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

71–530 PDF 2012

THE FEDERAL RAILROAD ADMINISTRATION’S 

HIGH-SPEED AND INTERCITY PASSENGER RAIL 

PROGRAM: MISTAKES AND LESSONS LEARNED 

(112–65) 

HEARING 

BEFORE THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

DECEMBER 6, 2011 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

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

committee.action?chamber=house&committee=transportation 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JOHN L. MICA, Florida, Chairman 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

TIMOTHY V. JOHNSON, Illinois 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ANDY HARRIS, Maryland 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

JAIME HERRERA BEUTLER, Washington 

FRANK C. GUINTA, New Hampshire 

RANDY HULTGREN, Illinois 

LOU BARLETTA, Pennsylvania 

CHIP CRAVAACK, Minnesota 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

BILLY LONG, Missouri 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

JEFFREY M. LANDRY, Louisiana 

STEVE SOUTHERLAND II, Florida 

JEFF DENHAM, California 

JAMES LANKFORD, Oklahoma 

REID J. RIBBLE, Wisconsin 

CHARLES J. ‘‘CHUCK’’ FLEISCHMANN, 

Tennessee 

NICK J. RAHALL II, West Virginia 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

MAZIE K. HIRONO, Hawaii 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

STEVE COHEN, Tennessee 

LAURA RICHARDSON, California 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

(II) 

(III) 

CONTENTS Page 

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

TESTIMONY 

PANEL ONE

LaHood, Hon. Ray, Secretary of Transportation, United States Department 

of Transportation ................................................................................................. 10 

PANEL TWO

Capon, Ross B., President and CEO, National Association of Railroad Passengers .................................................................................................................. 39 

Geddes, R. Richard, Adjunct Scholar, American Enterprise Institute ................ 39 

McDonald, Joan, Chair, Northeast Corridor Infrastructure and Operations 

Advisory Commission ........................................................................................... 39 

Orski, Kenneth, Editor and Publisher, Innovation NewsBriefs .......................... 39 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Edwards, Hon. Donna F., of Maryland .................................................................. 59 

Gibbs, Hon. Bob, of Ohio ......................................................................................... 60 

Johnson, Hon. Eddie Bernice, of Texas .................................................................. 63 

Johnson, Hon. Timothy V., of Illinois .................................................................... 64 

Price, Hon. David E., of North Carolina ................................................................ 66 

Rahall, Hon. Nick J., II, of West Virginia ............................................................. 68 

Richardson, Hon. Laura, of California ................................................................... 70 

Slaughter, Hon. Louise McIntosh, of New York .................................................... 74 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Capon, Ross B. ......................................................................................................... 76 

Geddes, R. Richard .................................................................................................. 87 

LaHood, Hon. Ray .................................................................................................... 95 

McDonald, Joan ....................................................................................................... 109 

Orski, Kenneth ......................................................................................................... 114 

SUBMISSION FOR THE RECORD 

Capon, Ross B., President and CEO, National Association of Railroad Passengers, response to question from Hon. Richard L. Hanna, a Representative in Congress from the State of New York .................................................... 82 

LaHood, Hon. Ray, Secretary of Transportation, United States Department 

of Transportation, responses to questions from Hon. John L. Mica, a Representative in Congress from the State of Florida; Hon. Jeff Denham, a 

Representative in Congress from the State of California; Hon. Laura Richardson, a Representative in Congress from the State of California; and 

Hon. Larry Bucshon, a Representative in Congress from the State of Indiana ......................................................................................................................... 104 

ADDITION TO THE RECORD 

Hammond, Paula J., Chair, States for Passenger Rail Coalition, written statement ...................................................................................................................... 120 

iv 


Insert offset folio 1 here 71530.001
v 


Insert offset folio 2 here 71530.002
vi 


Insert offset folio 3 here 71530.003
vii 


Insert offset folio 4 here 71530.004
viii 


Insert offset folio 5 here 71530.005
ix 


Insert offset folio 6 here 71530.006
(1) 

THE FEDERAL RAILROAD ADMINISTRATION’S 

HIGH-SPEED AND INTERCITY PASSENGER 

RAIL PROGRAM: MISTAKES AND 

LESSONS LEARNED 

TUESDAY, DECEMBER 6, 2011 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

WASHINGTON, DC. 

The committee met, pursuant to notice, at 11:06 a.m. in Room 

2167, Rayburn House Office Building, Hon. John Mica (Chairman 

of the committee) presiding. 

Mr. MICA. I would like to call to order the House Transportation 

and Infrastructure Committee, and welcome you to our hearing 

today. The title and subject of this hearing is ‘‘The Federal Railroad Administration’s High-Speed and Intercity Rail Program: Mistakes and Lessons Learned.’’ And we have some distinguished panelists. 

We have two panels today. And I think in between we are going 

to squeeze in a small Members panel. We have had a couple of requests for Members to speak who are not on the committee, but 

their districts are affected by some of these projects. So we are 

going to provide some opportunity for a couple of the Members 

after we finish with Secretary LaHood. And then we will turn to 

our second panel. But we are delighted and pleased this morning 

to welcome the Secretary of Transportation, Ray LaHood, and my 

former colleague, who will lead off today for the administration. 

The order of business will be opening statements first by Members, and then we will go to Mr. LaHood. And as I said, we will 

have one or two Members not on the committee who have requested to come forward with some brief comments. And then we 

will go to our second panel today. So with that, the order of business will be, again, Members’ statements. 

And I want to open with my statement and, again, thank the 

Secretary for his participation, and others. 

As some of you may know, I have been a long, strong, committed 

advocate to high-speed passenger rail service in the United States. 

I was delighted to work in the past to put provisions in PRIIA, 

which was signed into law by President Bush. That was the first 

rail operations and Amtrak reauthorization in, I believe, 11 years. 

And I took great pride in working on trying to set up a blueprint 

and some guidelines for beginning the process of instituting highspeed rail in the United States. 

2 

I was also pleased when President Obama made high-speed rail 

one of his top priorities. And, in fact, I think it was his commitment and direction in which we had some $8 billion firmly anchored to high-speed rail. 

All that being said, I am here today—and actually tried to give 

some of these projects as much time and leeway as possible to 

move forward and see what develops—but I am here today in this 

hearing to say that I am very disappointed in some of the things 

that have happened. I have to give some credit where credit is due, 

but as far as high-speed rail we have hit an impasse. I am very 

concerned about the progress of actually achieving a successful 

high-speed rail program. 

And the failure to date, particularly on high-speed rail, actually 

sets us, I think, further behind. There are many critics to various 

forms of public transportation. And unfortunately, it gives them 

more ammunition to undermine what should be positive alternative 

means of transportation, which is efficient, which helps with our 

energy problems, which has a whole host of benefits. 

Unfortunately, some of the high-speed rail funds—and we have not only the $8 billion that was in the Recovery Act and committed 

some 21⁄2, almost 3 years ago now in January, we had $2.5 billion 

in regular appropriations, bringing the total for high-speed rail in 

the country and improvements to $10.5 billion. Of that, some $400 

million has been rescinded and gone back to deficit reduction. 

Unfortunately, three States have returned money for projects 

that did not get off the ground, or fell off the track, so to speak: 

Ohio, Wisconsin, and my State of Florida. Actually, it is quite startling that more than a third of the funds have been returned, 

which is another setback for the program. 

More recently, our one hope of actually achieving high-speed 

rail—and I have given that project as much leeway as I possibly 

can in trying to see what would develop—but again, the one potential where we had to achieve high-speed rail on an average of at 

least 110 miles per hour—that is not reaching 110 miles an hour, 

that is not reaching 150 miles an hour at some point in the journey. I am talking about the average speed, which is the measure 

by which, internationally, high-speed rail is evaluated. 

But our one hope, California, appears to be in disarray. In fact, 

we are devoting an entire hearing to that next week, to see where 

that one project is going. We have problems with, first of all, the 

route that was chosen. I went out with Mr. Denham and actually 

looked at some of it—Fresno to Bakersfield, mostly populated by 

agricultural community and interests. We will hear from those 

folks next week. 

But again, the site that was abandoned, southern California or 

the Bay Area, where you have significant populations to be served 

and at the present time have incredible congestion, both of those 

corridors—again, it is an initial operating segment that was chosen. 

The more disturbing news is within the last month now the projections on the cost may double the original $40-some billion and 

reach over $90 billion. Furthermore, it appears that there will be 

a 13-year delay. We are now looking at, what, 2033, which would 

mean either subsidization of a ‘‘dog operation’’ and give us more 

3 

heartburn, as far as anyone ever seeing a viable high-speed rail operation in the United States. 

And finally, I was informed last week that even if they built this 

segment—again, trains to—at the short operating segment, not 

serve any fixed large population—that the equipment that would 

be available at that point would only be contemporary slow train 

vehicles, which could not achieve high speed. 

So, I am very concerned about the progress of California. We will hear more about that next week. So we have $3.8 billion, the biggest amount going of the $8 billion and a total of $10 billion, going 

to California. There is $10.1 billion, as I said, left over after the 

return of $400 million. 

Then the next issue that I have with the whole process of selecting these corridors is—well, of course it is not something I raised, 

but also GAO in March 2010 said that the process that FRA had 

followed in selecting these lacked transparency and some of the 

manner in which these were chosen did not really make a whole 

lot of sense. 

We have three what I call pseudo-high-speed rail projects, and 

maybe you will hear of those touted as a success, most of them centered in Chicago, two of the three, Chicago to St. Louis. That is 

going to run an average of 71 miles an hour. Now that is not incremental high speed, that is not high speed. And it doesn’t hold much 

hope for the future. Chicago to Detroit, that route goes at 64 miles 

an hour on average, a snail-speed train followed by a Portland to 

Vancouver so-called and named high-speed rail project, which is 65 

miles an hour. 

These are, again, a bait and switch for high-speed rail, and will 

continue to give high-speed rail a bad name in the United States 

because they will not operate at high speeds, and act as merely a 

mirage of high-speed rail. 

Finally, Amtrak and some of the projects—and they are—hosted by them, spread around the country—will get another $3.6 billion. 

Of that there is $900 million that was redirected to the Northeast 

Corridor. But if you take that $3.6 billion and amortize it over 3 

years, you have a current subsidy of $49 a passenger on Amtrak, 

and you attribute the cost of that $3.6 billion and amortize it over 

3 years, you are looking at a subsidization during these 3 years of 

$99, just a $1 under $100 per ticket for every Amtrak passenger, 

based on 30 million, which is their current ridership. So that is disturbing. 

So, I have to say, sort of in conclusion, we need a success. I believe that the most logical place to put high-speed rail—have said 

it before, I am from Florida—is in the Northeast Corridor. You are 

from—members of the panel—are from around the country. But we 

can all benefit by a success of high-speed rail in the Northeast Corridor. Unfortunately, there too we have seen delays. It has taken 

now 3 years to finally issue an RFP to do an environmental study. 

That environmental study RFP went out in August. To date—and 

this is December—there is no award for doing the environmental 

study in the Northeast Corridor. So we still lag behind in moving 

forward with that project in the Northeast Corridor. 

We will all benefit by the Northeast Corridor, one, because it is 

the most densely populated area—20 percent of the U.S. population 

4 

resides in that corridor. We own the corridor. It is the only corridor 

that we own. Between the Federal Government and the States, 

they own almost the entire distance between Washington, DC, and 

Boston. 

We, of course, operate Amtrak’s other service over freight rails, 

22,000 miles of them. We also will benefit as a Nation, because 70 

percent of our chronically delayed flights are in this area, whether 

it is summer or winter causing the meltdown of air transportation. 

And most of it will emanate from the northeast region, so we can 

all benefit by, again, having one success in our most densely populated area on a corridor that we already own. Half of Amtrak’s passengers of the 30 million are in that corridor. So, again, it just 

makes sense. 

Finally, let me say I had offered an alternative and suggested 

separating out the Northeast Corridor into a separate entity. I did 

meet a slight bit of resistance on that. And I announced recently 

that I was willing to look at having Amtrak and—if there wasn’t 

an Amtrak, we would have an Amtrak; I have supported a nationwide service system. But I am willing to work with Secretary 

LaHood, Mr. Boardman and others to come up with a plan. And we 

don’t have to create a separate entity and transfer the assets out. 

But what we do need is to attract private sector capital and move 

this project, which Amtrak now has projected would take 30 years, 

and would cost $117 billion. 

Now, Congress cut off funds to high-speed rail in the coming fis- cal year. And Congress certainly is not going to give Amtrak $117 

billion, based on its current record, lack of plan or progress in the 

Northeast Corridor. So we have got to work together and we have 

got to find a solution to have a success and put high-speed rail and 

transportation projects where they make sense, and move forward 

on these important projects. 

So, I’m willing to work with the administration, with other Members of Congress, and in an effort to, again, end the failure that we 

have seen, and hopefully have a pattern for success for high-speed 

rail in the future. 

So, that is my opening, rather lengthy comment. I will defer to 

Mr. Sires. 

Mr. SIRES. Thank you, Mr. Chairman, for holding this hearing 

today. I represent some of the most densely populated areas in the 

country. And I want to thank you for being here. I always been a 

proponent of not only the Northeast Corridor, but especially local 

train and also freight, because of the district that I represent. 

I am sorry to see some of the problems that we are having with 

Amtrak and some of the expanding—or some of the programs. I 

wish we could speed it up. But I know that there is progress that 

is being made. The Northeast Corridor, I think, is probably the 

only place where you have the population to sustain a real highspeed rail. And that was always my argument with local rail in 

some of the areas of the country where they don’t have the population to sustain intercity rail. You know, my district, I think it is 

something like a quarter of a million people going through New 

York City every day. 

I just wish that we could speed up some of this—some of the 

issues that are holding back some of this—the work. And I want 

5 

to thank you, Secretary LaHood, for knowing that the Portal 

Bridge going into New York City is one of the bridges that is 100 

years old, and is getting a whole face lift and a new bridge. It really means a great deal to my district. 

And that is basically what I have to say. Thank you. 

Mr. MICA. Thank you so much. We will turn to the chair of the 

rail subcommittee, the gentleman from Pennsylvania, Mr. Shuster. 

Mr. SHUSTER. Thank you, Mr. Chairman. Mr. Secretary, good to 

see you again. I am going to abbreviate my typical speech that I 

give on this issue. Mr. Szabo is sitting behind there, smiling. I 

think he could probably recite it verbatim. But I appreciate having 

this hearing, and I agree with the chairman and many other Members. 

With respect to the President’s vision of high-speed rail in this 

country, I just don’t believe it is going to happen because we don’t 

have the money. Number two, I don’t really think we have the need 

to have 80 percent of the American population have access to highspeed rail. I do believe there are corridors in this country that need 

high-speed rail; we should be focused on them. We should be absolutely focused. And we are not, in this present form that we are 

taking. We are spreading money all over the country. It is no surprise that Ohio and Wisconsin have turned down these large sums 

of money, because they realize they are going to be strapped with 

operating costs that are going to drive them further into debt. 

I really believe if we focus on the one true high-speed rail corridor that we have today that desperately needs it, it is the Northeast Corridor. We own the tracks, so we don’t have to go round and 

round with our friends in the freight rails on it. We own the tracks, 

we can do separations where we need it. And as my friend from 

New Jersey mentioned, there is a bridge up there, and it is a huge 

bottleneck. We should focus the money there. Regarding the tunnel 

in Baltimore, I know some of the money is coming back to make 

those improvements. 

But if we are really serious about getting high-speed rail, we 

need to find one place to do it in the country to do it right, spend 

the money to do it right, learn from it, and then take it to these 

other corridors that will emerge in the future. 

The California corridor, the money being spent there, the more 

I see of it—and you see the numbers; they have gone from $40 billion to $100 billion to maybe 20 years to who knows—and, Mr. Secretary, you have been in Congress, you have been in Government 

long enough to know that if they are saying $100 billion or $90 billion, you know it is going to be more than that. And I have been 

to southern California. And they are telling me that between $1 

billion and $1.5 billion you could truly have significant impact on 

intercity rail transportation between San Diego and Los Angeles. 

That is where we ought to start in California. The northern city of 

San Francisco and that corridor and the southern California. 

So, again, I urge you to go back and sit down with the President 

and Mr. Szabo and really reevaluate what we are doing here, because I just don’t believe that we are going to be able to have highspeed rail across this country because we can’t afford it and because the American people really aren’t clamoring for that. They 

are clamoring, though, to have better intercity rail at higher 

6 

speeds. The Keystone Corridor is a great example. It is not high 

speed, but the ridership has gone up 40 percent over the last 4 or 

5 years, and it continues to grow, Harrisburg to Philadelphia. And 

that is not high-speed rail, but it is higher speed, more frequency. 

Those are the things that I think will benefit the traveling public 

and America, if we focus on those areas. 

So, again, appreciate you being here today, look forward to your 

testimony, and I yield back. 

Mr. MICA. I would like to recognize the ranking member, and the 

gentlelady from Florida, Ms. Brown. 

Ms. BROWN. Thank you, Mr. Chairman. And I am glad we are 

holding this hearing today to focus on progress and pitfalls of implementing high-speed and intercity passenger rail in the United 

States. 

All of our international competitors are beating us to the punch. 

They have invested billions of dollars in passenger rail systems 

that have significantly reduced highway and aviation congestion. 

While here, in the United States, we fail to provide adequate funding for passenger rail, and waste $115 billion a year in fuel and 

lost time sitting in traffic. 

Let’s step back and look at this committee progress, or lack 

thereof. Over the past year we have no surface transportation bill, 

no FAA bill, no water resource bill. And to top it off, we are here 

today arguing about a High-Speed and Intercity Passenger Rail 

Program that has already been defunded by the Republicans. 

Our country is building huge infrastructure projects in Iraq, giving tax credits to the company, taking jobs overseas, and building 

massive bridges in the United States with Chinese steel. Yet, the 

committee leadership here today is trashing a program that would 

improve passenger rail throughout the country and put thousands 

of people to work. 

Since today’s hearing is titled, ‘‘Mistakes in FRA High-Speed and 

Intercity Passenger Rail Program,’’ I thought I would make a list 

of a few mistakes that I have seen since enacting the Passenger 

Rail Investment and Improvement Act of 2008 and Recovery. 

First of all, we fail to dedicate any significant funds for passenger rail. Our main competitor, the Chinese, have invested $350 

billion in rail. Let me say that again: $350 billion. They see the importance of moving people, goods, and services. 

Then we invite private companies that I have had several meetings with over the world, including some of the biggest rail operators and manufacturing business today to invest time and resources into vying for parts of the U.S. high-speed rail market, only 

to slam the doors in their face by canceling projects and cutting 

Federal funds. 

Look at Wisconsin. Just yesterday, Talgo announced it is going 

to shut down its Milwaukee train manufacturing operations in 

2012, killing over 4,700 jobs because Wisconsin Governor Scott 

Walker rejected Federal funds for the high-speed line between Milwaukee and Madison when he took office. It is worth noting that— 

talking about mistakes—that the government later reapplied for a 

portion of the funds he rejected. That is absurd. 

And let me talk about the poster child of mistakes, my home 

State of Florida. The mistakes started when Governor Jeb Bush 

7 

shut down the high-speed rail authority in Florida before they were 

able to study the most desirable Orlando to Miami route. Our current Governor, Rick Scott, was able to come up with one of the biggest acts of stupidity—returning $2.4 billion in awarded funds. A 

ridership study which was paid for by taxpayers’ dollars indicates 

that it would have made money. The study estimates that the ridership, at more than 3 million the first operating year, would increase to 4.7 million in the 10th year. Revenues were estimated at 

$4.2 million in the first operating year, rising to $38 million in the 

10th year. 

And with respect to jobs, something we have all been talking 

about and are supposed to be focusing on, 30,000 jobs. You know, 

well, what kind of jobs are we talking about? We are talking about 

engineering firms, steel, cement factories, and construction jobs. 

