of those deliberations. 

First, I want to thank the individual commissioners for their part 

and their efforts. I recognize that it took time and dedication on 

your part to not only attend meetings and public hearings, but 

some of you had to learn an entire new sub-culture, the Federal 

Aid Highway world. This next bill will be my fourth reauthorization, and I am still learning. So I know it wasn’t an easy job for 

you guys. 

I think the important lessons to take from the report are that if 

we don’t take dramatic action, growing congestion and deterioration of the pavement conditions will choke the U.S. economy. Another key finding is that both the current models of stovepiped 

modal decisions in the current program structure are outdated. 

That being said, I am not sure I agree with all of your conclusions 

specifically. I am concerned that the report seems to expand the 

role of the Federal Government at the expense of the States. I have 

long been an advocate of just the reverse. 

Now, I have a complete statement I will ask be made a part of 

the record. But let me just ad lib for a moment, Madam Chairman. 

First of all, this is really fun, because it shows the world that Senator Boxer and I can get along and can agree on some things. We 

have both been very much concerned. 

When we worked on this bill, and my experience with the transportation committees started back when I was in the House. The 

first year was 1987. So we have been through quite a few of these 

over the years. As you look back at the group, I see several 

attendees here that were at a speech I made last night, as you look 

back over the years, you can see that we have really been doing 

it the same way since the Eisenhower Administration. That is the 

reason all of us, Senator Boxer and myself, and everyone up here 

5 

who was a part of the 2005 bill, felt that it is important to put this 

Commission together to really explore other alternatives. 

I asked you, Mr. Rose, if you had a chance to really vent some 

of the observations from other States like Indiana, California, 

Texas. It has been my feeling that there is going to have to be 

something other than just highway taxes, gas taxes to support this 

if we are going to take care of the future. 

Let’s look at what we did. This bill that we passed, the reauthorization bill, and at that time, Republicans were the majority so I 

was the author of that thing, that was the largest non-defense 

spending bill, I think, in our history. And yet that only, maybe 

came close to maintaining what we have today. So it is just not 

adequate. 

So my concerns are to try to get something that is new, different, 

new and different approaches. I am hoping that we will be able to 

have this as the first such meeting to explore these approaches. I 

appreciate, Madam Chairman, getting right onto this. 

[The prepared statement of Senator Inhofe follows:] 

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

STATE OF OKLAHOMA

Thank you Madame Chairman. It is safe to say that the anticipation for the Commission Report has been high. We recognize that we need to give critical thought 

to our transportation policy as me move into reauthorization in 2009. The results 

of the Commission’s study will be an important part of those deliberations. 

First, I want to thank the individual Commissioners for their efforts. I recognize 

that it took time and dedication on your part to not only attend meetings, and public hearings but some of you had to learn an entire new subculture, the FederalAid Highway world. This next bill will be my fourth reauthorization and I am still 

learning how this program works, so I congratulate and thank you for sticking with 

it to come up with this comprehensive report. 

I think the important lessons to take from the report are that if we don’t take 

dramatic action, growing congestion and deteriorating pavement conditions will 

choke the US economy. Another key finding is that both the current model of stove 

piped modal decisions and the current program structure are outdated. 

That being said, I not sure I agree with all of your conclusions. Specifically, I’m 

concerned that the report seems to expand the role of the Federal Government at 

the expense of the States. I have long advocated for the reverse. I am a firm believer 

in a national transportation system, but think our current Federal-aid program has 

expanded beyond that to be a State and local system paid for with Federal-aid dollars. 

I am interested in hearing more of your thoughts behind some of the recommendations. For example, I believe you are heading us in the right direction in 

collapsing the program into more targeted focus areas, but I am not sure I agree 

with all of your new programs. Nonetheless, I appreciate you starting the discussion 

and look forward to learning more of what you envision. As stated earlier, if we are 

to successfully address our pressing infrastructure needs, I believe we need to think 

beyond individual modal needs and talk about how they all work together. 

Certainly, for this to be successful, highways users cannot be the only mode contributing. If I understand your recommendation, I believe your transit user fee proposal is indication you agree with me on this point. 

Two of your proposals, environmental streamlining and increased focus on safety, 

were among my highest priorities during the last reauthorization. We labored long 

and hard to reach consensus on streamlining the environmental approval process, 

so I am curious to better understand what more you propose be done. Likewise, we 

created a new core Safety program that requires States to develop a comprehensive 

safety plan that must focus on the biggest safety problems in the state, then use 

the new Safety money to address those problems. Again, I am interested in your 

views on why that is not working. 

Finally, I have to comment on the proposed financing mechanism. I believe increasing the Federal fuel tax by the amount proposed in your report is not doable. 

Furthermore, I am not convinced it is necessary. Certainly, given the balances in 

the Highway Trust Fund, an increase in the fuel tax must be considered, but not 

6 

to the level you propose. I had hoped that the Commission would have considered 

in more detail alternative financing mechanisms that could eventually replace the 

fuel tax as the primary method to collect revenue for transportation. As vehicles become more fuel efficient, the existing funding model of paying per gallon of fuel will 

not be effective. 

Again, I appreciate your efforts and thoughtful recommendations and look forward 

to discussing them further with you. 

Senator BOXER. Thank you, Senator Inhofe, so much. And yes, 

this is an area where we will continue to work very closely together. 

In early bird rule, I have Senator Isakson next. 

OPENING STATEMENT OF HON. JOHNNY ISAKSON, 

U.S. SENATOR FROM THE STATE OF GEORGIA 

Senator ISAKSON. Thank you, Madam Chairman. 

This is a critically important hearing today and I commend the 

Commission on its work and thank you for taking your time to be 

here today. 

Transportation infrastructure is a critical resource in my State 

of Georgia, the tenth largest State in the Country and one of the 

fastest-growing. Furthermore, transportation is essential to the 

commerce and provision of goods and services throughout the Nation. The task ahead of us is challenging, creating the necessary 

programs and finding the necessary funds to maintain and improve 

the infrastructure is indeed going to be difficult. 

Finding solutions in my State of Georgia has been especially 

daunting. The Georgia Department of Transportation estimates a 

$7.7 billion transportation funding shortfall during the current 6- 

year period. In Fiscal Year 2007 alone, it was estimated that maintenance, safety and other transportation improvements were short 

by nearly $445 million. I recognize the Committee does not have 

jurisdiction over revenue-raising measures, and the responsibility 

lies within the jurisdiction of other committees. 

However, Chairman Baucus, of the Subcommittee on Transportation Infrastructure and I as the Ranking Member, also recognize 

that today’s hearing is determined to be a discussion of reauthorization of the surface transportation program, and this report’s suggestion condensing the 100 current Federal surface programs into 

10 new focus areas that are outcome-based as opposed to the current system that is modality-based. 

However, I do not think that this Committee can discuss new 

programs or focus areas in a vacuum without including in that discussion realistic expectations about what funds are available. This 

has to be a coordinated approach with other committees, because 

we need to understand and know what is possible and what is not 

possible from a revenue standpoint. Congress too often, with the 

best of intention, authorizes programs that far exceed resources 

available for it only to have these programs suffer or even fail for 

lack of funding. We are in just such a circumstance today. 

We need to be cognizant of that in the debate going forward and 

recognize we will need to partner with our revenue-raising committees in the House and Senate to ensure we are not creating conditions where we are unable to solve America’s transportation infrastructure. 

7 

On that note, I do believe that current revenue-raising mechanisms for surface transportation are broken and no longer appropriate for funding our Nation’s surface transportation program. I 

recognize we are facing a $340 billion problem. But I am not sure 

that just recommending an increase to the existing fund-raising 

mechanism, for example, 40 cents a gallon on gasoline, is the right 

solution to approach. It is time to look at the entire revenue-raising 

measure, the challenges of the 21st century, the differences in the 

way fuels operate, vehicles operate and other modes of transportation operate, to ensure we make a financial recommendation that 

is best for the 21st century. 

Madam Chairman, the suggested focus that the Commission has 

outlined are of great interest. For example, in September, this 

Committee held a hearing on bridge safety. In my State of Georgia, 

we have 9,000 bridges statewide and Georgia DOT inspects a minimum of every 2 years with many being inspected annually. Fifty 

percent of the bridges are on-system, 50 percent of the bridges are 

off-system, which means they are either city or county-controlled. 

In Georgia, approximately 1,100 bridges are classified as structurally deficient, with 200 of these being on the system and 900 

being off-system. 

The National Asset Management Program as recommended by 

the Commission is an attractive solution to ensure that these 

bridges are maintained and the tragedy in Minnesota is not repeated. The ports of Savannah and Brunswick in my State are 

growing at a tremendous rate. The freight transportation program 

to relieve congestion, increase intermodal connections and reduce 

time and cost to the supply chain appear they will ensure that the 

port growth is not choked off. I commend the Commission on its 

work. 

I have long advocated for inter-city passenger rail along the I– 

75 and I–85 corridor, in particular, the I–85 corridor. I also believe 

the Federal Government should provide the infrastructure, but not 

necessarily in an Amtrak subsidy-type basis, but more of an aviation type of a model, where the private sector delivers the service, 

the Government puts in the infrastructure. I think that makes an 

awful lot of sense from the standpoint of commuter rail. 

I am pleased to see the Commission’s recommendations on national access programs for smaller cities and rural areas. When 

many people think of Georgia, they think of metropolitan Atlanta 

and often forget that so much of our critical State is rural. I have 

long advocated for connections to these rural communities to the 

economic centers of my State for moving freight, moving people and 

moving commerce. I look forward to hearing from the Commission 

on this report. 

Finally, my greatest interest in the Commission’s recommendation on congestion relief is for our metropolitan area. In the city of 

Atlanta today, it is estimated that it takes over 1 hour a day just 

to commute to and from work, and time period is growing at a 

rapid rate. Further, only 4 percent of our metropolitan community 

uses mass transit. I look forward to hearing the Commission’s suggestions on strategies that include expansion of transit, highways, 

road capacity and inter-modal connections. 

8 

Madam Chairman, I thank you for the time and I yield back the 

balance of my time. 

[The prepared statement of Senator Isakson follows:] 

STATEMENT OF HON. JOHNNY ISAKSON, U.S. SENATOR FROM THE

STATE OF GEORGIA

Thank you Madam Chairman. 

This is a critically important hearing that we are having today. Transportation 

infrastructure is a critical resource to my State of Georgia, and our Nation, in providing greater mobility and a higher quality of life. Furthermore, transportation is 

essential to the commerce and the provision of goods and services throughout our 

Nation. The task ahead of us is challenging. Creating the necessary programs, and 

then finding the necessary funds to maintain and improve the transportation infrastructure is becoming increasingly difficult. 

Finding solutions in my State of Georgia have been especially daunting. The Georgia Department of Transportation estimates a $7.7 billion transportation funding 

shortfall during the current 6 year period. In fiscal year 2007 alone it was estimated 

that maintenance, safety and other transportation improvements were short nearly 

$445 million. 

I recognize that this Committee does not have jurisdiction over revenue raising 

measures, and that responsibility lies within the jurisdiction of the Committee 

chaired by my colleague Senator Baucus, who also chairs the Subcommittee on 

Transportation and Infrastructure on which I am the Ranking Member. I also recognize that today’s hearing is intended to be a discussion of a reauthorization of the 

surface transportation program, and this report’s suggestions of condensing the 100 

current Federal surface programs into 10 new focus areas that are outcome based, 

as opposed to the current system that is modally based. 

However, I do not think this Committee can have a discussion about new programs or focus areas in a vacuum, without also including in that discussion realistic 

expectations about what funds are available. This has to be a coordinated approach 

with the other Committees, because we need to understand and know what is possible and what isn’t possible from a revenue standpoint. Congress too often, with 

the best of intentions, authorizes programs that far exceed the resources available 

for it only to have those programs suffer or even fail for lack of funding. We need 

to be cognizant of that in this debate going forward, and recognize that we need 

to partner with our revenue raising Committees in the House and Senate to ensure 

we are not creating conditions whereby we are unable to solve America’s transportation and infrastructure needs. 

On that note, I do believe that the current revenue raising mechanisms for surface transportation are broken and no longer appropriate for funding our nation’s 

surface transportation infrastructure. I recognize that we are facing a $340 billion 

problem, and am not sure how raising the Federal motor fuel tax by upwards of 

θ40 per gallon when we have demonstrated that this mechanism is failing, solves 

that problem. 

Madam Chairman, the suggested focus areas that the Commission has outlined 

are of great interest in my State. For example, in September this Committee held 

a hearing on bridge safety. In preparation for that hearing I contacted Georgia DOT 

and learned that Georgia has approximately 9,000 bridges statewide, and GDOT inspects all of them at a minimum of every 2 years with many being inspected annually. 50 percent of these bridges are ‘‘on system’’, which means they are controlled 

by the state, while 50 percent are ‘‘off system’’, which means they are either city 

or county controlled. In Georgia, approximately 1,100 bridges are classified as structurally deficient, with 200 of these being on system and 900 off system. The National Asset Management Program as recommended by this Commission is an attractive solution to ensure that these bridges are maintained, and the tragedy in 

Minnesota is not repeated. 

The ports of Savannah and Brunswick in my State are growing at a tremendous 

rate. The Freight Transportation program to relieve congestion, increase intermodal 

connections, and reduce time and costs to the supply chain appears that it will ensure that these ports growth is not choked off. 

I have long advocated for intercity passenger rail along the I–75 and I–85 corridors in the south to relieve congestion on those interstates in our region. I believe 

that the Federal Government should provide the infrastructure, but instead of Amtrak running the routes on a government subsidy we should instead leave it to the 

private sector to compete and provide service. I am pleased to see the Commission’s 

emphasis on this. 

9 

I am also pleased to see the Commission’s recommendations on a national access 

program for smaller cities and rural areas. When many people think of Georgia they 

think of metropolitan Atlanta, and often forget that so much of our State is rural. 

I have long advocated for connections for these rural communities to the economic 

centers of my State for moving freight and people. I look forward to hearing from 

the Commission on this. 

Finally, my greatest interest is in the Commission’s recommendations on congestion relief for our metropolitan areas. In metropolitan Atlanta, the average 

roundtrip commute time is over 1 hour per day. The impact on business and families as a result of this congestion is very real. Further, only 9 percent of our metropolitan community uses mass transit. I look forward to hearing the Commission’s 

suggestions on strategies that include an expansion of transit and highway and road 

capacity. 

Madam Chairman, in Georgia we have been working on this issue for some time. 

I would like to submit for the record a report that the Joint Study Committee for 

Transportation Funding in our State Legislature put forth with its suggestions on 

addressing Georgia’s transportation congestion problems. We must keep in mind as 

we move forward that any changes we make here in Washington have a tremendous 

impact on our State Departments of Transportation, and other stakeholders in our 

States. We must work in partnership with the States to ensure that we maximize 

our programs and resources as we work toward the common goal of ensuring that 

we meet infrastructure demand for the next century. 

Madam Chairman, I yield back my time. 

Senator BOXER. Senator, I really appreciate your comments, and 

also the work you do with Chairman Baucus on the subcommittee. 

It is crucial. Thank you. 

Senator Alexander, you are next. 

OPENING STATEMENT OF HON. LAMAR ALEXANDER, 

U.S. SENATOR FROM THE STATE OF TENNESSEE 

Senator ALEXANDER. Thank you, Madam Chairman, Senator 

Inhofe. I thank all of you for your work on this. I really look forward to this. 

If there was anything that we could do to reduce congestion on 

America’s roads, the American people would congratulate us and 

double our approval ratings overnight. So we are going to take this, 

I am going to take this seriously. In the mid–1980’s, when I was 

Governor of Tennessee, Saturn and Nissan had just come to our 

State. I was trying to understand what we could do to bring the 

auto industry there. We had a good location, a right-to-work law 

and low taxes. But what I realized was we had a poor four-lane 

highway system. 

So we had three big road programs build what the truckers said 

was the best four-lane highway system in the Country, built a lot 

of interstate-quality roads with 100 percent State money. And 

today a third of our manufacturing jobs are auto jobs, where 25 

years ago, almost none were. In order to do that, we had to pay 

the bill, which meant doubling the gas tax and every Republican 

voted for it and almost every Democrat. The only people who got 

in trouble were those who didn’t. 

Now, I say that because I hope that we don’t have a big discussion about revenue before we have a big discussion about what we 

need to do. We can get all hung up on how to pay the bill but pay 

the bill for what? So the first thing we need to talk about are your 

recommendations to envision what should the greatest country in 

the world have as a transportation system for the next 20, 25 

years, and then we can recommend how to pay the bill. And I 

10 

imagine that most Americans would be grateful to pay the bill to 

reduce congestion and keep our jobs. 

The subjects I am interested in are the following. I hope to hear 

your comments on them. I will list them briefly. How can we give 

States more flexibility to contract in a more cost-effective way? 

Senator Bond’s home State has a way of improving all of its 

bridges by 2012 and maintaining them for 25 years with Missouri 

making no payments until after the construction is finished and 

using existing Federal dollars to do it. 

A second point is, Senator Isakson and others have proposed a 

2-year budget for the Federal Government and I would like to understand exactly what inefficiencies are caused by our failure in 

Congress to have an orderly budgeting process. I know it must be 

billions of dollars every year from the inability to let contracts on 

an orderly basis. So what can we do with existing dollars if we had 

a more orderly system here, what opportunities are there to do 

more of what Missouri is doing? 

I would like to understand much we lose by applying rescissions 

to the highway funding, in other words, by taking money out of the 

existing Highway Trust Fund and using it for other purposes, and 

make sure that we Senators understand that. 

I would like to make sure I understand, too, why we don’t have 

some sort of efficiency rating for States based upon their efficient 

use of their roads. Senator Bond and I used to go to Governors conferences. And we would brag about how Missouri was ahead of 

Tennessee or vice versa. 

I can guarantee you that if Tennessee were 50th in the Country 

in terms of the efficient use of existing roads, that is because we 

were doing construction in rush hours and not getting, and just 

doing a sloppy job of the roads we already have, a person could win 

a Governor’s race based upon that. So why don’t we rank States 

1 to 50 based upon the efficient use of the roads, and let Governors’ 

campaigns be based upon that as we go ahead? 

So I am very much looking forward to this. I thank you for the 

time you have spent on it, and I would end where I started: I hope 

we will focus first on imagining the kind of transportation system 

that a great country ought to have. I believe most Americans will 

respect us for that if we do that, and it would be an exciting thing 

to do and vitally important for our Country. 

Then second, let’s talk about how to pay the bill. Of course, that 

is an important subject and there are many ways to do it. But let’s 

don’t start out talking about how to pay the bill when we haven’t 

even had a consensus yet of what we are paying the bill for. 

Thank you very much, Madam Chairman. 

Senator BOXER. Senator, you speak for me on that point. 

The order I have, and if anyone says I am wrong, is Barrasso, 

Bond, Voinovich and Craig. So we will go to 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 

want to thank members of the Commission for being here today. 

This is a topic in which I am very interested. Wyoming is a very 

large, rural State, and we have about five people living in every 

11 

square mile of the State. So people are spread out. We rely heavily 

on the Highway Trust Fund, and it is appropriate, because much 

of the damage done to our roads is not done by the people of Wyoming, it is done by the large trucks as part of our Nation’s commerce, moving product from east to west, west to east. For each of 

those large trucks, that does more damage than many, many cars. 

So it is appropriate for us as we look to the Federal Government 

for help, because this is part of national commerce. As we heard 

earlier this morning, that national commerce and those products 

are going to double and have that same impact on our roads. 

In the Wyoming State Senate, I was chairman of our transportation committee. We did push within the State of Wyoming for additional State money to go into our highway system. Every year I 

was chairman of the committee, we were able to accomplish that. 

We were able to accomplish it also without raising the gas tax. I 

have heard much already around the State of Wyoming about your 

recommendation that the gas tax be raised. I have significant concerns there. 

As we proceed through this process, I will tell you I hope that 

we can discuss proposals that are truly equitable and that don’t pit 

big cities against rural America and highways against transit. So 

I thank you very much for being here and look forward to your 

comments. Thank you, Madam Chairman. 

Senator BOXER. Thank you very much, Senator Barrasso. 

Senator BOND. 

OPENING STATEMENT OF HON. CHRISTOPHER BOND, 

U.S. SENATOR FROM THE STATE OF MISSOURI 

Senator BOND. Thank you very much, Madam Chair and Ranking Member Inhofe, for having this very important hearing today. 

It is vital that we initiate this discussion and special thanks goes 

to members of the Commission, especially those here today. Because you have taken on a global subject and given some very interesting outlooks on how we deal with it. 

In addressing this issue, we need to take a hard look at the best 

way to balance our critical national infrastructure needs with helping American families keep more of their hard-earned money. Most 

people call me conservative, but I am infrastructure conservative. 

You can’t have good economic growth unless the Government plays 

its role in assuring that vital infrastructure. I believe, as I know 

you do, that transportation infrastructure is an absolutely vital 

component of our economy. We need to bring the infrastructure of 

this Nation back to the point where it can promote and sustain 

strong economic growth. 

Now, Governor Alexander and I had numerous discussions between the States of Tennessee and Missouri who could provide best 

transportation. I can tell you that there was something I learned 

as Governor, when we were trying to bring jobs into the State. Jobs 

went where there was good transportation; if you had a four-lane 

highway, and especially if you had good rail service, and if you had 

adequate water transportation. Too often we limit our focus just to 

the highways. We drive on them every day, but we know that the 

much more efficient and environmentally friendly way of transportation will be rail and water. 

12 

So the long-term financing and infrastructure problems we face 

today need to be evaluated in depth, and all the viable solutions 

need careful consideration. 

The one thing that is clear in this debate is the need for action. 

With the growth of our population, coupled with expanding global 

economic activity, our Country cannot withstand the consequences 

of inaction. As I pointed out in our arguments over the 2002 Water 

Resources Development Act, which we finally managed to pass in 

2007, that we were in great danger of losing our agricultural exports to Brazil and other countries were they were developing 

water transportation. One of our great exports to Latin America 

were the barges and tow boats that we used to be able to use on 

our rivers. We were shipping them the means to compete more effectively in transportation to take their products to the market, 

while we were sitting land-locked with our highways over-crowded, 

our rails at capacity and our water resources under-utilized. 

We need a good starting point in understanding our current infrastructure situation and the possible solutions. However, as we 

move into these discussions, there are a couple areas of concern in 

the Commission’s recommendations. It is important to address possible alternatives to the recommendations regarding the increased 

Federal role, the gas tax hikes and the rise in tolls. We did, in the 

SAFETEA measure, provide streamlining that cut, some people 

say, 10 to 15 percent of the cost of highway construction by making 

the process run more smoothly. That was an easy one. I think we 

have taken the easy solutions. We need to take a look at the tougher ones now. 

And while I respect the Commission’s report, it is my hope that 

this report will foster the discussion of possible alternatives, rather 

than narrow the scope of solutions. I will have a question either I 

ask or submit for the record, that kind of bothers me on how the 

Department of Transportation can effectively administer 10 new 

focus areas, eliminating the modal-focused divisions that we currently have, and how we as a Congress can do a better job in exercising oversight of those areas where they cross jurisdictional lines. 

Undoubtedly our transportation infrastructure is in need of an 

overhaul. We should strike a balance with the need and the everyday needs of the American family. We have difficult decisions. 

But your report has given us a good starting point. We very 

much appreciate your work and we look forward to hearing from 

all of you and working with the entire Commission and our Committee to solve these problems. 

[The prepared statement of Senator Bond follows:] 

STATEMENT OF HON. CHRISTOPHER BOND, U.S. SENATOR FROM THE

STATE OF MISSOURI

Thank you Chairman Boxer and Ranking Member Inhofe for holding this hearing 

today. This hearing is a great opportunity to initiate the necessary conversation of 

how to move this country forward to meet our country’s transportation needs. 

In addition, thank you to all the members of the commission for their hard work 

on this report, and especially to the members testifying today. It is your work that 

has brought needed attention to this issue. 

In addressing this issue, we need to take a hard look at the best way to balance 

our critical national infrastructure needs with helping American families keep more 

of their hard earned money. Many call me a conservative but I am an infrastructure 

conservative. 

13 

I believe, as many do, that our transportation infrastructure is a vital component 

of our economy and that we need to bring the infrastructure of this nation back to 

the point where it can promote and sustain strong economic growth. For this reason, 

the long term financing and infrastructure problems that we face today need to be 

evaluated in-depth and all viable solutions need careful consideration. 

However, the one thing that is clear in this debate is the need for action. With 

the growth of our population, coupled with the expanding global economy, our country cannot withstand the consequences of inaction. I hope that our discussion today 

will be a good starting point from which we can better understand our current infrastructure situation and the possible solutions to this situation. 

However, as we move forward in our discussions, there are a couple areas of concern in the commission’s recommendations. It is important to address possible alternatives to the recommendations regarding the increased Federal role, the gas tax 

hikes and the rise in tolls. In SAFETEA, we managed to streamline the Federal 

process. 

Also, I will have to question how the Department of Transportation can administer the 10 new focus areas eliminating the modal focused divisions and how we 

exercise effective congressional oversight. Additionally, the Commission focused a 

great deal on highway but needs to expand the focus to include efficient rail and 

water (WRDA). 

While I respect the commission’s report, it is my hope that this report will foster 

the discussion of possible alternatives rather than narrow the scope of solutions. 

Undoubtly, our transportation infrastructure is in need of an overhaul; however, 

we should strike a balance to strike a balance with that need and the everyday 

needs of the American family. We have difficult decisions before us, but this report 

can make those decisions more informed and more effective. 