Those are real jobs. What a loss. What a loss. I want to welcome 

Secretary Ray LaHood, and thank him for his efforts in working 

out the agreement that averted a possible rail strike during the 

holiday season. I really think you are one of the bright spots in 

transportation. And I welcome you here today. And I want to thank 

you for your leadership. 

Mr. MICA. Thank the gentlelady. Mr. Denham, gentleman from 

California. 

Mr. DENHAM. Thank you, Mr. Chairman, thank you for holding 

this hearing, something that is of great concern to us who are representing California, especially in the Central Valley. Here not only 

to hear about the mistakes and lessons, but what we always continue to hear about is the investment. 

Now, to me, as a small business owner, the investment means 

there is a return on investment at some future date. So, really, 

what I think what we have to look at here is: What is the public 

benefit, and does that outweigh the cost to taxpayers? 

The concern that I have in the California project is there is a real 

failure to plan. There is not a defined Federal obligation. How 

much of our transportation dollars are we going to spend in California? We have got $3.6 billion right now already obligated. Where 

do we come up with the other $95 billion on the new costs that 

have been projected? What is the State’s obligation on that? What 

is the local obligation? And where are the private investors that we 

continue to hear about? 

Recently the ridership numbers have—certainly have been great 

doubt. They have pretty much fallen apart on the California side 

of things. And now we have extended it by another 13 years. 

So, certainly as we are defining an investment, and we are going 

to ask a private investor or a private company to invest in this 

project, we have got to be able to define what the project is. Who 

is obligated on each of those various areas? And how much are the 

taxpayers obligated to, as well? 

We get compared to other countries quite frequently. There are 

other countries that are certainly spending billions of dollars on 

high-speed rail. And their cost per mile of track is much lower than 

what we have here, in California or across the Nation. So as we 

start to compare with other countries, we need to look at how they 

are doing things not only smarter, but less expensive. 

8 

In California, we have the CEQA environmental law, which is 

much greater than NEPA. Why do them both? If the President and 

the administration’s commitment is to do high-speed rail in California, wouldn’t we waive some of the high cost of the environmental process that we have seen the Federal Government waive 

in the past for other priority projects? So those are going to be 

some things that I will be looking at as we take a look at the investment of our taxpayer dollar. 

And then, finally, we have been hearing about shovel-ready jobs 

for quite some time now. The stimulus package was passed in 

2008. And yet in 2011 going into 2012, we still do not have one 

shovel in the ground. To me, a shovel-ready project means if you 

are going to go out and ask taxpayers to spend money on a shovelready project, that means it is ready to put a shovel in the ground. 

Three years later, going on 4 years now, still no shovel and no plan 

on putting a shovel into the ground. I believe that if the high-speed 

rail project in California is not going to get moving quickly, then 

that money ought to be diverted to shovel-ready projects that would 

be committed quickly: goods movement, people movement, building 

highways. But letting a pool of money just sit out there, I think, 

is irresponsible. 

Mr. Chairman, I yield back. 

Mr. MICA. Thank the gentleman. Mr. DeFazio? 

Mr. DEFAZIO. I am waiting to hear from the Secretary, sir. 

Mr. MICA. OK. Ms. Johnson? 

Ms. JOHNSON OF TEXAS. Thank you, Mr. Chairman. I simply 

want to welcome our Secretary and ask for unanimous consent to 

put my remarks in the record. 

Mr. MICA. Without objection, so ordered. 

We haven’t yet—we got a little late start. 

Mr. RAHALL. I will just ask, Mr. Chairman, my remarks be made 

part of the record, as well, so we can go ahead with the Secretary. 

Mr. MICA. Without objection. 

Other Members seek recognition on the Democrat side first? Ms. 

Edwards. Then we will come back—— 

Ms. EDWARDS. And the same, Mr. Chairman. I will simply ask 

that my remarks be made part of the record. 

Mr. MICA. Without objection, so ordered. 

All statements will be included. Any other comments, Members 

seeking recognition? Mr. Gibbs, I guess, is next? I am sorry, Ms. 

Schmidt, not Mr. Gibbs. Sorry. 

Ms. SCHMIDT. Thank you. First off, I want to thank the Secretary 

for coming today. 

Mr. Chairman, in your remarks you talked about the subsidies 

that we have for Amtrak, $49 per rider over a 3-year period. I 

would like to also highlight another subsidy, and that is the food 

service. Last year we lost almost $61 million in the food service on 

Amtrak. If you buy a hot dog for $4.50 it costs $6.60 to produce 

that hot dog for your plate, which means the taxpayers are left 

holding the bag of $2.10. I do have a bill that I have given—that 

I put in the hopper a few weeks ago to correct that. And I do hope 

that this is a simple fix to save the taxpayers almost $61 million. 

And I do hope that we can come together and remedy that. 

9 

And by the way, I also want to thank you for the signage issue 

for highways. You have made a whole lot of people in the State of 

Ohio very, very happy. Thank you for your leadership on that, and 

I yield back. 

Mr. MICA. Another Member on our side? Mr. Gibbs, you are recognized. 

Mr. GIBBS. Thank you. Thank you, Mr. Chairman, for holding 

this hearing. I think it is appropriate that I make an opening statement because when we talk about mistakes and lessons learned, 

Ohio is probably an example of some lessons learned. 

I served on the State Senate during—in the Transportation Committee—during the consideration of our so-called high-speed rail 

project that would connect Cleveland, Columbus, and Cincinnati. 

After the details of the project came to light, Ohio rejected the Federal funding, due to the impractical, inefficient, and expensive 

problems inherent to the project. 

First, the supposed high-speed rail was more like snail rail. The 

proposed Ohio passenger rail service would only reach a maximum 

speed of 79 miles per hour, with an average speed of 39 miles per 

hour. According to the 2009 Amtrak study, the estimated travel 

time from Cleveland to Cincinnati would have been 6 hours and 30 

minutes, substantially slower than the 4 hours it would take to 

drive the car. Combined with the fact that the average round trip 

ticket was priced—was projected to be $190, it is hard to believe 

that many Ohioans would see any real savings. 

Cost to the taxpayer is another serious issue. A 2009 Amtrak study determined that the project would require $500 million to 

$700 million in startup costs, plus millions of dollars in annual operating subsidies. Further studies have suggested that ridership 

would average only 1,315 riders per day, resulting in extremely low 

rate of return. 

Aside from the long travel times and high costs, there are several 

other impractical elements to the project. For example, unlike some 

larger cities, Ohio lacks the interconnectivity necessary for passenger rail to work. When a rider gets off the train at a Columbus 

station, where would they go from there? There is nowhere to go. 

Additionally, this proposal would share with freight lines, and 

any move to go faster than 79 miles an hour would require a totally new system. 

In the Northeast Corridor, true high-speed rail may be feasible. 

Earlier this year I visited the Northeast Corridor with Chairman 

Mica and members of this committee. And it quickly occurred to me 

that if true high-speed passenger rail is going to work, it would 

work in the Northeast Corridor. The Northeast Corridor has the 

population, the congestion, and the interconnectivity that makes 

sense for a project like this, as well as the need for alleviating the 

highly congested roads and airports. 

While this region of the country looks promising for cost-effective 

development, for Ohioans $190 per ticket for a 61⁄2-hour ride from 

Cincinnati to Cleveland simply didn’t make economic sense. 

Thank you, and I yield back. 

Mr. MICA. Thank the gentleman. Mr. Capuano? 

Mr. CAPUANO. Thank you, Mr. Chairman. Mr. Secretary, welcome. Great to see you again. Welcome back to the committee. 

10 

Very briefly, I just want to be very, very clear. Anybody who 

wants to give the money back to you, we will take it in Massachusetts. I just want to be on record very clearly. We will take it, we 

will use it, we will improve our rail, and we will say thank you to 

you and anybody else who wants to give it back. And I look forward 

to a couple of hundred million, maybe, any time you are ready. 

Thank you. 

Mr. MICA. Thank you, Mr. Capuano. And I will be supporting 

you, as long as it is dedicated towards the Northeast Corridor. 

I had one more Member. Mr. Hanna? 

Mr. HANNA. Thank you, Secretary LaHood, for being here. 

I want to just take a minute and say thank you and recognize 

the DOT commissioner from my State, New York. And in particular, Joan, I would like to thank you for your responsiveness in 

the recent hurricane and disaster in our district. You set an example for the whole State with—through Irene, and for the whole 

country, through those disasters of Irene and Lee. And you expedited permits, and you did things concurrently, and it was a big 

help, and I am grateful. So thank you for being here, ma’am. 

Mr. MICA. Other Members seek recognition? Mr. Cravaack? 

Mr. CRAVAACK. Thank you, Mr. Chairman and Ranking Member 

Rahall, for holding this important meeting today. And I would like 

to welcome Secretary LaHood, and I look forward to your testimony, sir. I look forward to the fact-based hearing on high-speed 

passenger rail that includes a discussion of benefits, and perhaps, 

most importantly, all the costs associated with high-speed rail. 

Too often, in some parts of the country, the proponents of highspeed rail exaggerate its collective benefits while downplaying, obscuring, or misrepresenting the actual capital costs and the eventual long-term operating costs to the American taxpayer. 

Moreover, I am concerned that the bulk of this administration’s 

high-speed rail plans will only be viable as a result of this administration’s energy and environmental policies that are continuing to 

drive up energy costs to the American public. 

Thank you again. I will be brief, and I look forward to your testimony. And I yield back. 

Mr. MICA. I think we have now heard from all Members who 

seek recognition. I appreciate the Secretary, again, being with us 

and also having an opportunity to hear from some of the members 

of our committee. 

And we will now yield to our distinguished Transportation Secretary, Mr. LaHood. Welcome. 

TESTIMONY OF THE HON. RAY LAHOOD, SECRETARY OF 

TRANSPORTATION, UNITED STATES DEPARTMENT OF 

TRANSPORTATION 

Secretary LAHOOD. Thank you, Mr. Chairman. I am delighted to 

be back on a committee that I served on for 6 years. And also, to 

the Ranking Member, Mr. Rahall, to both of you, thank you for 

your leadership on transportation. Over the last 3 years I think we 

have worked well together, and I look forward to continuing to do 

that. 

The reason I am here is simple. I asked to be here. High-speed 

rail is a signature initiative for President Obama and this adminisVerDate Aug 31 2005 12:28 May 07, 2012 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\12-6-1~1\71530.TXT JEAN
11 

tration. But most of all, it is an important initiative to the American people, whose representatives have submitted more than 500 

applications requesting $75 billion to build high-speed rail projects. 

And all that since 2009. 

In fact, when Florida’s Governor decided to send back his State’s 

$2 billion of high-speed rail money, 24 States and the District of 

Columbia and Amtrak submitted requests for $10 billion. Another 

powerful testament to America’s enthusiasm for high-speed rail. 

So, I am looking forward to our conversation about President 

Obama’s vision, President Obama’s plan, and 3 years of successes 

achieved and progress to build on. 

The fact is, high-speed rail has been a priority for decades at the 

local, State, and Federal levels. And among members of both parties. Let me read you something that I just came across. And I 

quote: ‘‘It is the policy of the United States to promote the construction and commercialization of a high-speed rail transportation 

system.’’ That is a quote from the 1991 transportation bill signed 

into law by President Herbert Walker Bush. 

Just 1 year later, one of my outstanding predecessors, a Republican, former Transportation Secretary Andy Card, designated the 

first five high-speed rail corridors during a recession. And if you 

think this was an historic anomaly, I remind you that the Republican House and Republican Senate passed another transportation 

bill reiterating America’s commitment to high-speed rail in 1998. I 

remember, because I was one of 337 Members of this body who 

voted for it. 

So, what has changed today is that we have a President and a 

Vice President who are putting their money where their mouth is. 

We are not just asking—we are not just writing reports and filing 

them away. We are hiring workers, laying track, and building stations. 

High-speed rail is coming to America. It is here. Three years ago, 

President Obama started with a vision. He envisioned an American 

in which 80 percent of the people can have access to high-speed 

rail. And we know that as this system emerges, jobs, economic development, and economic competitiveness will follow. 

In the short term, we are creating manufacturing construction 

jobs. These are American jobs building the next generation of 

America’s infrastructure. Once track is laid and stations are built, 

we are spurring economic development, quality jobs, and Americanowned small businesses all along the United States rail corridors. 

What is more, our investment in train tracks, in train sets, don’t 

just give travelers more option, they improve existing rail lines for 

freight cars. 

We have invested in the last 3 years a half-a-billion dollars in 

our Class I freight rail system in America. Now we have done that 

selfishly, because that helps us get into high-speed rail. But that 

is the first time that anybody can remember that kind of investment was ever made in what is the best rail—freight rail—system 

in the world: ours. A half-a-billion dollars. 

President Obama’s administration is working every day to eliminate bottlenecks and choke points in America’s freight rail. I have 

been to tower 55 in Texas. I have been to the CREATE program 

in Chicago. All over America we are making investments in freight 

12 

rail. One-third of our competitive TIGER grants went to projects 

that speed delivery of products from factories, farms, and businesses to customers across the United States and around the 

world. And in the long term, high-speed rail will bolster America’s 

economic competitiveness. 

You know we are being out-competed right now, today, all over 

the world, but in particular in Asia, on countries that are building 

roads, building airports, building bridges, and building high-speed 

rail. We used to be the leader. If we don’t catch up here pretty 

quick, we are going to be in second place. 

We know our Nation will be home to 100 million additional people by the year 2050. That is the equivalent of another California, 

Texas, New York, and Florida, combined. Our highways and airports simply can’t handle the growth. We need to do something, or 

we will be crushed under the weight of our own expansion. 

So, how are we bringing President Obama’s vision to life? What 

is the plan? Well, we have designated an integrated network with 

trains moving at different high-end speeds, based on the needs of 

the market, just like in rail systems overseas. Not all the trains 

overseas go the same speed. Where it makes sense, we are building 

state-of-the-art high-speed lines on a par with anything in Europe 

or Asia. 

Feeding into this true high-speed core will be regional service. 

We know that everybody is not going to drive a car to a train station. There will be regional service. There already is, faster than 

most trains we have today. 

Finally, we are building out our energy corridors. This is happening already. These are local lines along which entrepreneurs 

are opening shops. These rail lines will become economic corridors 

for jobs, just like the interstate highway was. This integrated approach is exactly what rail operators have done in countries around 

the globe. Some trains are fast, other trains are faster. 

So, how far have we come during these last 3 years? We have 

put American workers on rail job sites in 32 States and the District 

of Columbia. Projects in Illinois, Maine, Minnesota, North Carolina, 

Oregon, Vermont are coming in ahead of schedule and under budget. The same time, we are supporting jobs at manufacturing plants 

in industrial States like Indiana, and at suppliers in States like Arizona and Arkansas. And everything from tracks to ties to train 

sets to construction material for new stations is being built by 

American workers, American workers building America’s infrastructure. 

From here, the future is bright. During the next 6 months, more 

than $1.1 billion of new job-creating construction projects will commence. We have invested in increasing the Acela speed from 130 

miles per hour to 186 miles per hour. We have invested in bringing 

110-mile-per-hour service to the Midwest. We will soon break 

ground on a new line between Portland and Seattle. We continue 

planning for a southwest network from—that connects Dallas to 

Houston and Oklahoma City. And we are committed to helping the 

people of California achieve their vision for high-speed rail. 

This is not Ray LaHood’s vision; this is California’s vision. This 

is the people’s vision, people that have worked on high-speed rail 

in California for 15 years. It is not a cheap project, but it is an esVerDate Aug 31 2005 12:28 May 07, 2012 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\12-6-1~1\71530.TXT JEAN
13 

sential one. Its costs are in line with those of similar projects that 

have been successful around the world. And we are in it for the 

long haul. We will not be dissuaded by the naysayers, by the critics, some of whom you are going to hear from later on today. We 

are not. 

High-speed rail is in America, coming to America, and expanding 

in America. There is no going back. The dollars to support all of 

this were included and paid for in every budget that President 

Obama has submitted to Congress. All of this was included in the 

President’s outline for a long-term transportation bill which 

charted a course in proposed funding for the next 6 years. All of 

this was included in our push for high-speed rail projects as a part 

of the American Jobs Act. And all of this is anchored in our shared 

history. 

We have always met tough challenges by doing big things. We 

have always done big things. 

And transportation has always been bipartisan, always. When I 

was here, sitting where you are sitting, I was voting for two transportation bills. Both of those bills passed with over 400 votes in the 

House. There are no Republican or Democratic bridges. There are 

no Republican or Democratic railroads. We have had a rich history 

in this country of bipartisanship when it comes to transportation, 

because transportation puts people to work. It puts friends and 

neighbors to work. That is why it has been bipartisan. 

Our blueprint for building high-speed rail is the same as America’s blue print for building the interstate system. We are right at 

the point where America was at when we started the interstate 

system. We didn’t know where all the lines were at. Do you think 

they knew where all the lines were at when President Eisenhower 

signed the interstate bill? Of course not. Do you think they knew 

where all the money was coming from? Of course not. Fifty years 

later, we have the best interstate system in the world because people had a vision. 

When the United States first started going from planning to paving, we didn’t know where all the routes were going to be. We 

didn’t know where every penny was coming from. But President Eisenhower set a goal. He had a vision. Through 10 administrations 

and 28 sessions of Congress—that is when I say, ‘‘High-speed rail 

is coming to America,’’ because through 10 administrations, 10 

Presidents, and 28 sessions of Congress, we got it done. That is 

what America has always been about. 

We didn’t invest when times were good. We have a proud history 

investing when times were tough, because transportation puts people to work. Through boom years and bust years, through eight recessions, we built the best roadway system in the world. And we 

should do no less for high-speed rail. 

Members of this committee, our parents and grandparents 

dreamed big, planned big, built big so we might have the chance 

to lead. What the previous generation did for us is left us an interstate system. State of the art. We should do no less for the next 

generation. I am not going to benefit from high-speed rail, but I 

have four grown children and nine grandchildren. They will. We 

should do what generations did for us. Think big, build big, and 

leave the next generation of transportation high-speed rail. 

14 

I am happy to answer your questions, Mr. Chairman. 

Mr. MICA. Well, thank you, Mr. Secretary. And again, we appreciate your commitment to transportation, and particularly to a successful high-speed rail program. 

I outlined some of the problems that we have had, and hopefully—the title of this hearing, again, is lessons learned from some 

of the mistakes that we have made. And one of the things that you 

just cited is that—in fact, we built the interstate back in the 1950s, 

with President Eisenhower. On Tuesday, we heard the President 

say, ‘‘We’ve lost our ambition, our imagination, and our willingness 

to do the things that built the Golden Gate Bridge and Hoover 

Dam and unleashed all the potential in this country.’’ 

I went back to look and see how long it took in the planning 

process and approval process and then the construction process. 

And then I look at the Northeast Corridor. 

For example, it has taken 3 years to get out an RFP on an environmental study, and that hasn’t yet been awarded. Can you tell 

us the status of the award of doing the environmental study for the 

Northeast Corridor, which is essential to move that—— 

Secretary LAHOOD. What I will tell you, Mr. Chairman, is we 

have taken our cues from what you have told us. We are investing 

in the Northeast Corridor. 

Mr. MICA. Yes, and you—— 

Secretary LAHOOD. We just announced an investment of almost $1 billion. I will get you the specific date when I believe the environmental will be done. 

Mr. MICA. Again, if you can’t give it to me now—— 

Secretary LAHOOD. I will give it to you. 

Mr. MICA [continuing]. Been helpful. After many, many years we 

finally got, in March of 2010, the designation of the Northeast Corridor, and I thank you. But we cannot move forward until that is 

awarded. And I guess back in August, the proposals had come in. 

We just need an award. So I think that is very important to moving 

forward. 

And then, wisely spending the money. I supported the money for 

the Northeast Corridor. We heard Mr. Sires, who was here, talk 

about additional funds and others—Mr. Capuano wants some for 

Boston. But what we don’t want to do is spend that money in a 

half-baked process without a good plan to build the whole corridor. 

And I don’t think $117 billion over 30 years is the way to go, and 

in dribbles and drabbles. 

Mr. Boardman testified, sat in the same chair and said he believed that we also had to attract private capital into that process. 

But the whole process is contingent on going forward with just a 

regular order of environmental study, and that is delayed. 

You said not all trains in Europe are high-speed. But every highspeed rail train goes between 110 and 150 miles an hour, on average. We don’t have a single proposal to reach that speed with any 

project that is under consideration. And we have had a setback 

now in California. 

Do you see any way to achieve high-speed rail in an expedited—— 

Secretary LAHOOD. The line between Chicago and St. Louis will 

go 110 miles an hour, Mr. Chairman. When—— 

15 

Mr. MICA. That is the high speed. 

Secretary LAHOOD. Let me just finish. In California it will be 

high speed—it will go 200 miles an hour when that project is finished. 

We are also—the investments we are making in the Northeast 

Corridor will get to higher speeds, which is what I said in my testimony. 

So the investments we are making—the figures that you used 

are the current figures. With our investments, trains will go higher 

speeds. Are they all going to go the same speed? No. California, 200 

miles an hour. Illinois, 110 miles an hour. The Northeast Corridor, 

higher than they are doing now. That is why we are making the 

investment. 

Mr. MICA. Again, the speeds that I have, average speed, Chicago/ 

St. Louis, 71 miles an hour, on average—— 

Secretary LAHOOD. That is the current speed, Mr. Chairman. 

Mr. MICA. Chicago to Detroit—— 

Secretary LAHOOD. Before we made the investment. 

Mr. MICA [continuing]. Sixty-four miles an hour. Now, these 

are—— 

Secretary LAHOOD. Before the investments. 

Mr. MICA. Yes. Again, I am just telling you what we are told, 

that after they make the investments these will be the average 

speeds. And this is information provided by your department on 

the project—— 

Secretary LAHOOD. Mr. Chairman. 

Mr. MICA. Yes? 

Secretary LAHOOD. After the investments, Illinois, 110 miles an 

hour. After—when California is complete, 200 miles an hour. On 

the Northeast Corridor, higher speeds than now once we invest the 

$1 billion that we just announced. 

Mr. MICA. There is a public article about some of the stress and 

problems by Mr. Phillips and appeared recently in Trains magazine. It talks about the turmoil at Amtrak. One of my concerns is 

I recently learned that Al Engle, who was the vice president for the 

high-speed rail under Amtrak was either fired or dismissed, we are 

not sure. I believe he has been replaced. But the reports are that 

there is turmoil right now in Amtrak, not only on high-speed rail, 

but overall. 

Secretary LAHOOD. I don’t run high speed—I don’t run Amtrak, 

Mr. Chairman. I have plenty of things on my agenda. I am not in 

charge of Amtrak. Mr. Boardman is. I can’t answer for him. I don’t 

have any idea who you are even talking about there. 

Mr. MICA. Well, again, we just gave $900 million to Amtrak, and 

I think that we should conduct some oversight. I mean that is— 

I can account for about $1 billion going into Amtrak. And when we 

have reports of the person in charge either being fired or dismissed 

on that project, it does raise concerns. 

Finally, I invite you to again look at some successful models. I 

would like to see Amtrak more successful. You did help Ms. Brown 

and I on an Auto Train facility in Florida. We finally made the connection at Lorton. Years ago they put a facility in. People deserve 

more than a tented, hot—a facility that was a replacement for a 

storm—we appreciate that. But my concern is that we have a great 

16 

project like Auto Train, but we don’t have people that can manage 

and expand that service. We should be running a larger number 

there, and also in the Northeast Corridor of passenger service in 

other quarters. 

Mr. Shuster and I put a provision in the PRIIA law that allowed 

for the private sector to pick up some of these routes and show 

what they can do on money-losing routes or successful routes, and 

make them more successful and less costly to the taxpayers. That 

process has been slow during the past 3 years. Not much has been 

done. And I understand a rule is about to be issued. 

Is that forthcoming? Can you tell the committee the status? 

Secretary LAHOOD. It is about—we are getting close. 

Mr. MICA. OK. And if you could give us a—maybe in writing to 

the committee, the—some specifics on when you plan to make that 

decision, we would be grateful. 

Secretary LAHOOD. Absolutely. 

Mr. MICA. All right. With that, I will yield to Mr. Rahall. 

Mr. RAHALL. Thank you, Mr. Chairman. Mr. Secretary, I certainly commend you for your testimony today and your—the fact 

that you asked to be before us. 

You are right in your nonpartisan remarks. There are no American bridges, American railroads, or—I mean no Democratic railroads or bridges or Republican bridges or railroads, they are all 

American bridges. And we all want to be nonpartisan when it 

comes to transportation. But I still think you are the best Republican in this administration. 

Let me—— 

Secretary LAHOOD. I think I am the only one. 

[Laughter.] 

Secretary LAHOOD. The bar isn’t very high. 

Mr. RAHALL. You know, I understand a lot of my colleagues 

wanting to put everything in the Northeast Corridor. You know, 

that is not the only part of this country that is experiencing 

growth. I think we have to look at rural America, we have to look 

at the West and Midwest. The passenger rail system in this country should truly be a national program. You have compared it to 

our interstate program, and how it took 60-some years to get our 

interstate systems to where they are today. And that could be very 

much the case with passenger rail service, as well. 

But there is growth in other parts of our country. There are people aching to be relieved of congestion that exists in rural America. 

Congestion is just not a big city problem any more. And passenger 

rail service is a way to alleviate that, along with improved infrastructure. So, I commend you for that national vision that you 

have, and the vigor with which you have expressed it here this 

morning. 

And, I know your application process, the DOT application process, has come under some severe criticism. But I commend you for 

that, too. I think you have been very transparent in that process, 

as confirmed by a GAO report released in May of this year that 

called the accusations against that program into question, and 

said—and I quote—that ‘‘the FRA selection process was an example 

of good grantmaking.’’ So, I commend you for that. You have inVerDate Aug 31 2005 12:28 May 07, 2012 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\12-6-1~1\71530.TXT JEAN
17 

volved all the stakeholders. It has been a transparent process. And 

bravo to you. 

Let me ask you a question about the Buy American provisions. 

You touched upon that in your testimony, as well, and a lot of us 

on my side of the aisle have introduced a stronger Buy American 

bill in the last week or two. 

There are loopholes—gaping loopholes, I would call—in the current Buy American provisions that allow companies to subdivide, 

et cetera, and escape Buy American provisions of current law. Do 

you think they need to be strengthened? Can we close those loopholes, legislatively? 

Yet, at the same time, as my legislation does, it allows you the 

waiver authority if there is a national interest issue involved. If we 

are incapable of making the product up to sufficient standards in 

this country, or we would drive up the cost above a 25-percent increase, it would grant you that waiver authority. 

Secretary LAHOOD. Well, Mr. Rahall, I would say this. I think we 

have a very, very strong commitment at DOT to Buy American. 

And we have been complimented numerously for the idea that Buy 

American is very important. We want to make sure that every one 

of these dollars goes to American companies and American workers. That is our number one goal. And if you want to strengthen 

that, go for it. We will take any encouragement we can. We are 

committed to Buy American, more than anything else. These are 

American tax dollars, and they should go to American workers and 

American companies. And that is why we have just been very disciplined about making sure that these dollars do go to American 

companies and American workers. 

Anything you can do to help us on that we will appreciate. 

Mr. RIBBLE. [presiding.] Thank you. And the chair recognizes the 

gentleman from Pennsylvania, Mr. Shuster. 

Mr. SHUSTER. Thank you very much. Again, Mr. Secretary, it is 

great to have you here today. And I would point out to the committee there is another Republican in the administration who came 

from the Armed Services Committee, Mr. McHugh, who is Secretary of the Army. So it is fitting that the Secretary of Transportation is a Republican and former members of two committees that 

have been bipartisan. And we hope to continue to be bipartisan. 

Part of the problem, though, with bipartisanship these days is 

that we don’t have the money. We just don’t have the money. And 

that is when I come back to—as I said, with this—with the way 

some of this money has been spent on stimulus, you put it out on 

projects, some of them may get speeds up to 110, others they are 

not going to get up there. And again, as we pointed out, Wisconsin 

and Ohio rejecting them because it is just—it is a tremendous 

drain on their treasury. 

So I come back to you talking about the vision. There was a vision Abraham Lincoln had for connecting this country with railroads, an important vision to the entire Nation. And Eisenhower 

with the highway system, something we had to do to connect this 

vast, vast country together. Aviation, vast spaces we have to travel. 

And when you come to passenger rail today the need is not the 

same as it was in the past. But it is present in some of these corridors, and that is what I come back to: Focus on these corridors. 

18 

To send out the money in dribs and drabs as we have I don’t think 

is going to accomplish the President’s vision, which I believe is 

wrong, to think we are going to have high-speed rail available to 

80 percent of the country. 

So, I get now to my question of the Northeast Corridor. You 

know, why isn’t there a focus? I mean what are you—why are you 

opposed to saying with all this money—taking the money from 

maybe even California and focusing it on the Northeast Corridor, 

when we own the tracks, when the numbers, the number of people 

who live in the Northeast Corridor, 18, 19 percent of our population 

on 2 or 3 percent of our landmass, it is absolutely ripe for highspeed rail. So why wouldn’t we focus on that like a laser to get it 

done there, a place that I believe will be highly successful and we 

can learn tremendous lessons to take it to these other emerging 

corridors, especially in these times of very, very short, very small 

budgets that we have to work with? 

Secretary LAHOOD. Well, we do believe in the Northeast Corridor. But we also believe in America. We believe there are people 

in other places in America that would like to have a train to ride. 

We have just invested $1 billion in the Northeast Corridor. We just 

had the Northeast Corridor designated for rail. We are paying attention to it. 

Look it. When we started this 3 years ago, there were different 

Governors in different States. I don’t have to tell all of you that. 

You know that. There is a new Governor in New York. He wants 

high-speed rail. That didn’t exist when we started 3 years ago. 

There is a new Governor in Connecticut. And I have met with 

these Governors. These Governors are our partners. We need partners. 

Amtrak has been a good partner. For all the criticism and how 

people love to decry Amtrak, Amtrak is making money, ridership 

is up. I was on a train to New York City this weekend, from Washington to New York, completely full. From New York to Washington on Sunday, completely full. Ridership is up on Amtrak. We 

are making investments in Amtrak. They are as good a partner as 

any State that has stepped up and wants to get into the passenger 

rail business. 

We are not going to just invest every dollar in one part of the 

country. That is not fair. It is not fair to people who get elected to 

this House who have people in their States that want to get into 

the passenger rail business. That is simply not fair. 

Mr. SHUSTER. You make my case for me. You were on a train 

from Washington to New York. It was full. Absolutely. That is why 

we need to focus there. 

Secretary LAHOOD. And it was on time. And they made money. 

Mr. SHUSTER. The train that exists in California between San 

Francisco and Los Angeles isn’t full. I don’t believe there is enough 

money in California to ever complete that project. You have got a 

State that is as close—— 

Secretary LAHOOD. Well, I—— 

Mr. SHUSTER [continuing]. Close to being bankrupt as you can, 

and so why don’t we—look. I am for passenger rail in this country. 

I am just not for spending this money on high-speed rail lines that 

19 

aren’t going to be built, that the American people aren’t clamoring 

for. 

My good friend from West Virginia said there are people in this 

country that are aching for relief. You know where they are aching 

for relief to have passenger rail, where we should be spending some 

of this money? Los Angeles to San Diego. For half of what we are 

investing in the central corridor they could have significant improvements to move people around. 

And anybody—Mr. Secretary, I know you have been to southern 

California. All you have to do is walk out the front door of your 

hotel and you see massive congestion. So, why aren’t we really focusing on these places that really have tremendous needs? As far 

as I can tell from San Francisco to Los Angeles, the roads are not 

backed up. They are not sitting in tremendous traffic jams. That 

is occurring in southern California and northern California. 

So, I encourage you—again, I am in favor of high-speed rail 

where it makes sense. I am in favor of improving passenger rail 

systems. As I say, I use it all the time as an example. I hope you 

do. I know Mr. Szabo and I have spoken about it. The Keystone 

Corridor. That is an example of passenger rail, it is not high-speed 

rail, and people are getting on it. 

I am the poster child for railroad passenger rail service. Twenty 

years ago, as you know, my father sat on this committee and I told 

him, ‘‘I will never get out of my car and ride in a train, because 

I want the freedom, as most Americans do.’’ But today, if I am 

going to Philadelphia from Washington or from my district, I go to 

Harrisburg and get on the train, because I don’t want to deal with 

the traffic. 

And I think American people—when you have frequency and reliability you don’t have to go 150 miles, 180 miles an hour. And it 

is a lot less expensive to upgrade those, as we are seeing in some 

of these corridors in the Midwest. I think that is really where our 

focus should be. 

And I see my time has expired. One other thing I just want to 

bring up, not to get a response from you, but there is a procurement issue that is coming up. Mr. Szabo and I have talked about 

it. This is not the right venue, but I hope to stay engaged with you 

on a procurement issue—Mr. Szabo is shaking his head back 

there—that is important to the United States when it comes to 

purchasing locomotives for some of these different routes around 

the country. 

So, again, thank you for being here, and I would urge you to go 

back and reevaluate the Northeast Corridor and some of these 

other corridors that have a desperate need today, and we can be 

successful. And with that I yield back. 

Mr. MICA. Thank the gentleman. Yield to the subcommittee 

Ranking Member, Ms. Brown. 

Secretary LAHOOD. Mr. Chairman, if you wouldn’t mind, he 

just—— 

Mr. MICA. Did you want to respond? I saw you—— 

Secretary LAHOOD. I do. 

Mr. MICA [continuing]. Nod your head affirmatively, and Mr. 

Szabo—— 

Secretary LAHOOD. I was not agreeing with him. 

20 

Mr. MICA. Oh, OK. 

[Laughter.] 

Mr. MICA. Oh, I am sorry. 

Secretary LAHOOD. Which I will—— 

Mr. MICA. I apologize. Mr. LaHood—— 

Secretary LAHOOD. Which I will be very clear about. 

Mr. MICA [continuing]. I apologize, go right ahead. 

Mr. SHUSTER. I am glad you cleared that up, Mr. Secretary. 

Secretary LAHOOD. Mr. Shuster, we don’t make this stuff up. The 

ideas for this map that was included in my testimony today, these 

corridors, Ray LaHood didn’t make this up. These corridors came 

from people who live in these States who want passenger rail. 

So, if you don’t like the idea where a rail line is going in California, then you need to talk to the people in California who have 

been working on high-speed rail for 15 years, including some Members of Congress who have personally come to me and told me 

where they think there would be a good investment of money, just 

like the people in the northwest, just like the people in the Northeast Corridor, just like the people in the Midwest, and all—this is 

a reflection of what people in America are asking for. It is not a 

reflection of President Obama sitting down at a map and drawing 

a line, or Ray LaHood. 

This came from the people, and the people want this, irregardless 

of whether you think they do or not. The people in California want 

this, people that have been working on it for 15 years. People in 

Mr. DeFazio’s area in the northwest want this corridor. We didn’t 

make it up. And we are making investments where we think they 

are good investments where over time, over a period of time—it 

took 50 years to build the interstate. We are not going to build 

high-speed rail overnight. It is going to take some time. We are 

doing what the people want. 

Mr. SHUSTER. Well—— 

Secretary LAHOOD. And also elected representatives of the people, by the way. 

Mr. SHUSTER. With all due respect, Mr. Secretary, my daughter 

wants a brand new Jeep Grand Cherokee luxury SUV. She can’t 

afford it, nor can I afford it. 

Secretary LAHOOD. Well—— 

Mr. SHUSTER. And that is part of the problem in this situation. 

Secretary LAHOOD [continuing]. I am glad you didn’t think that 

when you came to me about the Keystone line, because you thought 

it was a good idea and we thought it was a good idea, and we found 

the money to make the investments. And that is what we are doing 

for other representatives in Congress. 

Mr. SHUSTER. You are absolutely right. Where it makes sense. I 

am not coming to you asking you to invest in high-speed rail from 

Harrisburg to Pittsburgh. That goes right through my district, and 

I haven’t done that. Where it makes sense I support it. Where it 

doesn’t make sense, again, I think we are wasting our money. And 

we should be focused on areas where we can see tremendous success stories that are out there—that we will be able to see that. 

Mr. MICA. I thank the gentleman, I thank the Secretary. And 

now we will go back to Ms. Brown. 

21 

Ms. BROWN. Thank you, thank you, thank you, Mr. Secretary. 

Thank you so much for being here. You are just such a bright spot. 

I have to tell you. 

In 1980, Senator Graham—then Governor Graham—appointed 

me to a committee to bring high-speed rail to Florida. In other 

words, in Florida we have been working on it for over 30 years. It 

has been on the ballot, the people passed it, the House of Representatives and the Senate and the Governor at the time signed 

the bill supporting it. 

What I want to know is how can we protect the taxpayers, the 

Federal taxpayers’ dollars, when you have the kind of investments 

that Florida have made over the years? And how can we—and I am 

looking at it—how can we recoup? We can’t have one Governor 

coming up and saying, ‘‘Well, I don’t want it,’’ and all of the investment that we made over the years—how can we get the Federal 

taxpayers’ dollars back? Because regardless of what my colleagues 

who don’t understand say—some of them clearly don’t understand—we applied for the funds. No one asked us to apply. And it 

was extensive—we did environmental work, and studies, and partnerships. 

I mean someone thanked you a few minutes ago for a project in 

Florida—by the way, it was stimulus—you know, we hate the word 

stimulus, but it was stimulus dollars that put people to work. 

Thank you, thank you. Florida, that was Florida. 

So, can you tell us how can we deal with these States that are 

causing overall problems, as far as taxpayers’ dollars are concerned? I want my money back. 

[Laughter.] 

Secretary LAHOOD. Well, look it. There was only one person in 

Florida who didn’t want high-speed rail, Congresswoman. 

Ms. BROWN. I understand that. 

Secretary LAHOOD. Thank you for your leadership, thank you to 

Mr. Mica for his leadership. I am not going to go into political 

science 101 about how you get your money back. I think you know 

more about that than probably anybody on the committee here. So, 

good luck. 

Ms. BROWN. Would you like to talk about—you know, there has 

been a lot of discussion about where these projects should go, and 

basically that, you know, it should go to the Northeast Corridor. I 

support that. This area is already developed. And when you go to 

Europe, I mean, there are different forms of speed, as you mentioned. And then there are some areas in this country that we can 

develop that will be true high speed. 

But how can we educate people who have, clearly, no understanding of the process? They come here, their vision is one route 

from one area to the other. They don’t understand the importance 

of getting people out of that little car and getting them into other 

modes of transportation. I mean that is the future of our country. 

We are the caboose—— 

Secretary LAHOOD. Well—— 

Ms. BROWN [continuing]. And we started the train system. 

Secretary LAHOOD [continuing]. We have to continue to make 

progress. As we make progress, we will show success and we will 

prove that the vision that we all have about passenger rail is a 

22 

good vision, and it is one that the people want. It will take some 

time to do that. We will continue to invest in those places in the 

country that are ready, willing, and able to move ahead with it. 

And as we have success, I think that will tell the story. 

Ms. BROWN. And all the hearings that we have had here, when 

people come from other countries, they have indicated once you 

have some success then the other part of the country will demand 

it. 