Again, I thank the chair and the commission for their hard work. I look forward 

to hearing from the other commissioners and to working with the entire commission 

to move forward in solving America’s infrastructure needs. 

Senator BOXER. Thank you, Senator Bond. 

Senator VOINOVICH. 

OPENING STATEMENT OF HON. GEORGE VOINOVICH, 

U.S. SENATOR FROM THE STATE OF OHIO 

Senator VOINOVICH. Thank you, Madam Chairman. I am pleased 

that you are holding this hearing today and really appreciate the 

commissioners being here and the time that you put into making 

this report available to us. 

Federal transportation policy is of real importance to my State, 

because Ohio has one of the largest surface transportation networks in the Country, the tenth largest highway network, fifth 

largest volume of traffic, fourth largest interState system and the 

second largest number of bridges. Fourteen percent of all freight 

that moves in the United States moves in through or out of Ohio— 

the third greatest amount in the 50 States. 

Throughout my career, I have worked to increase funding for infrastructure. As Governor, during ISTEA, I sought to increase 

Ohio’s rate of return from the Highway Trust Fund from 80 to 85 

percent. In 1998, as Chairman of the National Governors Association, I was involved in negotiating TEA–21, and I fought to even 

out highway funding fluctuations and assure a predictable flow of 

funding to the States, which is extremely important. I remember 

the days when it would go up and down and you couldn’t do any 

planning. I think we have been able to correct that. 

During consideration of SAFETEA-LU, I pushed for increased 

funding. I thought the total funding levels were well below what 

was appropriate and necessary for the Nation’s infrastructure 

needs. At that time, we knew that what we were doing was inadequate. I predicted that the money spent in that authorization bill 

would not be enough. Sadly, I was right. Because of the rising cost 

14 

of construction and energy, the purchasing power from SAFETEALU has significantly declined. In effect, we are not even going to 

keep up with inflation as a result of SAFETEA-LU. Everyone at 

this table knows how the projects that people anticipated to go forward aren’t going forward because the money has evaporated. 

So as I say, I have been looking forward to this report for a long 

time. If any of us think that we can deal with these problems without more money, we are being intellectually dishonest. I hope that 

the next President of this Country clearly understands that. It is 

time to level with the American people. 

Recently we have been talking about putting together an economic stimulus package to jump-start the economy. We ought to 

look at how our inadequate highway system is hurting our economic situation here in the Country and impacting our competitive 

position in the global marketplace. I know how important highways 

are, I am a former Governor. Remember that I doubled the exits 

on the Ohio Turnpike when I was Governor. We went to three 

lanes on the Ohio Turnpike, made a big difference and helped the 

economy. We have to understand those things. 

As ranking member of the Clean Air and Nuclear Safety Subcommittee, I am also aware of the relationship between highway 

planning and air quality. I am glad that you talked about that in 

the report. 

I have also been a champion of public-private partnerships. The 

Diesel Emission Reduction Act, which Senators Carper, Clinton 

and I championed during the Energy Bill and the last Highway 

Bill, is a great example of this, how we are going to spend Federal 

money, get the private sector involved and really do something 

about reducing diesel emissions. 

I support the Commission’s recommendations on improving and 

streamlining the delivery of transportation projects. One of the 

things I campaigned on when I ran for the Senate was to reduce 

the time it takes to complete transportation projects. Even though, 

as Senator Bond mentioned, we have done some good work, we 

really need to look at that again. We need to revisit this. I couldn’t 

believe this, I thought we had made some real significance, but 

your report says that it takes 13 years on average to complete 

major projects? Thirteen years? Unbelievable. 

The report echoes what I have been saying for years: it is the 

Government’s role to provide the infrastructure for American business. Unless we develop this infrastructure of competitiveness, our 

children and grandchildren are not going to be able to enjoy the 

same standard of living or quality of life that we have been able 

to enjoy. We owe you a great debt of gratitude for the time that 

you have spent on this report. I can tell you for sure that we are 

going to take your recommendations into consideration when we 

put the next Highway Bill together. 

Thank you. 

[The prepared statement of Senator Voinovich follows:] 

STATEMENT OF HON. GEORGE VOINOVICH, U.S. SENATOR FROM THE

STATE OF OHIO

Mrs. Chairman, I am pleased that you are holding this hearing today. I would 

like to thank the Commissioners for being here and for all your hard work and 

strong leadership in putting together this report. 

15 

Federal transportation policy is of particular importance to my State because Ohio 

has one of the largest surface transportation networks in the country. The State of 

Ohio has the 10th largest highway network, the fifth highest volume of traffic, the 

fourth largest interState system and the second largest number of bridges. 14 percent of all freight that moves in the United States moves in, through, or out of 

Ohio—the third greatest amount of any state. 

Throughout my career, I have worked to increase funding for infrastructure. As 

Governor, during ISTEA, I fought to increase Ohio’s rate of return from the Highway Trust Fund from 80 percent to 85 percent. In 1998, as Chairman of the National Governors Association, I was involved in negotiating TEA–21 and I fought to 

even out highway funding fluctuations and assure a predictable flow of funding to 

states. 

During consideration of SAFETEA-LU, I pushed for increased funding. I thought 

the total funding levels were well below what was appropriate and necessary for the 

nation’s infrastructure needs. Even, the Federal Highway Administration acknowledged that more funding was needed. In 2004, Federal Highways stated that the 

average annual investment level needed to improve our highways and bridges would 

be $118.9 billion. The average annual investment level necessary to just maintain 

the current condition and performance of highways and bridges would be $77.1 billion. 

I predicted that the money spent from that authorization bill would not be 

enough. Sadly, I was right. Because of the rising costs of construction and energy, 

the purchasing power from SAFETEA-LU has significantly declined. As a result, 

highway projects have had to be canceled and states and locals have had to stepup and assume more of the financial burden, and they are doing so at a time when 

many states are projecting severe budget shortfalls. 

I have been looking forward to reading this report for a long time. If any of you 

think that we can deal with these problems without more money, you are being intellectually dishonest. And, I hope the next president understands this clearly. 

Recently, we have been talking about putting together an economic stimulus package to jumpstart the economy. I think our failure to invest in the improvements necessary to keep pace with our growing population and increasing demands is one of 

the roadblocks standing in the way of moving our economy forward. Investing in our 

nation’s transportation could create hundreds of thousands of jobs and move our 

sluggish economy down the road to recovery. Manufacturing states, such as Ohio 

with a ‘‘just-in-time’’ economy, cannot be competitive with failing infrastructure 

where traffic congestion and bottlenecks in our rails and waterways is the norm. 

I am very encouraged that this report recognizes the link between our infrastructure 

and our ability to compete in the global market. 

As Ranking Member of the Clean Air and Nuclear Safety Subcommittee, I am 

well aware of the important relationship between highway planning and air quality. 

I am pleased that this report emphasizes environmental stewardship and recommends more State flexibility on funding efforts to improve our air quality. 

I have always been a champion of public private partnerships. The Diesel Emissions Reduction Act, which Senators Carper, Clinton and I championed during the 

energy bill and last highway bill, is a great example of this. The Federal Government provides funding for private entities to retrofit their vehicles to help reduce 

emissions. One of the findings of the report was that public private partnerships 

should play an important role in financing our national surface transportation system and for reducing our energy consumption. I hope that we can encourage this 

in the next authorization bill. 

I also support the Commission’s recommendations on improving and streamlining 

the delivery of transportation projects. As a former Governor and Mayor, I have 

been frustrated at how long it can take to finish a highway project from beginning 

to end. In fact, during my first Senate campaign—as part of my platform, I pledged 

to reduce this timeframe. I am pleased that this report acknowledges this lag time— 

major projects take nearly 13 years on average to complete. During the last highway 

bill, we tried to expedite the environmental review process but there are still many 

improvements that need to be made as the report recognizes. 

This report echoes what I have been saying for years—it’s the government’s role 

to provide the infrastructure for American business, and unless we develop an infrastructure of competitiveness, our children and grandchildren will not be able to 

enjoy the same standard of living and quality of life that we have enjoyed. 

The American people must be made aware of the infrastructure challenges our nation faces. Hopefully, with your participation, Commissioners, our hearing today can 

shed more light on this critical issue. 

Senator BOXER. And last but certainly not least, Senator Craig. 

16 

OPENING STATEMENT OF HON. LARRY CRAIG, 

U.S. SENATOR FROM THE STATE OF IDAHO 

Senator CRAIG. Madam Chair, thank you very much. 

Commissioners, this is a bit of a unique panel. Most of us have 

either served in State legislatures, dealt with transportation, you 

have a Governor, a Governor and a Governor that just left, who 

knew their political fortunes were based on doing the right things 

in transportation. You have a mayor. 

Senator Barrasso and I come from those States that are unique 

to the formula: lots of lane miles and darned few people. But lane 

miles that, as the Senator said, are critical crossings for the commerce of America across the western States. Having said that, my 

State of Idaho is in an interesting microcosm at the moment, because we are one of the fastest-growing States in the Nation, third 

now, because the metro area of Boise-Nampa-Caldwell is growing 

so rapidly it is sucking up all of the transportation money that once 

spread across the State. And it has to, just to keep things moving 

there, because it is hard to catch up with where you are or where 

you need to be when you are growing as rapidly as we are. So that 

in itself becomes a fascinating anomaly. 

Mr. Rose, you have a right-of-way in Sand Point, Idaho, that I 

am very interested in. Because it is another anomaly. Rails and 

roads used to go right down here, and then the communities built 

around them. All of a sudden, they become too big. We want to put 

a highway system on your right-of-way. We have been negotiating 

with you for 10 years. I am ready to sign the contract. Are you? 

[Laughter.] 

Senator CRAIG. But my point is quite simple. All of these are 

real, very real problems that we have to deal with. I was in Spain 

a week ago, and at an ambassador’s reception, and into the embassy walked a young man who had just negotiated a 75-year lease 

on a toll road in Chicago, between Chicago, I think, and Indiana. 

A Spanish government, a Spanish company had taken it over, 

going to run it for 75 years, collect the toll. Why are we letting that 

happen? Because we have no other way to finance roads. I think 

they own or they have leased now for 75 years one of the Pennsylvania turnpikes and toll roads. 

So there are interesting, unique things happening out there in 

this transportation system of ours that I find fascinating. Just before the Christmas recess, this Committee, under the chairmanship 

of Senator Boxer, completed a climate change bill. We are all very 

interested in cars that are cleaner, that burn less fuel. I am a Senator who, for the first time in 27 years changed my position and 

helped lead a change in CAFE standards for fleets in this Country. 

Yet we are saying we have to ask more per gallon of gas to fund 

the system, when we are saying we are going to burn less gas per 

car per unit? And if we are good at what we do by 2030 we will 

more hybrids and plug-in vehicles and they are going to be electrical and they are not going to pay a dime, or very little, gas tax. 

That ought to be our goal. 

So a funding mechanism, a new formula on how we finance, because they will be wearing out the roads, they will be lighter, they 

won’t do as much damage, but the heavy trucks will still be there, 

unless we do what others are saying, what Senator Bond has 

17 

talked about in water transportation and rail transportation. Phenomenal challenges for our Country, but directly tied to our economic vitality. There is just no doubt about it. 

We in the west, as we grow and populate, are still going to have 

those unique rural anomalies. Drive 500 miles across my State on 

the interState and see few people. But it is bumper to bumper 

trucks moving from Chicago to Los Angeles or Chicago to San 

Francisco or any place in between. It must continue to happen. 

So those are going to be challenges. Personal investment in rural 

America will be critical as we work our way through that. So let 

me conclude and listen, as we all will, to you and your reports. Mr. 

Rose, we will talk about the right-of-way later. 

Thank you. 

Senator BOXER. Senator Craig, let me say that I agree with your 

comments on the gas tax. It is just—it is going to be, if we succeed 

in getting off of the fossil fuels—— 

Senator CRAIG. And that is our goal. 

Senator BOXER. That is right. So we have to now think much 

more creatively about miles traveled and other ways to think about 

this. I have talked with Senator Inhofe and we are really going to 

work very hard together across party lines. I would say, this 

doesn’t reflect a lack of interest, it reflects interest in FISA and the 

stimulus package. That meeting was just going very strong when 

I left. So know that I will be talking to all my colleagues. This is 

a bipartisan approach that we are taking to this issue. 

Well, now we get to you, and we are just so pleased to have 

members of the Commission here. We will start with Mr. Jack 

Schenendorf, who was appointed by Speaker Hastert and was the 

Vice Chair of the Commission. We welcome you, sir. 

STATEMENT OF JACK L. SCHENENDORF, OF COUNSEL, 

COVINGTON AND BURLING, LLP 

Mr. SCHENENDORF. Thank you, Chairman Boxer, Senator Inhofe 

and other members of the Committee. 

I am Jack Schenendorf, I am Of Counsel with Covington and 

Burling law firm in Washington, DC. I had the honor of serving as 

the Vice Chair of the Commission. 

Given the subject matter of today’s hearing—— 

Senator INHOFE. Let me interrupt just a minute, Madam Chairman. 

You should also say you have all this extensive background 

working on the committees. Way back when I was in the House, 

Jack was in the transportation committee and has extensive background there. 

Mr. SCHENENDORF. I worked for 25 years on the House Transportation Committee. 

Senator BOXER. Well, we know you are qualified. 

[Laughter.] 

Mr. SCHENENDORF. Given the subject matter of today’s hearing, 

it is true a special honor for us to appear before this Committee. 

For it was the leaders of this Committee, men such as Senator Al 

Gore, Sr., and first-term Senator Prescott Bush, who just over 50 

years ago, in cooperation with President Eisenhower and their 

counterparts in the House, had the wisdom, the vision and the poVerDate Aug 31 2005 10:57 Jan 15, 2014 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\85519.TXT VERN
18 

litical will to establish the interState highway program and to ensure adequate investment by creating the Highway Trust Fund and 

almost tripling the Federal user tax on motor fuels. 

These leaders understood that the Nation’s transportation system was in crisis and at a crossroads. They knew the importance 

of transportation to our economy, our national defense and our 

quality of life. They understood that the political generation that 

pays for transportation improvements is not usually the political 

generation that benefits from the rewards. But they were willing 

to sacrifice and make the tough decisions, so that America would 

have a bright and prosperous future. We owe then an enormous 

debt of gratitude. 

Madam Chairman, our commission has concluded that our transportation system is once again in crisis and at a crossroads. We 

have outgrown our aging highway, transit and rail systems. Now 

is the time for new leadership to step up with a vision for the next 

50 years that will ensure U.S. prosperity and global preeminence 

for generations to come. It is in this context that we respectfully 

make our recommendations to Congress for the next transportation 

bill, which is scheduled to be considered in 2009. 

We are recommending that Congress start with fundamental and 

wide-ranging reform. The Commission does not believe that the 

Federal program should be reauthorized in its current form. Instead, we are calling for a new beginning. We believe that Congress 

must restore a mission or sense of purpose to the Federal program. 

That is why we are recommending that the existing 108 some odd 

Federal transportation programs be replaced with 10 new programs that are performance-driven, outcome-based, free of earmarking, generally mode-neutral and refocused to pursue objectives 

of genuine national interest. 

U.S. DOT, State and regional officials and other stakeholders 

would establish performance standards in the new Federal program areas and develop detailed plans and cost estimates to 

achieve those standards. These plans would then be assembled into 

a national surface transportation strategic plan which would guide 

Federal investment. All levels of government would be accountable 

to the American people for achieving the results promised. We are 

also recommending the project delivery time be reduced dramatically and we are recommending a BRAC-type commission to help 

depoliticize the process. 

Reform, though necessary, will not be enough on its own to 

produce the transportation system the Nation needs for the 21st 

century. We also need adequate investment. We must upgrade our 

existing transportation network to a State of good repair and we 

must expand capacity and build the more advanced facilities we 

will require to remain competitive. 

We need a system that emphasizes modal balance and mobility 

options, one that dramatically reduces fatalities and injuries, one 

that is environmentally sensitive and safe, one that minimizes use 

of our scarce energy resources, one that erases wasteful delays, one 

that supports just-in-time delivery and one that allows economic 

development and output more significantly than ever seen before in 

history. 

19 

Accomplishing these objectives will be expensive. We must come 

to grips with the sobering financial reality of such an undertaking. 

We estimate that all levels of government, including the Federal 

Government and including the private sector, will need to invest at 

least $225 billion annually for the next 50 years. We are spending 

less than 40 percent of that amount today. 

Therefore, we have proposed a comprehensive set of financing 

recommendations. As a general matter, we strongly support the 

principle of user financing. We recommend continuation of budgetary protections for the Highway Trust Fund and we recommend 

that revenues generated by transportation, including concession 

fees, be used only for transportation purposes and not be diverted 

to non-transportation uses. 

More specifically, for the long term, we are recommending that 

we transition to a VMT fee as quickly as possible, provided that 

substantial privacy and collection cost issues can be addressed. We 

have suggested specific steps for the next reauthorization bill to 

hasten this process. Like the National Academy of Sciences, 

though, we believe it will take until about 2025 to get this system 

up and running in the interim, the period between 2010 and whenever we can move to the VMT fee, whether it is 2025, 2030, whatever that timeframe is, we are recommending a range of financing 

options to be implemented. These include an increase in the Federal Motor Fuels tax, a Federal freight fee, dedication of a portion 

of existing customs duties, a ticket tax on transit and inter-city rail 

passengers, increased use of tolling, congestion pricing, private financing, including concessions, and increased State and local revenues. In other words, to close the investment gap, we must use all 

of the financing tools available to us in this interim period. 

Let me close by saying that a failure to act would be devastating. 

The United States would be unable to compete effectively in the 

global marketplace. Our status as an economic superpower would 

be jeopardized. Jobs would be lost and our quality of life would 

safer substantially. Eventually, we would reach the point of catastrophic failures. Tragedies like the I–35 bridge collapse in Minnesota would become all too common. 

We cannot sit back and wait for the next generation to address 

these ever-increasing needs. It will be too late. The crisis is now, 

and we have a responsibility and obligation to create a safer, more 

secure and ever-more productive system. We must do for our children and grandchildren what our parents and grandparents did for 

us. We need to create and sustain the preeminent surfaced transportation system in the world, and we need to do it now. 

Thank you. 

[The prepared statement of Mr. Schenendorf follows:] 

20 


85519.026
21 


85519.027
22 


85519.028
23 


85519.029
24 


85519.030
25 


85519.031
26 


85519.032
27 


85519.033
28 


85519.034
29 


85519.035
30 

RESPONSES BY JACK SCHENENDORF TO ADDITIONAL QUESTIONS

FROM SENATOR LIEBERMAN

Question 1. I have a question about your newly proposed ‘‘Metropolitan Mobility’’ 

program, which will be geared to reduce traffic congestion. I agree that all solutions 

to ease congestion must be explored, including tolling and possibly congesting pricing. In your report, the Commission specifically stated that funds authorized under 

the Metropolitan Mobility program will be reserved for urban areas of 1 million or 

more in population. Can you explain to me how you arrived at that figure? As you 

know, there are a number of small cities in Connecticut, including Hartford, New 

Haven, Stamford, and Bridgeport. Each of these cities has serious traffic congestion 

problems. New Haven is a good example. If you have ever driven from New York 

City to Boston, you are well aware of the traffic problems along I–95 and even the 

Merritt Parkway. According to recent consensus estimates, New Haven’s population 

is close to 125,000, with 600,000 people residing in the Greater New Haven area. 

Under the Commission’s proposal, New Haven would not be eligible to apply for 

funding in the Metropolitan Mobility Program. How would a city such as New 

Haven—which exists at the juncture between two major interstates (I–95 and I–91) 

resolve its congestion problems. After all, traffic congestion does not always arise 

in direct connection because it is the nexus in the northeast corridor between New 

York and Boston. 

Response. In proposing the Metropolitan Mobility program, focused on large cities, 

the Commission recognized that congestion must be addressed through a regional 

approach. Accordingly, the Commission explicitly recommended that eligibility for 

this program use a broad definition of ‘‘metropolitan area’’, such as the combined 

statistical areas (CSAs) defined by the Office of Management and Budget. Under 

this definition, Fairfield, New Haven, and Litchfield counties would be included in 

the New York-Newark-Bridgeport CSA, and would thus be eligible for funding 

under this program. Hartford, Middlesex, Tolland, and Windham counties would 

also be eligible as part of the Hartford-West Hartford-Willimantic CSA. 

Question 2. I would like to ask a question about the independent commission you 

have proposed creating, tentatively named NASTRAC (National Surface Transportation Commission) in your report. I understand the advantages of creating an independent commission to make difficult policy decisions, such as closing military bases 

with BRAC and raising postal rates with the Postal Regulatory Commission. I 

would like to hear more about how you think an in dependent transportation commission would operate vis-a-vis Congress. In your report, you State that the Commissions’ revenue recommendations would be sent directly to Congress. The recommendations would then be subject to a congressional veto, requiring 2/3 recorded 

vote of both Houses within 60 days of receipt. If no action was taken, the recommendations would become law. I understand that other independent commissions, such as BRAC, work in similar ways. But if an independent transportation 

commission was created, I worry that Congress would be ceding much of its authority over transportation policy in the Unites States. I also worry that Congress may 

be ceding an important representational function. 

Therefore, my question is what is Congress’s role in transportation policy if many 

of the revenue decisions are turned over to an independent commission? I understand that an independent commission would work with the departments of transportation from each state, but how can a ten-member commission possibly master 

the particular needs of all 50 states? 

Response. We did not spell out the details of exactly how NASTRAC would operate, but our vision was that Congress would retain a strong role in guiding surface 

transportation policy. Congress would continue to be responsible for multi-year surface transportation authorizing legislation and for oversight of surface transportation programs. Among other things the surface transportation legislation enacted 

by Congress would establish the individual Federal programs through which funds 

would be allocated to the States, establish eligibilities for funding under each program, and define the parameters under which NASTRAC would operate. In our 

study of comparable BRAC and postal setting apparatus, we saw that there were 

adjustments made by Congress in the authorities provided to those entities over 

time. If after operating with NASTRAC for a period of time there were changes that 

Congress wished to make in its operations, those changes could be made in subsequent legislation. 

In our report we recommended 10 program areas that we believe should be the 

foundation of an overall Federal surface transportation program and outlined how 

those programs might be administered. We envision that NASTRAC would oversee 

certain aspects of U.S. Department of Transportation (U.S. DOT) implementation of 

the laws passed by Congress. We did not envision that NASTRAC itself would work 

31 

extensively with the State departments of transportation in developing the national 

plans in each program area that would be the basis for funding decisions. That 

would be the role of the U.S. DOT, working through its extensive field office organization that has day-to-day contact with the State departments of transportation. 

The U.S. DOT would consolidate State and metropolitan level plans from the various States, ensuring that projects included in the plans appear to be cost-beneficial 

and contribute to meeting agreed upon performance standards. The U.S. DOT would 

then integrate the individual programmatic plans into an overall national strategic 

plan for surface transportation that would be presented to the NASTRAC. 

The NASTRAC would oversee development of performance standards and plans 

to meet those performance standards to assure the credibility of the plans developed 

under the Department’s technical criteria. Its primary role, however, would be to 

recommend funding levels and any necessary changes in user fees to provide the 

Federal share of funds needed to carry out the plan. 

Question 3. I would like to delve further into the decision making process that 

NASTRAC will use when setting national transportation policy objectives. In your 

report, you State that the U.S. Department of Transportation would lead the strategic planning process in consultation with State departments of transportation, 

metropolitan planning organizations, and private sector interests. The U.S. Department of Transportation would then submit a consolidated plan to NASTRAC for approval as the consolidated national strategic plan. I am interested to know more 

about the criteria that NASTRAC will use when determining if a component of the 

U.S. Department of Transportation’s strategic plan will become part of the national 

plan. 

The Commission has also recommended that NASTRAC make revenue recommendations to Congress, and also be granted the authority to change the amount 

of Federal funding a project should receive based on performance. How is Congress 

supposed to act on the revenue recommendations of NASTRAC knowing that these 

funds may be reallocated. 

Response. We envision that NASTRAC would review several aspects of the strategic plan presented by the U.S. DOT. One important area we anticipate that 

NASTRAC would want to review is whether multi-State transportation projects are 

adequately represented in the plans. Another area would be to assure that plans 

in the various program areas are adequately integrated, especially in metropolitan 

areas where passenger and freight transportation needs must be jointly considered. 

We anticipate that NASTRAC would want to be assured that projects included in 

the various plans all contribute to applicable performance standards and that appropriate procedures for assessing whether projects are cost-beneficial were used. The 

NASTRAC might also be want to be assured that the procedures for developing 

plans in various States were sufficiently compatible that they did not distort the relative needs among the States. 

We envision that in setting up NASTRAC Congress would specify the conditions 

under which a larger Federal share could be provided. We do not envision that 

NASTRAC would apply a different Federal matching share to a large share of total 

funding. To reward innovation and high performance, we thought NASTRAC might 

be given the authority to temporarily change the Federal share for particular programs in individual States. These changes would be included in funding recommendations NASTRAC would send to Congress, so Congress would be aware of 

any changes to standard matching shares before they acted on NASTRAC’s recommendation. 

RESPONSES BY JACK SCHENENDORF TO ADDITIONAL QUESTIONS

FROM SENATOR CARPER

Question 1. Most Americans understand the value of a gas tax and the impact 

on consumers is relatively minimal. However, the public must be assured that their 

money won’t be wasted—not simply more highway miles and more road congestion. 