Some people that live in some areas have not even gone to the 

outskirts of their town. So, they have no idea of the freedom—for 

example, being able to get on a train in Orlando and go from Orlando to Tampa, or from Orlando to Miami, 200 miles, 1 hour and 

15 minutes. 

I mean that is the future of our country. It is going to happen. 

And it is going to happen for Floridians. One person will not stop 

us. It is going to happen. 

I mean the amount of people that could be working now. I saw 

a ‘‘60 Minutes’’ piece where a person was unemployed, living homeless, a construction worker. How many jobs would that project have 

generated in Florida, construction jobs? 

Secretary LAHOOD. Thousands of jobs for the people that were 

going to build the rail lines, thousands of jobs for people that were 

going to build the cars. And all along the corridor, all of the small 

businesses that would have benefitted from that, that would have 

hired people. Thousands and thousands and thousands of jobs. 

Ms. BROWN. You know, I have heard people say, ‘‘Well, those are 

temporary jobs.’’ What are they talking about? 

Secretary LAHOOD. Every job in America is important. And the 

idea that people that were going to build the rail line was a temporary job—it was an important job, and it was a job that would 

have paid a good salary and given people the opportunity to get experience and then—you know what the plan was. Once the Orlando 

to Tampa, then Orlando to Miami. That would have been the next 

leg, and would have provided more jobs, with experienced workers 

who built the Orlando to Tampa. 

Ms. BROWN. Well, tell me about the study that was done that we 

paid for, the Federal Government paid for. Can you just briefly— 

we had it up on the—— 

Secretary LAHOOD. The ridership study? 

Ms. BROWN. Yes, sir. Yes, sir. 

Secretary LAHOOD. Yes, the ridership study showed that the ridership would be there for the rail plan from Orlando to Tampa. 

And everybody, including the newly elected Governor, knew that. 

He knew the ridership would be there. On the day that the Governor made the announcement in Florida there were nine companies—— 

Ms. BROWN. Yes. 

Secretary LAHOOD [continuing]. From foreign countries who were 

ready to invest in Florida high-speed rail. As soon as the agreement was signed they were ready to invest in American jobs, and 

Built-in-America in Florida. And that all went away. 

Ms. BROWN. Yes, sir. In closing, I understand the day that he 

made the announcement members of the Chinese Government were 

in Tampa with CSX, and they wanted to know what was the probVerDate Aug 31 2005 12:28 May 07, 2012 Jkt 000000 PO 00000 Frm 00032 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\12-6-1~1\71530.TXT JEAN
23 

lem, when money was not the issue. If money is not the issue, what 

is the problem? Why it is that we turned back $2.4 billion? It is 

a disservice to this country. 

I yield back the balance of my time. 

Mr. MICA. I thank the gentlelady. Mr. Denham. 

Mr. DENHAM. Thank you, Mr. Chairman. Happy birthday, Mr. 

Secretary. 

Secretary LAHOOD. Thank you, thank you. 

Mr. DENHAM. I don’t think anybody has said that to you yet 

today. Thank you for sharing your birthday with us today. 

Secretary LAHOOD. Thank you. My birthday present will be 

when I win you over, Mr. Denham. 

[Laughter.] 

Mr. DENHAM. I hope the facts can win me over. That is my biggest concern right now. 

And, you know, I agree with you, that you know, these projects, 

these roads, these high-speed rail, they are not Republican or Democrat. But the question is, are they good investment or bad investment? And that is where I have been trying to get the proof on. 

California, you know, you continue to talk about that being a 

good investment, although the numbers have ballooned to $98.5 

billion. So my question to you is, sir, where does that money come 

from? 

Secretary LAHOOD. There is not enough money here in Washington to do what the people in California want to do. And so we 

have encouraged companies that were going to invest in Florida 

and other places to go to California. I have had a couple of meetings with Governor Brown about this. I have arranged meetings 

with Governor Brown and investors from China and Japan that 

could possibly—discussions are still going on—come to California, 

establish opportunities for jobs to build the infrastructure, to build 

the train sets so that these Californians can go to work. They are 

doing them. 

It is going to take private investment, there is no question about 

it. And there are companies that are in discussions with California 

officials to make investments. 

Mr. DENHAM. But you do agree with the $98.5 billion number, 

that at least that—we are dealing—we are starting with a factual 

baseline of that was going to be the true cost. 

Secretary LAHOOD. It is going to be expensive to build the highspeed rail. If that is the figure today, that is the figure today. It 

will be different tomorrow. Look it. The longer—— 

Mr. DENHAM. Well—— 

Secretary LAHOOD. These—there is an inflation factor here. 

When this project started it wasn’t $95 billion, it was less than 

that. 

Mr. DENHAM. No, it was $33 billion. 

Secretary LAHOOD. And when—— 

Mr. DENHAM. Now it has over tripled. 

Secretary LAHOOD. When we are here 3 years from now, it is 

going to be higher than that. So the answer is you got the right 

figure today. 

This is an expensive project. But all of the money is going to 

American workers to build American infrastructure. It is not as if 

24 

the money—it is going to our people. It is going to your friends and 

neighbors. It is going to your constituents to pay their salaries, to 

build the train sets, to build the infrastructure. That is where the 

money is going to. 

Mr. DENHAM. At what—— 

Secretary LAHOOD. And if we can get private investors—pardon 

me? 

Mr. DENHAM. At what cost? So I am with you. I want to create 

American jobs, too. The shovel-ready projects that we talk about, 

I would love for the shovel to actually be in the ground creating 

these jobs. But at what cost? I mean if it is a $98.5 billion project, are we saying $1 million a job is a good job, $2 million a job is a good job? At what price 

do we throw money at a project that you can’t define numbers on? 

Secretary LAHOOD. This money is going to small businesses, 

going to big businesses, going to contractors, and going to American 

workers. 

Mr. DENHAM. Yes, sir. 

Secretary LAHOOD. That is where the money is going. 

Mr. DENHAM. I understand that. And my time is limited. My 

question is the American public wants to know at what cost. Is it 

$98.5 billion? And if that is really the cost, where does that money 

come from? Because right now, California voters that approved a 

$9.95 billion bond, 10 percent of the overall cost, they want their 

money back. Today’s Sacramento Bee shows that 64 percent of the 

people are now opposed to it. People that went to the ballot box 

and voted for the $9.95 billion bond are now opposed to it, and 

want that pulled back. 

So, if the Federal Government’s commitment is $3.6 billion, 

which they have already allocated as stimulus dollars that haven’t 

put a shovel into the ground, where does the other $95 billion come 

from? If there is a private investor out there that wants to spend 

$95 billion, bring them on. Give me their names, I would love to 

see the plan that they have. I would love to see them not only invest, but I would like to see them get a return on their investment. 

But we continue to talk about investing with no plan on what the 

return to the taxpayer is. 

So, you know, every transportation project we look at, we have 

a plan. We know what it is going to cost in the environmental 

phase, the planning phase, construction phase. We know how many 

jobs we are going to create. But yet, this big picture of high-speed 

rail, which sounds warm and fuzzy, isn’t sounding warm and fuzzy 

any more, because we don’t have any concrete numbers. 

So I would assume that, if you are going to throw more stimulus 

dollars, if you are going to throw more of the taxpayers’ dollars at 

this project, that you have to have some kind of plan, other than 

maybe there is a private investor out there that might want to put 

some money into this. 

Secretary LAHOOD. California has a plan. I will be happy to 

share it with you. I would suggest you talk to Jim Costa about it. 

He has worked on it when he was a State assembly person, he has 

worked on it since he has been a congressman. Governor Brown 

has a new team of people in place. California has a plan. That is 

why we are funding it. 

25 

Mr. DENHAM. Mr. Secretary, do you have a plan? 

Secretary LAHOOD. Absolutely. Here it is in pictures. And I can 

give it to you in writing, too, if you like. 

Mr. DENHAM. I would—I am here to not debate you, but to understand what the Federal Government’s obligation is. Right now 

you have obligated $3.6 billion of stimulus dollars to a project that 

is not shovel-ready. If California has a plan, they must be relying 

on the Federal Government somewhat for an additional lump sum 

of money above the $3.6 billion. What is that number? 

I think not only as a member of this committee I should have 

that number, but my taxpayers in the district that have committed 

$9.95 billion should understand what that number is. 

Secretary LAHOOD. We will share it with you. 

Mr. DENHAM. I look forward to seeing it. 

Mr. SHUSTER. [presiding.] The gentleman’s time has expired. 

Mr. DeFazio. 

Mr. DEFAZIO. Thank you, Mr. Chairman. First, Mr. Secretary, I 

would like to congratulate you. You mentioned Buy American. But 

I would point out that the Federal Transit Administration, under 

the leadership of the former Secretary and President Bush, was actually using Federal taxpayer dollars with routine waivers to build 

prototype transit vehicles overseas. That came to an end with this 

administration. We are not funding research and development for 

manufacturers in other countries. That was crazy. 

I appreciate the tightening up the Buy American, and we have 

some of the tightest rules here in rail, and we need to tighten up 

elsewhere. Like what happened in California, I hope the gentleman 

shares the same sense of outrage about the so-called segmentation 

of the Oakland Bay Bridge and the Chinese getting a new factory 

paid for by U.S. taxpayers. And we will offer him an opportunity 

to cosponsor a bill that will fix that loophole in the future. 

I just want to talk, and I don’t have many questions. I have been 

quiet, which is unusual for me. But, look, these things take a long 

time. I remember talking to former Senator Hatfield, a good friend, 

about him riding an electric train in Oregon over to the main electric line and being able to go to Portland or down to Eugene when 

he was a kid in times that rivaled today’s interstate highway, without an accident or an interruption. 

We lost that. We are trying to get it back. We have been a little 

slow coming up with the funding in Oregon, but we have now 

bought two Talgo train sets with help from the Federal Government. Washington State has two. We have a plan partnering with 

Washington State—and we have been working in partnership with 

the mainline rail roads to build sidings and things so we can move 

our trains more quickly. And the biggest problem is at-grade crossings, and it takes a long time and a lot of money to deal with atgrade crossings. But we have a plan that is feasible, with a little 

Federal help, to get to 79 miles an hour going to Portland. 

Now, that doesn’t sound like any big deal, but guess what? If we 

can do that, I won’t be driving my car to Portland any more because about every other time now there is an accident, there is a 

delay, it is so congested. That will be faster than I could make it 

on an optimal day. That is a viable plan. But it is going to take 

26 

continued partnership with the Federal Government, and more 

planning. 

This is where we are looking for some Federal help. We are looking at using that old electric rail line, our heritage, which is now 

a Class II railroad and not very frequently used, and upgrading 

that to have true high-speed rail. So we have a short-term plan 

with the power, with the plan to do the at-grade crossings, with the 

plan to partner with the main line to improve the speeds. 

And we have had growing ridership, despite the pathetic speeds 

we get now. I rode the train up to Portland last year. It took 21⁄2

hours. If we get to 79 miles per hour, we are going to do it in an 

hour and 30 minutes or less. So, you know, we cannot break faith. 

I got this corridor designation working with a guy named Al 

Swift who used to be in Congress. We were one of the first of five 

high-speed rail corridors proposed in the country, back when nobody wanted one. Well, guess what? Everybody wants one now. It 

is kind of funny that this is such a bad idea, yet everybody in 

America wants one of these things. My State has finally gotten on 

board with some investment, in partnership with the Federal Government. Washington State has done a much better job. And it 

isn’t just the Portland to Vancouver, to correct one thing; it is the 

Eugene to Vancouver, B.C., vision that we put in place back then. 

But it is going to take a little patience, and a little more time. 

We spent 70 years ignoring and destroying the rail system in this 

country. And we are only in the second year of trying to rebuild 

it. Now, I don’t want to just throw money willy nilly, but for people 

who have good plans in a region that isn’t only the Northeast 

United States—which, by the way, last time I checked has relatively declining population compared to States in the West; I 

think they are losing representatives all through that region, so I 

think that means we are growing faster. 

Yes, it is congested, and yes, I want to help them. But we got 

to help the rest of the country, too, especially the parts that are 

growing faster, where the problems aren’t as expensive to deal with 

before we become that congested. 

So, Mr. Secretary, if you have any response to any of that, I 

would be happy to hear it. 

Secretary LAHOOD. Well, Mr. DeFazio, on the Buy American, we 

certainly thank you for your support and your leadership on highspeed rail. On a number of other transportation issues you have 

been an outstanding leader, and we appreciate your support. 

Mr. DEFAZIO. Thank you, Mr. Chairman. 

Mr. SHUSTER. Thank you, Mr. DeFazio. And again, the gentleman from New Jersey piped up down there and said, ‘‘Congestion, density, population density, that is where high-speed rail 

needs to focus on.’’ And I have no—if you have a good plan, as I 

said to the Secretary, and as the Secretary pointed out, the Keystone Corridor makes sense. I went to the Secretary because I support that and said, ‘‘Let’s spend money where it makes sense.’’ So 

it is about where—making sense. And I don’t hear people all over 

the country clamoring for high-speed rail. In some parts they do, 

but it is not something that is a phenomenon happening all around 

the country. 

27 

And with that, who is next in the lineup? The gentleman from 

Minnesota. 

Mr. CRAVAACK. Thank you, Mr. Chair. Thank you, Mr. LaHood. 

I appreciate your passion today. 

A big thing I have got a question on. I agree with you 100 percent. This is not a Republican issue, it is not a Democrat issue, it 

is an American issue. Because it is the American taxpayer that has 

to foot the bill, and that is one of the big things. To pay for these 

jobs and projects, to pay for these, the money has got to either be 

taxed, or it has got to be borrowed to pay for these projects. 

The high-speed rail makes sense where it is, you know, high-density areas. It doesn’t make sense in other areas. The high-speed 

rail is what the people want. I have heard you say this again. But 

we have to discern wants versus needs. It is imperative that we do 

that. 

How do you set your priorities? Especially when we have decaying roads, we have decaying bridges—in Minnesota we are a little 

sensitive to that—and we are trying to get NextGen off the ground, 

as well. How do you set your priorities of where we are going to 

spend the precious taxpayers’ dollar, and to which project? 

Secretary LAHOOD. Well, we set our priorities with our partners, 

and that includes the Congress, people that sit on this committee, 

people that sit on committees in the Senate, and our partners in 

the States, Governors and transportation officials. That is how we 

set our priorities. 

And, look it, we know there is not an unlimited amount of 

money. But in a country where you have a $3 trillion budget, over 

$3 trillion, you have to have priorities. And the purpose of the 

Transportation Committee is to set those. And we follow the guidance of Congress in—when you write a transportation bill, when 

you hopefully some day pass an FAA bill we can get to NextGen, 

which is a priority for us. That is our number one priority, when 

it comes to the FAA. We need a bill. 

So, I would encourage all of you, before the next deadline, pass 

a 5-year bill. We haven’t had a long-term plan for 51⁄2 years. We 

set our priorities with you. That is where we get our priorities. 

Mr. CRAVAACK. You said a $3.5 trillion budget; $1.6 trillion of 

that money is borrowed. Forty-seven percent of our debt is foreignowned. Thirty percent of it just ticked up recently to the Chinese. 

You say you are concerned about the next generation, but you seem 

to have no problem about putting the burden of the expense of 

these projects on the back of the next generation. That is what I 

am very concerned—that is why I came to Congress. I am concerned about how much money that we are placing on the next 

generation. 

In 2025 Medicare, Medicaid, Social Security, and the interest 

that we pay on the debt is going to take 100 percent of the revenue 

incurred by the United States. So my question is, do we want to 

increase—are you saying to pay for these projects we should increase taxes to pay for it? Should we borrow more from foreign entities that really don’t like us that much? Or should we be able to 

analyze what is a need and what is a want in this great United 

States, and make sure we take care of our roads, make sure we 

28 

take care of our bridges, and make sure that we don’t have airplanes flying into one another and congested airports. 

Now, I understand the difference between a want and a need. 

And right now, what I don’t see is a dramatic need to create a 

high-speed rail system throughout the United States at this point 

in time in some rural areas, where they just don’t need it. 

For example, in between Duluth and Minnesota, if you want to— 

Minneapolis. If you want to put a high-speed rail that goes in between there, you better leave another car for a boat, because every 

third car that is on that 35 Highway that is going up and down 

between Duluth and Minnesota has a boat behind it, because people go up there for tourism. They are not going to take the train 

between Minneapolis and Duluth for that. 

Now, I understand it is a sensitive issue. My—again, sir, as a 

leader, as the Secretary of Transportation of this great country of 

ours, I ask you to put that in part of your purview in making a 

package of what we, as the American people, need to spend our 

money on, and what we are willing to ‘‘indebt’’ future generations 

of this great country to pay for, because that is exactly what we 

are doing. A newborn baby born today this very second, their part 

of the bill is 50 grand. Since I started campaigning about 21⁄2 years ago, that has gone up $5,000. 

So, that is just my message to you, sir. I look forward to any response you may have. 

Secretary LAHOOD. You have—you all decide what the priorities 

are, pass the transportation bill, figure out where the money is 

coming from, and we will follow your guidance on this. 

Mr. CRAVAACK. Thank you very much, sir. And I will yield back. 

Mr. SHUSTER. Thank the gentleman. And Ms. Johnson from 

Texas. 

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

and thank you, Mr. Secretary, for being here. 

I have listened with interest and understand full well these are 

very, very austere times. But I am also trying to find a project that 

yields response before investment. In my judgment, you have to 

make the investments first, but there has to be some project that 

this—especially the Republicans—think we can do without revenue 

first. 

Can you give me an example of how we can enhance revenue and 

create jobs without first making an investment? 

Secretary LAHOOD. Well, if we continue to make investments 

with transportation dollars, we know that that creates jobs. It 

doesn’t just create projects, and it doesn’t just solve transportation. 

It does create jobs. The one thing we know creates jobs would be 

a transportation bill, an FAA bill, either one of those. And we hope 

you all will pass both of those, soon, so we can get America back 

to work. We know what we do puts America to work. 

Ms. JOHNSON OF TEXAS. Thank you. I believe that very sincerely. 

But it appears to me that many of the people on this committee 

think that we can get all that done without first making an investment. 

Secretary LAHOOD. You have to make the investment. 

Ms. JOHNSON OF TEXAS. Thank you very much. Thank you, Mr. 

Chairman. 

29 

Mr. SHUSTER. Mr.—oh, excuse me. 

Ms. BROWN. Do you yield the rest of your time? 

Ms. JOHNSON OF TEXAS. I would like to yield the remainder of 

my time to Congresswoman Brown. 

Ms. BROWN. Thank you. Mr. Secretary, yesterday I mentioned in 

my presentation that Talgo announced that they were closing down 

the Wisconsin manufacturing plant because of what has happened 

in Milwaukee. Is there anything that we can do to encourage them 

to relocate in areas where we are making some investments? 

Secretary LAHOOD. Well, I know there are a lot of Governors 

that are trying to encourage them to come to their States. So we 

will see where they end up. 

Ms. BROWN. But, do you think at this point they are just going 

to shut down? 

Secretary LAHOOD. I didn’t see that news account, Congresswoman, so I don’t know much more than what you have just told 

me. But I know there are Governors that have talked to Talgo 

about relocating. 

Ms. BROWN. Yes. I mean the point is when you have these companies that want to invest, invest in the United States, they want 

to partner—I mean we talk the talk, but the point is, when we are 

shutting down and cutting programs, it is just not worth the investment. That is what they are telling me—particularly what has 

happened in Florida—over and over again, where it costs money to 

even apply to be partners. 

And, you know, it is a long-term investment. And when we cut 

it off, it is a problem for them. They can’t trust the Federal Government as real partners—or necessarily the Federal Government; it 

is the State, you know—— 

Secretary LAHOOD. I think that these companies that I have 

talked to from China or Japan or other places in Europe, they 

think we are pretty good partners at the Federal level. 

Ms. BROWN. Yes, sir. 

Secretary LAHOOD. And I think, as these Governors approach 

them from different States, they will have to make a judgment 

about whether it is in their best interests to do that. 

Ms. BROWN. Thank you. OK, I yield back. 

Mr. SHUSTER. The gentleman from New Jersey, Mr. Sires. 

Mr. SIRES. Mr. Secretary, first of all, let me just say I never had 

the pleasure of serving with you here. But now that you are here, 

and your passion and determination and your commitment to 

transportation, it is commendable. 

Secretary LAHOOD. Thank you. 

Mr. SIRES. I wish I had served with you. 

Secretary LAHOOD. Thank you. 

Mr. SIRES. And I have to say that, as someone who has been a 

local official and worked on a local issue of transportation, I hope 

the—this focus on speed rail does not take us away from passenger 

rail. It seems to be a big focus. Because in my district, passenger 

rail has been a godsend. 

I remember being a local official in what they call the Hudson 

Bergen Light Rail. And all the comments that were made about 

where we were going to get this money, how long is it going to be, 

I have to tell you it has been the best thing that has happened in 

30 

my district. Because growth along all the stations is immense. Jersey City has just—it is the gold coast. And it is all because the 

light rail—Hoboken, New Jersey, there was just one part was developed, now the west part of it, because of the light rail, that 

moves people around and takes you into the city. 

I know we had a little incident with the tunnel going into New 

York recently—I hope you don’t hold that against us when we do 

the next tunnel, because the driving engine in my region is New 

York City, in terms of creating jobs. People come as far back as 

Pennsylvania into New York City. 

And one of the things—you know, people talk about debt. I have 

to tell you. I was sick when I first got here, voting on—there was 

a vote for the war in Iraq, where we were placing $100 billion for 

5 years, infrastructure construction in Iraq. And my district, it 

needs all the infrastructure money it can get. And we are spending 

$100 billion when they are going to blow it up 3 months later, and 

not paying for it. 

I mean those are the kind of things that just make me sick, you 

know, when we talk about this debt that we incurred. I just feel 

that, you know, the creation of jobs, transportation, areas that really need it certainly are a worthwhile investment. And, obviously, 

what is $50 billion today is going to be 60 tomorrow. But if it creates jobs, it brings business to the area, where the business hire 

people, I think it is an investment that America cannot miss. 

So, I don’t really have a question. And I love the fact that we are 

buying stuff made in America. I think that really tops it off. So let’s 

invest not only in passenger rail, but also freight. You know, the 

Lincoln Tunnel in New Jersey now is $12 to get through. And they 

had a big billboard—and I think I told this to the chairlady—just 

before going into the tunnel, and it had President Lincoln on it. 

And you know what the billboard said? It said, ‘‘President Lincoln. 

A great President. Lousy tunnel.’’ And now it is $12. So you can 

imagine how important this was to have light rail, passenger rail 

bringing people into the city. 

So, I commend you for your determination. I commend you for 

your—you know, I can see why the President picked you. Thank 

you very much. 

Secretary LAHOOD. Look it. New York and New Jersey are the 

transportation Meccas in terms of airports, in terms of rail, in 

terms of highways, and also in terms of light rail. We are going to 

continue to make investments. 

One of the things that I told Governor Christie, when he and I 

finally agreed on how we were going to resolve the ARC project, 

is—because he said something that—similar to what you just said. 

We have big transportation needs, what he said, and he said, ‘‘I 

hope you don’t—this issue with the ARC and our disagreement 

doesn’t disadvantage us.’’ 

And my statement back to him was, ‘‘Absolutely not. Where we 

have Governors and mayors and congressmen and Senators that 

want to get something done on transportation, we will be a partner.’’ And we are going to continue to be partners in New Jersey, 

because New York and New Jersey has huge, huge transportation 

issues. And where we have leadership, like we have now in the 

New York Governor’s office, and in the New York mayor’s office, 

31 

and in offices all over New Jersey, including Members of Congress, 

and in the Senate and in the House, you will have good partners 

with us. 

Mr. SIRES. Thank you very much. 

Mr. SHUSTER. Just—you talk about New Jersey and New York 

and some of the problems they face there. Seventy percent of the 

chronically delayed flights come out of that air space across the 

country. So high-speed rail in the Northeast Corridor, getting some 

of these flights out of the air from Washington to Boston, Washington to New York, would be a great help to the air space. 

Secretary LAHOOD. Mr. Chairman, you just made the case for 

passing an FAA bill. 

[Laughter.] 

Secretary LAHOOD. If we want to get to NextGen, we don’t need 

any more extensions. 

Mr. SHUSTER. I am all—— 

Secretary LAHOOD. We have had 22 extensions. We have gone 

51⁄2 years beyond the time of the last bill. We need an FAA bill. 

I hope you will pass it. 

Mr. SHUSTER. We did pass it in the House. I think a couple of 

times we have tried to do that. But we are all committed to passing 

that, because I agree with you 100 percent. 

And with that, I yield to Mr. Denham 5 minutes. 

Mr. DENHAM. Thank you, Mr. Chairman. Mr. Secretary, again, 

thank you. I am looking forward to getting the plan on how this 

money is going to be invested. I would ask that you submit that 

to us before next week’s hearing, which is specifically on California 

high-speed rail. 

On the overall picture of transportation funding, you had said 

something I found interesting. I am a freshman here. This is my 

first year, my first transportation bill. I do believe that Congress 

should have a set of priorities. And certainly Congress should have 

a pool of money for transportation projects. I do believe that improving our infrastructure can create American jobs. 

But you had mentioned Congress presenting that, coming up 

with the presentation. I would assume, just like in California, 

when I served in the State Senate, the Governor comes up with his 

proposal on priorities, that the administration would come up with 

a list of priorities on what you think the transportation projects 

should be across the Nation, and how money should be best spent, 

as well as where the revenue for that would come from. Do you 

have a plan on the overall transportation project? 

Secretary LAHOOD. Yes, sir. I will be happy to share it with you. 

It is a $550 billion plan that the President has put forth. It is a 

comprehensive transportation program, and we will be happy to 

share it with you. 

Mr. DENHAM. Thank you. And the pay-for on that? 

Secretary LAHOOD. The pay-fors will be included. 

Mr. DENHAM. So there is a revenue stream for—— 

Secretary LAHOOD. Absolutely. 

Mr. DENHAM. And do you—— 

Secretary LAHOOD. You want—do you want to get into great detail? I think it would be better if I just—I will share it with you, 

32 

and then if you want me to come and visit with you about it, I will 

be happy to do it. 

Mr. DENHAM. I would love to see it. I would love to—I would welcome the meeting. Can you give me just an example of the broader 

aspects? Are we—I don’t need to go line by line on the revenue, but 

I would like to at least get a good understanding of whether or 

not—— 

Secretary LAHOOD. Use of the highway trust fund, which has 

been diminished over the years, but is set aside for the use of 

transportation. It is the way we have always paid for it. And then 

there are some other provisions in there. And I don’t have them at 

my fingertips, but I will be happy to share them with you. 

Mr. DENHAM. How much is in the trust fund, currently? 

Secretary LAHOOD. How much is the trust fund? Well, look it. It 

fluctuates. I mean I don’t have the figure today. I will get it. I will 

put it on the record for you. I am sure one of those smart staff people up there knows exactly what the figure is. 

Mr. DENHAM. He says 220. So, ballpark, where does the other 

330 come from? 

Ms. BROWN. Excuse me—— 

Secretary LAHOOD. Congressman, I will be happy to share the 

revenue part of it with you, as well as the plan. Look it, if I say 

something here on the record and it is not quite accurate, somebody is going to point that out. I will share it with you, so I can 

get it accurate. 

Mr. DENHAM. OK. But are we looking at—I mean that is a big 

number. Are we looking at bonding? Tax increases—— 

Secretary LAHOOD. If—you asked me if the President has a plan. 

The answer is yes. Does he have the revenue to pay for it? The answer is yes, and I will be happy to share it with you. 

Mr. DENHAM. Thank you. 

Secretary LAHOOD. Actually, the committee has it. I mean we 

have submitted it. 

Mr. SHUSTER. I appreciate the gentleman’s questions. And again, 

we are going to have a hearing on California next week. 

And so, we certainly would look forward to making sure we have 

it. I don’t know for sure, but we would like to have it in our hands 

before next Thursday’s hearing. 

And with that, Mr. Capuano? 

Mr. CAPUANO. Thank you, Mr. Chairman. Mr. Secretary, again, 

thank you for coming and doing this today. 

I want to be real clear. I am a big supporter of high-speed rail. 

I particularly like the national long-term vision. I think it is the 

right vision, and I think it is the right goal to have. At the same 

time, it is also a goal, like anything else, that you and I both know 

can’t be achieved quickly. It is going to take some time, as the 

interstate highway system was done. It was done over a long period of time. And we are now into the next round of repairing some 

of the things we have. And for me, that is where the Northeast 

Corridor comes in. 

I understand fully well and support the concept of bringing rail 

all across this country, including intercity and everything else. But 

when it comes to the Northeast Corridor, the only way—and I 

guess here has been my concern—the problems that I have found 

33 

on the Northeast Corridor are like anything else. It is already in 

a—the most heavily congested area in the country, it is difficult to 

deal with some of these issues. 

Right now you are dealing with one of the most important ones, 

it is that junction in New York City. We talked about how New 

York impacts air traffic, but it also impacts rail traffic to a great 

degree. I will tell you. I ride the rail from Boston to New York, and 

as often as I go I don’t do it from Boston to DC because of the holdup in that New York area. It just makes the ride too long and too 

unpredictable. 

Some of the things you are doing are fine. Some of the things, 

however, will need national leadership from the FRA and others, 

which is not the natural bent. And I will give you an example. 

I mean if there is a stretch of rail in Connecticut that needs to 

be addressed, some people in DC want to see it as a Connecticut 

problem, when the fact is it is not. It is national problem, because 

it prevents Amtrak and others, the high-speed rail, from actually 

being a high-speed rail. 

Even as we have now, I will tell you—I guess they have stopped 

doing it, but I laughed the first time that I rode the high-speed 

rail, when they announced for a matter of 30 seconds that the train 

had hit a speed of 100 and whatever miles an hour, and then we 

slowed right down. And then we sat outside of Penn Station for an 

hour. Now, this is several years ago and, again, that is being addressed. 

But what I guess I want to say is as you are doing the long-term 

vision—and I also want to say one other thing before I forget it. 

As far as the amount of money that goes, you are never going to 

have enough money to do it. You know it and I know it. The demands we have for transportation are significant, we will never 

meet them. So I am not worried about how much. We will debate 

the how much in the greater scheme of things. But to me, the questions to you are most properly addressed in whatever it is you get, 

if it is $1, $1 billion, or $10 billion, what will you do with it? Priorities, that is the issue. 

Some of them you do need to come to us for, and I appreciate 

that and I agree with it. Some of them you don’t. And for me, the 

question is—and it is not really a question but a comment—when 

you do these things, I would strongly encourage you to talk to your 

people to let them know that sometimes a Federal vision, a national vision, requires national muscle to tell local and State people 

that these are the priorities you are going to have. 

If you have to go to a given State or a given region and say, 

‘‘This is what we are doing, because this is a problem’’—again, this 

junction that you are doing in New York, I can’t remember the 

name of it, is a classic example. It may not be seen as a problem 

by the very people in that State—in this case it would be New 

York—who say, ‘‘Well, it is not a problem for us, it is your problem.’’ It is the same thing—and I think that is the problem all 

along the Northeast Corridor, is that it was built not as a national 

rail. It has kind of become one over the years. 

But the only way to get through some of these things, and to 

make this money worth spending, is for the Federal Government 

to get in there and say, ‘‘Here is what we are doing. Here is what 

34 

we are doing now. This is the tunnel we are going to fix. This is 

the intersection we are going to fix. This is the holdup we are going 

to fix,’’ to actually take what we already have and make it into 

what it could be, which is a true—maybe not true, but as close as 

we can get to a true speed rail. And I know you are doing it, but 

I really just wanted to take my time to encourage you to do it 

more. 

And as far as the other projects go—and I am not even kidding— 

it is going to take many, many Members of Congress from my seat, 

and many, many Members—and many Secretaries of Transportation to get this done. In the meantime, as you are fighting, trying 

to get the California and the northwest and all the other projects 

done, as they get held up, as you have debates in California—the 

truth is, I don’t know how I feel about the California rail. I know 

there is issues, I have heard some of them. But rather than sitting 

and just pushing it, which you should do, in the meantime don’t 

let the others go south. 

And a classic example is the northeast rail. We had to wait, really, to get the scraps from other States to get much done. And there 

is still money that is not obligated, and there are projects on the 

Northeast Corridor that need to be done. And all I am saying is 

while you are fighting the—which I agree with—don’t let the existing structure go unimproved when we know what to do, and we 

know how much it is going to cost. 

And with that, Mr. Secretary, it is not really a question, more 

of an encouragement. 

And also a thank you. You have done it, I just want you to do 

it even more. 

Secretary LAHOOD. Thank you. 

Mr. SHUSTER. I know the Secretary had a hard stop about an 

hour ago, he got twice what he bargained for. But I just want to 

encourage them—— 

Secretary LAHOOD. Donna has been here from the beginning. 

Mr. SHUSTER. I know she has. And I just want them to know the 

Secretary has been here an hour longer than he—than we negotiated. So if you would ask your questions, we want you to have 

that time. But if you can put anything in writing to shorten it, I 

am sure he would appreciate it. 

Secretary LAHOOD. Take your time. 

Mr. SHUSTER. Go ahead. 

Secretary LAHOOD. Take whatever time you want. 

Mr. SHUSTER. Ms. Edwards, one of the great players of the congressional football team. 

[Laughter.] 

Ms. EDWARDS. Thank you, Mr. Chairman. 

Mr. SHUSTER. She played football, too. 

Ms. EDWARDS. Thank you. And—middle linebacker, thank you 

very much. 

[Laughter.] 

Ms. EDWARDS. Thank you, Mr. Secretary, and I appreciate your 

time and your passion, and I really do share it. 

I was looking at, you know, some of the numbers, and appreciate also that Maryland was a recipient of about $90 million for bridge 

work and tunnel work, as part of the Northeast Corridor. And 

35 

while I share the view and the passion of so many of our colleagues 

on this committee for the Northeast Corridor, I also understand the 

importance of creating a national vision. And we wouldn’t want to 

take away from that. 

I looked at the numbers for the initial grantmaking. First of all, 

about—you had $57 billion in requests for $8 billion that was available. I happen to have believed, at the time when we created this, 

that we needed to have more of an investment, because I knew 

that the demand was there. And I think that, from your testimony 

as well, speaks to the demand. 

I also note that of the $8 billion, the overwhelming majority of 

it actually did go to the Northeast Corridor, if I am correct in looking at those numbers. And so I am a little bit unclear—and I will 

just go right to the question—when the interstate highway system 

was developed, and the vision had to spread out across the Nation, 

I remember looking at a documentary several years ago about a 

small—the story of a small town that had fought tooth and nail not 

to be part of that highway system. And this documentary told the 

story of that town and how it died over time, because it wasn’t included in the vision. 

And so, I wonder if you could talk about the vision for a national 

rail system, with that in mind, and understanding that it is going 

to take us some time to get there, even though there are some profitable corridors in which to invest. 

And then, secondly, I would like you to address, if you would, 

why it is you think that the Northeast Corridor didn’t receive an 

application for private investment. I find that curious because, 

frankly, I have always thought that, really, if you want infrastructure as a Nation, that the citizens of Montana and Maryland ought 

to invest in our infrastructure as a Nation, and not necessarily be 

dependent on private investment. And so I am curious as to why 

the most profitable and dense corridor of our rail system didn’t receive applications for private investment. 

Secretary LAHOOD. I think that during the last 3 years there has 

been new leadership at Amtrak, and they have put a team of people together. And I think during that process maybe they were 

busy trying to straighten a few other things out. But now they 

have straightened things out. Ridership is way up, profits are up. 

They are making money. And I think that they understand that 

they need to find some other partners that can be helpful to them. 

But—and the other part of it is that the Federal Government has 

basically been the only partner that Amtrak has really had. And— 

but I think Amtrak now understands that they need to look around 

and see what other opportunities are there. 

I can—Congresswoman, I can cite you examples of light rail, bus 

service, streetcars, high-speed rail. If you build it, they will come. 

The ridership will be there. 

And all along these corridors, what happens is what happened 

along the interstate system. Lots of small businesses that hire 4, 

5, 6, 12 people. And these really become the opportunities for people all along these communities. These corridors, whether they be 

rail or streetcar or light rail or bus or high-speed rail become economic corridors, once they are there, because of all the people that 

36 

are using the services and the small businesses that pop up along 

train stations or next to train stations. 

And the classic example here in Washington, DC, is Dulles Airport. I am sure people thought whoever had an idea to build an airport out there, they thought that person was crazy. Why would you 

do that 50 miles from Washington, when you have an airport right 

in downtown Washington? And look what happened? Look at the 

corridor that exists there now. 

The Silver Line will be complete. But the Silver Line will be used 

mostly by working people who can’t afford a car or a gallon of gasoline, but are going to the airport to work, or going to one of those 

businesses that are along the corridor there. That corridor is a corridor of economic development, and those exist all over America, 

where people had good visions for what happens when you build 

a road, build a bus line, build a light rail, build a streetcar line, 

or whatever. 

Ms. EDWARDS. Mr. Secretary, thanks for your leadership. 

Secretary LAHOOD. Thank you. 

Mr. SHUSTER. Ms. Richardson. 

Ms. RICHARDSON. Yes. Thank you, Mr. Chairman. And, Mr. Secretary, let me start off by saying you looked quite dashing last 

night. 

Secretary LAHOOD. Thank you. 

Ms. RICHARDSON. Three quick questions for you, and one comment to my colleagues. 

First of all, I just want to remind everyone that all roads to glory 

always lead west. So we appreciate your efforts. And I thank Ms. 

Edwards for at least allowing California to stay on the map. 

Mr. SHUSTER. Will the gentlelady yield? Did you mean western 

Pennsylvania when you said that? 

[Laughter.] 

Ms. RICHARDSON. No, sir. I meant the real west, where the gold 

was found, and—— 

Mr. SHUSTER. Just want to check. 

Ms. RICHARDSON [continuing]. And you know, the shores of California. 

But my three questions are very brief. First of all, sir, my question is I know Mr. Denham—I had an opportunity to participate in 

a hearing with transportation with Mr. Mica. And initially in our 

proposal in California it started off that the segment would be in 

the Central Valley. There has obviously been multiple discussions. 

And it is my understanding that any future proposals has to include the Central Valley. 

Are you still, you know, committed that it has to be the Central 

Valley? Or is there openness to other potential routes? 

Secretary LAHOOD. It is the Central Valley. And again, this is 

not stuff we make up. We go to the stakeholders that have been 

involved in these projects for 15 years, and we take our cues from 

them. 

But we also have made investments in—we made a $450 million 

investment in Transbay. That is not in the Central Valley, by the 

way. It is at the other end. It is at the start. 

So the idea that we are just—this is kind of a dead-end thing in 

California is not accurate. We made a half-a-billion-dollar investVerDate Aug 31 2005 12:28 May 07, 2012 Jkt 000000 PO 00000 Frm 00046 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\12-6-1~1\71530.TXT JEAN
37 

ment in Transbay, which is in San Francisco, in downtown San 

Francisco, which is one of the demarcation points for the highspeed rail. Everything is not in the Central Valley, but we are in 

the Central Valley. We have made a commitment there. That is 

where people want us to be. And so until somebody tells us differently, or they have a different plan, that is where we are going 

to be. 

Ms. RICHARDSON. OK. I just wanted to clarify. My other two 

questions were not related, but I think very important, timely. 