If the additional revenue from a higher gas tax can go toward a better product, then 

it’s a good idea. Is the gas tax increase recommended in this report solely a matter 

of resources or is there some prioritization or improvements to projects we build 

that are needed as well? 

Response. The Commission was unanimous in concluding that simply raising the 

Federal fuel tax and putting more money into the same programs will not be acceptable. The Commission strongly believes that before Federal financial support for 

surface transportation is increased, the Nation’s surface transportation programs 

must be fundamentally reformed. Our recommendations include limiting the scope 

of programs eligible for Federal assistance to the ten programs identified in our Report, making State and local agencies receiving Federal funds accountable for meetVerDate Aug 31 2005 10:57 Jan 15, 2014 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\85519.TXT VERN
32 

ing specific performance objectives, reducing unnecessary and wasteful project delivery requirements and requiring that major projects be subject to benefit-cost analysis. Such reforms are needed to ensure the projects that are selected for implementation are effective in addressing the national interest. 

On March 3d 2007, I introduced the National Infrastructure Improvement Act. 

This legislation creates a commission to look at the State of infrastructure throughout the country—including rail, roads, bridges, airports, and food control structures. 

The commission would then make recommendations to Congress and the President 

about how to maintain our current infrastructure while meeting future needs and 

safety requirements. While your report was a good start in highlighting the need 

to sustain the US surface transportation system, a more detailed plan as called for 

in my bill is necessary. How does the Commission anticipate that the specific steps 

needed to achieve the wide-ranging reform recommended by the report will be developed and prioritized? What in your report do you expect that transportation agencies can begin to implement immediately. What required congressional approval? 

Most of the Commission’s recommendations related to the Federal program would 

require congressional approval. The Commission described several short-term steps 

that could be taken to generate revenue for the Highway Trust Fund. The long-term 

restructuring of the Federal transportation agencies would hopefully take place in 

the next reauthorization of SAFETEA-LU. Meanwhile, there are certainly some 

tools, techniques, and processes outlined in the report that could be implemented 

by State and local governments on their own. 

Question 3. New transportation development has numerous environmental effects, 

including the additional runoff from paved surfaces. Lack of coordination between 

transportation and land use policies can cause this effect to be overlooked during 

project planning. This lack of coordination can lead to unintended storm water pollution. Unfortunately, Senator Warner’s amendment to include storm water runoff 

in the last surface transportation reauthorization was not successful. How do the 

Commission’s recommendations ensure that agencies representing transportation, 

environment and land planning interest at the Federal, State and local levels work 

together to consider all the impacts of new infrastructure to ensure that transportation investment does not require greater taxpayer investment elsewhere as storm 

water treatment? 

Reducing project delivery time was a major priority for the Commission. Overall, 

we recommended handling environmental mitigation issues early such that potential mitigation could be considered while the range of alternatives were being developed rather than restricting the options for serious consideration. We also believed 

that projects should be reviewed by the governmental parties at the Federal and 

State levels in an integrated and systematic manner, not just handling requirements on a sequential basis. That lead agency approach is now in law but not nearly as often in practice today. 

Question 4. In Delaware, tolls make up a significant portion for State programs. 

The Delaware Department of Transportation (DelDOT) finances the maintenance of 

both State Route 1 and a portion of InterState 95 by collecting tolls from users of 

these roads at a rate sufficient to cover the costs of maintaining these roads. The 

report recognizes the important role that tolls play in funding highway projects and 

recommends providing new flexibility for tolling and pricing. Implementing congestion pricing was mention specifically. What other flexibilities would be given to 

states and local governments? 

The Commission recommends that States and localities be given a great deal of 

flexibility in determining the financing and design of their capital improvement 

plans to address performance objectives. The use of tolling, pricing, and public-private partnerships should be encouraged where such mechanisms are in the national 

interest. Pages 47 through 51 of Volume I of our report identify a number of criteria 

that should be met to ensure that the use of these mechanisms is in the public interest. 

Our recommendations regarding speeding project delivery are intended to provide 

State and local grant recipients with greater flexibility in completing environmental 

reviews, to allow projects to be advanced more quickly in a manner that is still consistent with our environmental objectives. Our proposal to replace 108 existing Federal surface transportation programs with 10 plan-driven programs is also intended 

to provide States and local governments with additional flexibility. Each State and 

local government would be permitted to tailor their capital investment plans to reflect the preferences of their communities while meeting agreed-upon performance 

standards. States and local governments would be free to determine the modal investment splits and financing mechanisms that would work best for them, rather 

33 

than having their investment patterns be artificially constrained by numerous Federal funding categories. 

RESPONSE BY JACK SCHENENDORF TO AN ADDITIONAL QUESTION

FROM SENATOR INHOFE

Question. The commission report does seem to explicitly define the role of State 

and local governments. Could you succinctly describe the role of State and local governments under the commission’s proposal? 

As State and local governments own and operate the vast majority of the nation’s 

existing transportation assets, they will bear primary responsibility for planning 

and implementing the capital improvements necessary to improve the system. The 

Commission’s proposal envisions the USDOT, in cooperation with State and local 

governments, and a range of public and private stakeholders would develop national 

performance standards for each applicable program area; the USDOT would then 

work with each State and major metropolitan area to develop specific performance 

standards for their programs. 

State and local governments would be tasked with developing comprehensive 

plans to meet these performance objectives, identifying the mix of activities including capital investments across any and all modes as well as operational improvements, and the estimated costs. States and local governments would have a great 

deal of flexibility in developing their plans to fit their communities and their customers. They would tailor their relative investments in different modes, their use 

of tools such as congestion pricing, and their utilization of public private partnerships, as necessary to address the particular circumstances they are facing. 

While States would have greater flexibility under the Commission’s proposal, they 

will also have more accountability. Once their plans have been approved and funded, State and local grant recipients will be held accountable for achieving the specific performance objectives they had agreed to. Failure to make adequate progress 

toward meeting such standards could result in their receiving a lower Federal 

matching share in future years. Conversely, matching rates could be increased for 

grant recipients that exceed performance objectives, or as an incentive to reward 

creativity and innovation in the design and implementation of State and local plans. 

RESPONSES BY JACK SCHENENDORF TO ADDITIONAL QUESTIONS

FROM SENATOR BOND

Question 1. While I don’t necessarily agree with all of the conclusions found in 

your national commission report, I am curious why it is that you chose to expand 

the Federal role rather than reduce it? Would each of you please comment on what 

you believe the Federal role in government should be? What would you propose the 

Federal role should be if a gas tax increase were not agreed to by Congress? 

Response. I do not think that the Commission recommended an expanded Federal 

role. The Federal contribution will remain, on a percentage basis, about what it is 

today. And in some important ways, we reduced the Federal role. 

Let me start by saying that we kept a strong Federal role for a variety of reasons. 

The Federal Government has played an important role in building the Nation’s infrastructure from its earliest days. Decisions made about transportation in one State 

can influence the success of commerce and economic growth throughout the whole 

Nation by either promoting or impeding the interState flows of goods and services. 

Similarly, the efficient movement of citizens and goods within congested major 

urban areas is critical to the productivity of these areas, and by extension, to the 

economic vitality of the entire Nation. Americans are also entitled to transportation 

that is safe and an environmentally sound, regardless of where they may be in the 

Nation, thus justifying a Federal role in ensuring these objectives. Each of the 10 

programs described in Volume 1 of the Commission Report is introduced by an explanation of why the Federal role is necessary. 

Given the need for a strong Federal role in these 10 programs, and the enormous 

investment needs of the transportation system, the Commission supports a substantial increase in the level of Federal funding for these programs. However, as I mentioned above, the Federal contribution will remain about the same on a proportional 

basis. State and local governments, with the help of the private sector, will have 

to significantly increase their funding contribution as well. 

Clearly, in the event that Congress does not increase the Federal fuel taxes, the 

importance of the Federal role in transportation would remain and the investment 

needs would remain. Therefore, Congress should look for another source of Federal 

revenues to replace the Federal fuel tax. It is imperative that the Federal Government contributes its fair share. 

34 

The failure of the Federal Government to increase the motor fuel tax, or find an 

equivalent source of revenues, would be tantamount to dumping our national transportation crisis on State and local governments. We do not believe that State and 

local governments can handle the entire burden, even with the help of the private 

sector. Our transportation network would suffer. Our economy would suffer. And 

our way of life would suffer. 

Congress should also expedite the transition to the Vehicle Miles Traveled (VMT) 

fee. VMT fees are linked directly to each vehicle’s actual travel, which may or may 

not vary by time of day. In the Commission report, the transition year from fuel 

taxes to VMT fees is projected to be 2025. However, we recommend that Federal 

research funds be targeted aggressively, beginning almost immediately, to overcome 

the technological, institutional, and privacy concerns that might otherwise impede 

a more rapid transition to VMT fees and the funding and operational efficiencies 

they will enable. Hopefully, we will be able to transition to a VMT-approach, assuming the problems and concerns can be worked out, as soon as possible and earlier 

than the estimated 2025. 

Question 2. I worked hard along with my colleagues, Senator Inhofe, Senator 

Reid, Senator Baucus and Senator Jeffords to make sure that spending levels on 

SAFETEA were as robust as we could make them during life of SAFETEA. Although SAFETEA was a 44 percent cumulative increase in spending for highways, 

transit and safety about TEA–21 (SAFETEA was 286.5 billion and TEA–21 was 198 

billion), I was told the day that we passed it that the buying power remained the 

same from bill to bill due to the increased costs of labor, materials (steel and concrete). Would each of you please comment on this and what your view would be of 

the next authorization? 

Response. The funding increases in SAFETEA-LU were an important step forward, but they still fall far short of what is needed to avert a national transportation crisis. The next reauthorization bill should increase investment to the levels 

recommended in our report. 

Moreover, we need to address project delivery. The buying power of the funding 

authorized under SAFETEA-LU has declined further subsequent to its passage, as 

the recent sharp increases in the prices of construction materials that you have 

cited have continued. This trend makes it critical that our recommendations for 

speeding project delivery be incorporated in the next reauthorization. Our report illustrated that, based on recent inflation trends, the cost of a project started now 

and completed by 2011 would be half as much as the same project if its completion 

were delayed until 2021. Shaving time off of the project delivery process will yield 

savings that could then be applied to other projects, substantially reducing the overall funding needed to meet national objectives. Until we can do that, inflation will 

continue to severely diminish or even eliminate the impacts of increased funding 

levels on the performance of the surface transportation system. 

Question 3. The commission’s report raises some issues of jurisdictional concern 

to those of us here on the Hill. You propose to eliminate all existing programs of 

the FHWA, FTA, FMCSA, NHTSA and the FRA and replace them with 10 new programs that cross agencies and modal lines. As a practical matter, how do you think 

that this goal could be accomplished here in the Senate, and for that matter within 

the Department of Transportation? 

Response. The Commission believes there is great value in realigning activities of 

the U.S. Department of Transportation along functional lines. Not only would this 

likely save money, but it would increase coordination and help deliver the right 

blend of transportation projects in a timely manner. It would put the proper focus 

on problem solving in terms of outcomes and system performance rather than any 

one means to get there. 

The Commission acknowledges that, in the short term, this type of realignment 

would require major statutory, bureaucratic, and regulatory changes. The Commission did not speculate how a realignment would impact congressional operations. 

The Commission has utmost confidence that Congress and executive branch agencies could oversee such a transformation of transportation-related activities. 

Moreover, it may be possible to structure the program in a way that meets the 

Commission’s goals, while at the same time respecting current jurisdictional realities. 

RESPONSES BY JACK SCHENENDORF TO ADDITIONAL QUESTIONS

FROM SENATOR VOINOVICH

Question 1. As a former Governor, I believe states should have maximum flexibility to use their highway dollars to meet their own unique transportation needs. 

I am interested in hearing about the Commission’s recommendations to restructure 

35 

the Department of Transportation programs so that are focused on national interests and performance. 

How will this proposal promote State and local decision making authority? How 

will funds be allocated on a state-by-State basis? Does this new approach eliminate 

the donor/donee status based on these new categories? 

Response. The Commission believes that the multitude of narrowly focused highway and transit programs that have been created in recent surface transportation 

legislation reduces State and local flexibility to target Federal funds toward either 

national or State and local interests. The 10 new Federal program areas we have 

recommended reflect not only national surface transportation priorities but State 

and local interests as well. State and local transportation agencies will have much 

greater flexibility in how they spend Federal funds than under the current program 

structure. This flexibility will allow them to meet Federal performance standards in 

a way that is best suited to their unique local transportation needs. 

We recommend changing the current method for allocating funds among States 

with ‘‘pass through’’ to localities as match the comprehensive plans. State and local 

agencies would develop plans for achieving performance standards in each of the 

main program areas. Funds would be allocated to States in proportion to the cost 

to implement their plans compared to the cost to implement all State plans. This 

is essentially the same method that funds were allocated to construct the InterState 

System. The equity programs that currently guarantee a minimum return to States 

would be eliminated, but we believe that all States would receive sufficient Federal 

funding to contribute to meeting their highway and transit improvement needs. 

Question 2. Through 2055, the Commission estimates that the Nation will need 

to invest $255 billion annually to maintain and improve the existing surface transportation system—almost a tripling of the $86 billion annually spent on all modes 

today. The Commission also recommends that the Federal Government share of 

total investment would be maintained at its current 40 percent level. This implies 

that states would have to increase their revenues to match the increase in Federal 

funds. 

Is it reasonable to believe that states will triple investments in transportation infrastructure? At the current required 80/20 match, would states have to raise State 

gas tax or other forms of revenue to match Federal funds as it grows? Did the Commission consider giving states flexibility on the match component for State DOT 

projects? 

The Commission believes that increased expenditures from all levels of government and the private sector will be necessary to compensate for past investment 

failures while addressing significant increases in future demand. As indicated in our 

report, based on the investment gap we identified, the non-Federal share of additional investment requirements—from State, local and private sources—could range 

between the equivalent of 34 and 63 cents per gallon of fuel tax. While State fuel 

taxes are likely to remain an important part of the funding mix, we anticipate that 

individual States and local governments will draw upon a wide array of other financing mechanisms as well. We recommend that the Congress provide States with 

new flexibility for tolling and pricing, and encourage the use of public-private partnerships where States or local governments are willing to use them. The revenues 

generated from such sources, along with increased revenues from other financing 

mechanisms that States may opt to employ, would reduce the size of any fuel tax 

increases that may be required. Our report includes an analysis of the advantages 

and disadvantages of a variety of revenue sources that individual States and local 

governments might opt to utilize in closing the investment gap. 

In terms of matching rates, our report proposes that the Federal share for particular activities could be adjusted as an incentive, rewarding States and metropolitan planning organizations (MPOs) that demonstrate creativity and innovation in 

meeting their performance objectives. However, we believe that the large increase 

in Federal investment that we have proposed should be matched by a commensurate 

increase in funding from other levels of government, so we would not recommend 

significant changes to the matching rates we have proposed. 

While the prospect of tripling the current level of surface transportation infrastructure investment is daunting, we believe that the American people will rally behind this cause. They will only do so, however, if we can adequately communicate 

the benefits that can be derived in terms of lives saved, time saved, and overall improvements to people’s quality of life. Such an increase in investment, coupled with 

the programmatic reforms that we have recommended, are essential to the long 

term economic health of our Nation. 

36 

Question 3. Can you elaborate on the vision for National Surface Transportation 

Commission and could you discuss the pros and cons of the impact this commission 

functions as it relates to national program priorities? 

Response. The National Surface Transportation Commission (NASTRAC) is envisioned to provide an independent assessment of nationwide surface transportation 

investment requirements and to recommend to the Congress funding levels to meet 

those requirements. The NASTRAC would review nationwide plans developed for 

each of the 10 program areas recommended by the National Surface Transportation 

Policy and Revenue Study Commission. NASTRAC would ensure that plans address 

key national performance standards and that proposed projects would be cost-beneficial. The NASTRAC would coordinate with the U.S. Department of Transportation 

which would consolidate plans developed by State and local transportation agencies 

in cooperation with key stakeholders. 

The advantage of NASTRAC in the Commission’s view is that it would remove 

decisions regarding surface transportation funding from the political process. The 

Commission did not make this proposal lightly and recognized how controversial it 

would be. We believed, however, that the only way to adequately fund surface transportation programs would be to create an independent body to make funding recommendations. Congress could veto NASTRAC’s recommendations, but we hoped 

that the political cover provided by the independent commission would make it easier for Congress to accept funding levels in the long term interest of the country 

without undue concern about short term political pressures to constrain funding. We 

believe the Base Realignment and Closure Commission is serving Congress well and 

we hope that NASTRAC could be equally effective. 

The biggest disadvantage of our NASTRAC proposal is the difficulty Congress will 

face in developing a consensus to create such a Commission. We recognize that it 

would take some decision making responsibilities away from congressional committees, which understandably is difficult, but it would not take away congressional 

oversight responsibilities or dilute the role of Congress in enacting periodic legislation to reauthorize surface transportation programs. 

Question 4. During our consideration of SAFETEA-LU, there was a significant debate between the donor and donee states. Did the Commission review equalizing the 

rate of return to all of the states? 

The Commission believes that the lack of a clear Federal vision or mission, such 

as there was in the InterState era, significantly contributed to the donor-donee debate. While the Commissioners recognized the congressional interest in equity with 

respect to the amount of Federal funds returned to each State, there nevertheless 

was a consensus that funds should be allocated to the States in relation to the needs 

of States for investment in key program areas being recommended, without specific 

consideration of equity. Restoring a sense of national purpose to the Federal program should help to address the donor-donee issue. 

Question 5. I have long advocated for an increase in the gas tax. However, in this 

climate, I am uncertain of the feasibility of this. 

If the gas tax cannot be increased, how much more do you think we generate from 

other financing mechanisms to invest in our nation’s transportation system in the 

short term? How crucial is a user free increase to meeting our future transportation 

needs? 

The potential revenue-generating potential for different Federal, State, and local 

funding mechanisms is explored in our report. Exhibit 5–17 in Volume II of our report includes estimated revenue generation from fuel taxes, motor-fuel sales taxes, 

heavy vehicle use taxes, tax credit bonds, customs duties, investment tax credits, 

container fees, motor vehicle registration fees, motor vehicle sales taxes, general 

sales taxes, tolling/pricing, local option taxes and impact fees. The advantages and 

disadvantages of these options are evaluated in Exhibits 5–20 and 5–21. 

While other financing mechanisms can and should be utilized to defray a portion 

of fuel tax increases where possible, the fuel tax remains the most obvious source 

of revenue to address the infrastructure needs that we have identified in the short 

and medium term. Failure to increase revenues above current levels will cause us 

to fall further and further behind in meeting our transportation needs, causing us 

to face a steady decline in the physical condition of our infrastructure assets, and 

significant degradation of the operational performance of the system. 

Beyond 2025, we anticipate that the factors that you have identified will make 

it necessary to transition to a new revenue source. The most promising alternative 

that has been identified to date are Vehicle Miles Traveled (VMT) fees linked directly to each vehicle’s actual travel, which may or may not vary by time of day. 

We support additional research and pilot projects to overcome the technological, inVerDate Aug 31 2005 10:57 Jan 15, 2014 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\85519.TXT VERN
37 

stitutional, and privacy concerns that would need to be overcome in order to make 

such a mechanism feasible. 

Question 6. Senator Carper, Senator Clinton and I have been working on legislation to establish National Infrastructure Commission. This commission would examine all at our nation’s infrastructure needs. This legislation passed the Senate last 

year. We are not waiting for the House. In your experience, do you think this type 

of commission would be helpful? Do you have any advice for how to put it together? 

Commissions can play a very helpful role in defining needs, identifying solutions 

and building consensus. While there is always value in expanding the field of knowledge about the Nation’s infrastructure, I do not think that a new commission is necessary with respect to transportation infrastructure. Study after study, including 

our 20-month study, has made it clear that we are not investing enough in our national surface transportation network. In my view, we do not need any more transportation studies. We need action. We strongly encourage Congress to act on the recommendations outlined in our report. 

With respect to non-transportation infrastructure, I do not have a view as to 

whether a new study would be useful. 

With respect to how a new commission should be put together, I do have two suggestions. First, if the desire is to have an independent commission, I would respectfully suggest that Federal legislative or executive officials not be included on the 

commission. Second, I recommend that adequate funding be included to ensure that 

the Commission can hire its own staff and contract for independent studies. 

Question 7. We are currently considering economic stimulus legislation. How important do you think is transportation infrastructure to providing an economic boost 

to the economy? 

Response. The Commission did not consider whether transportation investment 

should be part of a short-term economic stimulus package. My own personal view, 

based on my professional experience of over 30 years, is that transportation investment would be an effective component of a stimulus package. 

In my view, Congress should consider including in the stimulus package three elements related to transportation. 

First, Congress should include a provision to fix the Highway Trust Fund’s cash 

deficit problem in 2009. This problem is causing uncertainty in State and local governments and the private sector, and could cause them cut back on planned investments. Fixing the problem will remove this uncertainty and allow planned investment to go forward. 

Second, Congress should include a provision to bolster Highway Trust Fund revenues to ensure that funding in 2010 and beyond will not be less than SAFETEALU levels. Again, this will provide State and local governments and the private sector sufficient certainly to ensure that they do not retrench from planned investments. The Commission’s recommendation to dedicate a portion of existing revenues 

derived from customs fees to the Highway Trust Fund could be helpful in this regard. 

Third, Congress should provide $15 to 20 billion for ready-to-go transportation 

projects. Not only will this investment help stimulate the economy in the short to 

medium term, but it will produce long-term benefits by contributing to economic 

growth and international competitiveness. 

Question 8. I have always been a champion of public private partnerships. During 

the last highway bill, I worked with the Ohio delegation on an intermodal facility 

that is going to create 10,000 jobs. Unfortunately, this project has hit some snags 

because there were barriers at FHWA and the State during the project implementation. Many people do not recognize the important of these types of partnerships. 

What do you recommend for breaking down these barriers and for the public to 

recognize how the public benefits and when the Federal Government partners with 

a private entity? 

We spent considerable time during our Commission meetings discussing publicprivate partnerships and also heard many views regarding such partnerships at the 

public hearings we held across the country. In our report we recommended a number of safeguards to assure that the public interest would be protected when States 

undertake public-private partnerships. Putting appropriate safeguards in place 

should help build confidence that both the public and the private sectors will benefit 

from public-private partnerships. This should help to break down barriers and earn 

the trust of the public. 

Senator BOXER. Thank you very, very much. 

38 

Our next speaker is Hon. Frank Busalacchi, Wisconsin Secretary 

of Transportation, Commissioner, appointed by Minority Leader 

Pelosi, she was then Minority Leader, now Speaker. 

STATEMENT OF HON. FRANK BUSALACCHI, WISCONSIN 

SECRETARY OF TRANSPORTATION 

Mr. BUSALACCHI. Good morning, Madam Chair, Ranking Member 

Inhofe and members of the Committee. 

My name is Frank Busalacchi. I am Secretary of the Wisconsin 

Department of Transportation and the Chair of the States for Passenger Rail Coalition. As a commissioner, I have had a unique opportunity to share my perspective and goal for a new direction in 

national transportation policy, one that includes a Federal-State 

funding partnership for inter-city passenger rail similar to the 

partnership that exists for highways, transit and aviation. 

The Commission heard testimony from State and local officials 

and others asking for additional public investment in inter-city 

passenger rail. The Commission agrees that passenger rail must be 

a part of a multi-modal solution. It can help alleviate highway and 

airway congestion, high gas prices, and the impacts of global warming. We don’t envision rail replacing other transportation modes. 

We see rail providing greater mobility to help meet the needs of 

our growing and our aging population. 

To assist the Commission in advising Congress, I engaged the 

passenger rail working group to provide analysis. This group created a 2050 map and cost estimates for passenger rail improvements. The map’s focus is city to city connections in corridors of 

500 miles or less. 

The map provides one perspective of the future of passenger rail. 

It is entirely illustrative. Individual States will be responsible for 

their own rail plans, and with congressional support, they will be 

empowered to implement them. 

Of the ten new transportation programs recommended by the 

Commission, inter-city passenger rail is the only modal-focused 

program. The Federal Government will fund 80 percent of the program, similar to the other modes. 

Fifty years ago, a bold vision and strong commitment to funding 

the interState highway system made it possible. Today, both our 

highway and aviation systems are congested. It is time to invest in 

another mode and to provide our citizens a modal choice. 

I commend my colleagues on the Commission for agreeing to this 

bold new vision for passenger rail. We are united in our view that 

this Nation needs passenger rail if it is to achieve its vision of 

being the preeminent transportation system in the world. 

Thank you. 

RESPONSES BY FRANK BUSALACCHI TO ADDITIONAL QUESTIONS

FROM SENATOR LIEBERMAN

Question 1. I would like to ask a question about the independent commission you 

have proposed creating, tentatively named NASTRAC (National Surface Transportation Commission) in your report. I understand the advantages of creating an independent commission to make difficult policy decisions, such as closing military bases 

with BRAC and raising postal rates with the Postal Regulatory Commission. I 

would like to hear more about how you think an independent transportation commission would operate vis-a-vis Congress. In your report, you State that the ComVerDate Aug 31 2005 10:57 Jan 15, 2014 Jkt 000000 PO 00000 Frm 00042 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\85519.TXT VERN
39 

mission’s revenue recommendations would be sent directly to Congress. The recommendations would then be subject to a congressional veto, requiring 2/3-recorded 

vote of both Houses within 60 days of receipt. If no action were taken, the recommendations would become law. I understand that other independent commissions, such as BRAC, work in similar ways. But if an independent transportation 

commission was created, I worry that Congress would be ceding much of its authority over transportation policy in the United States. I also worry that Congress may 

be ceding an important representational function. 