If we have a CR, one of the things I found with the airports is 

that some jobs are not considered essential positions. And I went 

to a particular room where people, if there is an accident or a 

major issue—one lady was retiring and I was told that they weren’t 

able to backfill her position. 

Have you had an opportunity to reevaluate if there is any positions that are currently not listed as essential that could be included if—in the event our budget success is not as we hoped? 

Secretary LAHOOD. We need for Congress to pass an FAA bill. 

We do not need any more extensions. We simply do not. We need 

Congress to pass a transportation bill. We have gone 21⁄2 years beyond the last bill. There is nothing that we can do creative right 

now in transportation, because we are operating on a bill that expired 21⁄2 years ago. 

There are certain provisions that OPM uses to define essential 

employees, and that is what we go by. 

Ms. RICHARDSON. OK. And then my final question is regarding 

TIGER funding. I know we are in our second round here, and it 

is very positive, and State and local governments are excited about 

the opportunities. 

I just wanted to point out to you in my particular region it is my 

understanding that—like, let’s say if the Port of Los Angeles receives TIGER funding, then the Port of Long Beach, because it is 

within the same region, even though on its own merits they are the 

two largest ports in the country, Port of Long Beach would be 

somewhat in a disadvantage, because of some of the wording. Are 

you familiar with that concern? 

Secretary LAHOOD. Well, a port would not be disadvantaged if 

another port got a TIGER grant. 

Ms. RICHARDSON. OK. It is my understanding in the funding—— 

Secretary LAHOOD. You know, I would just say this. We are right 

in the middle of our deliberations. I don’t know if these ports have 

submitted TIGER grants or not. But I really shouldn’t be talking 

about specific projects, but I will say this. A project will not be disadvantaged because of its proximity to another project. 

Ms. RICHARDSON. OK. That was not what was communicated 

to—— 

Secretary LAHOOD. Well, if I have it wrong, I will correct the 

record and I will get back to you this afternoon. I will check it out. 

Ms. RICHARDSON. Thank you sir, and thank you for your service—— 

Secretary LAHOOD. Thank you. 

Mr. SHUSTER. And if—the gentlelady from Florida has one question I believe she wanted to—— 

38 

Ms. BROWN. Thank you. Thank you again, Mr. Secretary, for 

coming, being so gracious with your time, particularly on your 

birthday. I want to say happy birthday. 

Secretary LAHOOD. Thank you. 

Ms. BROWN. And I do want to mention—I didn’t mention it earlier, because I didn’t think it was appropriate, but you did look 

very nice last night. 

Secretary LAHOOD. Oh, thank you, Ms. Brown. 

[Laughter.] 

Ms. BROWN. Goodness. But the last question. The GAO report 

mentioned that the good grantsmaking process was very transparent, and you all did a good job. They did make some recommendations. Many of my colleagues want to tell you where to 

put different, you know, funds and how to do the grants, and we 

don’t like the way you’ve done it, then we have some problems with 

it. 

Do you want to say anything to that? Because I think you all did 

a yeoman’s job. And I mean you have been just such a bright spot, 

I have to tell you—— 

Secretary LAHOOD. We have tried to make these decisions based 

on the merits of the projects. And—but look it. As a former Member of Congress, I know these projects are important. And I am not 

offended at all when a Member of Congress calls me to put in a 

plug for their project. And—but they all get fair consideration. 

And I am very proud of the fact that the $48 billion that we got 

under economic recovery has all been spent. And there hasn’t been 

one bad story about this money. There were no boondoggles, no 

earmarks, no sweetheart deals. We created 65,000 jobs with 15,000 

projects. I am proud of that. 

It goes to my point: Transportation creates jobs. You pass a 

transportation bill, a lot of friends and neighbors will go to work. 

We proved it with $48 billion, all spent correctly, all spent by the 

way Congress told us to spend it. 

Ms. BROWN. I think one of the problems is for the first time ever 

in the history of the United States you have people that really 

don’t want America to succeed, really don’t want to put people to 

work, because we know that if we invest in transportation for every 

billion dollars we spend, we generate 44,000 jobs. And for the first 

time ever, we have a committee that is just not committed to putting people to work. 

And my position is let’s get to work. Like you say, let’s pass the 

FAA bill. Let’s pass the transportation bill. Let’s put American people to work. Thank you so much for your leadership. 

Secretary LAHOOD. Thank you, thank you. 

Mr. SHUSTER. It is always good to have the gavel, because you 

get the last word. And there are people in this Congress that want 

to put America back to work, we just don’t think that the Federal 

Government spending money helped to create jobs. In fact, we have 

got a tremendous debt crisis. You know, our financial house is in 

disarray. There is incredible uncertainty out there amongst our 

small businesses. That is why they are not investing in their businesses. 

So, you know, there is a group of us up here that really want to 

see America succeed, because we know that the Federal GovernVerDate Aug 31 2005 12:28 May 07, 2012 Jkt 000000 PO 00000 Frm 00048 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\12-6-1~1\71530.TXT JEAN
39 

ment is not going to be the job creator, it is the private sector. But 

there are things the Federal Government is charged to do that we 

should do and we should invest in, and one of those is transportation. That is why I am on this committee, because I believe. 

If only that stimulus bill that was passed would have really been 

serious about creating jobs, serious about rebuilding our infrastructure, we wouldn’t be having this discussion here today. We would 

probably be slapping each other on the back and saying what a 

great job it was we rebuilt this highway, we rebuilt that, we expanded this, we built that. I mean it would have been a tremendous story to tell, if we would have spent just maybe $250 billion 

out of the $800 billion, instead of $60 or $70 billion, depending on 

how you calculate it. 

So, again, there are those of us in Congress that really want to 

put the American people back to work in a meaningful way that 

will be sustainable, and that is by keeping taxes low, putting regulatory certainty out there, and investing in transportation and infrastructure. 

So again, Mr. Secretary, thank you for spending your birthday 

with us. You got twice what you bargained for. And again, I will 

have to concur with my colleagues. You did look dashing last night. 

[Laughter.] 

Mr. SHUSTER. So again, happy birthday, and thanks for coming. 

And the next panel, as soon as the Secretary makes his way from 

the table, we will get you set up for the next panel. 

Ms. BROWN. Excuse me. I do want to tell you that the Talgo 

news—yes. 

Mr. SHUSTER. Are we missing Mr. Geddes? Mr. Geddes missing 

in action out there? Well, we are going to go ahead and get started. 

But yes, we are going to go ahead and get started with our second 

panel. 

And then our second panel is made up with the Honorable Joan 

McDonald, who is the chairperson of the Northeast Corridor Infrastructure and Operations Advisory Commission; Mr. Ken Orski, 

editor and publisher of Innovation NewsBriefs; right on cue, Mr. 

Richard Geddes is the adjunct scholar at the American Enterprise 

Institute. And Ross Capon, the president and CEO of the National 

Association of Railroad Passengers. 

Thank you all for being here with us today. And with that, we 

will start with Ms. McDonald. You may proceed. And please keep 

your testimony to 5 minutes. Thank you. 

TESTIMONY OF JOAN MCDONALD, CHAIR, NORTHEAST CORRIDOR INFRASTRUCTURE AND OPERATIONS ADVISORY 

COMMISSION; KENNETH ORSKI, EDITOR AND PUBLISHER, 

INNOVATION NEWSBRIEFS; R. RICHARD GEDDES, ADJUNCT 

SCHOLAR, AMERICAN ENTERPRISE INSTITUTE; AND ROSS B. 

CAPON, PRESIDENT AND CEO, NATIONAL ASSOCIATION OF 

RAILROAD PASSENGERS 

Ms. MCDONALD. Good afternoon, Mr. Chairman, Representative 

Brown, and members of the committee. I am Joan McDonald, commissioner of the New York State Department of Transportation 

and chair of the Northeast Corridor Infrastructure and Operations 

Advisory Commission. 

40 

The commission is made up of 18 commissioners representing 8 

States, the District of Columbia, U.S. DOT, and Amtrak. Another 

five States, four freight railroads, and one commuter agency are 

nonvoting representatives. We all bring unique perspectives to the 

table. We all agree the Northeast Corridor and its connecting feeder services are critical transportation assets, and are closely tied to 

the economic future of the entire northeast region. 

As has been mentioned earlier today, the Northeast is the densest region in the Nation. It is home to 4 of the 10 largest metropolitan areas, generating 20 percent of the U.S. GDP. However, this 

density creates significant transportation challenges for the region. 

Some 260 million commuter and intercity riders, and an estimated 30 million ton-miles of freight are moved over the corridor 

each year by more than 2,200 daily trains. The service we have 

today is not enough to meet the future needs of our region and our 

Nation. The corridor is congested in many locations, and demand 

for rail service is growing. 

For much of its history, the Northeast Corridor has suffered from 

underinvestment. We now face a considerable backlog in state-ofgood-repair needs that require billions of dollars of investments. 

Amtrak’s Northeast Corridor master plan estimated that $52 billion is needed over the next 20 years, just to maintain reliable 

service for all users of the corridor. 

Addressing capacity needs beyond 2030 will add substantially to 

that total. While our corridor’s needs are significant, there is not 

a clear consensus long-term vision for the future of the corridor. 

The charge of the commission, as we see it, is to bring together diverse interests, develop a unified, long-term vision for the corridor, 

and establish that consensus on a plan to secure the public and private investments needed to implement the vision. By coming together to coordinate these activities, the States, Amtrak, and the 

Federal Government can achieve a level of success that far exceeds 

the potential reach of any individual entity. 

Critical to the process is the passenger rail corridor investment 

plan being led by the FRA in cooperation with the commission, the 

Northeast States, and Amtrak. The Northeast is a compelling market for high-speed rail service, and compares favorably to other nations that have successful implemented high-speed rail. The question we need to answer is: What is the right path forward? And 

how do we fund it? 

The commission’s approach is cooperative, fact-based, and nonideological. We will look to do what is best for the long-term economic growth of the northeast region. We will seek opportunities 

to partner with the private sector, while ensuring that the public 

interest is protected. 

The Northeast Corridor benefitted from the $1.3 billion in capital 

funds appropriated to Amtrak in the economic recovery act, and received another billion dollars in high-speed rail program grants. 

And I must add that during that process each State endorsed the 

other States’ proposals for consideration to U.S. DOT. These 

projects are creating jobs and helping to improve rail service. 

In my home State of New York, under the leadership of Governor 

Cuomo, we are advancing a number of important projects on the 

Northeast Corridor mainline, and our empire corridor, an imporVerDate Aug 31 2005 12:28 May 07, 2012 Jkt 000000 PO 00000 Frm 00050 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\12-6-1~1\71530.TXT JEAN
41 

tant feeder. One of my short-term goals, as chair of the commission, is to facilitate close cooperation between FRA, the States, and 

Amtrak, to ensure that all of these projects move forward as quickly as possible. 

Despite the importance of the funding we have received so far, 

much more is needed. The commission is working to identify priority projects that need to move forward as soon as possible. 

On behalf of my fellow commissioners, we appreciate this committee’s strong support for the Northeast Corridor, and look forward to working with you. A strong Federal partnership is critical 

to our success. Thank you, and thank you for the opportunity to 

testify today. 

Mr. SHUSTER. Thank you, Ms. McDonald. 

And with that, Mr. Orski. 

Mr. ORSKI. Thank you, Mr. Chairman, for the opportunity to testify before you. As requested, I shall only briefly summarize the 

key points of my testimony. The committee, I believe, has my full 

statement. 

Mr. Chairman, let me state at the outset that I do not question 

the merits of or the need for the intercity passenger rail service, 

nor do I question the desirability of high-speed rail, a technology 

that I believe we should pursue in this country. What I do question 

is the manner in which the administration has gone about implementing its $10 billion initiative. 

The administration’s first misstep, in my judgment, has been to 

misleadingly represent its program as ‘‘high-speed rail,’’ thus conjuring up an image of bullet trains cruising at 200 miles per hour, 

just as they do in western Europe and the Far East. In reality, the 

administration’s rail program will do no such thing. A close examination of the grant announcements shows that, with one exception, the program consists of a collection of planning, engineering, 

and construction grants that seek incremental improvements in existing facilities of Class I freight railroads in selected corridors 

used by Amtrak trains. 

Now, those improvements may result in some cases in top speeds 

of 110 miles per hour. But the average speeds will increase only 

modestly. Average speed is a more accurate measure of performance and service quality than top speed, for it determines trip duration, which is, after all, what really counts, from a traveler’s perspective. 

Had the administration candidly represent the HSR program for 

what it is—and that is an effort to introduce useful but modest enhancements in existing intercity Amtrak services—it would have 

earned some plaudits for its good intentions to improve train travel. But by pretending to have launched a ‘‘high-speed renaissance,’’ 

when all evidence points to only small incremental improvements 

in speed and trip duration, the administration, I believe, has suffered a serious loss of credibility. Its pledge to bring high-speed rail 

to 80 percent of Americans is not taken seriously any more. 

The administration’s second mistake, in my opinion, has been to 

fail to pursue its objective in a focused manner. Instead of identifying a corridor that would offer the best chance of successfully deploying the technology of high-speed rail, and concentrating resources on that project, the administration has scattered $9 billion 

42 

on 145 projects in 32 States. Indeed, the program bears more resemblance to an attempt at revenue sharing than to a focused effort to pioneer a new transportation technology. 

Ironically, the Northeast Corridor has received scant attention. 

And yet, as other witnesses and members of the committee have 

pointed out on repeated occasions, this is where high-speed rail has 

the best chance of succeeding. It is probably the only rail corridor 

in the Nation that has all the attributes necessary for viable highspeed rail service, and it is also the only corridor where passenger 

trains do not have to share track, and thus are not slowed by 

freight traffic. 

Now, to its credit, the administration belatedly recognized the 

potential of the Northeast Corridor, and made some useful grants. 

Now, these grants are a small beginning in what will hopefully become a restructured high-speed rail program refocused on the 

northeast program—corridor. 

Finally, a comment about the role of the private sector. As Chairman Mica and you, Mr. Chairman, have observed more than once, 

there is a clear need for substantial financial participation by the 

private sector, in view of the constraints of the Federal and State 

budgets. The density of travel in the Northeast Corridor and its 

continued growth should, in principle, generate sufficient stream of 

revenue to attract private capital. 

However, this is still an untested hypothesis. We simply do not 

have enough experience with public-private partnerships in the 

passenger rail sector to confidently predict the response of the private investment community, its assessment of the risk, rewards, 

and expected rate of return on investment in such an enterprise. 

Thus, I believe that an early step, Mr. Chairman, in the process 

should focus on thoroughly exploring the potential of private financing and ascertaining the private investors’ interest in this venture, both domestically and internationally. And this, I might add, 

should include an examination of the lessons learned from the 

Channel Tunnel project, the largest rail infrastructure project totally financed by the private sector. Thank you, Mr. Chairman. 

Mr. SHUSTER. Thank you, Mr. Orski. 

And with that, Mr. Geddes, you are recognized. 

Mr. GEDDES. Thank you, Mr. Chairman, and all the members of 

the committee, for inviting me to once again appear in this hearing. 

My name is Rick Geddes, and I am an associate professor in the 

department of policy analysis and management at Cornell University, and a visiting scholar at the American Enterprise Institute. 

Let me state from the outset that I am a firm supporter of highspeed passenger rail in the United States, and those corridors and 

on those routes where it makes economic sense. Such corridors are 

likely to have the population densities, the proven ridership or the 

indications thereof, and the public transportation options at stations necessary to yield positive social benefits to additional investment. 

The hearing today focuses on concerns about recent attempts to 

expand high-speed rail through the High-Speed and Intercity Passenger Rail Program. I believe that two errors were made. The 

first, which has been highlighted, is the issue of trying to spread 

taxpayer funds out over too many projects across the country, rathVerDate Aug 31 2005 12:28 May 07, 2012 Jkt 000000 PO 00000 Frm 00052 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\12-6-1~1\71530.TXT JEAN
43 

er than focusing resources on improving existing corridors with 

demonstrated demand. The second was in not creating the institutional structure and public policies necessary to attract and retain 

private investment. I wish to discuss each of these in turn. 

The social returns on investing in high-speed rail are likely to 

vary widely across different possible routes. In particular, the market population must be sufficiently dense to support high-speed 

rail. And for several reasons, the Northeast Corridor is likely to 

yield the highest social returns to additional investment. 

First, population densities in areas served by the Northeast Corridor are very high, with over 50 million people living in the corridor, even though it represents only 2 percent of the Nation’s 

landmass. 

Second, one of the main concerns in constructing any new highspeed rail line is forecasting ridership. This issue has not been discussed today, and I think it is critical. How is ridership going to 

be forecast? The record of ridership forecasting for new passenger 

rail lines around the world is very poor. The estimates typically are 

overestimated, while the costs of construction are typically underestimated. This has been documented in detail by a professor at 

Oxford University, Bent Flyvbjerg. Ridership in the Northeast Corridor is known. So only changes in ridership induced by new investment need to be estimated. A major hurdle is thus already overcome. 

Third, much of the necessary right of way is already in hand. Although additional right of way may be needed to accommodate improved high-speed rail service, this greatly reduces uncertainty regarding the cost of installation. Uncertainty surrounding both the 

costs and the benefits of additional investment in the Northeast 

Corridor are low, relative to new lines. 

Fourth, cities along the Northeast Corridor, such as Washington, 

New York, and Boston, feature well-developed local transit systems 

that facilitate passengers’ use of intercity passenger rail systems. 

These considerations all suggest that scarce public dollars should 

be directed first to making much-needed improvements to highspeed passenger rail in that corridor. That is likely to—where the 

marginal returns are the highest. 

In my view, the second concern was a failure to create the institutional structures necessary, and to focus on those structures to 

attract private investment to high-speed rail, and instead relying 

almost exclusively on taxpayer funding. There are many advantages of including private participants, which I outline in my written testimony. Private investment, I believe, can play a major role 

in improving passenger rail on the Nation’s entire network. But I 

believe it is important to separate the Northeast Corridor financially from the rest of the system, because that corridor is most 

likely to be able to operate without subsidies, without operating 

subsidies, and because the rest of the system operates mainly on 

freight train tracks, unlike the Northeast Corridor. 

On the Northeast Corridor I believe a public-private partnership 

should be structured so that firms wishing to operate passenger 

rail service would bid against one another on the basis of the size 

of an upfront concession payment for the right to operate. That upVerDate Aug 31 2005 12:28 May 07, 2012 Jkt 000000 PO 00000 Frm 00053 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\12-6-1~1\71530.TXT JEAN
44 

front payment could then be used to help fund necessary improvements to the infrastructure on the corridor. 

This approach is also fair, since future riders would effectively be 

paying for the physical infrastructure improvements that they 

would be using. Private investment in passenger rail infrastructure 

can also be used on other parts of the network. But the nature of 

the bidding must change. That is why I believe it is important to 

do the Northeast Corridor separately. I am happy to explain that 

later. 

Future efforts to improve high-speed passenger rail in the United 

States should focus on attracting private investment and on first 

renovating existing routes, where I believe the social returns to the 

next dollar of investment are the highest, rather than on constructing a—or trying to construct a number of new lines. Those returns are likely to be highest for renovations and improvements on 

the Northeast Corridor. 

To mitigate taxpayer costs, improve performance, and enhance 

innovation, the private sector should be engaged as a full partner 

through public-private partnerships, and I believe that is possible. 

Thank you once again, and I look forward to answering your 

questions. 

Mr. SHUSTER. Thank you, Mr. Geddes. 

And with that, Mr. Capon, who has been here before a number 

of times. Good to have you back. You may proceed. 

Mr. CAPON. Thank you for having me back. Thank you, Mr. 

Chairman and Ms. Brown. I wanted to acknowledge the presence 

of the volunteer chairman of our association from Fort Myers, Florida, Bob Stewart. 

Perhaps the most singular ‘‘lesson learned’’ is that it takes a Federal partner to advance passenger train improvements. In our view, 

it was essential that a substantial part of the funds in this program go to upgrading conventional services. In spite of pleas from 

the States for over 15 years, Federal funds generally have not been 

available to support State investments in conventional intercity 

passenger trains. One exception, a happy exception, is the Keystone Corridor, where Amtrak was able to match, dollar for dollar, 

I believe, Pennsylvania’s investment. And that became a success 

story. 

But back in 2002, AASHTO put out a fairly thick book, their first 

report on intercity passenger rail transportation, that documented 

the many conventional corridors around the country that were crying out for investments. President Obama, when he launched this 

program, made it clear that part of the funds would go to upgrading conventional service. The administration also, of course, made 

an effort, in Florida, California, and more recently the Northeast 

Corridor, to do ‘‘true’’ high-speed rail. 

But back to conventional rail. The need for conventional rail as 

an important part of the transportation network is illustrated both 

here and abroad. There is a table on page 2 of my statement that 

shows that in France, where they have a well-developed TGV highspeed rail system, the non-TGV share of intercity rail is 70 percent. 

That reflects the fact that it is the network that counts, and highspeed rail works, as I think the chairman has pointed out, where 

45 

there is a network not just of commuter trains, but also of connecting intercity trains. 

In this country, California’s three conventional corridors, the 

ones that exist today, account for 18 percent of all Amtrak passengers. The Downeaster, I think, deserves particular mention— 

this is the train between Boston and Portland. Before this train 

started running, so many people said it would be a flop. It was too 

slow. It wouldn’t go to Boston’s South Station, it wouldn’t go beyond Portland. It makes too many stops. And today, it is considered 

very successful. In fact, I have heard that a major reason that— 

the second major reason that Massachusetts students go to University of New Hampshire is because of the accessibility that the Durham station on the Downeaster line provides to the university. 

The conventional rail projects also improve the freight network 

because the added track capacity that results from these projects 

is available 24/7, whereas the passenger trains are not using those 

tracks 24/7. 

The elimination—the trends in the aviation industry underline 

the growing need for passenger trains. And just on November 29th 

it was reported that as Southwest Airlines gets out of the Pittsburgh-Philadelphia market, the nonrefundable round trip fair for 

US Airways apparently is going to jump from $118 to $698. 

I have heard people talk in Ohio about how they really wish 

there was a train to take from Columbus to Cleveland, especially 

when they are trying to drive on a nasty day. 

Nearly 90 percent of the portfolio, as the Secretary’s written 

statement points out, is invested in five key corridors. So I don’t 

see this as revenue sharing. I see this as being concentrated, for 

the most part, on conventional lines that desperately need and 

have been waiting for improvements. A lot of this investment is 

just beginning to take place. And the silver lining, as I point out 

in my written statement, is that at a time when a lot of cries are 

heard for more stimulus, the rail program is just starting to generate valuable jobs in a much bigger way. In fact, North Carolina 

DOT has a chart that shows that 2013, 2014 is going to be when 

employment for its rail projects peaks. 

The GAO report said that the administration ‘‘established a fair 

and objective approach for distributing these funds and substantially followed recommended [grantmaking] practices used throughout the Government,’’ and that ‘‘an application’s technical review 

score was largely the basis for the selection deliberations.’’ So we 

think that the administration did, on balance, a good job. 

The fundamental problem that we have, as you have pointed out, 

is the shortage of money. But that is just as much a problem with 

the Northeast Corridor. If 100 percent of the money had gone into 

the Northeast Corridor, people would still be looking at the price 

tag on getting the job done, and they would see a gap between 

needs and available funds perhaps even bigger than the gap that 

has already been observed with regard to California. 

But we commend the committee for holding this hearing and for 

its tremendous interest in intercity passenger rail, and we look forward to working with you as the program goes forward. 

Mr. SHUSTER. Thank you. Thank you very much. And with 

that—before I go to Ms. Brown—let Ms. Brown start the quesVerDate Aug 31 2005 12:28 May 07, 2012 Jkt 000000 PO 00000 Frm 00055 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\12-6-1~1\71530.TXT JEAN
46 

tioning—just your last, very last point there. I believe that if you 

take care of the bridges that cross New Jersey to New York, you 

take care of the Baltimore Tunnel, and you take care of the catenaries on the Northeast Corridor, I have been told you can reduce 

the time from New York to—from Washington to New York by 15 

or 20 minutes. And if you are—when you get 15 or 20 minutes, you 

get more—I think you start to incrementally also get more people 

riding the train. So I think that that is a step in the positive direction. 

You know, obviously, it is going to be a big bill to do the Northeast Corridor the way it is. But I think along the way—and I will 

give you a chance to rebut that, if you want to, but—— 

Mr. CAPON. OK. 

Mr. SHUSTER [continuing]. Let me get Ms. Brown first to go 

ahead. 

Ms. BROWN. Thank you very much. I am going to start with Ms. 

McDonald. I think this is the second time I have heard you or 

someone from your organization this year, because I came up to 

New York for the hearing. And let me just thank you all. 

You know, when I listen to my colleagues, or experts that is, they 

call themselves experts on the discussion, they act as if the Northeast Corridor is just one area. How many different cities, communities, groups are involved? And they act as if they can just go into 

these communities that are already developed and just say, ‘‘Well, 

we are going to run through there at 200 miles an hour.’’ They 

don’t have a clue. And it is not my job to give them a clue. 

Ms. MCDONALD. Well, you know, we are in a Federalist country, 

and we have—as I stated, the commission has 18 members. It is 

a collection of eight States, the District of Columbia, U.S. DOT, and 

Amtrak. And I think, you know, in a part of the country that is 

very much home rule-oriented, the fact that these States come together, and major cities in this country—Boston, Philadelphia, New 

York, Washington, Wilmington, Baltimore, and work collectively for 

the corridor is extremely important, because when you get on a 

train you don’t know when you are crossing a State line. 

You know, when you get on a road, you don’t know if it is a State 

road or a local road. It is the transportation network. And the 

Northeast Corridor commission is looking at it as a network, and 

it is highly critical that we keep that message clear. 

Ms. BROWN. And I agree with you. I mean I was in Connecticut, 

I was able to get on a train at 5:00 in the morning or 6:00 in the 

morning and go to New York. The key is not just how fast it will 

go. In the testimony that I have heard, it is knowing that it is 

going to be there at a certain time every day. Reliability. 

And that is—and it is also homeland security. I mean when we 

had 9/11 or other incidents, the only thing that was moving was 

the train. 

Ms. MCDONALD. And to that point, reliability is a key factor on 

determining whether someone will take a train or not. And as I 

mentioned in my testimony, on the corridor it is 2,200 trains a day. 

And that includes freight rail, commuter rail, and intercity passenger rail. 

Ms. BROWN. And the key is to keep it separated. Keep it safe. 

47 

Ms. MCDONALD. The key is to keep it reliable and safe. That is 

correct. And it is—and as many people have said today, when the 

goal on a high-speed rail line—it is an average speed—is to make 

sure that when you say you are going to leave your destination at 

a certain point in time and arrive at your final destination, that 

that reliability is there. 

Ms. BROWN. Yes. And of course, when I have been on trains in 

other countries, that has also been the key. They run a certain 

speed going into the cities, but it is different when you are out in 

the countryside. But they also have it separated so that cars can’t 

integrate into the system. There are many factors. 

If we could fix some of those tunnels, which is very expensive, 

that would cut down on the time. And bridges. 

Ms. MCDONALD. Yes, in the Northeast we have some of the oldest infrastructure in the country, and—except for the tunnels, 

which have their own interesting challenges, we suffer from severe 

weather changes. So all those are factors. And, as I mentioned, the 

disinvestment that has occurred over the last decades contributes 

to why the need is so great. 

Ms. BROWN. Thank you. Mr. Capon, I have a question about the 

Talgo—the announcement that I mentioned. Talgo is shutting 

down its Milwaukee train. This was announced yesterday in the 

Milwaukee paper. And we are going to lose 4,700 jobs because Governor Scott Walker rejected Federal funds for the high-speed rail 

line between Milwaukee and Madison when he took office. It is 

worth noting that he went back and tried to apply for a portion of 

that $810 million he had earlier rejected. 

Can you give me some insight as to what we need to do, dealing 

with the politics of the time and the investment that let’s say this 

company made or the community made in bringing this, the Talgo, 

to this community? 

Mr. CAPON. Yes. Well, I was actually at that plant within the 

past 2 months. And I believe the city of Milwaukee put $22 million 

into restoring it. It was an old automobile plant, I believe. And obviously, we disagreed with the Wisconsin Governor’s decision. 

I think that one of the things—one of the most encouraging 

things that I have seen in the 30-plus years I have been doing this 

job—is the number of places where trains have become established 

and accepted where they didn’t exist 10 or 20 years ago. And in 

fact, we earlier this year gave our Golden Spike awards to the two 

Republican Senators from Maine, because of their strong support 

of Amtrak and the Downeaster. 

Downeaster is a classic example of a service that did not exist 

before 1991. Mainers were watching the legislation that the House 

Appropriations Subcommittee had this year that would have eliminated the ability of Amtrak to provide any support for the Statesupported trains. I got a phone call on Sunday night November 

13th from a Portland, Maine, reporter—just before the appropriations deal was announced—who was—you know, just wanted to get 

any glitter of information he could, because the Downeaster is such 

an important fixture up there now. 

So, my theory, the best success is success. In other words, if we 

have more and more Downeasters, more and more people that have 

trains in their lives, that makes it much harder to turn it into a 

48 

partisan issue, which—I think really did happen in Florida, because we heard, you know, about high-speed rail for 15, 20 years. 

Ms. BROWN. Thirty, sir. 

Mr. CAPON. Thirty. 

Ms. BROWN. Thirty. 

Mr. CAPON. Excuse me. And then all of a sudden in the last—— 

Ms. BROWN. I was—30. 

Mr. SHUSTER. Could you wrap up, please? We want to get to the 

next questioners. 

Mr. CAPON. The last X months it was no longer ‘‘high-speed rail,’’ 

it was ‘‘Obamarail.’’ 

So I think that getting more of these projects going, and getting 

more satisfied customers is the key, ultimately, to getting more 

support. 

Mr. SHUSTER. Thank you very much. 

Ms. BROWN. I agree with you, and thank you very much. 

Mr. SHUSTER. Thank you. 

Ms. BROWN. And let me just say I am going to figure out what 

we are going to do. Because when we invest taxpayers’ dollars, we 

have got to make sure that we have a way of recouping, and taking 

the politics out of it. 

Mr. SHUSTER. That is awfully tough to do, but we will work with 

you on that. 

Ms. BROWN. Thank you. 

Mr. SHUSTER. A question for—first of all, the—my colleague from 

Florida brought up that it is not always about speed, it is about 

reliability. And I was—related to me that the folks at Virgin Rail 

that run one of the western rails from Manchester to London, 

they—it is—one of their lines, it was about an hour and 15 minutes, and they thought they could get it down to 55 minutes by 

some improvements. So as any good company that provides a service to people, went to their customers and said, ‘‘Hey, we want to 

reduce the time from an hour and 15 to 55.’’ 

And overwhelming, the response came back as, ‘‘No, we don’t 

want it to be less than that,’’ and it perplexed them. So they looked 

at it even closer. Well, why, exactly? And the average commuter 

said, ‘‘An hour and 15 minutes gives me time to get on the train, 

get my coffee, set up my computer, and I get about an hour’s work 

done. If you have 55 minutes, I get my coffee, I sit at my computer, 

I got maybe 40, 35 minutes.’’ So they rejected it. 

So, it is not always about speed. It is about the service, the reliability, what makes sense to the traveling public. So you know, I 

think that is an important point that my friend from colleague 

pointed out—or my friend from Florida pointed out. 

My question first is just a yes or no to all of you, just yes or no. 

Do you believe that Amtrak needs significant reform? It is a yes 

or no. If you don’t think—it is a question of significant reform. I 

will take that as a—— 

Ms. MCDONALD. I can’t say maybe? 

Mr. SHUSTER. No. 

Ms. MCDONALD. Yes. 

Mr. SHUSTER. Mr. Orski? 

Mr. ORSKI. Yes. 

Mr. SHUSTER. Geddes? 

49 

Mr. GEDDES. Yes. 

Mr. SHUSTER. Mr. Capon? 

Mr. CAPON. No. 

Mr. SHUSTER. I believe it does. And you know, it is—and we can 

talk about a lot of the underinvestment over the years, and there 

has been some significant underinvestment. But we still need to 

find ways—one of my colleagues today pointed out about the fact 

that you buy a hot dog for $4.50, and it costs them $6 to produce 

it. I mean that is just stupid, if we are operating a business like 

that. So, I believe that it needs significant reform. 

Mr. Orski, you have said—and I agree with you, and I wonder 

if you could talk a little bit about the administration 25 years, 80 

percent. That is really a false expectation. Based on what they 

have been doing over the past year, can you—do you still have that 

same thought, or do you think it is worse? What are your thoughts 

on that? 

Mr. ORSKI. Yes, Mr. Shuster. I do think that, had the administration candidly represented the HSR program for what it is, it 

could have earned some credit for doing useful things by improving 

rail service incrementally. Its biggest mistake has been to really 

hype the program to represent it for what it really is not. It is not 

a high-speed rail program, it is a program of passenger rail improvements which, in themselves, are a useful measure. But it is 

certainly not what the administration and the President himself 

had represented from the very start. 

Mr. SHUSTER. I agree with that. Mr. Geddes, in your study—one 

question I ask. I don’t know if you have looked at this, but you 

talked a little bit about forecasting, its poor forecasting. Do you 

know and have you looked at when they are forecasting, do they 

take price elasticity into their equation to determine if people are 

going to ride or not ride? At what price they are going to ride or 

not ride? 

Because I have been on the Keystone—I ride the Keystone Cor- ridor. And in prime time it is $39 one way and in off times it is 

$29. And I have just, you know, sketched out the cost for me to go 

to Harrisburg to Philadelphia, what it costs me in the car with 

parking and all those things. And it seems to me that they could 

raise the price. And especially the business—the traveling business 

people are going to pay $5, $10, $20. 

So, in your looking at Amtrak and pricing and forecasting, do you 

know if they take price elasticity into figuring that out? 

Mr. GEDDES. Yes. Thank you, Mr. Chairman. I think that there 

are actually two different academic literatures that we would be referring to. One is the literature on forecasting ridership for a new 

project, sort of a mega-project, and what would the likely ridership 

be on that. The other literature would be regarding exactly what 

you are referring to of price elasticities on existing lines. And suppose we were to raise the price by 10 percent. How many riders 

would we lose? And would that increase or decrease our revenues? 

So I am certain, you know, there is a literature for passenger rail 

on elasticities. 

But there is this other literature that I am referring to in my testimony that has been reviewed exhaustively by Bent Flyvbjerg at 

Oxford about we are going to build a new big project. What do we 

50 

expect the ridership to be? And then he goes back and looks at 

what the actual ridership was. And he finds that many of the ridership projections were wildly overstated. And particularly relevant 

for today’s discussion is that they were most overstated on a lot of 

the passenger rail projects. So you have to be very, very careful 

about the ridership projections for new passenger rail projects. 

Mr. SHUSTER. Right. And I think you were all here for the Secretary. I don’t believe the Secretary is making up any of his numbers, but I believe the folks in California on the high-speed train, 

they are making stuff up. Because I have seen, you know, their— 

the price they are charging is low, the numbers are inflated. I 

mean it is crazy. So I think that is a real problem, and across the 

board with Government. When the Government is involved in pricing things out, they never get it right. 

Mr. GEDDES. I am happy to follow up with any elasticity information—— 

Mr. SHUSTER. Sure. 

Mr. GEDDES [continuing]. That would be helpful. 

Mr. SHUSTER. I thank you. I appreciate it. Now, you mentioned 

about bidding, the bidding process. Can you expand upon that? 

Mr. GEDDES. Yes, certainly. So one of the key things in publicprivate partnerships is how the bidding is conducted, what the nature of bidding is. And what I was suggesting in my testimony is 

that a logical approach to bidding for the Northeast Corridor on the 

right to operate the trains—a concession—you mentioned Virgin 

Rail in the UK, and you know, that would be an example of a private operating company that could come in. And Amtrak could be 

another bidder, as well. Perhaps a concession might last 10 years, 

or something of that nature. But you would lay out all the terms 

of service in detail. 

Reliability has been a point of emphasis here. You could lay out 

exactly what schedule you want, with enforceable penalties and rewards for bad or good performance, and then bid on the basis of 

which company will give you the biggest up front concession payment. 

I am thinking about some lease—this is not fantasy, this has 

been done on toll roads around the world where, you know, there 

is an existing toll road. You get an upfront lease payment in exchange for a private operator to operate the road. And I am suggesting in this case to use that lease payment to help improve the 

infrastructure in the Northeast Corridor. And the effect of that is 

to have future riders paying for the infrastructure improvements 

that they will be using, which I think is an inherently fair approach. 

Now, bidding off the Northeast Corridor may have to take a different structure, because I don’t believe that the other non-Northeast Corridor routes are self-sustaining, even in an operating cost 

type of a sense. Some people would say, ‘‘Oh, well, you can’t use 

a public-private partnership in that case.’’ Well, that is false. You 

can still use a public-private partnership, even if it requires an operating subsidy. It is simply that the nature of the bidding for the 

PPP has to change. 

Mr. SHUSTER. Right. 

51 

Mr. GEDDES. You bid on the basis of the lowest subsidy you will 

accept, rather than the biggest payment you will make. And that 

has a wonderful, I think, public policy outcome, in that you get not 

only transparency in exactly what the subsidies are, but you get 

the least subsidy, the smallest subsidy you need to operate that 

route. So taxpayers, in effect, get the most value for money through 

this bidding type of approach, even on non-Northeast Corridor 

routes. 

Mr. SHUSTER. Well, thank you for that. And I am going to have 

another round of questions for myself. So, Mr. Capon, I am going 

to give you, the next time, an opportunity to rebut me. 

And with that, Mr. Cravaack, if you—— 

Mr. CRAVAACK. Thank you, Mr. Shuster. Mr. Capon, you claim 

that if—in your testimony—that if the high-speed rail program focused solely on the Northeast Corridor, national support and enthusiasm for the program could not have been sustained. 

So, are you saying that the program was correct to spread the 

money thinly over numerous projects in the interest of garnering 

political support, rather than focusing on the Nation’s best opportunity to actually have a high-speed rail system? 

Mr. CAPON. Well, I am saying two things. I am saying if all the 

money had gone to the Northeast Corridor, you would not have 

begun to address the list of projects that Mr. Shuster just asked 

me about. The magnitude of the needs in the Northeast Corridor 

are that great. 

Number two, I am saying that, as the Secretary said, 90 percent 

of the money went to five major projects. There are small amounts 

of money that went to States to start rail plans that don’t have rail 

plans, which I think is worthwhile. But that was a tiny fraction of 

the money. The 90 percent of the funds, the five projects are the 

Pacific Northwest, the Cascades, the California routes, the Midwest, the Northeast to North Carolina. These are all projects— 

these are all lines that are heavily used, heavily used trains where 

the improvements are needed. 

And I can agree that some of the rhetoric that the administration 

has used does not track, as he said, with all of these projects. But 

that does not mean that the projects are not worthwhile. 

Mr. CRAVAACK. Fair enough. And I am all for making sure that 

our Federal dollars are spent in the right places. Whatever makes 

sense, let’s go into—explore that. What doesn’t make sense, I think, 

we are wasting the Federal dollars. 

And I have a—I am kind of curious. In March of 2011 the GAO 

noted that the Federal Railroad Administration applied its established criteria for weighing the merits of rail projects during the 

eligibility and technical reviews. But the GAO could not verify if 

this criteria was used for the final selection process, because the 

rationale given for the final selection was typically vague. 