Therefore, my question is what is Congress’ role in transportation policy, if many 

of the revenue decisions are turned over to an independent commission? I understand that an independent commission would work with departments of transportation from each state, but how can a ten-member commission possibly master the 

particular needs of all 50 states? 

Response. Early on the Commission determined that it was important to look at 

transportation issues from a clean slate perspective. We tried to think less about 

the political process that creates a transportation authorization bill and more about 

identifying the issues and crafting solutions. 

The NASTRAC is meant to address two current issues related to transportation 

financing: inadequate revenues to fund the system and politicization of project decision making. Those who support the Commission report stand behind the needs 

number identified in the report and it is staggering to think about raising the revenues needed to support the transportation system we envision. Public officials and 

members of Congress are aware of the problems associated with raising taxes on 

motor fuels. They will most likely face the same problems attempting to implement 

tolls, congestion pricing or road privatization. If the public doesn’t support the value 

associated with the project they will oppose the revenue increase—regardless of the 

form it takes. 

The notion of the NASTRAC—to more dispassionately look at a rolled-up national 

plan, price it and send the revenue needs number to Congress for an up or down 

vote—was our attempt to diffuse the politics associated with Members of Congress 

supporting a motor fuel tax increase. This goes hand-in-hand with the national plan, 

the roll-up of many local and State plans which the revenue increase is designed 

to support. 

In my view the NASTRAC shouiCi’not in any way detract from congressional authority over the transportation program. Congress would retain its traditional role 

of developing an authorization bill that establishes the funding and program parameters for the multiyear program. Local governments and states would then create 

their plans for applying Federal funds to projects. (This may be much like the creation of the current State Transportation Improvement Plan [STIP] with some process outcome modifications) US DOT and, ultimately, NASTRAC would assure that 

the plans address key policy goals (as outlined in the authorization bill) to have a 

positive cost-benefit ratio and have appropriate performance standards. In its oversight role NASTRAC would help to assure that State and local governments and all 

other entities receiving Federal transportation funds meet the national requirements. This non-partisan review and approval of the national plan was intended to 

help Congress with its oversight roles. 

Commissioners who supported this concept expect that Members of Congress will 

carefully evaluate the pros and cons of this approach and we encourage that evaluation. 

Question 2. I would like to delve further into the decision making process that 

NASTRAC will use when setting national transportation policy objectives. In your 

report, you State that the U.S. Department of Transportation would lead the strategic planning process in consultation with State departments of transportation, 

metropolitan planning organizations, and private sector interests. The U.S. Department of Transportation would then submit its consolidated plan to NASTRAC for 

approval as the consolidated national strategic plan. I am interested to know more 

about the criteria that NASTRAC will use when determining if a component of the 

U.S. Department of Transportation’s strategic plan will become part of the national 

plan. 

Response. The Commission did not outline the criteria that NASTRAC would use 

for approving these plans. Instead, the Commissioners believe that MPOs, States, 

the private sector and USDOT would work to create specific criteria for each of the 

ten programs. Each program would include planning requirements, how to establish 

project cost-benefit information, and performance and accountability requirements. 

NASTRAC would use those criteria after the technical and program experts developed them. 

40 

Question 3. The Commission has also recommended that NASTRAC make revenue 

recommendations to Congress, and also be granted the authority to change the 

amount of Federal funding a project should receive based on performance. How is 

Congress supposed to act on the revenue recommendations of NASTRAC knowing 

that these funds may be reallocated? 

Response. In general, Congress should be confident that what NASTRAC sends 

up to the Hill will have been reviewed and vetted by US DOT, the State or local 

government entities and when involved (e.g. the freight program) the private sector. 

As a result, the funding and project plan will generally hold. It is the Commission’s 

hope that the cost-benefit analysis will result in strong project performance. 

RESPONSE BY FRANK BUSALACCHI TO AN ADDITIONAL QUESTION

FROM SENATOR CARPER

Question. The report highlights passenger rail transportation as a key component 

of the Commission’s vision for the future. The Commission believes that intercity 

passenger rail is a critical missing link in the nation’s surface transportation system. I have long been a proponent of dedicating cent of gas tax revenue to intercity 

passenger rail. Does the Commission support devoting a portion of the gas tax for 

passenger rail? 

Response. I was a strong proponent of including intercity passenger rail in the 

Commission’s report. I believe it is time to provide Federal funding support to passenger rail, as has been done for decades for highways and transit. 

The Commission recommends that intercity passenger rail be supported by the 

following revenue sources: 80 percent from the Surface Transportation Trust Fund 

(partially motor fuel tax-financed) and 20 percent from the General Fund. Ticket 

taxes, similar to those imposed on airline tickets, would be collected, with the ticket 

tax revenues deposited into the Surface Transportation Trust Fund. 

RESPONSES BY FRANK BUSALACCHI TO ADDITIONAL QUESTIONS

FROM SENATOR BOND

Question 1. While I don’t necessarily agree with all of the conclusions found in 

your national commission report, I am curious why it is that you chose to expand 

the Federal role than reduce it? Would each of you please comment on what you 

believe the Federal role in transportation should be? What would you propose the 

Federal role should be if a gas tax increase were not agreed to by Congress? 

Response. At the beginning of work together, the Commission committed to a full 

slate of public hearings. I participated in those hearings, and we heard from citizens 

and transportation experts from all over the country. The vast majority of those who 

testified told us the Nation needs to focus on our infrastructure and must make investments to upgrade and expand our system. When asked specifically about the 

Federal role, the vast majority of those who testified said they believed the Federal 

role must grow. 

In my comments during the EPW hearing, I indicated that I believe our citizens 

expect two things from the Federal Government: a strong defense and strong infrastructure. We’ve been very successful at investing in the first, but not the second. 

The strength of our transportation system is its national character. Roads and 

rails crisscross the Nation, and these interState systems serve both passengers and 

freight. Users do not see a significant difference driving on the interState highways 

in different states. I believe that Federal strategic leadership and funding is critical 

to assuring a national system perspective among the states and local governments 

and consistent performance. Otherwise, and I can assure you of this, states and 

local entities will focus on their own self interest in making investment decisions. 

As to your question on the gas tax, the Commission envisioned that possibility in 

its ‘‘do nothing’’ vision. I think there will be a good deal of variability among states 

and local governments on what they are willing and able to invest; this would lead 

to the continued degradation of our transportation system. 

Question 2. I worked hard along with my colleagues, Senator Inhofe, Senator 

Reid, Senator Baucus and Senator Jeffords to make sure that spending levels on 

SAFETEA were as robust as we could make them during the life of SAFETEA. Although SAFETEA was a 44 percent cumulative increase in spending for highways, 

transit and safety above TEA–21 (SAFETEA was $286.5 billion and TEA–21 was 

$198 billion), I was told the day that we passed it that the buying power remained 

the same from bill-to-bill due to the increased costs of labor, materials (steel and 

concrete). Would each of you please comment on this and what your view would be 

of the next authorization? 

41 

Response. The Commission heard testimony on the loss of purchasing power due 

to inflation in the construction industry. In my role as Secretary of the Wisconsin 

Department ofTransportation, I know that between 2003 and 2007, the significant increase in commodity prices for petroleum, concrete, asphalt, steel and construction machinery reduced the improvements that states and local transportation agencies could fund. 

One way to address this issue would be to index the Federal motor fuels tax to the 

consumer price index. Our revenue source, whether it be vehicle miles traveled, gas 

tax or any other mechanism, should include a mechanism to address the impact of 

inflation on the program. 

Question 3. The commission’s report raises some issues of jurisdictional concern 

to those of us here on the Hill. You propose to eliminate all existing programs of 

the FHWA, FTA, FMCSA, NHTSA and the FRA and replace them with 10 new programs that cross agencies and modal lines. As a practical matter, how do you think 

that this goal could be accomplished here in the Senate, and for that matter, within 

the Department of Transportation? 

Response. The Commission felt a new beginning was necessary to address the 

problems that have arisen in our transportation system over a period of 50 years. 

Providing funding in silos to the different modes creates real difficulties for states 

and local governments who must find ways to fund multi-modal projects. The nation 

needs a multi-modal, intermodal system. 

While the Commission’s recommendations will need to be phased in over time, 

Congress could begin work now to consolidate the US Code titles related to highways and transit (Titles 23 and 49), which have always been separate. During the 

transitional period to the new programs, it would be important to advance projects 

to completion that are already underway. I would encourage Congress to consider 

transforming US DOT into an intermodal agency that could bridge the divide across 

administrations and begin to look at problems from the perspective of the 10 different programs outlined in the Commission report. 

From a State DOT perspective, there is no question that the FHWA-model has 

always been easier to work with than the FTA-model. The history of the partnership, program and funding, has instituted a culture of working in FHWA that more 

outcome-driven. 

RESPONSES BY FRANK BUSALACCHI TO ADDITIONAL QUESTIONS

FROM SENATOR VOINOVICH

Question1. I As a former Governor, I believe states should have maximum flexibility to use their highway dollars to meet their own unique transportation needs. 

I am interested in hearing about the Commission’s recommendation to restructure 

the Department of Transportation programs so that they are focused on national interests and performance. 

How will this proposal promote State and local decision making authority? How 

will funds be allocated on a state-by-State basis? Does, this new approach eliminate 

the donor/donee status based on these new categories? 

Response. I believe that the Commission approach, in recommending the 10 program areas, will actually enhance State and local decision making and their ability 

to choose the right transportation solution to their transportation issue. Depending 

on the program, each government entity will need to create a plan that addresses: 

project cost-benefits, performance measures and institutional accountability. For example, accountability may rest at the metro level for the Metropolitan Mobility plan. 

With most other plans, the accountability will rest with the states. The general notion is that Congress would authorize funds based on the needs identified in each 

of these plans. Ultimately, US DOT and the NASTRAC would assure the State and 

local plans address the requirements related to projects, performance and accountability. 

I agree that there are unanswered questions related to implementation detail in 

the Commission report. We were constrained to stay at a 50,000-foot level. I look 

forward to working with stakeholders and Congress during the transportation authorization bill to fill in some of those details that must be addressed in the broader 

vision that the Commission outlined. 

On the donee/donor issue, I replied in Question 4 that the Commission tried to 

create a vision that would mitigate this issue?—which relates to size of pie, rather 

than what we want to accomplish at the national level. I do believe that states must 

generally feel they are treated fairly under any new approach.. At the same time, 

I hope that the policy discussion associated with the next bill addresses the purpose 

of the program, rather than how the 50 states carve up a diminishing funding pie. 

42 

Question 2. Through 2055, the Commission estimates that the Nation will need to invest $255 billion annually to maintain and improve the existing surface transportation system—almost a tripling of the $86 billion annually spent on all modes 

today. The Commission also recommends that the Federal Government share of 

total investment would be maintained at its current 40 percent level. This implies 

that states would have to increase their revenues to match the increase in Federal 

funds. 

Is it reasonable to believe that states will triple investments in transportation infrastructure? At the current required 80/20 match, would states have to raise State 

gas tax or other forms of revenue to match Federal funds as it grows? Did the Commission consider giving states flexibility on the match component for State DOT 

projects? 

Response. State highway investment is, in my states, already considerably higher 

than the required 20 percent match for Federal funds. While this is true in Wisconsin, it may not be the case in all states. In the passenger rail mode, depending 

on how match requirements are defined, it is true that more states will need to develop a source of funding for the strategical portion of their project costs. Again, in 

Wisconsin, we are ready to match up to $400 million in Federal funds with State 

bond funds. 

The Commission report did provide some flexibility on the match issue, but generally came down on an 80/20 arrangement. However, the Safety and Energy Security programs have higher match ratios of 90/10 and 100 percent Federal, respectively. The Commission sought to equalize treatment between the surface modes of 

highways, rails and transit. 

Question 3. Can you elaborate on the vision for the National Surface Transportation Commission and could you discuss the pros and cons of the impact this commission functions as it relates to national program priorities? 

Response. I have outlined my view on NASTRAC in questions 1, 2 and 3 of Senator Lieberman. 

Fundamentally, I believe the NASTRAC is the mechanism that the Commission 

settled on to assure that an outside group with program and technical expertise, reviewed the work of the states and local governments and provided their professional 

perspective to Congress that if the projects outline the plan were completed, these 

projects serve the national interest. 

Question 4. During our consideration of SAFETEA-LU, there was a significant debate between the donor and donee states. Did the Commission review equalizing the 

rate of return to all states? 

Response. The Commission agreed that Federal investments should have a positive cost-benefit, associated performance measures and that states should be accountable for the investment. There was agreement among all Commissioners that 

the donee-donor debate was not productive because it did not support a national system strategy. Instead, what the Commissioners tried to assure was that all states 

would be eligible for funds to put their system into a State of good repair, addressing investment needs in both urban and rural areas. 

As I indicated in Question 1t I do believe it is critical that we shift off the donordonee debate, but at the same time, work to assure that all states feel they are 

treated fairly in the authorization bill. 

Question 5. I have long advocated for an increase in the gas tax. However in this 

climate, I am uncertain of the feasibility of this. 

If the gas tax cannot be increased, how much more do you think we generate from 

other financing mechanisms to invest in our nation’s transportation system in the 

short term? How crucial is a user fee increase to meeting our future transportation 

needs? 

As Highway Trust Fund revenues decrease in the future due to increased fuel efficiency and use ofalternativefuelstwhatdoestheCommissionrecommendto maintain a 

reliable source of highway funding? 

Response. Commissioners who support this report are keenly aware of how sensitive raising the gas tax, or any tax is. Our strong view is that it will be difficult 

to raise revenues from any source, whether it is public-private partnerships, tolls, 

congestion pricing or user fees. I believe the motor fuel tax will be a sound revenue 

mechanism for use over the next 10 years. I also believe that increasing the motor 

fuel tax would be compatible with an energy policy goal of reducing reliance on oilbased fuels. We expect that higher taxes may result in less usage. That is why, during this shorter-term window, the Commission recommended a 25-to 40-cent increase in the motor fuel tax over 5 years and that the tax be indexed after 5 years. 

Motor fuel tax revenues could continue to shrink in relation to the increasing 

costs of infrastructure investment needs as a result of high prices at the pump. That 

43 

is why the Commission recommended that Congress implement a vehicle miles traveled (VMT) approach as soon as possible. The transitional groundwork must be laid 

out in the next authorization bill. 

As for private sector involvement in our system, there may be some projects 

where the public sector investment can be protected and private sector investment 

goals can be satisfied. I think those projects will be limited; AASHTO has supplied 

the perspective that P3s, tolling and congestion pricing, could supply seven to 10 

percent of the needed revenues. The real issue with tolling (whether private or public sector supported) is that much of the revenue generated on a particular segment 

of roadway must be reinvested into the maintenance and technology: and ultimately 

reconstruction, on that segment. This is especially true of congestion priced roadways which are extremely technology intensive and thus, expensive to maintain. 

Question 6. Senator Carper, Senator Clinton and I have been working on legislation to establish a National Infrastructure Commission. This commission would examine our nation’s infrastructure needs. This legislation passed the Senate last 

year. We arc now wailing for the I-louse. In your experience, do you think this type 

of commission would be helpful? Do you have any advice for how to put it together? 

Response. I was not familiar with Senate Bill 775 prior to your question, but I 

have reviewed it to respond to this question. Based on my understanding, the bill 

seeks to evaluate a number of issues related to our nation’s infrastructure (broadly 

defined), including: economic development and competitiveness, age and condition, 

methods of financing, investment needed to maintain and improve by all levels of 

government, the impact of local development patterns, the impact of deferred maintenance and the collateral impact of deteriorated inFrastructure. 

As a response to the evaluation of these issues, the Commission will make recommendations on a number of issues, including: an infrastructure plan that details 

national priorities; improvements and methods for delivering projects, analysis and 

criteria that could be used by State and local governments for assessing conditions 

and guidelines for uniform reporting by Federal agencies. The legislation further envisions that the eight-member Commission will do its work between 2008 and 2010. 

I certainly think the work of the Surface Commission would assist in addressing 

many of the surface transportation issues that you outline in your legislation. With 

that said, I have a couple recommendations, based on my Commission experience. 

First, this legislation, in addition to surface transportation, also encompasses air 

transportation and the broad spectrum of infrastructure projects (water, sewage 

treatment, dams, etc). The scope and breath of the Commission’s charge may be extremely challenging, especially in the 2-year timeframe. There is a certain amount 

of ramp-up with Commission work, when Commissioners are charting their work 

plan and getting to know one another. It will likely take in the range of three 

months before their time together becomes productive. Finally, our Commission 

started 6 months late, due to the slow appointment of members by the Administration. All of that said, you may want to consider providing this Commission a slightly 

longer timeframe for their final report. 

Second, $4 million is likely not adequate funding for the charge. Our Commission 

received $2 million and requested another $2 million in the technical corrections 

bill, which we never received. We needed to rely on Commissioners to pay for many 

aspects of the work (documents, facilitators, analytical work, additional staff) and 

we had to enlist the help of stakeholder groups to host the field hearings. I would 

guess that a Commission with the broad responsibility that you envision will require 

more than $4 million to adequately cover the issues you envision without relying 

on external help. When Congress asks for the time and expertise of Commission 

members, Congress should assure that the Commission they have created has adequate resources to do their work. 

Third, assure that the Commission does outreach and can discuss their findings, 

after their report is available, with the public. Our Commission does not have the 

revenue to do this, and we are missing a critical opportunity to educate the public 

on the importance of our surface transportation system and our findings. 

Fourth, and this is a very important issue in my view, the legislation should specifically State that an administration appointee does not fill the chair position of the 

Commission. There are many issues with this approach and they should be avoided. 

Finally, I would encourage Congress to carefully consider the issues outlined in 

our Commission report, and perhaps, revisit the charge of this new Commission in 

light of the progress we made. I believe there are elements of the proposed Commission’s charge that may not be necessary in light of the Surface Commission’s recommendations. 

44 

Question 7. We are currently considering economic stimulus legislation. How important do you think transportation infrastructure is to providing an economic boost 

to the economy? 

Response. In my testimony before the House Transportation and Infrastructure 

Committee, 

I indicated that I believed the states were ready to deliver projects within 6 

months of passing a stimulus bill for infrastructure. Since that time, the American 

Association of 

State Highway and Transportation Officials (AASHTO) surveyed the states and 

found that states could deliver projects. I strongly urge Congress to pass another 

Stimulus Bill that includes an infrastructure element. The bill should use the current system to get money out the door, as quickly as possible, to projects in the 

states. This bill would mean jobs to our citizens and would provide a long-term investment for the Nation. 

Question 8. I have always been a champion of public private partnerships. During 

the last highway bill, I worked with the Ohio delegation on an intermodal facility 

that is going to create 10,000 jobs. Unfortunately, this project has hit some snags 

because there were barriers at FHWA and the State during the project implementation. Many people do not recognize the importance of these types of partnerships. 

What do you recommend for breaking down these barriers and for the public to 

recognize how the public benefits when the Federal Government partners with a 

private entity? 

Response. I agree that transportation has had a long tradition of Public-Private 

Partnerships (P3s). We have successfully implemented P3s in Wisconsin; a most recent example is our intermodal terminal in downtown Milwaukee. But I would agree 

with you, this project has not been easy to implement, especially working with FTA 

and FHWA on different governmental funding streams. 

However, there are some P3s, specifically the long-term leases in Chicago and Indiana, where I do have concerns and spoke about those concerns in my February 

2007 testimony before the House Transportation and Infrastructure Committee. My 

fundamental concern is assuring that an asset, paid for and owned by taxpayers, 

is getting the best value from the private sector entity. In addition, I want to assure 

that we consider access in these deals. I am very concerned about the cost of using 

toll roads when a private sector entity has the option of raising tolls each year based 

on three different factors (Indiana deal). We must assure that if we toll roadways, 

our citizens can afford the tolls or have other convenient and cost-effective modes 

of travel. 

In the end, I believe the Commission devoted a tremendous amount of time to this 

issue and developed an approach that encourages private investment, but still protects our ’ citizens’ interests. We encouraged these deals to the extent that they help 

address our revenue gap, but still protect the public sector interest. 

Senator BOXER. Thank you, sir. 

Matthew Rose, we welcome you. You are Chairman, President 

and CEO of BNSF Railway Company. And you were appointed by 

Speaker Hastert, at that time Speaker Hastert. 

STATEMENT OF MATTHEW K. ROSE, CHAIRMAN, PRESIDENT 

AND CEO, BNSF RAILWAY COMPANY 

Mr. ROSE. Thank you, Madam Chair, Senator Inhofe. 

I am usually associated as the freight rail individual on the Commission. Pat Quinn, who is the former ATA chairman, and the coCEO of U.S. Express, is not here with us today, so I will focus my 

remarks on the overall freight message. 

The last 20 months have been spent in holding field hearings all 

over our great Country, testimony from experts from all transportation constituencies. What we found is that goods movement was 

not only a global competitiveness and an economic growth issue, 

but it was truly a key element of our commuter congestion. Eliminating choke points and increasing freight capacity solves a number of problems, including relieving commuter congestion. 

The problem is really evidenced in two ways. First, the average 

commute times for everybody in the United States is growing. SecVerDate Aug 31 2005 10:57 Jan 15, 2014 Jkt 000000 PO 00000 Frm 00048 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\85519.TXT VERN
45 

ond, the supply chain costs, as a percent of GDP, which has had 

a 25-year downward trend over the last couple of years, has started 

to reverse and started to increase again, impacting our global competitiveness. Expected population and economic growth will result 

in significant worsening of both of these indicators. 

The Commission made a number of recommendations aimed at 

increasing freight capacity and targeting these choke points, which 

I will briefly highlight. However, even more fundamentally, the 

Commission brought freight into the policy stable in a meaningful 

and mode-neutral way. Personally, I am pleased that the Commission recognizes freight rail’s critical role in moving gross ton miles 

from the highway to the significantly more fuel-efficient and environmentally friend freight railroad network. The Commission essentially concluded that freight capacity needs to be expanded systematically over the next 50 years, and also determined that 

freight rail market share should be increased. 

In sum, here is what the report recommended with regard to 

freight. The Commission made freight-related programmatic recommendations that I predict will be hotly debated in the freight 

stakeholder circles. The Commission believes that there ought to be 

a freight program to help expand and de-congest freight networks. 

For example, to expand inter-modal connectors and do more 

projects like the Alameda Corridor. 

The Commission recommended more funding for freight projects 

from a variety of sources and broad eligibility across programs for 

freight programs. Additional funding should include gas tax revenues and also a portion of the customs fees, any revenues that the 

Federal Government might realize from greenhouse gas regulation 

and potentially a freight fee. Trade is the key driver for these increasing volumes, so I think that customs duties are a particularly 

appropriate source of revenue to help fund some of these freight 

programs. 

Diverting just 5 percent from the customs duties would generate about $2 billion a year and would not displace any freight between 

ports of entry. Also, collection and administration is already established. The Commission was not specific about the form of any 

freight fee which Congress might authorize, such as a container fee 

or a waybill surcharge. But it did clearly State that it must not 

burden commerce. No local and State proliferation of such fees, no 

private sector administration, collection requirements, and steamship lines, trucking companies and rail companies will find it hard 

to pass on a fee to the ultimate consumer. 

The Commission also recognized that the payers of such a fee 

must realize the benefit of improved freight flows. This is a fundamental user fee principle. Shippers agree to pay for the Alameda 

Corridor because they could see the benefits of capacity and 

throughput as well as the benefits to the surrounding Los Angeles 

neighborhoods. 

Although it will no doubt be asked, should there be a freight 

trust fund, the rail industry has long had no trust that the funds 

would flow to the projects that meet the goals of goods movements 

versus the political earmarking process. The Commission makes a 

variety of recommendations for creating transparency and accountability in directing these funds to high priority freight projects. 

46 

Achieving responsible governance around project funding will be 

critical to obtaining the freight community’s support. I could not 

support any freight fee and related program without it. 

Second, the Commission advocates promoting private investment. 

The report recognizes that private investment is and always will be 

the primary means of meeting the goal of expanding the freight rail 

network to meet continuing demand. It states that rational economic, safety, security, labor, environmental policies are all fundamental to sustaining private investment. It also supports 

incentivizing private investment in freight railroad network expansions, including investment tax credit for expansion expenditures. 

From a public policy standpoint, you should weigh every freightrelated proposal against whether it will expand or constrict investment in the freight railroad capacity. Thank you very much. 

RESPONSE BY MATTHEW ROSE TO AN ADDITIONAL QUESTION

FROM SENATOR INHOFE

Question. There is a delicate balance between damaging the nation’s economy by 

allowing congestion to worsen ad by raising taxes and tolls to unnecessarily high 

levels. How comfortable are you that you struck the correct balance? Is the goal of 

the 20 percent reduction in congestion on somewhat arbitrary? Was economic modeling done to measure the impact of congestion and tolls on the economy? 

Response. There is a critical equation that must be solved in the next surface 

transportation bill increased fees from whatever source balanced against the necessary maintenance and expansion of the nation’s infrastructure. In general, I believe investments made with additional user fees would preserve and promote economic development to support the added costs, whether they come from gas taxes, 

tolls or VMT fees. Furthermore, the performance-based prerequisites for infrastructure spending called for in the Commission report should help calibrate which investments are worthy of public participation. 

There was no modeling done to measure the impact of tolls on the economy; however, the Texas Transportation Institute (TTl) has long analyzed the impact of congestion on the economy. TTl reports that the cost of highway congestion in the nation’s urban areas increased 60 percent, from $39.4 billion to $63.1 billion, from 

1993 to 2003. The U.S. DOT estimates that the cost of congestion across all modes 

of transportation could be three times as high-approaching $200 billion per year-if 

productivity losses, costs associated with cargo delays, and other economic impacts 

are included. If you factor in all modes and forecast to 2020, it is clear that the cost 

of congestion will be well over $200 billion. We can only assume that these numbers 

will climb as more congestion builds on all segments of our surface transportation 

system. 

Additionally, specific to freight, total logistics costs, which are about 10 percent 

of OOP, are increasing as demand is outstripping available capacity. For example, 

from 2005 to 2006, transportation costs increased 9.4 percent, and inventory and administrative costs increased 13 percent. This trend will ripple through the economy 

beyond merely the users of the freight system (both truck and rail). China has much 

higher logistics costs than the United States, about 18 percent of OOP. Their response has been to increase spending on transportation infrastructure, which will 

bring down logistics costs and increase their comparative advantage in the global 

marketplace. 

RESPONSES BY MATTHEW ROSE TO ADDITIONAL QUESTIONS

FROM SENATOR BOND

Question 1. While I don’t necessarily agree with all of the conclusions found in 

your national commission report, I am curious why it is that you chose to expand 

the Federal role rather than reduce it? Would each of you please comment on what 

you believe the Federal role in government should be? What would you propose the 

Federal role should be if a gas tax increase were not agreed to by Congress? 

Response. I believe the report attempted to more sharply focus Federal dollars on 

national priorities so that, in some respects, the Federal role may be reduced. I support sharply focusing the Federal program aimed at national priorities-interState 

commerce and providing a Federal partnership to an even larger regional effort 

around congestion relief. The programmatic streamlining contained in the report, 

47 

and other reforms such as improved project permitting processes and improved 

planning, are important to matching the more focused Federal role to Federal funding. 

State and local governments and public private partnerships also will have to significantly increase funding contributions to meet transportation demand. Regional 

priorities should be consistent with national programs and priorities but, in some 

instances, will go beyond. The envisioned Federal role remains a partnership, recognizing that State and local governments must do more but are not always best positioned to promote and support important national transportation priorities. They 

certainly cannot fund all of them. 

Question 2. I worked hard along with my colleagues, Senator Inhofe, Senator 

Reid, Senator Baucus and Senator Jeffords to make sure that spending levels on 

SAFETEA were as robust as we could make them during life of SAFETEA. Although SAFETEA was a 44 percent cumulative increase in spending for highways, 

transit and safety about TEA–21 (SAFETEA was 286.5 billion and TEA–21 was 198 

billion), I was told the day that we passed it that the buying power remained the 

same from bill to bill due to the increased costs of labor, materials (steel and concrete). Would each of you please comment on this and what your view would be of 

the next authorization? 

Response. I fully associate myself with the response of Vice Chairman 

Schenendorf who stated for the record in response to the above question the following: 

‘‘The funding increases in SAFETEA-LU were an important step forward, but 

they still fall far short of what is needed to avert a national transportation crisis. 

The next reauthorization bill should increase investment to the levels recommended 

in our report. 

Moreover, we need to address project delivery. The buying power of the funding 

authorized under SAFETEA-LU has declined further subsequent to its passage, as 

the recent sharp increases in the prices of construction materials that you have 

cited have continued. This trend makes it critical that our recommendations for 

speeding project delivery be incorporated in the next reauthorization. Our report illustrated that, based on recent inflation trends, the cost sofa project started now 

and completed by 2011 would be half as much as the same project if its completion 

were delayed until 2021. Shaving time off of the project delivery process will yield 

savings that could then be applied to other projects, substantially reducing the overall funding needed to meet national objectives. Until we can do that, inflation will 

continue to severely diminish or even eliminate the impacts of increased funding 

levels on the performance of the surface transportation system.’’ 

Question 3. The commission’s report raises some issues of jurisdictional concern 

to those of us here on the Hill. You propose to eliminate all existing programs of 

the FHWA, FTA, FMCSA, NHTSA and the FRA and replace them with 10 new programs that cross agencies and modal lines. As a practical matter, how do you think 

that this goal could be accomplished here in the Senate, and for that matter within 

the Department of Transportation? 

Response. The Commission discussed the value in realigning activities of the U.S. 

Department of Transportation along functional lines. There was discussion of increased coordination to deliver transportation projects in a timely, mode-neutral 

manner. The Commission weighed whether this approach would put the proper 

focus on problem solving in terms of outcomes and system performance rather than 

anyone means to get there. I personally have concerns about how the safety functions of these agencies would be affected by any major realignment and spoke out 

during Commission proceedings about the need to ensure that agencies which have 

primarily safety jurisdictions remain independent and focused on that important 

function. Nevertheless, I do agree with Vice Chairman Schenendorfs response that 

it may be possible to structure the program in a way that meets the Commission’s 

goals, while at the same time respecting current jurisdictional requirements and political realities. 

RESPONSES BY MATTHEW ROSE TO ADDITIONAL QUESTIONS

FROM SENATOR VOINOVICH

Question 1. As a former Governor, I believe states should have maximum flexibility to use their highway dollars to meet their own unique transportation needs. 

I am interested in hearing about the Commission’s recommendations to restructure 

the Department of Transportation programs so that are focused on national interests and performance. 

48 

How will this proposal promote State and local decisionmaking authority? How 

will funds be allocated on a state-by-State basis? Does this new approach eliminate 

the donor/donee status based on these new categories? 

Response. I concur with the response to this question provided by Vice Chairman 

Schenedorf: 

‘‘The Commission believes that the multitude of narrowly focused highway and 

transit programs that have been created in recent surface transportation legislation 

reduces State and local flexibility to target Federal funds toward either national or 

State and local interests. The 10 new Federal program areas we have recommended 

reflect not only national surface transportation priorities but State and local interests as well. State and local transportation agencies will have much greater flexibility in how they spend Federal funds than under the current program structure. 

This flexibility will allow them to meet Federal performance standards in a way 

that is best suited to their unique local transportation needs. 

We recommend changing the current method for allocating funds among States 

with ‘‘pass through’’ to localities as match the comprehensive plans. State and local 

agencies would develop plans for achieving performance standards in each of the 

main program areas. Funds would be allocated to States in proportion to the cost 

to implement their plans compared to the cost to implement all State plans. This 

is essentially the same method that funds were allocated to construct the InterState 

System. The equity programs that currently guarantee a minimum return to States 

would be eliminated, but we believe that all States would receive sufficient Federal 

funding to contribute to meeting their highway and transit improvement needs.’’ 

Question 2. Through 2055, the Commission estimates that the Nation will need 

to invest $255 billion annually to maintain and improve the existing surface transportation system—almost a tripling of the $86 billion annually spent on all modes 

today. The Commission also recommends that the Federal Government share of 

total investment would be maintained at its current 40 percent level. This implies 

that states would have to increase their revenues to match the increase in Federal 

funds. 

Is it reasonable to believe that states will triple investments in transportation infrastructure? At the current required 80/20 match, would states have to raise State 

gas tax or other forms of revenue to match Federal funds as it grows? Did the Commission consider giving states flexibility on the match component for State DOT 

projects? 

Response. I concur with the response to this question provided by Vice Chairman 

Schenendorf: 

‘‘The Commission believes that increased expenditures from all levels of government and the private sector will be necessary to compensate for past investment 

failures while addressing significant increases in future demand. As indicated in our 

report, based on the investment gap we identified, the non-Federal share of additional investment requirements-from State, local and private sources-could range between the equivalent of 34 and 63 cents per gallon of fuel tax. While State fuel taxes 

are likely to remain an important part of the funding mix, we anticipate that individual States and local governments will draw upon a wide array of other financing 

mechanisms as well. We recommend that the Congress provide States with new 

flexibility for tolling and pricing, and encourage the use of public-private partnerships where States or local governments are willing to use them. The revenues generated from such sources, along with increased revenues from other financing mechanisms that States may opt to employ, would reduce the size of any fuel tax increases that may be required. Our report includes an analysis of the advantages and 

disadvantages of a variety of revenue sources that individual States and local governments might opt to utilize in closing the investment gap. 

In terms of matching rates, our report proposes that the Federal share for particular activities could be adjusted as an incentive, rewarding States and metropolitan planning organizations (MPOs) that demonstrate creativity and innovation in 

meeting their performance objectives. However, we believe that the large increase 

in Federal investment that we have proposed should be matched by a commensurate 

increase in funding from other levels of government, so we would not recommend 

significant changes to the matching rates we have proposed.’’ 

Question 3. Can you elaborate on the vision for National Surface Transportation 

Commission and could you discuss the pros and cons of the impact this commission 

functions as it relates to national program priorities? 

Response. I endorsed the concept of the National Surface Transportation Commission (NASTRAC) with the proviso that I was concerned about its political viability 

in Congress. As envisioned, it would provide an independent assessment of nationwide surface transportation investment requirements and recommend to the ConVerDate Aug 31 2005 10:57 Jan 15, 2014 Jkt 000000 PO 00000 Frm 00052 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\85519.TXT VERN
49 

gress funding levels to meet those requirements. Although that is not the same as 

choosing and funding projects, and certainly would have no impact on the congressional oversight function, I was concerned that an argument could be made that it 

usurps congressional authority and prerogatives. However, an equally compelling 

argument can be made that insulating decisions regarding surface transportation 

funding from the political process, such as through an independent commission, 

would make it easier for Congress to allocate funding without undue concern about 

short term political pressures. 

Question 4. During our consideration of SAFETEA-LU, there was a significant debate between the donor and donee states. Did the Commission review equalizing the 

rate of return to all of the states? 

Response. No, it did not. The Commission based its recommendations on system 

needs and performance outcomes, not donor-donee concepts. However, it is my view 

that funding based on need and premised on performance will be a good proxy for 

a fair donor/donee relationship. The Commission believed that the re-orientation of 

a Federal program and funding mission, in an era of overall increased funding to 

meet transportation needs, will provide a constructive alternative to the donor-donee 

analysis. 

Question 5. I have long advocated for an increase in the gas tax. However, in this 

climate, I am uncertain of the feasibility of this. 

If the gas tax cannot be increased, how much more do you think we generate from 

other financing mechanisms to invest in our nation’s transportation system in the 

short term? How crucial is a user free increase to meeting our future transportation 

needs? 

Response. The report contained a discussion of options. I believe that the Congress should move quickly to develop and implement a VMT fee system that is 

workable and fair and does not cross-subsidize users of the highway system. 

Question 6. Senator Carper, Senator Clinton and I have been working on legislation to establish National Infrastructure Commission. This commission would examine all at our nation’s infrastructure needs. This legislation passed the Senate last 

year. We are not waiting for the House. In your experience, do you think this type 

of commission would be helpful? Do you have any advice for how to put it together? 

Response. I would not oppose a commission which is tasked with looking at infrastructure needs across all sectors. However, there has already been a substantial 

amount of analysis done, particularly in the area of transportation infrastructure. 

It is my view that Congress could develop legislative proposals based on the existing 

body of research and solicit input on them from the public and private sector entities which have done the work. Given the amount of time available before the current surface transportation authorization lapses, this would seem to be necessary. 

Question 7. We are currently considering economic stimulus legislation. How important do you think is transportation infrastructure to providing an economic boost 

to the economy? 

Response. There is no doubt that transportation investment provides a stimulus 

to the economy. The stimulus proposal with which I am most familiar—the 25 percent railroad expansion investment tax credit—will provide an estimated 20,000 jobs 

for each additional billion that railroads spend to expand their networks, which the 

Commission deemed essential to meeting future freight demand. 

Question 8. I have always been a champion of public private partnerships. During 

the last highway bill, I worked with the Ohio delegation on an intermodal facility 

that is going to create 10,000 jobs. Unfortunately, this project has hit some snags 

because there were barriers at FHWA and the State during the project implementation. Many people do not recognize the important of these types of partnerships. 

What do you recommend for breaking down these barriers and for the public to 

recognize how the public benefits and when the Federal Government partners with 

a private entity? 

Response. The Commission report strongly supported the concept of such partnerships. albeit with a number of safeguards that the Commission felt were essential 

to preserving the public’s confidence in these joint ventures. In the railroad industry, we have a long track record of public private partnerships to fund projects 

which have benefits not only for freight mobility in an area, but contribute other 

public goods such as cleaner air, reduced truck and auto congestion. The private 

good is increased capacity and through-put. The paradigm requires a fair determination of each’s benefits and correlating financial participation. There have been barriers to successful rail project PPPs, such as eligibility limitations for public funds, 

which ought to be reviewed and eliminated in the upcoming surface transportation 

reauthorization legislation. 

50 

Senator BOXER. Thank you very much. 

And then we hear from an appointee by Leader Reid, Tom 

Skancke, CEO of the Skancke Company and Commissioner. Welcome. 

STATEMENT OF TOM SKANCKE, CEO, THE SKANCKE COMPANY 

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

Inhofe and members of the Committee. My name is Tom Skancke. 

It has been an honor and a privilege to serve on this Commission 

for the past 22 months with such a distinguished and incredible 

group of people. I cannot imagine 12 other individuals who could 

have served our great Nation in such a better capacity. 

I would also like to thank you for the additional time that you 

gave this Commission to complete our work. We needed the time 

and this report is very compressive and very thoughtful. 

As my colleagues know, I have spent most of my professional life 

working in the private sector to bring to completion important, 

needed transportation projects across this Nation. I do so within 

the framework of the rules and regulations and laws passed by 

Congress. And I must say that we have a transportation crisis in 

this Nation that we have never seen before, and one which will 

likely not change unless we as a Nation do something quickly and 

swiftly. 

I would like to thank each and every one of you for bringing up 

a topic this morning that is very near and dear to my heart. And 

I want to focus my comments today on the project delivery process 

that causes a lot of waste in both time and money in our program. 

As we started our transportation program, we found that as we 

continued to try and improve our system, we seemed to be adding 

more government to the process, not less. We seemed to add more 

years onto our project delivery process, which is already costing the 

American taxpayer billions and billions of dollars in time and productivity through inflation. 

We have been throughout this Country in public hearings and in 

our research. We found that when we add one Federal dollar to a 

transportation project in our Nation, it can add an additional eight 

to 10 years to the project delivery process, making that project go 

from 5 years to 14 years from the time of conception to completion. 

I will never forget about 7 years ago I had a meeting in Southern 

California with the CalTrans district director regarding a $1.5 billion interchange and highway expansion project. She told me that 

if she could not get $100 million in one of the authorizations that 

she didn’t want the hassle and the trouble with the Federal dollar, 

because it would slow her project down by at least 10 years. 

My friends, that is just unconscionable. The Utah Department of 

Transportation does not put one Federal dollar in their major capital program, because it adds too much time to the delivery process. 

Instead, Utah uses their Federal dollars for routine striping, painting, rehabilitation and preventive maintenance programs. These 

are all meritorious programs, but they do not meet the goals that 

the Federal program intended to address and the Nation’s needs as 

a whole. 

Now, some will say that this is all about the NEPA process. And 

I will tell you that the elaborate processes surrounding NEPA are 

51 

a part of the problem, but they are not the entire problem. We are 

all environmentalists to some degree. We all want to save our own 

piece of the environment, and we should. 

However, in my humble opinion, we are being environmentally 

irresponsible when we take 14 years to deliver a transportation 

project in this Nation. We are being irresponsible when we are not 

insisting that all Federal agencies take advantage of the latest 

changes in the laws and therefore resist the coordination that you 

all provided in SAFETEA-LU when they conduct the NEPA reviews. 

We are being derelict to the environment when we take 10 years 

to perform an environmental assessment that ultimately results in 

a finding of no significant impact. These laws need to be updated 

and brought into the 21st century. These laws are old, some are 

dated. And they need to be reviewed and updated so that the outcomes better protect our environment, not used to stop a transportation project or harm the environment. 

I realize that this is a political hot button here in Washington, 

DC. and across the Nation. I will likely have to start my car from 

a remote location after I leave this hearing today. But with all due 

respect to my colleagues and members of this Committee who have 

served this Nation so well for many years in the transportation 

arena, and have dedicated their lives to this issue, don’t you think 

it is time to cut the project delivery time to 5 years and be more 

environmentally responsible by getting the review process done in 

2 years instead of 5 years or 10 years? 

When you add one Federal dollar to a project, you can add 10 

years to delivery time. The New Starts Program in transit is even 

worse. Let me explain to you briefly the cost to the American taxpayer. A $1 billion project today in 2008 dollars delivered in 2022 

costs the American taxpayer an additional $3 billion to $4 billion. 

That cost is in review time, inflation, product cost increases, the 

public bidding process and the like. 

Ladies and gentlemen, we are spending money we just don’t 

have, and we are spending future money that can be better spent 

elsewhere. 

If I may, Madam Chair, if that $1 billion project took 5 years instead of 14 years, we could not only have more projects earlier to 

meet the community’s needs, but we could have more money to authorize more projects. We could maybe upgrade 200 more $50 million interchanges. We could fix 150 bridges. We could add additional freight and passenger rail lines, improve our transit systems, 

and we could add capacity equal to hundreds of additional miles 

with new technology, lanes, up-to-date design to provide congestion 

relief and still have money left over for more bike lanes, pedestrian 

walkways and have a cleaner, safer, healthier environment. 

At this time when the President and you all as Members of Congress are considering enacting an economic stimulus package, let 

me point out that the payoff for transportation investment is dramatic. Federal Highway Administration research has estimated $1 

billion in investment can generate an overall 40,000 new jobs in either direct or indirect induced jobs. Numerous academic studies 

have demonstrated that the investment in public capital, such as 

transportation facilities, have a positive effect on private output 

52 

and productivity. Streamlining the project delivery process means 

that our economy would realize these benefits sooner, not a decade 

down the road. 

Senator BOXER. Tom, if you could just wrap up. 

Mr. SKANCKE. I most certainly will. 

In closing, Madam Chair, I would like to point out a couple of 

things for you. This Commission ran out of money in August 2007. 

I think it is important to point out that all of us paid our own way 

to and from Washington, DC. to complete this work. That is how 

seriously we took this project. 

Commissioner Frank Busalacchi from Wisconsin paid for the 

inter-city passenger rail report out of his budget; Steve Hemminger 

paid for the executive summary of this report. We took this job 

very seriously for the past 22 months. This was a 30 hour a week, 

non-aid full-time job for many of us. 

I want to thank each and every one of you today for your years 

of dedication to our Nation and the people who live here. It is an 

honor for me to be here today and be a part of this Commission. 

I look forward to any questions you may have. Thank you. 

RESPONSE BY TOM SKANCKE TO AN ADDITIONAL QUESTION

FROM SENATOR LIEBERMAN

Question. One of the Commission’s recommendations is to improve project delivery 

by decreasing the time from inception to completion. Right now, it takes an average 

of 13 years to finish a Federal transportation project. In principle, I agree with you 

that 13 years is too long, and poses many problems from a planning perspective because costs exceed allocated budgets over time. However, I would like you to elaborate on the Commission’s suggestion that regulations should be revised to allow for 

a simple Environmental Impact Statement (EIS) rather than the current requirement for a draft and final EIS. My experience is that communities often learn a lot 

about a proposed project when the draft EIS is made public, and their concerns are 

frequently addressed in the final EIS. How will the streamlining of the EIS process 

impact the ability of communities and environmental groups to comment on major 

transportation projects as they progress through the planning phase? 

Response. I am greatly concerned about the time it takes to get a project approved, and I know my fellow Commissioners share this frustration. The Commission’s suggestion for a revised EIS process would allow for the same participation 

and opportunity to comment, but it would reduce the redundancy that exists in the 

current EIS documentation process. Under the simple EIS process, public participation during the preparation of the draft EIS would be the same as it is with the 

current process. The issuance of the draft EIS would be followed by a required public hearing and additional opportunities to comment before a project decision is 

made. Response to public concern and input would be addressed in the Record of 

Decision rather than in both the final EIS and Record of Decision. The need for a 

final EIS fully documenting the same issues addressed in the draft EIS that needs 

no further analysis would be eliminated. The Record of Decision would become the 

document for addressing public concerns on the draft EIS. In my opinion, we are 

being environmentally irresponsible when we take 13–15 years to deliver an infrastructure project in our county. We can do better than that. We’re the United States 

after all. 

RESPONSES BY TOM SKANCKE TO ADDITIONAL QUESTIONS

FROM SENATOR CARPER

Question 1. Most Americans understand the value of a gas tax and the impact 

on consumers in relatively minimal. However, the public must be assured that their 

money won’t be wasted—not simply more highway miles and more road congestion. 

If the additional revenue from a higher gas tax can go toward a better product, then 

it’s a good idea. Is the gas tax increase recommended in this report solely a matter 

of resources or is there some prioritization or improvements to the projects we build 

that are needed as well? 

Senator, all the Commissioners felt that just raising the Federal fuel tax and putting more money into the same programs is not the answer to our problems. Our 

53 

hearings throughout the country made it clear that the public will not support a 

gas tax increase unless the entire program is changed from top to bottom. We made 

several recommendations to accomplish this. One that is especially important to me 

is to drastically reduce the long project delivery time period which contributes enormously to the cost of all projects. In addition, I, and my fellow Commissioners feel 

that Federal dollars need to be better targeted to those projects that clearly affect 

the national transportation system and are cost beneficial. This reform needs to 

take place whether or not you concur with our recommendation for an independent 

Commission to oversee a national surface transportation plan. 

Question 2. On March 3, 2007, I introduced the National Infrastructure Improvement Act. This legislation creates a commission to look at the State of infrastructure 

throughout the country—including rail, roads, bridges, airports, and flood control 

structures. That commission would then make recommendations to Congress and 

the President about how to maintain our current infrastructure while meeting future needs and safety requirements. While your report was a good start in highlighting the need to sustain the U.S. surface transportation system, a more detailed 

plan as called for in my bill is necessary. How does the Commission anticipate that 

the specific steps needed to achieve the wide-ranging reform recommended by the 

report will be developed and prioritized? What in your report do you expect that 

transportation agencies can begin to implement immediately? What requires congressional approval? 

Response. Senator, we recognize that our report did not go into specifics in some 

areas because we felt that this was best left to the congressional process. However, 

one thing that we feel must be done immediately is to ensure that the Highway 

Trust Fund has enough money to pay its obligations. This needs to be done in advance of any reform. In addition, we do not suggest that new rules and procedures 

apply to projects already in the pipeline. 

However, we believe the Congress needs to establish a transition process in the 

next reauthorization bill, which among other things, requires a shift to performancebased planning by States and others, and which will return the Federal program 

to it ‘‘national’’ purpose. Other changes such as the reorganization of DOT may take 

somewhat longer as it requires major administrative change. As to your question 

on the need for congressional legislation, the answer is an unqualified ‘‘yes’’. In particular, the structure of the U.S. Department of Transportation, and funding formulas are in large part set by statute, and therefore the recommendations by the 

Commission to reorganize the agency from a modal stovepipe to one centered on programs, and which establishes new funding formulas, and an independent Commission, will take both legislation and time. The process, however, must begin with the 

upcoming reauthorization. Congress could direct a newly created NASTRAC to do 

the drafting with the assistance of DOT, or it could direct DOT itself to provide 

draft legislation Congress. Congress of course would have the final say in the reform 

of our surface transportation program. 

Question 3. New transportation development has numerous environmental effects, 

including the additional runoff from paved surfaces. Lack of coordination between 

transportation and land use policies can cause this effect to be overlooked during 

project planning. This lack of coordination can lead to unintended stormwater pollution. Unfortunately, Senator Warner’s amendment to include stormwater runoff in 

the last surface transportation reauthorization was not successful. How do the Commission’s recommendations ensure that agencies representing transportation, environment and land planning interest at the Federal, State and local levels work together to consider all of the impacts of new infrastructure to ensure that transportation investment does not require greater taxpayer investment elsewhere, such as 

stormwater treatment? 

Response. As a resident of Las Vegas, one of the fastest-growing metropolitan 

areas in the United States, I know firsthand that we need to closely coordinate 

transportation with land use planning. My fellow Commissioners agreed with me, 

and the final report notes the following: ‘‘The Nation’s population is expected to 

swell to 420 million residents by 2050. Given the immensity of this increase, it is 

essential that the surface transportation system be transitioned away from fossil 

fuels, and that planners incorporate transportation into thoughtfully planned, efficient, and environmentally sustainable communities.’’ 

The Commission recommended handling environmental mitigation issues early by 

considering them in an integrated fashion, looking at overall resources rather than 

in a sequential, project-by-project basis. 

In my discussions with the U.S. Department of Transportation, I learned that 

there are already some initiatives underway related to these recommendations. 

Many State transportation agencies and local governments are joining with resource 

54 

and regulatory partners to identify and map their watersheds and other green infrastructure resources, so that environmental data will be available to better guide 

land use and transportation decisions. 

In 2006, the Federal Highway Administration and seven other Federal agencies 

published Eco-Logical: An Ecosystem Approach to Developing Infrastructure 

Projects. This approach addresses an alternative to the resource-by-resource, 

project-by-project approach to environmental protection. It looks instead at the ecosystem and the current and proposed land use for that area. FHWA is currently 

awarding grants to 14 State and local agencies based on the Eco-Logical approach. 

The FHWA is also working closely with the Transportation Research Board to develop an outcome-based ecosytem-scale approach and corresponding crediting system. 

The U.S. Environmental Protection Agency and the FHWA are leaders in the 

Green Highways Partnership. This is a collaborative effort with mid-Atlantic State 

and local governments, non-governmental officials, and the construction industry. It 

is an attempt to engage collaboratively on highway improvements. 

With respect to stormwater management, mitigation from Federal aid highway 

projects is currently an eligible construction expense, and has been for some time. 

New construction and reconstruction projects must meet current environmental 

standards. Additionally, stormwater retrofits and stand-alone projects for 

stormwater abatement are eligible for both National Highway System and Surface 

Transportation Program funding, with some limitations. 

Stormwater pollution may be a problem on older facilities that were built prior 

to current requirements and do not adequately address the runoff from the roadway. 

However, for facilities that are new or are being rebuilt, those issues are being addressed as part of the construction or reconstruction project, and hopefully they 

should not create any burden on local facilities, or on the taxpayer, for stormwater 

treatment. For older facilities that are not planned for improvements in the foreseeable future, the SAFETEA-LU provisions for stand alone projects for stormwater 

abatement and treatment may be an option. 

Question 4. The report discusses ineffective investment decisions, a problem that 

is partially attributed to the lack of performance standards. I stand behind any programmatic changes that lead to making better use of public money for transportation. Linking funding to performance is a step in the right direction. Benefit-cost 

analysis is referred to throughout the report as an economic tool to be used to make 

informed decisions. What provisions does the commission recommend for ensuring 

that this—as well as other proven economic tools—is utilized broadly and appropriately, so that waste is minimized? 

Senator, as I said in my earlier answer, the Commission heard loud and clear that 

the public will not fork over more money unless it can be assured that it is spent 

in a way which makes a difference, particularly in terms of congestion, safety, and 

efficiency. We debated the best way to achieve this, and we determined that the future surface transportation system must be based on fundamentally different project 

selection procedures. This new process would require the development of plans by 

each State and major metropolitan area. These plans would be at the system level, 

i.e., a combination of investment and operations and technology in the context of 

community situations and decisions These comprehensive plans would be conceived 

and assessed in terms of how they can be expected to attain performance standards 

that we set as a Nation. Individual projects would have to be shown to make a contribution to those plans that are cost-beneficial. These investment plans would essentially determine eligibility for Federal funding. 

We think that subjecting each project to a rigorous and transparent analysis at 

the beginning will lead to better project decisionmaking. However, this alone is not 

enough. We also strongly feel that recipients must be held strictly accountability for 

meeting the established performance standards. The success, or failure, of grant recipients in meeting these standards would be evaluated, and would be taken into 

account in determining Federal matching ratios in the future. With this overall 

structure in place, we believe that provide grant recipients will have powerful incentives to select and implement projects efficiently and to minimize waste. 

RESPONSES BY TOM SKANCKE TO ADDITIONAL QUESTIONS

FROM SENATOR INHOFE

Question 1. The report points out the waste of taxpayer funds attributable to excessive delays in project delivery due to lengthy and often redundant environmental 

reviews. Many of the problems identified are the same problems we heard about 

prior to drafting SAFETEA-LU and even TEA–21 before that. Some of the recommended solutions seem similar to ideas we tried to incorporate in Title VI of 

55 

SAFETEA-LU. Could you please comment on what, if any, impact these SAFETEALU provisions have had? Were we on the right track and now just need to wait a 

little longer to realize the benefits? Or did we miss the mark? 

Response. Overall, there appear to be encouraging developments around the country, but it is still too early to determine whether or not improvements will align 

with congressional expectations. This is because SAFETEA-LU mandated changes 

in the planning and environmental review processes are not pervasive or integrated 

in common practice sufficiently to be reflected in performance metrics. The Federal 

Highway Administration has been working with the General Accounting Office to 

answer similar questions associated with an ongoing audit of SAFETEA-LU 6001 

and 6002 requirements. 

As shown in the report, I believe that we can go much further and must be more 

aggressive in our efforts to be more cost-effective with our planning and project development processes. Although the States complete environmental reviews in many 

different ways, most believe they did not need to make major changes to their existing processes to comply with the requirements added by SAFETEA-LU. My sense 

is that those changes were perceived as institutionalizing a more disciplined project 

management, essentially ‘‘tightening up’’ the environmental review process. If undertaken, the work at the project level might be accomplished with more speed but 

only after complying with the new requirements. We need to go beyond simply efficiency within the existing institutional arrangements. 

Even the limited experience has been mixed. Some State transportation departments and resource agencies have noted challenges in their efforts to implement the 

post-SAFETEA-LU changes. For example, the so-called ‘‘resource agencies’’ have 

themselves rather limited resources to take on what might be considered extra responsibilities. Despite extensive outreach, resource agencies and local public authorities still have incomplete knowledge about post-SAFETEA-LU requirements. 

There are concerns about paperwork slowing down efforts to complete environmental reviews. However, some States do not believe that the additional documentation requirements are not overly burdensome. They noted that the new documents, 

especially the coordination plan, help to achieve better management and oversight 

of projects. 

Some State transportation agencies and FHWA Division Offices note that the new 

statute of limitations could lead to cost savings. It limits lawsuits and to a period 

when it would not cost as much to change project plans. If no lawsuit is filed, work 

can proceed on a project without the risk of a lawsuit and cost escalation. 

Overall, I understand from the Federal Highway Administration that it may take 

between three and 5 years to discern the effects that SAFETEA-LU made to the environmental review process. That does not mean, however, that we cannot continue 

to develop common sense approaches that might be implemented in the next reauthorization bill. 

Question 2. On March 3, 2007, I introduced the National Infrastructure Improvement Act. This legislation creates a commission to look at the State of infrastructure 

throughout the country—including rail, roads, bridges, airports, and flood control 

structures. That commission would then make recommendations to Congress and 

the President about how to maintain our current infrastructure while meeting future needs and safety requirements. While your report was a good start in highlighting the need to sustain the U.S. surface transportation system, a more detailed 

plan as called for in my bill is necessary. How does the Commission anticipate that 

the specific steps needed to achieve the wide-ranging reform recommended by the 

report will be developed and prioritized? What in your report do you expect that 

transportation agencies can begin to implement immediately? What requires congressional approval? 

Response. Senator, as I indicated in an earlier response, the Commission suggested several short-term proposals to increase revenue for the Highway Trust 

Fund—which is the most immediate need. Certainly many of the proposals we suggest will take some years, and congressional legislation to implement, but we believe 

the reauthorization of SAFETEA-LU should begin this process. In the short term, 

I would strongly suggest that Congress take steps to permit transportation agencies 

the ability to speed up the project delivery process which currently adds many years 

and countless dollars to the completion of needed projects. 

RESPONSES BY TOM SKANCKE TO ADDITIONAL QUESTIONS

FROM SENATOR BOND

Question 1. While I don’t necessarily agree with all of the conclusions found in 

your national commission report, I am curious why it is that you chose to expand 

the Federal role rather than reduce it? Would each of you please comment on what 

56 

you believe the Federal role in transportation should be? What would you propose 

the Federal role should be if a gas tax increase were not agreed to by Congress? 

Response. Senator, the Commission believes that the national focus of our surface 

transportation system has been diluted over the last two reauthorization cycles. The 

need for a national system of transportation is absolutely critical to our economic 

vitality as a country. Individual states have an important perspective and set of responsibilities for construction and maintenance of that system. However, the sum 

of those perspectives are not necessarily equal to a national one. A decision by one 

State can influence the success of commerce and economic growth throughout the 

whole Nation by either promoting or impeding the interState commerce. Every 

American is entitled to the benefits of a surface transportation that is efficient and 

safe, whether they live in Whitefish, Montana, or St. Louis, Missouri. The Commission believes that Congress must reaffirm the historic, and constitutional, role of the 

Federal Government in transportation and commerce. 

We described the need for a strong Federal role in each of the 10 programs described in Volume 1 of the Commission Report. Given the need for a strong Federal 

role in these 10 programs, and the enormous investment needs of the transportation 

system, the majority of the Commissioners advocated a substantial increase in the 

level of Federal funding of these programs. If Congress does not increase the Federal funding for transportation, through gas taxes or other means, the need for a 

robust NATIONAL transportation will not go away, but the ability of the Country 

to achieve that goal will be compromised. 

Certainly, some of the program reforms recommended in the report such as simplifying and consolidating Federal transportation programs so they function more efficiently; focusing those programs on clearly defined national interests, using performance goals and better investment tools would allow our current existing Federal 

dollars to go further. The majority of the Commission, however, determined that 

this alone would not cover all the needs built up over many years. 

Question 2. I worked hard along with my colleagues, Senator Inhofe, Senator 

Reid, Senator Baucus and Senator Jeffords to make sure that spending levels on 

SAFETEA were as robust as we could make them during the life of SAFETEA. Although SAFETEA was a 44 percent cumulative increase in spending for highways, 

transit and safety above TEA–21 (SAFETEA was $286.5 billion and TEA–21 was 

$198 billion), I was told the day we passed it that the buying power remained the 

same from bill to bill due to the increased costs of labor, materials (steel and concrete). Would each of you please comment on this and what your view would be of 

the next reauthorization? 

Response. The Commission heard a great deal of testimony relating to the decreased buying power of the funding authorized under SAFETEA-LU due to the dramatic increases in the prices of construction materials that you have cited. This 

trend makes it critical that our recommendations for speeding project delivery be 

incorporated in the next reauthorization. Our report illustrated that, based on recent inflation trends, the cost of a project started now and completed by 2011 would 

be half as much as the same project if its completion were delayed until 2021. Shaving time off of the project delivery process will yield huge SAVINGS that could then 

be applied to other projects, substantially reducing the overall funding needed to 

meet national objectives. Until we can do that, inflation and the increase in the cost 

construction materials (for whatever reason) will continue to severely diminish or 

even eliminate the impacts of increased funding levels on the performance of the 

surface transportation system. I believe that before we can ask the tax paying public 

to pay more for a transportation system that is broken, we need to prove to them 

that our Government can save and the project delivery process is one way we can 

prove to save billions. 

Question 3. The Commission’s report raises some issues of jurisdictional concern 

to those of us here on the Hill. You propose to eliminate all existing programs of 

the FHWA, FTA, FMCSA, NHTSA, and the FRA and replace them with 10 new programs that cross agencies and modal lines. As a practical matter, how do you think 

that this goal could be accomplished here in the Senate, and for that matter within 

the Department of Transportation? 

Response. Senator, the Commission recognizes that organizing DOT by function 

rather than mode would be a fundamentally different approach to doing business 

for the agency. However, we believe it makes sense because it would increase coordination and help deliver the right blend of transportation projects in a timely manner. I do not feel it would be appropriate for me to suggest how Congress would 

choose to organize itself in relation to such a change, but am fully confident that 

it is up to the task. 

57 

RESPONSES BY TOM SKANCKE TO ADDITIONAL QUESTIONS

FROM SENATOR VOINOVICH

Question 1. As a former Governor, I believe states should have maximum flexibility to use their highway dollars to meet their own unique transportation needs. 

I am interested in hearing about the Commission’s recommendation to restructure 

the Department of Transportation’s program so that they are focused on national 

interests and performance. 

How will this proposal promote State and local decisionmaking authority? How 

will funds be allocated on a state-by-State basis? Does this new approach eliminate 

the donor/donee status based on these new categories? 

Response. Senator, as I said in answer to several other questions, the Commission 

strongly believes over the last number of years the surface transportation program 

has lost the national focus that created the extraordinary system which has so 

greatly contributed to our growth as an economic super power. States play a critical 

and indispensable role in building and maintaining that National system. However, 

the Commission is enormously concerned that the multitude of narrowly focused 

highway and transit programs that have been created in recent surface transportation legislation actually reduces State and local flexibility to target Federal funds 

toward either national or State and local interests. 

The 10 new Federal program areas we have recommended address national surface transportation priorities, as well as State and local interests. Under the planning structure we propose, State and local transportation agencies will have much 

greater flexibility in how they spend Federal funds than under the current program 

structure. This flexibility will allow them to meet Federal performance standards in 

a way that is best suited to their unique local transportation needs, while at the 

same time ensuring that the needs of the Nation as a whole will be served. 

As to the allocation of funds, we recommend changing the current method. As I 

indicated earlier, State and local agencies would develop plans for achieving performance standards in each of the main program areas. Funds would be allocated 

in proportion to the cost to implement these plans. Individual citizens benefit from 

the investments far beyond the piece that they are traveling on at any particular 

time because the performance of the overall route or corridor is influenced by the 

traffic flow on the entire route as well as parallel ones. That is why the funding 

for constructing the InterState System was apportioned out to the entire system on 

a cost to complete basis as segments were completed. We are all in this together 

rather than looking year by individual year as to how much funding one State receives compared to how much fuel is purchased (as a proxy for how much Federal 

fuel tax is accrued) in that State. We believe that the focus should be on all States 

receiving sufficient Federal funding to contribute to meeting their highway and 

transit needs. 

Question 2. Through 2055, the Commission estimates that the Nation will need 

to invest $255 billion annually to maintain and improve the existing surface transportation system—almost a tripling of the $86 billion annually spent on all modes 

today. The Commission also recommends that the Federal Government share of 

total investment would be maintained at its current 40 percent level. This implies 

that states would have to increase their revenues to match the increase in Federal 

funds. 

Is it reasonable to believe that states will triple investments in transportation infrastructure? At the current required 80/20 match, would states have to raise the 

State gas tax or other forms of revenue to match Federal funds as it grows? Did 

the Commission consider giving states flexibility on the match component for State 

DOT projects? 

Response. As one of my fellow Commissioners, in describing the recommendations 

in the Report, stated—‘‘There is no free lunch.’’ The Commission believes that all 

levels of government need to increase their funding for transportation. Only this, 

along with increased private sector investment, will compensate for years of under 

investment and at the same time address increases in future demand. 

Based on the investment gap we identified, the non-Federal share of additional 

investment requirements—from State, local and private sources—could range between the equivalent of 34 and 63 cents per gallon of fuel tax. Certainly State fuel 

taxes will remain an important part of the funding mix, however, we believe that 

States and local governments will begin to use other financing mechanisms as well. 

In this regard, we recommend that the Congress provide States with new flexibility 

for tolling and pricing, and encourage the use of public-private partnerships where 

States or local governments want to use them. The advantages and disadvantages 

of various revenue sources are described in our Report. 

58 

As I indicated in some earlier responses, our report proposes that plans meet performance standards, projects be cost beneficial, and that recipients be held accountable for results. In terms of matching requirements, the Federal share for particular 

activities could be adjusted as an incentive, rewarding recipients that demonstrate 

creativity and innovation in meeting their performance objectives. However, given 

the large increase in Federal investment that we have proposed, we believe that this 

major commitment to surface transportation should be matched by a commensurate 

increase in funding from other levels of government. 

The Commission heard over and over, that users of the system recognize the need 

for significant additional investment in the nation’s transportation infrastructure, 

provided it is spent wisely to address congestion, improve safety, and have a direct 

impact on their quality of life. The Commission strongly believes that the combination of increased funding and program reforms, are absolutely critical to both the 

short and long term economic health of our Nation. As a nation we must restore 

faith in our transportation system that we can deliver the preeminent transportation system in the world. We do that by bringing integrity back to the program 

and restore the trust the American people have not had for many years. 

Question 3. Can you elaborate on the vision for the National Surface Transportation Commission and could you discuss the pros and cons of the impact of this 

commission functions as it relates to national program priorities? 

The role of the National Surface Transportation Commission (NASTRAC) is to 

provide an independent assessment of nationwide surface transportation investment 

requirements and to recommend to the Congress funding levels to meet those requirements. As described in the Report, NASTRAC would work closely with the U.S. 

Department of Transportation. The focus of the experts and program managers at 

U.S. Department of Transportation would be to ensure that plans address key national performance standards, and that proposed projects included in the plans are 

cost-beneficial, consolidating the plans developed by State and local transportation 

agencies in cooperation with key stakeholders into a national strategic plan. Its 

unique role would be to look at the linkages between the nationwide plans developed for each of the 10 program areas described in the Report, and serve to assure 

their integration. 

The very important advantage of NASTRAC is that it would remove decisions regarding surface transportation funding from the political process. We recognize this 

is a very controversial proposal. After much thought and discussion, however, we 

concluded that this was the best way to return a national focus to surface transportation system, adequately fund it, and reduce the number of earmarks that have 

so eroded the confidence of the public in regard to transportation decisionmaking. 

Under our proposal, Congress could certainly veto NASTRAC’s recommendations, 

but we felt that an independent commission would make it easier for Congress to 

accept funding levels in the long term interest of the country without undue concern 

about short term political pressures. The Base Realignment and Closure Commission appears to working well, and we have every expectation that NASTRAC could 

be equally effective. 

We recognize that it will be difficult to achieve a consensus to create such a Commission, and that some decisions now made by Congress would be made by the 

Commission. However, congressional oversight responsibilities would continue as 

well as the need for Congress to enacting periodic reauthorization legislation.. 

Question 4. During our consideration of SAFETEA-LU there was a significant debate between the donor and donee states. Did the Commission review equalizing the 

rate of return to all of the States? 

Response. The Commission did not specifically consider this issue. However, several Commissioners questioned the advisability of the Federal Government collect 

taxes and simply returning money to the States without any oversight of whether 

those taxes were spent in a manner which reflected the Federal interest in the national surface transportation system. Commissioners recognized congressional interest in equity with respect to the amount of Federal funds returned to each State, 

but there was a consensus that funds should be allocated to the States in relation 

to the needs of States for investment in key program areas without specific consideration of equity. Again, the Commission believes that is imperative that Federal surface transportation policy return to a national vision. Finally, we believe that with 

increased investment at all levels, the need to focus on rate of return would be diminished. 

Question 5. I have long advocated for an increase in the gas tax. However, in this 

climate, I am uncertain of the feasibility of this. 

If the gas tax cannot be increased, how much more do you think we generate from 

other financing mechanisms to invest in our nation’s transportation system in the 

59 

short term? How crucial is a user fee increase to meeting our future transportation 

needs. 

As Highway Trust Fund revenues decrease in the future due to increased fuel efficiency and use of alternative fuels, what does the Commission recommend to maintain a reliable source of highway funding? 

Response. Senator Voinovich, I couldn’t agree with you more. However, as I have 

said in my answers to previous questions, how can we expect the American tax 

payer to keep paying when we have a system and a program that is broken? It takes 

a minimum of 13–15 years to deliver a transportation project in this country and 

that is both fiscally and environmentally irresponsible. The waste in the program 

is outrageous. We can build a 5000 room hotel in Las Vegas in thirty-six (36) 

months, maybe less, and it takes 13 (13) years to build thirty (30) miles of highway. 

If we apply performance standards, create a cost/benefit analysis and cut the project 

delivery time by 9–10 years we save billions ultimately restoring trust back into the 

trust fund and then we can ask the American tax payer to pay more. 

The potential revenue-generating potential for different Federal, State, and local 

funding mechanisms is explored in our report. I would refer you to Exhibit 5–17 in 

Volume II of our report. This Exhibit includes estimated revenue generation from 

fuel taxes, motor-fuel sales taxes, heavy vehicle use taxes, tax credit bonds, customs 

duties, investment tax credits, container fees, motor vehicle registration fees, motor 

vehicle sales taxes, general sales taxes, tolling/pricing, local option taxes and impact 

fees. The advantages and disadvantages of these options are evaluated in Exhibits 

5–20 and 5–21. 

While other financing mechanisms are available, and can and should be utilized 

to defray a portion of fuel tax increases where possible, the fuel tax remains the 

most convenient, immediate source of revenue to address the infrastructure needs 

that we have identified in the short term. In any event, if we do not increase revenues above current levels, we will face an ever increasing gap in meeting transportation requirements of this country. 

In the longer term, which we have defined as 2025, we feel it will be necessary 

to transition to a new revenue source. At the moment, the most promising of these 

is Vehicle Miles Traveled (VMT) fee. This fee would be directly linked to each vehicle’s actual travel. This fee could also be adjusted by time of day or other travel conditions. The Commission strongly supports additional research, pilot projects etc., to 

overcome the legitimate technological, institutional, and privacy concerns associated 

with this type of fee. Depending upon the speed with which the country can address 

the technological and administrative issues associated with implementation of such 

a fee and the speed with which the public adopts alternative fueled vehicles, the 

time at which this new approach to a more direct user fee will be sooner than 2025. 

Question 6. Senator Carper, Senator Clinton and I have been working on legislation to establish a National Infrastructure Commission. This commission would look 

at all of our Nation’s infrastructure’s needs. This legislation passed the Senate last 

year. We are now waiting for the House. In your experience, do you think this type 

of commission would be helpful? Do you have any advice for how to pull it together? 

Response. Senator, our Commission spent almost 2 years examining the Nation’s 

surface transportation needs. Certainly additional information relating to the Nation’s transportation infrastructure would be extremely valuable. However, in the 

case of our surface transportation infrastructure, our Commission believes that we 

cannot delay a decision. We believe that we have made the case and pointed the 

way forward. Many of the issues are, frankly, philosophically based in our view of 

the future. The upcoming NEW authorization bill will provide Congress the opportunity to address the recommendations in our Report. 

Question 7. We are currently considering economic stimulus legislation. How important do you think is transportation infrastructure to providing an economic boost 

to the economy? 

Response. The Commission did not hear testimony regarding using transportation 

investment as a component of a short term economic stimulus bill. The Commission 

did hear a great deal of testimony about the importance of transportation investment to long term economic growth and international competitiveness. As we know 

that there are many meritorious projects ready to go and address the backlog in investment, I believe that they should be advanced for their transportation benefits 

as well as they employment benefits. However, I do not have the expertise to address whether in the short term; transportation investment would be an effective 

component of a larger measure to stimulate the economy. My personal opinion is 

that no American truly wants a hand-out they want a job. They want to preserve 

their personal integrity, their home and self worth. A $1 billion investment in transportation infrastructure creates at least 47,000 direct and indirect jobs according to 

60 

the Federal Highway Administration. Let’s put Americans back to work and improve our infrastructure at the same time. 

Question 8. I have always been a champion of public private partnerships. During 

the last highway bill, I worked with the Ohio delegation on an intermodal facility 

that is going to create 10,000 jobs. Unfortunately, this project has hit some snags 

because there were barriers at FHWA and the State during the project implementation. Many people do not recognize the importance of these types of partnerships. 

What do you recommend for breaking down these barriers and for the public to recognize how the public benefits when the Federal Government partners with a private entity? 

The Commission spent a great deal of time, in fact too much time, discussing public-private partnerships. We also had the benefit of much testimony on PPPs in our 

hearings. In our report we recommend a number of safeguards to assure that the 

public interest would be protected when States undertake public-private partnerships. We believe that when appropriate safeguards will help build confidence that 

both the public and the private sectors will benefit from public-private partnerships. 

It is true that some Commissioners were concerned that the safeguards recommended to protect the public interest might have a ‘‘chilling’’ effect on the desire 

of the private sector to engage in them.. We probably would benefit from additional 

study on how to protect the public interest without creating barriers to private sector investment. 

Frankly, at the present time the U.S. is not very familiar with PPPs. The domestic industry is in an immature State but has much to learn from experiences abroad 

as well as other utility industries. As time goes on, and various types of arrangements are put into place, some of the barriers you describe will probably not seem 

so significant. I firmly believe that in the future, it will be easier for governmental 

agencies and the private sector to work together to their mutual benefit on surface 

transportation projects. 

Senator, we need every dollar from the public and private sectors to accomplish 

the goals and objectives outlined in our report. I personally believe that we can do 

this. This is the United States of America! We are letting our Nation down by not 

making the investment we should be to sustain the current system we have built 

over the last 50 years, moreover, making the needed investment for the future generations to continue to have the preeminent surface transportation system in the 

world. We have an obligation to our country to do so. 

Senator BOXER. Thank you very much. 

We are going to start the question time. I just want to say, I was 

unaware that you had run out of the funds. You had so much dedication to continue your work, by paying all those expenses. I just 

want to say, I know I speak for every one of us here on both sides 

of the aisle, how much we appreciate this. 

This is really important work that you are doing, and it is exciting to see bipartisan interests. So much of our work, unfortunately, 

is partisan in nature. But we have so much common ground, all of 

us, on this matter. It is wonderful that you are out there helping 

guide us. 

So since we are going to write a new bill in 2009, what I hope 

to work on with my wonderful friend, Jim Inhofe, this year is setting the stage for that bill. And to the best of our ability, to reach 

a consensus on some basic viewpoints that will be reflected in the 

bill. For example, I am putting now a few that I think may well 

be unanimously endorsed, such as user financing. It is an important point, because there are a lot of ways to go after that. I think 

that Senator Alexander is right, we certainly need to know exactly 

what we need to raise. But I think we have to simultaneously look 

at the most fair way to do it. 

Budgetary protection for the Highway Trust Fund. That is essential. I have always been for that. I think hopefully most of us, if 

not all of us, want to make sure that those funds are for the stated 

purpose. I think improvements in the delivery, I mean, which I 

think, Tom, you were most eloquent on, are important. 

61 

So with that in mind, let me start with you, Commissioner 

Skancke, and ask you, because I thought you made a very important point, we try to protect the environment, and sometimes we 

do it well and sometimes we don’t. You are making a good point, 

if these projects are delayed, and one of the major functions is to 

reduce congestion, then by taking 13 years instead of 6, which is 

what the Commission wants to do, you are adding to greenhouse 

gases, you are adding to air pollutants that harm our kids. 

So I think you make a good point. Since I would agree with you 

that is a notable and laudable goal and would like to see us do it, 

what would be some of the ways you would go about doing that? 

Mr. SKANCKE. Thank you, Madam Chairman. In the report, we 

specifically outlined, and I will just address a couple of those items 

for you. 

Senator BOXER. Please. 

Mr. SKANCKE. One is a preliminary environmental document and 

a final environmental document, EIS. Our recommendation is that 

you don’t need to do both. You can initiate as much public input 

by just doing either a preliminary or a final. But you can have as 

much public input as you can have through the process. In our discussions with departments of transportation directors across the 

Country, they pretty much know in the first 90 days meeting with 

a group which alignment is going to be the best. 

Now, we don’t want to predetermine an alignment. But when you 

go out and do public hearings, you know in the first 90 days about 

what is going to be the best location for a highway, both environmentally and for use. So one of the streamlining is to get departments to coordinate, reduce the number of documents that you 

have to submit, and really force other agencies to cooperate with 

the Department of Transportation. 

Senator BOXER. So if I could just cut through, you are saying 

that if we had a certain amount of time on the front end to take 

in all the public input, guidance and so on, look at all the available 

options but not call that an official preliminary EIS, would that 

change? Would we have to change NEPA to do that? 

Mr. SKANCKE. No, I don’t believe so. 

Senator BOXER. OK. Well, that is one good suggestion. 

Based on your conversations with transportation experts around 

the Country, what do you believe the consequences would be if the 

Federal Government continued current levels of funding for infrastructure into the future? Now, we know the current levels of funding backed by gas tax are even going down. But if you could put 

it into some stark terms, and I would ask Jack and Frank to respond to that. 

Mr. SCHENENDORF. It would be an absolute disaster to continue 

current levels of funding, even if we are able to maintain the 

SAFETEA-LU levels. That level represents an enormous under-investment. What is going to happen if we continue at those levels 

is the system is going to continue to deteriorate, you are going to 

wind up with catastrophic failures of our existing system, and you 

won’t be putting in place the additional new facilities that we need 

to be able to compete in the 21st century. 

62 

So it will hurt our economy, it will hurt the American people. 

They will have less jobs and it will change our quality of life in a 

very unfavorable way. 

Senator BOXER. I appreciate that, Jack. Frank, would you like to 

add to that? 

Mr. BUSALACCHI. Sure, Senator. Thank you. Let me just give you 

a couple of factual examples here of what Jack is talking about, 

and I think a little bit about what Tom is talking about from my 

perspective as a secretary of transportation. 

In Milwaukee, Wisconsin, we are in the process of rebuilding an 

interchange, which is a key interchange in the heart of downtown 

Milwaukee. We built that interchange in the 1960’s for $80 million. 

We are replacing it for $810 million. We are going to embark on 

another project in 2009, rebuilding interState 94 from the Illinois 

State line up to Milwaukee, 35 miles of road. We built that for 

about $120 million. It is going to cost us $1.9 billion to redo it. 

Senator, this is going on throughout the United States, not just 

Wisconsin. We are kind of like a parallel between what is going on 

in every State in the Union. The interState system is shot. It needs 

to be replaced. Not just the interState system, all the roads. 

Senator BOXER. So your point is, if we were to stay at current 

levels of funding, finish the sentence. 

Mr. BUSALACCHI. We wouldn’t even come close, Senator, to accomplishing what we need to do. This is very serious. And this is 

what this Commission has dealt with for the last 20 months. 

Senator BOXER. Well, you caught my attention. 

Mr. BUSALACCHI. Thank you. 

Senator BOXER. Senator Inhofe. 

Senator INHOFE. Thank you, Madam Chairman. 

I was going to get into that. I think you have covered it pretty 

well, except for the record, you might share with us, it is kind of 

a delicate balance that you are dealing with. On one hand you have 

the damage to our economy, on the other hand, you have the taxes 

and tolls, as what would be right. 

But the question I would like to ask, I had a couple of things in 

my opening statement. One was, I thought that we were going the 

wrong direction when we were going toward the Federal Government and away from the State and local governments. Do you see 

your report as doing that? 

Mr. SCHENENDORF. I do not. I think that the area where you 

might say the Federal Government is being asked to do more, it 

is not that it is being asked to do a different function. It is being 

asked to be a full partner the way it is today, which would mean 

more money, raising more money for the Federal portion of this. 

But the overall percentage of Federal capital investment we envision being very similar to where it is today. 

In many respects, this is turning the program back to State and 

local governments. Because in these performance-based plans, 

while the Federal Government will be involved in helping set the 

standards, if you look at the, let’s take the metropolitan areas, 

where you are going to reduce congestion by 20 percent by 2025 in 

the face of the growth that is coming. Those plans would be developed at the local and State level as to how to best do that for that 

particular area. 

63 

Senator INHOFE. OK. Let me ask this question. When was the report finished? I know when it was submitted, but when was it finished? 

Mr. SCHENENDORF. It was finished, December 20th is when we 

had the final vote on the report. 

Senator INHOFE. The question I would ask, I talked about this 

in the opening statement, that when we talk about increasing, and 

you gave some suggested levels, up to certain amounts of fuel tax, 

to make these things happen, if this report was actually finished 

on December 20th, it happens that on the, I remember it was December 18th, I believe, that the Energy Bill passed. I think that is 

right, because that was my 48th wedding anniversary. I don’t forget those things. 

[Laughter.] 

Senator INHOFE. So you only had 2 days between the time that 

you were aware of the CAFE standards and the projections that 

you made. Anybody else? 

Mr. SCHENENDORF. Well, I would just add that the proposal to 

increase the fuel tax at the Federal level is at an interim period 

while we are transitioning to something like a VMT tax. 

Senator INHOFE. Yes, but my question, let someone else answer, 

Jack, when you are calculating the proposed tax, did you include 

your calculations to affect what you anticipated would be the CAFE 

standards? Because you couldn’t have known at that time. Did you 

do that? 

Mr. ROSE. No. 

Senator INHOFE. OK. I hate to have Jack hog this thing, but I 

have to ask you this question. The VMT thing has always been fascinating to me, but I can’t figure out how it can be enforced. Do 

you have a short answer on how you would work on that? 

Mr. SCHENENDORF. That will be one of the challenges. Obviously 

it would be a GPS, satellite-based type of system, which would basically track where vehicles are, much the way your GPS system 

does. And there are certainly privacy issues with it. There are certainly VMT-related issues. 

Senator INHOFE. Well, don’t waste a lot of time on that one, because that isn’t going to happen. 

[Laughter.] 

Mr. SCHENENDORF. But that is out in the future. That is a ways 

away. And the gas tax, based on all the studies we had, is a viable—— 

Senator BOXER. That is thousands of years away, though, we are 

going to track where people take their cars. I don’t think so. I think 

we have a better way to get to the same point. 

Add more time to Senator Inhofe. 

Senator INHOFE. Well, I know I don’t need more time. But Senator Craig had some interesting things, I have heard him talk 

about this before, where there are some foreign investors who come 

in and do these things. Do you guys have any thoughts about this? 

Can you expand on this? 

Mr. BUSALACCHI. Well, Senator, I have some thoughts on it. The 

overall Commission, we felt that there is going to need to be investment on all different aspects of finance out there. I have to say that 

I was one of the commissioners that was probably kind of negative, 

64 

and still am, about public-private partnerships, tolling and things 

like that. Because I just don’t know that we know enough about 

them. 

But the thing that I caution everybody on, when you are talking 

about public-private partnerships and this innovative financing, it 

is going to come nowhere near, nowhere near solving the problem 

that we have with revenue here. We are going to try to do something with inter-city passenger rail. We need this investment for 

highways. We need this investment for bridges. Public-private partnerships are not the panacea that everybody paints them. 

Senator INHOFE. I don’t think anyone here is suggesting that. We 

are suggesting, it is kind of an all of the above thing, when we talk 

about the energy crisis, we need coal, oil, gas, nuclear, all of the 

above renewables and all that. So I think that would be, it is already in the mix. 

Mr. BUSALACCHI. Yes. 

Senator INHOFE. But politically there are problems with it. If you 

don’t believe it, there is no one on this panel from Texas, but I can 

assure you there are problems with it. 

Mr. ROSE. Senator, I don’t think there is anything inherently 

wrong with foreign investment. It is really the governance that is 

set up to have foreign investment come in. We spent some time 

looking at some of the privatization of some of the roads, some of 

the State roads and debating that issue. So I think it more around 

the governance, not around whether it is foreign or not. There is 

a lot of high quality capital out there that quite frankly, can go a 

long way to help some of our transportation needs. 

Senator INHOFE. Thank you very much. Thank you, Madam 

Chairman. 

Senator BOXER. Senator Cardin? 

Senator CARDIN. Thank you, Madam Chair. Let me thank all of 

you for your service on this Commission. I share the Chairman’s 

concern about failure to adequately provide the budget support that 

we should have done. 

I applaud your recommendations in looking at realigning the 

transportation programs of our Country into a more effective and 

efficient system. I think that is important. It is made more difficult 

because of the lack of resources that we put into public infrastructure in this Country. I think the President’s budget will probably 

make it even more challenging for us to deal with these issues. 

Currently, we invest less than three-tenths of 1 percent of our 

GDP in non-defense structures and buildings in this Country. We 

are paying a heavy price for that in transportation infrastructure. 

Some of you have already mentioned that. But we look at our economy and way of life, there is no an estimated 3.5 billion hours a 

year that Americans spend in traffic jams. You start to calculate 

that in dollars into our economy, so there is a direct economic impact. 

We know the safety issues. My colleague from Minnesota, Senator Klobuchar, knows first-hand, if we don’t tend to our bridges 

and roads what can happen. And the energy efficiency issues, the 

amount of wasted energy in this Country. We need to become energy-independent and wean ourselves off of foreign oil. 

65 

Then the environmental issues have been raised many times by 

our chairperson as to what we need to do about reducing greenhouse gases and how transportation can help. 

I want to ask a specific question dealing with an area that I am 

very concerned about. I am concerned on your recommendations as 

to whether my fears are well-founded or not. Assuming we had 

adequate funding, I am worried that mass transit and passenger 

rail could be shortchanged. We have a problem in my community 

with freight rail versus passenger rail. Here you have a specific 

program to deal with freight, and I am for freight being efficiently 

handled. But when my commuters are fighting with the freight 

trains on the MARC system, trying to get from Baltimore to Washington, we have to curtail service on passenger rail, because freight 

takes priority. 

We have a significant problem in this Congress dealing with Amtrak, and whether we would have adequate funding for rail. Then 

I look at our mass transit systems and look at our rapid rail systems, the Washington system, which is the second busiest in the 

Nation, is decaying. I went and visited one of the stations and saw 

the platforms literally falling down. I am concerned that because 

of the lack of specific attention to mass transit and passenger rail 

in the categories that are mentioned that it is going to be difficult 

to get the type of public investment in these areas even if adequate 

resources were made available for transportation in this Country. 

Could someone help me on this issue? 

Mr. SCHENENDORF. I think that we feel it is the exact opposite. 

We feel that transit, inter-city passenger rail are going to do very, 

very well. There is a specific program dedicated for inter-city passenger rail to put that in these dense corridors, maybe anywhere 

from 12 to 16 corridors, 300 to 500 miles in length. So we have a 

dedicated program to do that. 

Senator CARDIN. And I saw that, but that is not my specific concern. I am for passenger rail, I am very much for that. And Amtrak 

today is the major vehicle for us to help. 

I come from two urban centers in Maryland, Washington and 

Baltimore. One has a very mature, comprehensive rapid rail system. The other has a much more modest. Both need expansions, 

both need modernization. Both are fighting to get that. Where in 

this bill would we see that? 

Mr. SCHENENDORF. They will get that in the metropolitan program, where the goal would be to have a performance-based standard to reduce congestion by a certain amount in the face of the 

growth that is coming. Our analysis is that in that kind of analysis, 

the transit systems, the expansion of transit systems will be essential to meeting those targets. 

You can’t meet those targets with highway construction. You are 

going to need transit, you are going to need congestion pricing, you 

are going to need additional road capacity, you are going to need 

land use changes to do it, you are going to need new ways to telecommute. You are going to need all of those things in order to be 

able to reduce congestion by 20 percent from today’s levels in the 

face of the growth that is coming between now and 2025. 

66 

So we think transit will be a big winner in that program. It will 

be part of the solution. But it is going to have to be an enhanced 

part of the solution. 

Mr. BUSALACCHI. Senator, it is going to take a large investment 

to implement the program that we are suggesting with inter-city 

passenger rail. A lot of the passenger rail that occurs, and you 

know this, in your State and in the East, occurs on freight rail 

track. There has to be capacity improvements. There has to be expansion. We need to work this out. Obviously, Matt and his people 

are running a business. We have to understand that. 

But there is a huge advantage to the entire Country if we implement this program and invest what we are suggesting is invested. 

In my State alone, we are finding out throughout the Country that 

more and more people are using mass transit, more and more people are using inter-city passenger rail. So we know that the appetite is there for these programs. 

Chicago-Milwaukee, I would like to extend that to Madison. 

Madison I would like to extend to Minnesota. We can do this, but 

it is going to take this partnership with the Federal Government, 

the same partnership that we have with highways and airports. It 

is going to take the same commitment. 

If we get that commitment, believe me, we will help with the 

congestion. This will help. You are not going to get—I don’t want 

to leave here with anybody thinking that we are going to get people 

out of the car. We are going to figure out a way to operate these 

cars, you are going to get up in the morning, put a can of peas in 

the car and you are going to go. 

I mean, we are going to figure that out. I am confident of that. 

But we need to provide this modal shift to the American people, because they have shown that they want this. 

Senator CARDIN. Thank you. Thank you, Madam Chair. 

Senator BOXER. Thank you very much. I am thinking about the 

can of peas. 

[Laughter.] 

Senator BOXER. Senator Isakson, you are next. 

Senator ISAKSON. Thank you, Madam Chairman. 

I have two things. Mr. Skancke, I totally agree with your statement about expediting the construction of surface transportation. 

In fact, we have had some bills, streamlined bills on one side of 

this Congress and the other, but never have gotten one through 

both bodies. 

But I notice on page 33 of the report, when you go into the role 

of the independent commission, the independent commission, I understand, has one purpose, it seems to me, and that is to act like 

a postal commission or a BRAC commission from a standpoint of 

recognizing—actually establishing the funding mechanisms subject 

only to a veto override vote in both houses. Am I correct there? 

Mr. SKANCKE. Sure. 

Senator ISAKSON. I have two questions in that regard. The first 

question is, if you want to streamline the process and you are adding a new commission that is an addition to the process, does that 

run the risk of protracting even further the ability to construct? 

Mr. SCHENENDORF. It is not meant to. That commission is meant 

to be a much smaller body and simply to rubber-stamp the process 

67 

along the way, so that this independent commission would help to 

depoliticize some of the issues as to how much it is going to cost, 

whether or not things were done in accordance with the planning 

process that was set forth, and then what level of funding does the 

Federal Government really need to provide. 

So it is not envisioned as something that would get into individual projects and as they are moving it is more looking at the 

overall programmatic approach to the program. 

Senator ISAKSON. Which brings me to this question. I would assume then, that being the case, the DOT and the Congress are establishing the transportation infrastructure priorities and the Commission establishes how you pay for it? Is that correct? 

Mr. SCHENENDORF. The Commission would establish what that 

level was that you needed to fund the programs at to accomplish 

the performance-based objectives that those programs have. 

Senator ISAKSON. But the point I am trying to get to, we on the 

Transportation and Infrastructure Committee, we would pass 

SAFETEA-LU for 6 years, the highway authorization bill, which 

would include the projects that are therefore enumerated. Then the 

separate commission would then look at that, quantify it, establish 

what it would take to pay for it, and make that recommendation 

that would then be subject to a two-thirds vote of both bodies. 

Mr. SCHENENDORF. I think what they would do is, you would set 

up the program initially and then the plans would come to you and 

when you did the reauthorization bill, they would be suggesting the 

levels of funding that would be needed in order to carry out the 

program that you have placed into law. 

Now, you may in that bill change the programs. Obviously Congress can change anything as you go along. But they would be giving you, in the context of SAFETEA-LU, when that bill came up, 

they would have been recommending levels of funding and levels 

of the user taxes that would be necessary to accomplish the program as it was in the law. So you would have that as a guidepost 

in the reauthorization process. 

Senator ISAKSON. And I am thinking about what you recommended here, I am not coming down on one side or another. But 

the one point is, if you take a postal commission/BRAC approach 

on the funding issue and free Congress to only talk primarily about 

what it wants funded or what it wants billed. You are almost giving Congress the ability to determine what the infrastructure is 

going to be, and its cost without the responsibility, so to speak, of 

paying for it. That might be a pretty dangerous situation. 

So there needs to be an equal check and balance. I know you are 

giving a two-thirds vote check for Congress on the back to balance 

the Commission. But there is no check on Congress on what it 

might be recommending that runs that price so far up. 

My other question real quick was on, and I think Senator Inhofe 

was asking about it, the VMT, is that currently being done anywhere? 

Mr. SCHENENDORF. There was a pilot project in Oregon, and it 

is still going on. They just finished one report. But there is a pilot 

project there, and we are recommending a number of studies and 

additional pilot projects as we go forward to look at different ways 

68 

that it could be set up in order to work and still cover the privacy 

concerns and the collection concerns. 

Senator ISAKSON. One additional question, if I can, on that. Mr. 

Busalacchi, tell me, in this type of project, how are they determining knowing how much vehicle miles traveled the vehicles are 

making? Are you having to check odometers? Is there some type 

of—— 

Mr. BUSALACCHI. Yes, and that is really a good question. In Oregon, there is probably only two or three gas stations where they 

really are doing it. I went to Oregon to see the project, the pilot 

project that the university is doing. 

You purchase gas just like you normally do, but there is a computer. And the computer will determine the amount of miles that 

you are using on the roads in that particular State. As this system 

gets advanced, it will be able to determine what miles you are driving in any State. So if you cross the State line from Oregon into 

the State of Washington, it would calculate the miles in the State 

of Washington as well. 

So the project, before everybody says they don’t like it, the 

project does have some good to it, in that you would be able, 

through these computers, you would be able to control the number 

of miles that are being driven on the roads. And to take it a step 

further, just from a local DOT guy’s standpoint, we could gather an 

awful lot of knowledge on what roads are being used in our State 

and when they are being used from a system like this. So there are 

a lot of good things. And I know there are privacy concerns. But 

there are a lot of good things with this program. It is a very good 

program. 

Senator ISAKSON. Madam Chair, and again, I have to study this. 

I am not opening or shutting any doors right now. But I drive a 

Ford Escape hybrid. I have always wondered how you deal with 

this issue of taxing miles per gallon and you are protracting the 

number of miles per gallon a vehicle is getting, and your revenues 

actually go down, even though your mechanism might raise it up. 

But this seems like a way to take into consideration usage of the 

highways, rather than fuel burned. 

Mr. BUSALACCHI. That is exactly right. And that is what it is intended to do. I think somebody in their opening remarks had said 

that they are concerned because of the hybrids, the electric cars 

and everything else. And yet those automobiles, and those vehicles 

are still impacting this cost to the road system. That is what this 

system does. This system catches all of that. 

But it is going to take a number of years. We are advocating in 

our report for the Government to spend a substantial amount of 

dollars to develop this system. We know there are privacy concerns 

and some other concerns. But it is something worthwhile looking 

at. 

Senator ISAKSON. Thank you, Madam Chair. 

Senator BOXER. Well, if I just could say, speaking for myself, 

there are other ways to figure out how many vehicle miles we are 

using, other than having some Big Brother system tracking your 

every move. One would be when you register your car, you say, you 

certify, I am using this for pleasure, I am using it for business, et 

cetera, and you can estimate how many miles you go. There is a 

69 

chart, the more miles you go, the higher fee you pay. You could put 

in your vehicle miles, or it could be based on what you traveled the 

last year, rather than all this. 

And before I will support spending one dime on coming up with 

this system, and then finding out we have spent millions of bucks, 

I sure would like to talk more about that. Because I do believe in 

an honor system. I do believe you just have people certify the mileage they put on that car the year before if they assume it will be 

approximately the same. 

We did a little calculation, I was sharing it with Senator Inhofe’s 

staff, with Ruth, of how many cars there are on the road, 247 million, almost 248 million total vehicles registered. So we could figure 

this out. And we know how many are passenger cars, we know how 

many are motorcycles, we know how many are light trucks, we 

know how many are tractor-trailers. There is also the issue of the 

weight and what impact it has on the road. 

So I just want to lay it out here as Chairman of this Committee, 

it just sort of, when I get a feeling about something, I want to 

share it. And I think Senator Inhofe and I had a similar feeling at 

first about it. I am not speaking for him. But I think there are 

other ways to get to vehicle miles traveled, other than setting up 

some elaborate thing which, in you own words, will take until 2025 

to figure it out and maybe by 2020, somebody says, we have already spent a billion dollars on this. I am just not interested in 

that. 

Mr. BUSALACCHI. Senator, I don’t believe that any of the commissioners are totally married to any system. I think what we are seeing is that there is a definite impact to the infrastructure in this 

Country, and that we have to figure out a way of protecting the 

Highway Trust Fund. That is really what we are trying to do. 

Senator BOXER. We agree. All I am saying is, the vehicle miles 

traveled is a brilliant way. I agree with the Commission, vehicle 

miles traveled is the way to go. There are easier ways than this 

convoluted deal that, we spend money and 2025, you know, look, 

I believe in high-tech. I come from the high-tech capital. And I saw 

when computer voting came in, oh, this was going to be touchscreen, blah, blah. It doesn’t always work. You know how many 

miles you put on your car last year. And when you got to register 

that, you could just specifically State, this is what I did this year 

and I certify I am going to, it will be approximately the same, or 

it will be cut in half because I retired. 

I think that is a much better way to go without having to deal 

with all of this money for high-tech, anyway. I guess Senator 

Isakson is open-minded on the point. I am not open-minded on the 

point. I do embrace vehicle miles traveled, I really think that is so 

smart. 

So we will turn to a great member of this Committee, Senator 

Klobuchar. 

Senator KLOBUCHAR. Thank you so much, Chairman, and thank 

you so much to all of you. It is good to see you again. 

Thank you again, Chairwoman Boxer, and our four panelists. Mr. 

Busalacchi was with me in Minnesota, with Congressman Oberstar. We had a transportation forum that was very good. 

Mr. BUSALACCHI. A lot of fun. 

70 

Senator KLOBUCHAR. Yes, it was. Congressman Oberstar is always a good time—— 

[Laughter.] 

Senator KLOBUCHAR. The thing that I wanted to focus on, first 

of all, just to follow up on this a little bit, I was sitting here, thinking about this vehicle miles traveled and Senator Isakson and his 

hybrid. The one thing you would lose on this would be that when 

the tax is assessed, as it is now, per gallon, it creates some incentive, it is already there, obviously, from cost, for more efficient cars. 

Because this will be just based on pure use of the road, which is 

appealing, because that is what we are trying to upgrade, and the 

roads. But the thing you lose is that people who have less efficient 

cars now have to pay more tax, because they have to get more gas. 

Senator BOXER. Would the Senator yield on that point? 

Senator KLOBUCHAR. Yes. 

Senator BOXER. If you don’t do away with the gas tax, you still 

have that as the base, the gas tax. So that is that incentive. Plus 

the other incentives you get for buying those cars. But you are 

right, it does do away with that. But I think there are other rewards and the other financing mechanisms. 

Senator KLOBUCHAR. And as the price of oil goes up, clearly, you 

are going to have the incentive to have more efficient cars. Because 

it is so expensive to run them. 

Mr. SCHENENDORF. You could also set different rates for different 

classes of vehicles, for different weight vehicles. So you can never 

get to the point where you can actually tell how many vehicle miles 

traveled. It doesn’t have to be just one rate, it can be a variety of 

rates, depending on the weight of the vehicle, the mileage that the 

vehicle gets. So there are a lot of different ways to do it. 

Senator KLOBUCHAR. Have you looked at Senator Dodd’s proposal 

for transportation funding with the bonding and the infrastructure 

funding that he has? Have you discussed that as a group at all? 

Mr. SCHENENDORF. We had some discussions about it. I think 

that we came down really on the pay-as-you-go approach and tried 

to minimize the amount that we would provide in the way of debt 

servicing out into the future, that future generations would have 

to pay. So most of the recommendations that we have are in the 

area of pay-as-you-go, collect the money now and put the investment in place. 

We looked at some of the bonding, and I think we think it can 

play some role. But again, for the bulk of the program, we think 

the pay-as-you-go system is a good one. 

Senator KLOBUCHAR. I just spent the month of January going 

around our State. I visited 47 counties in January and Minnesota, 

which was quite an undertaking, and traveled on a lot of roads, as 

you can imagine. One of the things that I noticed, and our State 

gets a lot of understandable attention on, because of our bridge 

falling down, was just the lack of improvement to our roads in the 

rural part of our State. One of the things that is most challenging 

about this was of course because of the next century’s economy we 

are heading toward with the energy revolution. I think the Department of Agriculture estimates that truck freight in rural America 

is going to double by the year 2020. To me it seemed like as I went 

around our State and saw all these plants going up and the wind 

71 

turbines and all this understandable excitement with the climate 

change issues and things like that, all the possibilities were heading into the next century’s economy with a transportation system 

that is stuck in the last century. 

So one of the things I would like you to comment on, I know you 

have this national access program for smaller cities and rural areas 

that you have recommended out of your Commission, but if you 

could elaborate on that in terms of the rural roads and what you 

think is the best way to proceed there. 

Mr. SCHENENDORF. Well, I think the intent of that program is to 

really have a set of performance standards again for providing access and mobility in rural areas and smaller communities. So I 

think there is a strong feeling that we needed to tie all of America 

together with a first-rate road system. 

So in that program, you would see upgrading a lot of two-lane 

rural roads to four-lane divided highways, so that all of America 

can be tied together and they can have access to the same kinds 

of transportation network that everybody else does. So we view it 

as a very important program and a complementary program to the 

program for metropolitan areas of a million or more, this would be 

the rest of America, in connecting the rest of America together. 

Senator KLOBUCHAR. Other comments on this? 

Mr. BUSALACCHI. Senator, I think the program that we have put 

in the report would cover the rural areas. Our States are so similar, we are like twins. But I think this program would—— 

Senator KLOBUCHAR. Except that the Packers did better than the 

Vikings. 

[Laughter.] 

Mr. BUSALACCHI. I know, I am still in mourning. 

I really think that the program we are suggesting would work 

very well for our States, because it would fit into this rural situation that we have. In the State of Wisconsin, we have less than 6 

million people. We have to make sure that we take care of the metropolitan areas, but also we have to take care of rural Wisconsin, 

rural Minnesota. So this program would work very well. 

Mr. SCHENENDORF. And just so you know, too, the State of good 

repair program would bring the rural roads into a State of good repair. That is in addition to the rural access issues. And the National Freight Program would envision upgrading a lot of corridors 

through rural areas where you have major movement of freight in 

interState commerce. 

Senator KLOBUCHAR. Thank you. 

Senator BOXER. Thank you so much, Senator. 

Senator Barrasso. 

Senator BARRASSO. Thank you, Madam Chairman. 

Just a couple of quick things. One is, I heard that the Commission ran out of money and you are doing this out of your own pockets. People talk about public service, this is a real commitment and 

I want to thank each and every one of you for what you are doing 

for our Nation. Thank you very much. 

Mr. Busalacchi, if I could visit with you, you run in Wisconsin, 

you call it WisDOT? 

Mr. BUSALACCHI. WisDOT. 

72 

Senator BARRASSO. In Wyoming, we call it WyDOT. So I will ask 

you as if I were asking our own director of the Department of 

Transportation, in this report, they used the word performance a 

lot. I think over 200 times, if you do a word count. I know pay for 

performance has become a bit of a buzz word now. I hear talk 

about the $80 million for a project that now is at $810 million and 

the $120 million at $1.9 billion. 

COUld you give me some practical examples of how that paying 

for performance might work and how it would be effective? Because 

I don’t want it to just be a buzz word. 

Mr. BUSALACCHI. No, we are doing it now. Since I have been the 

secretary in Wisconsin, we have really enacted standards in our entire program. The project that I explained earlier, the Marquette 

interchange, $810 million, is on time and it is on budget. We are 

10 months away from finishing that project. 

We instituted a lot of performance standards in that program 

and in our entire program. So there are huge savings here. What 

my fellow commissioner here has been saying about performance 

standards and project delivery is true. We have shown that it is 

true. There can be a huge savings here. So from my standpoint, 

what we are doing in the State, this can be a very, very valuable 

cost-saving program. 

Senator BARRASSO. That is encouraging, because I think the public hears the stories about Boston, whatever it was, the Big Dig or 

something, with the overruns and the expenses. I think when we 

can point, as you can, to successfully implementing performance 

standards and paying for that level of performance, I think that 

will do a lot to help guarantee some public confidence in going forward with that. 

Mr. BUSALACCHI. Our department has worked very, very closely 

with our contractors and with our consultants. Our program with 

them has worked very, very well. We have learned, Senator, a lot 

of lessons from around the Country: Boston, California and other 

parts of the Country. We have a lot of lessons that we have learned 

and we have implemented those into our program in Wisconsin and 

they are working well. 

Senator BARRASSO. We are going to have to restore public confidence as we go forward. 

Mr. BUSALACCHI. There is no question about it. This project that 

we are doing in the heart of Milwaukee, downtown Milwaukee, 

caused a lot of anxiety in the city when we started this project. 

There was a lot of talk about, we were going to go way over budget 

and there were going to be traffic delays and everything else. I believe, quite frankly, that we restored public confidence. And when 

you do that, you can do a lot of things off of that confidence of the 

public. 

Senator BARRASSO. Mr. Vice Chairman, on another point, the report talks about de-politicizing this project by having an unelected 

commission. I still scratch my head to say, is this actually going 

to just add another layer of politics. If you would like to comment 

on that, please. 

Mr. SCHENENDORF. Well, I hope not. That certainly would not be 

the intent of it. The intent would be to have independent, respected 

transportation experts who would basically be able to verify, I 

73 

mean, a part of when you go back and you look at SAFETEA-LU 

and you look at that debate that took place, here on the one hand 

you had the Department of Transportation study saying, here is 

the level of funding, you had others in the Department saying, no, 

this is what you need, and Congress was stuck with these two, 

huge varying estimates of what needed to be done. 

The theory is, if you had a commission like this that was respected, they would be able to have the oversight and be able to 

say, yes, this is the need, this is the amount of investment you 

would have to do to meet the programs that you have established, 

and this is the implication with respect to how much you would 

have to raise fees in order to do it. So Congress would have something to look to to give it that kind of expert advice, then it would 

be up to Congress to decide what levels it wanted to actually fund 

the program at. 

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

Senator BOXER. Thank you so much. 

Senator Bond. 

Senator BOND. Thank you, Madam Chair. Again, I think an hour 

or so ago, somebody mentioned the possible bringing in of foreign 

investment. I hope that they will clear up some misinformation-information about that. One of the dumbest things Members of Congress ever did was block the Dubai World Ports deal. Because when 

we off-source $8 billion, which would have to be paid back from foreign sources, those facilities, we still have the facilities here and 

we don’t have their $8 billion that could create jobs, could deal 

with the other challenges we have. It is a bad strategic move to insult one of our best strategic allies, and it is the worst signal we 

can send to allies in the Muslim world. 

Having said that, I just wanted to get that off my chest, but if 

you have foreign investment, we need those dollars. If they buy a 

facility here, they are not going to take it home. It is absolutely 

outrageous to say that we can’t do it. 

Now, speaking of other things I am concerned about, while I am 

worked up, you talked about freight transportation. I will admit, I 

only had a chance to read this, I have been involved in some other 

things going on on the floor for the last couple of weeks. When you 

talk about freight transportation, there is a sideways glance on the 

second page, talking about all the Federal Aid Highway System. 

There is a line about intermodal connections, such as those near 

port facilities, where congestion increases. 

I know my good friend Matt Rose was on this Commission. If you 

are talking about freight, the most effective and efficient ways of 

moving freight are not on our highways. We talk about congestion 

on our highways, we need to be thinking more about freight. It is 

not just freight rail. I don’t know if they had anybody from waterways on this Commission. But that takes the burden off of the 

highways. The rails are at their capacity. 

I would like to know from Mr. Rose, well, first, I would add gratuitously when people say freight rail is tying up passenger service, 

who do you think built the rails? If the private sector is going to 

pay the money to build the freight rails, then I don’t think we can 

complain when they have to use the rails for freight and that interVerDate Aug 31 2005 10:57 Jan 15, 2014 Jkt 000000 PO 00000 Frm 00077 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\85519.TXT VERN
74 

feres with passenger service. There has to be a better balance. I bet 

Mr. Rose has a view on that. 

Mr. ROSE. First off, we did not look at the water system, outside 

of the port system. We did not look at the inland port of the United 

States. 

Senator BOND. That is what I was afraid of. When the Transportation Department covers it, the Transportation Department 

doesn’t pay attention to water transportation, which has to be in 

the mix. 

Mr. ROSE. Right. In regard to your question on the conflict of 

passenger and freight, the real objective is to not displace freight 

at all, because all that would do is move more trucks back to the 

highway, which is going to cause more and more of a problem, 

more and more of a challenge. 

What has happened in our Country is that we have gotten 

delusioned by how do we get a world-class passenger rail system 

like Asia? How do we get a world-class passenger rail system like 

Europe? And it is real simple: it is a separated right-of-way from 

freight. They do not run a combination freight rail and passenger 

rail network when you are running 300 kilometers an hour. While 

they don’t have good freight railroad networks like we have in the 

United States, it is just the opposite, we don’t have good passenger 

rail networks. It is because we are trying to utilize that same rightof-way. 

So the answer is going to be a significant investment in passenger rail if that is where as a society want to go. I think that 

the sooner it is, the better. We all believe that fuel prices will continue to go up. We need to give people an alternative to get out of 

their cars to something that will work. 

Senator BOND. That would be great, if foreign investors wanted 

to invest and bring the Shinkansen, Grande Vitesse here, if they 

want to invest in it, we would love to have them. 

Let me conclude very quickly by saying that I agree with the 

Commission that 108 programs should be reduced. But if you say 

no Member of Congress can have any input in where the dollars 

are spent, i.e., no earmarks, you overlook Article I of the Constitution and you ignore some of the most egregious earmarks exercised 

by the Department of Transportation. I could give you a list of 

them. They make dumb decisions, too. We need to fight them out 

on the floor and talk about some of the waste that has gone into 

the mis-application of dollars, Federal Transit Authority dollars 

being taken away from helping older adults transportation buses, 

for example, and putting it into a scheme for imposing tariffs or 

tolls in major cities, most of which don’t have the ability to do tolls. 

So before we jump on that no earmarks, I want to have a word. 

And I would like to submit for the record a question about how you 

would see the Department of Transportation administering these 

programs, if you focus not on the modal side and how we would 

oversee it. 

Senator BOND. Madam Chair, I apologize to you and my colleague from Ohio. But I had a few thoughts I just needed to share. 

Senator KLOBUCHAR. [Presiding] Senator Voinovich. 

Senator VOINOVICH. Thank you. 

75 

First of all, thanks again for the time you have put into this. I 

don’t know whether Mr. Skancke is coming back or not, but Mr. 

Schenendorf and Mr. Skancke spoke very passionately about the 

need for us to do something and the impact it is going to have on 

our competitive position in the global marketplace, and also on the 

question of what kind of a America our kids and grandchildren are 

going to live in. 

The problem is that it has to become a national priority. I just 

checked with my staff member, and I guess you guys had some 

kind of a press conference. I think you ought to get together over 

a cup of coffee and figure out—maybe getting hold of ASHTO and 

some of the other groups—how you can get some kind of a crescendo that will get this topic out into the political campaign this 

year. 

Maybe it is a letter to each of the candidates, or maybe wait 

until the decision is made as to who they are. But get them to start 

speaking about this problem and face up to it. Because unless you 

can get the public really engaged and understand how crucial this 

is, we are not going to get it done next time. We won’t. That is the 

way this place works. 

I worked on the 4(f) program during this last highway bill. We 

got a little teeny thing done on that. But all the other groups came 

in and said, we don’t want you to do this, you have to go through 

all the loops and hoops. We suggested maybe that one person 

should be the quarterback with all those groups that are involved, 

that those people would have to get their reports or their concerns 

in within, say, 60 days. No, we just want to do it, we want to leave 

it the way it is, it is this low-hanging fruit that could save enormous money. You need to engage in that. 

On this issue of performance-based standards, as you have talked 

about I have to tell you, when I was Governor, it took us there 

years to come up with what we call objective standards in determining which projects would be tier one, tier two and tier three. 

But once we did that, we had something that we could look at that 

was objective, and it got it out of the arena where the former Governor said, whatever you want, you have it. 

The other issue was earmarks that come out of Congress for 

projects that are never going to go anywhere. The money just sits 

there and doesn’t really make any difference. 

So the point I would like to make to you is, I hope that you 

would really give serious consideration to figuring out how you can 

get this topic on the national agenda, and it should be a focus on 

this campaign that is coming up for the President of the United 

States. Unless we face up to our infrastructure needs here, we have 

some basic problems, like all of the infrastructure of competitiveness, that if we don’t get at this stuff, we are really in deep trouble. 

What are your thoughts on how maybe we can make this happen? 

Mr. SCHENENDORF. We very much agree. I will tell you, the nine 

commissioners that are supporting the report are all very, very involved, very, very engaged. We plan to take the message out on 

this report. We plan on also talking to the groups to see how they 

can help us get that message out, so that we can talk to people. 

76 

We have felt that that was the No. 1 issue that needed to be 

faced here, talking about giving the program a new sense of mission and a sense of purpose that people can understand and get 

that buy-in from the American public. Because without that buyin from the American public, there is no way to raise the revenues 

that will be needed for this program. We are in agreement. 

Mr. BUSALACCHI. Senator, let me just say, I think the key word 

that I have used throughout this report is awareness. You have 

really hit on a hot button topic with me. And that is, it just always 

seems like transportation is not warm and fuzzy. For some reason, 

it really isn’t. Yet the American people expect two things out of 

their Government, Federal Government. One is a strong defense, 

which we provide, and a strong infrastructure, which we are failing 

on. 

Yes, we have to get out to the public and we have to get this in 

front of the candidates. I agree with you, this has to be an issue 

that must, must be talked about. The dollars that need to be invested here are substantial. 

This is an investment in America. It is not like we are going to 

spend this money and it is just going to go up in the moon. This 

is an investment in our Country. I think the Commission feels 

very, very strongly about this. This is why, as we got into this and 

we started looking at these numbers, these daunting numbers of 

our infrastructure, we became more and more committed and we 

just became kind of like united in what we were doing here. Because all of this investment, whether it is inter-city passenger rail 

or transit or highways or bridges, it is all very, very important to 

this Country. 

So I agree with you, you have really hit on a very important topic 

here. 

Mr. ROSE. Senator, I think the biggest problem is that our networks have run so well for so long, the investment that was made 

in the Eisenhower presidency and the development of the rail networks, we have had so much excess capacity, quite frankly. And as 

the capacity is filled up, we have had a hard time articulating it. 

Right now, the people who study this say right now that we are 

seeing $65 billion to $70 billion a year of costs in terms of congestion. It is very hard for people to understand, what does that mean 

on a $13 trillion or $14 trillion economy. People understand that 

their commute times are going up, but what they have missed is 

that over the last 20 or 25 years or so, our highway miles have 

gone up by 9 percent, but our VMTs have grown by 97 percent. It 

is just the math, the way the math works, when we go from 300 

million to 350 million, you are going to put so many more VMTs 

through this thing, and people don’t think about what the cost of 

that is going to be. 

We know that other people in the world are making incredible 

investments. China just announced a $44 billion rail investment. 

We can say they are a developing country and all that, but the bottom line is, we have not had a national vision for our transportation network. 

Senator KLOBUCHAR. Senator Carper? 

77 

Senator CARPER. Welcome. Thank you very, very much for your 

willingness to serve on this Commission and for the good work that 

you have done. 

We have any number of commissions that are formed that report 

back to the Congress and the President. Some of their work is 

quickly forgotten and set aside. I know there have ben concerns 

raised about some of the recommendations that you have made. 

But the fact that overwhelmingly, you have made these recommendations, difficult recommendations in some cases, I think 

your work will not have been for naught. When we have a new Administration, new President, new Congress, I believe we will have 

the opportunity to seriously take up and move forward on much of 

what you suggested. 

My friend Senator Voinovich and I used to serve as Governors 

of our States. We understand, I think, full well, the need for investments in infrastructure, in part because of those responsibilities. 

He and I have co-authored legislation that has passed the Senate, 

it is over in the House, that would seek to build on the work that 

you have done. What we have called for is the creation of yet another bipartisan commission, eight-member panel, four appointed 

by, in this case by Republicans, two by the President, one each by 

the Republican leader in the House and in the Senate, then four 

appointed by the Democratic leaders, two by the speaker and two 

by the Democratic majority leader in the Senate. 

The idea would be for them to look, not to duplicate what you 

have done, but to instead look at the other components of our infrastructure, which would include certainly rail. But it would include 

water, wastewater, it would include levees and dams, airports, too. 

It would seek to put on the desk of the next of the next President 

and the next Congress a series of recommendations, including 

prioritizing these recommendations and also trying to help us with 

figuring out how to pay for these proposals, much as you have 

sought to do in the work that you have done. 

But I want to thank you for your work. Let me just ask, if I may, 

one of my favorite ‘‘gee whiz’’ comments that I like to drop on people is with respect to fuel efficiency of moving freight, and I suppose people, too, by rail. I always like to ask people, how many gallons of diesel fuel do you suppose it takes to move a ton of freight 

by rail from Washington, DC. to Boston, Massachusetts. People 

take gases. But it is one gallon, one gallon of diesel fuel to move 

one ton of freight by rail from Washington to Boston. We know that 

it is a lot more efficient to move people by rail than it is in our 

cars, trucks and vans, too. 

I know that you have done some work in your commission that 

recognizes the importance of rail, whether it is on the freight side 

or on the passenger side going forward. But just take a moment 

and talk to us about how you have focused on putting extra investments, extra funding in support of passenger rail and in support 

of freight rail. 

Mr. SCHENENDORF. Well, we have two people here who are experts, and I will turn it over to them. But just in general, we have 

created, the only modal program that we are recommending is an 

inter-city passenger rail, to have an interstate-style program to put 

inter-city passenger rail in our densest corridors. Because without 

78 

that inter-city passenger rail, you can’t meet any of these congestion targets. You have to get people off the roads, in these 300 to 

500 mile corridors. 

Senator CARPER. And there are plenty of them, yes. I am told 

that over half the people in America now live within 50 miles of 

one of our coasts, which creates just any number of densely populated corridors, especially along our coastal areas. 

Mr. SCHENENDORF. Right. So we have a very strong recommendation on that. Then we also believe that the programs that 

we have for freight, the programs that we have for mobility in metropolitan areas are going to mean that when you try to meet those 

performance standards, they are going to require extensive rail-related movements. The goal of the Commission report is to grow the 

market share of freight rail, to grow transit, so that transit is a 

real option for people. 

So I think the way we have structured the program, it is our belief that both mass transit rail and inter-city passenger rail and 

inter-city freight rail are going to grow and grow significantly, because they are a big, big part of the solution. 

Mr. BUSALACCHI. Senator, the investment is going to have to be 

substantial because of the fact that passenger rail uses the freight 

rail tracks. So there is going to have to be expansion. We are going 

to have to work this out. 

Senator CARPER. That is outside of the Northeast Corridor. In 

the Northeast Corridor, as you know, between Boston and Washington, it is just the opposite, freight trains use Amtrak’s track. 

And yesterday, one of them got in our way. 

Mr. BUSALACCHI. But I think the point is that we are going to 

have to increase that capacity. 

The thing that really concerns me about the inter-city passenger 

rail is that if gasoline prices continue to skyrocket, continue to go 

up, which I think they are going to, and we get this exodus of people to mass transit, inter-city passenger rail, are we prepared to accept this mode of travel? Do we have the infrastructure to handle 

it? And quite frankly, the answer is no, we don’t. 

Senator CARPER. And my question is, what were your recommendations with respect to how to pay for that? 

Mr. BUSALACCHI. There are all kinds of different options. Obviously one of the things that the Commission came up with was the 

increase in the gas tax, ticket fee. There are all kinds of options. 

Senator CARPER. Tommy Thompson and I both served on the 

Amtrak board of directors at different times. We were always interested in the notion of some day, when you do raise the gas tax, 

whether it is by 3, 4, 5, 6, 10 percent, whatever, but to include in 

there a half cent increase that would go to passenger rail service 

that would be used just for capital investment. Just for capital investments in some of these densely populated corridors. 

And I think my time has expired, so go ahead and then we will 

call it quits. Thank you, Madam Chair. 

Mr. SCHENENDORF. This program would have a dedicated stream 

of funding that would be funded from the trust fund. It would come 

mostly from gas tax revenues, but also from a ticket tax that we 

are proposing. And it would be a dedicated stream of funding, very 

similar to the way transit capital is funded now, with a general 

79 

fund component. And it would be a guaranteed funding stream, in 

order to put the kind of passenger rail system in place, similar to 

the way we put the interState system in place. So over a certain 

period of time, you would know that these corridors were going to 

be constructed on a cost to complete basis. 

Senator CARPER. Good. Well, again, thank you very much, 

Madam Chair, you have been generous with the time. 

Let me just mention to you and Senator Isakson, if I may, interesting things going on in terms of ridership at Amtrak. The last 

quarter, October 1st through December 31st, ridership in the Country and system-wide is up about 15 percent, revenues are up by 

about 15 percent, which suggests that people are tired of the congestion and they are tired of what they are having to pay for the 

price of gasoline. 

Senator KLOBUCHAR. Yes, Senator Carper, we are seeing the 

same thing in Minnesota, where we just put a light rail line in. It 

has much more ridership than ever projected, a short line from 

Minneapolis to the airport. Now we are looking at other lines, and 

I just think there is going to be an increased interest in this. I 

agree with Mr. Busalacchi, but that we are just not ready for it. 

We have to start thinking ahead here, because there are just areas 

of our State where we never thought people would be crying out 

for public transportation like Anoka, Minnesota. They are because 

of the congestion and because of the cost. 

Senator CARPER. Madam Chair, I have a couple more questions 

I would like to submit for the record and ask our panel to respond 

to them at their convenience. Thank you. 

Senator KLOBUCHAR. Senator Isakson, do you have any more? 

OK, thank you very much. This has been a lot of food for 

thought. We have to get moving on this. We appreciate it. 

The hearing is adjourned. 

[Whereupon, at 12:42 p.m., the committee was adjourned.] 

STATEMENT OF HON. JOSEPH LIEBERMAN, U.S. SENATOR FROM THE

STATE OF CONNECTICUT

And thank you for convening this important hearing to receive the report of the 

National Surface Transportation Policy and Revenue Study Commission. The commission consisted of an expert blue-ribbon panel, and we must consider their proposals seriously as we develop a national transportation policy for the twenty-first 

century. In my statement, I will highlight several key elements of the report that 

I believe warrant further debate as we move forward this year. 

Our system does need reform. The Commission’s findings concerning the length 

of time it takes from a Federal transportation project’s inception until its completion 

are revealing, but not surprising. For example, the I–95 New Haven Harbor Crossing Corridor Improvement project in Connecticut may take a total of 27 years to 

complete—and that is without any complications or delays! Planning began in 1989, 

and the first phase of construction did not start until 2001. However, while I am 

concerned about the amount of time it takes to complete transportation projects, I 

am equally supportive of a comprehensive environmental review process that fully 

evaluates the impact a proposed project will have on the local community. It is a 

challenge of this committee, I believe, to figure out ways we can reduce inefficiencies 

in transportation project delivery without sacrificing the environment and I would 

like to thank the Commission for addressing the importance of environmental stewardship in future transportation planning. 

One way we can improve efficiency in our transportation planning is to increase 

emphasis on performance and outcomes. Cost-benefit analysis can play an important 

role in this type of significant reform. While I am generally supportive of these principles, we need to hear more about how these determinations will be calculated on 

a national scale. As a Senator from the State of Connecticut, I am charged with a 

80 

duty to represent the needs of my constituents. The Commissioners note in their 

report that developing performance standards and integrating them into a new system for prioritization would be a ‘‘challenge’’ since local conditions are disparate and 

not readily comparable. I think we can all agree that objective criteria must play 

a role in funding decisions, but that still begs the question of what specific variables 

will be used. For example, the number of cars and the volume of freight which travel over a bridge on a daily basis is certainly an indicator of the economic benefit 

gained from rehabilitation. Nonetheless, there are countless bridges—including several in Connecticut—which would not measure up on a competitive usage barometer 

but are in dire need of immediate repair. 

The final recommendation I will address is the creation of an independent National Surface Transportation Commission. I hope that during today’s testimony, the 

committee will receive more details from the witnesses about how this independent 

commission would function in practice. I understand the rationale to depoliticize 

how we pay for transportation projects. However, I am concerned about Congress 

ceding its authority to guide and implement national transportation policy to an 

independent commission, a concern also raised by the dissenting commissioners. The 

report explains that an independent commission will give a ‘‘voice’’ to stakeholders 

and commuters alarmed about the enfeebled State of our nation’s transportation infrastructure. I am unsure how a ten-member independent commission can provide 

a representational voice—on such a large scale—to those frustrated with the current 

transportation system. I know that earmarks are a dirty word in Washington, DC 

these days, but they do serve a purpose because lawmakers generally know their 

states better than Federal bureaucrats. The bottom line is that Congress shouldn’t 

abuse its authority to authorize and appropriate transportation funding, and we 

must make decisions that address national needs. I think our challenge today is engaging in an extended debate about what processes will best match our long-term 

goals for developing the next iteration of transportation and infrastructure policy in 

the United States. 

I applaud the Commissioners for their efforts, and welcome them to the hearing. 

81 


85519.001
82 


85519.002
83 


85519.003
84 


85519.004
85 


85519.005
86 


85519.006
87 


85519.007
88 


85519.008
89 


85519.009
90 


85519.010
91 


85519.011
92 


85519.012
93 


85519.013
94 


85519.014
95 


85519.015
96 


85519.016
97 


85519.017
98 


85519.018
99 


85519.019
100 


85519.020
101 


85519.021
102 


85519.022
103 

Æ 


85519.023