In your testimony, you described how the GAO found that the 

FRA established a fair and objective approach for distributing act 

funds and substantially followed recommended discretionary grand 

award practices used throughout the Government. 

To clarify, or perhaps reconcile, do you know how these priorities 

were set in this administration’s decision to award high-speed rail 

funding? 

52 

Mr. CAPON. First of all, the stuff that I said was—were quotes 

from the report. But I realize that—— 

Mr. CRAVAACK. Right. 

Mr. CAPON [continuing]. It was also the points that you made. I 

do not know the details of that. I know, from having worked this 

job for over 30 years, where the States had established successful 

programs, and when the money goes to those programs and I see 

the ridership generated—intuitively, it looked like commonsense 

good decisions. But I can’t give you the nuts and bolts answer that 

I think you were looking for. 

Mr. CRAVAACK. Right. OK, great. This fiscal climate kind of alluded to Secretary LaHood. Where do you propose the Federal Government obtain the funding for this ongoing Federal commitment? 

I mean we committed $1 billion to Amtrak. I mean that is a commitment, as far as I am concerned. But where you find, in regards 

to what our debt is, how do we justify spending hard-earned American taxpayer dollars into rail projects—and I don’t mind doing 

that, providing it makes common sense. And that is my—so where 

do you think we should be able to get the funding? Right now we have a $3.5 trillion budget. And unfortunately, $1.6 trillion of that money is borrowed. In 10 years we are handing 

our children a $23.5 trillion debt. That is what we have done. 

Mr. CAPON. Right. 

Mr. CRAVAACK. So we have to be very judicious with our—with 

the American taxpayer dollars, and not spend ourselves—we are in 

the shadows of Greece. We are in the shadows of Italy. And if we 

don’t have a viable economy and we do not have a Government 

that is not imploding, I mean these trains aren’t going to mean a 

thing. 

So, where do you see this funding coming from? 

Mr. CAPON. Yes. First of all, I heard two parts of the question. 

One is how do we justify the expenditure. And I think the justification for the expenditure goes to some of the points the Secretary 

made, in terms of the population growth that is expected, the fact 

that we can’t pave over the country and try to do this all with highways and aviation and still have a quality of life that is worth living. So I think that the justification is there. 

Now, where do you get the money? Everyone says that the gasoline tax increase is a nonstarter. But it is worth noting that the 

U.S. Chamber of Commerce is in favor of a gasoline tax increase. 

Also, Maryland just opened this toll road, the InterCounty Connector. I bought an E–Z Pass for my car, even though I only use 

it twice a year to cross the Bay Bridge. I firmly believe that tolling 

highways is another source of revenue that is going to be used a 

lot more. 

I am not necessarily in favor of what is entrapment, speed traps 

that are designed to raise revenue, but that is another issue. 

I could create, I guess, a lot of enemies by getting beyond transportation and talk about the subsidies in the energy field and agriculture. I mean I guess everyone has their list of somebody else’s 

ox that they would like to gore. But from a good Government 

standpoint I would say that, as an automobile driver, we are not 

paying our full share, and that that is one of the major potential 

funding sources. 

53 

And there was a TRB report, Transportation Research Board, 

from about 12 years ago that said where you could show impact on 

aviation congestion that you could justify using aviation user funds 

on high-speed rail development. 

Mr. CRAVAACK. Thank you, sir. My time has expired, I yield 

back. 

Mr. SHUSTER. Thank you. And with that, Ms. Brown for another 

question. 

Ms. BROWN. Thank you, thank you. I would just like to continue 

to say that this is transportation, and this is investment, and that 

is what we need to be doing here. I mean the fact is we have our 

debt—we ran two wars on the credit card, and all of a sudden we 

want to pay for it out of social security and transportation. And 

transportation is what puts people to work. And all of the economists indicate that what we need to do is invest and put people to 

work to grow the economy. 

But Ms. McDonald, let me just ask you a question. There has 

been a lot of criticism regarding the transparency of the program. 

Can you describe the New York experience? And would you agree 

that this is an example of good grantsmanship? Because basically, 

what experience did New York have in applying for the grant? The 

stimulus money, I think that is what we are talking about. 

Ms. MCDONALD. Sure. 

Ms. BROWN. That, you know, we need shovel-ready projects, as 

if you can go out and start digging before you do the environmental 

studies and other things that go into it. I don’t have time to educate the Members about what goes into having it ready. But if it 

is ready, then if there is funding, when it comes along, there is a 

lot of prior planning. None of this happened overnight. In Florida 

we have been working on high-speed rail for 30 years. All right. 

Ms. MCDONALD. Sure. New York State DOT released a rail plan 

which covered all aspects of rail, both freight rail, intercity passenger, and commuter rail in 2009. And that served as the basis 

of our requests for funding from Federal Railroad Administration. 

We actually found—and most of this process was initiated before 

my tenure began on February 1st of this year—we found the process extremely—I won’t say easy, but extremely straightforward to 

navigate, putting in the grant applications to the Federal Railroad 

Administration. What I applaud FRA on was the fact that for each 

grant that you were requesting, you had to identify service outcome 

agreements. And those are tied to whether they claw back the 

money or not in the future. 

And in New York’s instance, particularly on the Empire corridor 

between New York City and Albany, New York, that right of way 

is partially owned by Metro North Railroad, our commuter railroad, 

and partially owned by CSX. We had—— 

Ms. BROWN. I know. 

Ms. MCDONALD [continuing]. A very intense negotiation with—— 

Ms. BROWN. I know. 

Ms. MCDONALD [continuing]. CSX, Amtrak, and New York State 

DOT, and I am here to tell the committee that it was an extremely 

favorable outcome. And—— 

Ms. BROWN. Well, I can tell you it took a lot of work. 

Ms. MCDONALD. It did take a lot of work. 

54 

Ms. BROWN. It really did. 

Ms. MCDONALD. But I will quote our colleagues in FRA and some 

of my new friends at CSX Railroad that said this agreement that 

normally takes—a negotiation that normally takes 3 to 5 years we 

completed in 4 months. And it was with the guidance of FRA all 

along the way. So it was a very productive process. It will result 

in improvements to freight rail, and it will result in improvements 

to passenger intercity rail and commuter rail all along that corridor. 

Ms. BROWN. OK. Mr. Capon, I want to ask you that—you know, 

there is a lot of discussion about high speed, as if it was just one 

grants program. But it was high-speed and intercity passenger rail. 

Can you talk about the difference between the two? 

And do you happen to know how much the United States has invested in passenger rail compared to highway and aviation? Because it is just a lot of discussion about how rail doesn’t pay for 

itself. No form of transportation pays for itself, the last time I 

checked. It is the Government deciding that we are going to compete. And we are not competing in Florida with Mississippi and 

Alabama, we are competing with people from other countries. And 

it is important for us to understand the importance of moving 

goods, people, and service, and keeping them separated, and keeping it safe. 

Mr. CAPON. Difference between high-speed rail and what some 

people call higher speed rail, which is, you know, improving conventional, I guess there are different definitions. I think there is 

one in the Federal statute that is 110 miles per hour. 

The point I was going to make is that for the traveler, they are 

not necessarily looking at the top speed or the average speed, they 

are just looking at the running time. How long does it take me to 

get there? What does that tell you? That tells you that you can get 

a Seattle-Portland businessman on board a train at a lower speed 

than a Chicago-St. Paul businessman. 

And, by the way, when I first came to Washington, 3 hours was 

the limit. You know, you couldn’t get a businessman to ride more 

than 3 hours. I think the tolerance is now more than 3 hours. 

You asked also about funding. I think that there was actually an 

article yesterday where Senator Lautenberg said that the Federal 

highway spending last year of $40 billion was more than the Federal Government had spent on Amtrak in its entire history. And I 

think during that same period the Federal investment in highways 

was about—over $1 trillion. And there was actually a fact checker 

that said—check with the FAA—and gave the approval for the accuracy of what the Senator had said. 

Ms. BROWN. Well, sir, just don’t confuse us with facts up here. 

Thank you. 

Mr. SHUSTER. I thank the gentlelady for pointing that out to the 

witnesses. 

First of all, I will go to Mr. Capon, and you can rebut. As I think 

you said, talked about the Northeast Corridor, it is a massive bill. 

And my response was it is massive, but it is beneficial, I think, to 

take—if you are able to reduce it by 20 minutes with several billion 

dollars, let’s do it, and that will improve ridership and hopefully 

revenues. I believe it will. 

55 

So, you can rebut that—— 

Mr. CAPON. Yes, well—— 

Mr. SHUSTER [continuing]. But you can’t take my whole 5 minutes. I know you are passionate about trains, but be succinct. 

Mr. CAPON. No, I certainly support the investments in the Northeast Corridor. My point was the projects that you listed will go well 

beyond the $10 billion. 

And probably job one over everything is that some of the investments, including ones that you mentioned, if they don’t get done 

within our lifetimes, the corridor is going to collapse and shut 

down, and that would be the worst outcome possible. 

Mr. SHUSTER. Right. And that is why I think spending this 

money all over the country was wrong. It should have been focused 

where we get the best bang for the buck. 

And with that, I forgot Mr. Hanna. I apologize. I yield you 5 minutes for questions. 

Mr. HANNA. Thank you, Chairman. Mr. Geddes, what is the rationale behind allowing a company that is not financially stable, 

like Virgin Rail in Europe, of course, to bid on a project where you 

can’t predict the stream of income, either positive or negative, 

whether it is a subsidy or a pay-in by the company? How can you 

justify that when the—at the end of the day, the only backstop is 

the U.S. Government? 

Mr. GEDDES. Sure. I don’t want to comment on Virgin Rail’s financial condition, specifically, but—— 

Mr. HANNA. Better than Amtrak’s. 

Mr. GEDDES. Right. But in general, in terms of private involvement, I think your point is very well taken, because there is inherent risk in any investment, whether it is investment in maintenance and upgrades in a track, or investment in an entirely new 

high-speed rail line. It is always risky. 

The question—and the risk doesn’t go away simply because it is 

entirely public investment. The risk is simply borne on the back of 

taxpayers. The risk is still there. That is a critical point. It is just 

borne by taxpayers. When you include the private investor, you get 

equity investors, typically, who bear some of that risk in return for 

an expected rate of return. But they take some of the risk off of 

taxpayers and bear it themselves. Some projects will perform well, 

some projects will perform poorly. 

Mr. HANNA. Right, I get that. And that is kind of obvious. The 

point is, where do you go when the money is gone? How do— 

where—shouldn’t there be some threshold of capacity, some bond, 

some potential to go somewhere for that amount of money? 

Mr. GEDDES. You mean if the project fails—— 

Mr. HANNA. If the—— 

Mr. GEDDES [continuing]. And the private investor—— 

Mr. HANNA. If the project fails to make money, and the public 

demands the service, the Government is left with its back against 

the wall to pay the bill. 

Mr. GEDDES. Well, first, I mean, it would be like any typical hierarchy in a bankruptcy proceeding, where the first people to go are 

these—like equity investors. 

Mr. HANNA. But the point is—excuse me—you typically don’t let 

people in on a project that aren’t viable, regardless. To bid someVerDate Aug 31 2005 12:28 May 07, 2012 Jkt 000000 PO 00000 Frm 00065 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\12-6-1~1\71530.TXT JEAN
56 

thing—Ms. McDonald would not let a—someone bid a DOT road 

that didn’t have a bond, that wasn’t bondable. How do you come 

up—shouldn’t we be looking for companies—multinationals, perhaps—that are large enough to actually be the backstop, as opposed to the U.S. Government, over some—— 

Mr. GEDDES. Oh, sure—— 

Mr. HANNA [continuing]. Period of time? 

Mr. GEDDES [continuing]. Absolutely. Yes. I think you and I are 

in complete agreement on that. I believe we should be. And there 

are—I mean a lot of them are outside the United States. But internationally, there are very large companies that are—Transurban 

and Fluor are building the hot lanes on the DC Beltway. So they 

are the backstop. 

Mr. HANNA. Mr. Capon, do you—can you tell me how you would 

estimate the value of the pressure it would take off—and I apologize, as I am late, if you have already discussed this—the pressure 

this high-speed rail project would take off of, say, LaGuardia and 

Boston and the Thruway, and all the roads in between? 

I mean how do you add that value into what we can use to justify 

doing this? 

Mr. CAPON. You asking me? 

Mr. HANNA. Yes, sir. I am sorry. 

Mr. CAPON. Well, the overall transportation efficiency of the network becomes greater to the greater extent that air traffic—short 

distance air traffic is inefficient. The airline executives know it. 

And they are—they would love to have the slots at LaGuardia for 

longer flights. And if—so that if the proportion of short trips on 

taking on rail dramatically increases, that increases—— 

Mr. HANNA. No, obviously. But I am talking about the math 

itself. 

Mr. CAPON. OK. 

Mr. HANNA. How do you attach a value to that? Have you ever 

looked at that side of the equation? 

Mr. CAPON. The only thing I can tell you off the top of my head 

is that I know the German Government about 10 or 15 years ago 

did a fairly elaborate and forward-looking analysis of the rationale 

for their rail investment that I think guided some of the kinds of 

things that you are alluding to. 

Mr. HANNA. But it has not been done, that you know of? Do you 

know—something to look at, maybe. Thank you. 

Mr. CAPON. Thanks. 

Mr. HANNA. I yield back. 

Mr. SHUSTER. I thank the gentleman. I think that is an interesting point you bring up, and something we ought to look into. 

Ms. McDonald, I want to make sure I am clear. Your position on 

public-private partnership with the Northeast Corridor, is that 

something you support? 

Ms. MCDONALD. I do. I support looking at all alternatives—— 

Mr. SHUSTER. OK. 

Ms. MCDONALD [continuing]. For making it viable. 

Mr. SHUSTER. So I think it is—you are obviously—New York, you 

are on the commission—it is critical to make sure that New York 

is on board. Because I think, in the end of the day, it is—— 

Ms. MCDONALD. Yes. 

57 

Mr. SHUSTER [continuing]. Something we have to do. 

Ms. MCDONALD. And, you know, we—I think we, all of us that 

are in the transportation industry, we will be able to see the benefit of—— 

Mr. SHUSTER. Right. 

Ms. MCDONALD [continuing]. Of some of the successes and failures over the last 10 years of these public-private partnerships 

that—— 

Mr. SHUSTER. Right. 

Ms. MCDONALD [continuing]. Really looking at the revenue 

stream, and what it can generate, and what impact that has on 

fares. You know, some of the experience on the automobile toll side, 

the revenues haven’t realized—so a lot of interesting—— 

Mr. SHUSTER. Right. 

Ms. MCDONALD [continuing]. Issues that would need to be addressed. 

Mr. SHUSTER. And Mr. Orski, private companies being involved 

is critical? 

Mr. ORSKI. Yes. Very much so, Mr. Shuster. Nevertheless, I 

think this is still an untested hypothesis, that the private sector is 

willing and able to participate, let us say, in the Northeast Corridor. 

There is some experience, however, internationally. And I did 

cite to the Channel Tunnel, a project that was supported totally by 

private capital. So I would suggest that in any analysis of private 

participation in the Northeast Corridor, one of the first things we 

should do is investigate the interest of private investors, both domestically and internationally, in participating in the project. 

Mr. SHUSTER. Well, you are absolutely right. And that leads to 

my next and final question to Mr. Geddes. 

In your research, have you found out there are companies, private companies, interested in investing not only in the Northeast 

Corridor, but some of these other rail lines that we—I put in some 

language in legislation to go and find some of these nonprofitable 

lines and see if there is interest out there in the public sector—in 

the private sector. 

Mr. GEDDES. Yes. My research indicates to me that it is, in some 

sense, very mechanical. If the private sector investors are compensated for the risks that they are assuming, they will invest. 

And if they are assured of getting that—we are—typically here we 

are talking about long-term investment. This is not 1 or 2 years, 

this is a long-term investment. They have to be assured of getting 

that investment over that long period of time. That is why I emphasized the institutional structures that you need to make publicprivate partnerships work, particularly in something like passenger 

rail. 

But I believe it is almost mechanical, in the sense that if that 

return is offered to compensate for the risk that you are assuming, 

they will invest. And if it is not, they won’t. They will go look overseas, which is what—tragically, in my view—infrastructure investment in the United States, with the deepest and broadest capital 

markets in the world, is going to other countries. 

Mr. SHUSTER. Right. 

58 

Mr. GEDDES. China and India, we talk about them constructing 

infrastructure. They are building it through private investment, 

largely. 

Mr. SHUSTER. Right. And I have talked to some of these—Herzog 

is a company that is interested in the United States. Of course, 

Virgin Rail, they have been in to see me. Veolia, Keolis, all doing 

that. All—some of them have operations already in this country 

and they are up and running. 

So, again, I have got to get to another meeting, so I am going 

to end this. I appreciate all of you being here today. 

As long as you don’t filibuster me, Mr. Capon. I know you have 

a passion for passenger rail. Thirty seconds, go. 

Mr. CAPON. OK. I just want to make clear that my no answer 

to your question on Amtrak reform does not mean I regard Amtrak 

as a perfect organization. 

Mr. SHUSTER. That is—— 

Mr. CAPON. And I would like also to put something in the record 

for—in response to Mr. Hanna’s question. I think I may have something that—— 

Mr. HANNA. OK. 

Mr. CAPON [continuing]. That deals with that. 

Mr. SHUSTER. That would be great. Again, thank you very much. 

And I appreciate with respect to your passion for passenger rail. 

But you sometimes go on like a Senator. 

[Laughter.] 

Mr. SHUSTER. And in the House we have got the 5-minute rule, 

which I try to adhere to. 

Again, I want to thank all of you very much for coming today. 

I really appreciate you taking the time and helping to educate us 

here and bring us up to speed on some of these issues that we are 

discussing. 

So, again, thank you very much. And it is—I ask for unanimous 

consent for Members to submit statements and questions for the 

record within 3 business days. 

And with that, the meeting is adjourned. Thank you very much. 

[Whereupon, at 2:17 p.m., the committee was adjourned.] 

59 


Insert offset folio 7 here 71530.007
60 


Insert offset folio 8 here 71530.008
61 


Insert offset folio 9 here 71530.009
62 


Insert offset folio 10 here 71530.010
63 


Insert offset folio 11 here 71530.011
64 


Insert offset folio 12 here 71530.012
65 


Insert offset folio 13 here 71530.013
66 


Insert offset folio 14 here 71530.014
67 


Insert offset folio 15 here 71530.015
68 


Insert offset folio 16 here 71530.016
69 


Insert offset folio 17 here 71530.017
70 


Insert offset folio 18 here 71530.018
71 


Insert offset folio 19 here 71530.019
72 


Insert offset folio 20 here 71530.020
73 


Insert offset folio 21 here 71530.021
74 


Insert offset folio 22 here 71530.022
75 


Insert offset folio 23 here 71530.023
76 


Insert offset folio 24 here 71530.024
77 


Insert offset folio 25 here 71530.025
78 


Insert offset folio 26 here 71530.026
79 


Insert offset folio 27 here 71530.027
80 


Insert offset folio 28 here 71530.028
81 


Insert offset folio 29 here 71530.029
82 


Insert offset folio 30 here 71530.030
83 


Insert offset folio 31 here 71530.031
84 


Insert offset folio 32 here 71530.032
85 


Insert offset folio 33 here 71530.033
86 


Insert offset folio 34 here 71530.034
87 


Insert offset folio 35 here 71530.035
88 


Insert offset folio 36 here 71530.036
89 


Insert offset folio 37 here 71530.037
90 


Insert offset folio 38 here 71530.038
91 


Insert offset folio 39 here 71530.039
92 


Insert offset folio 40 here 71530.040
93 


Insert offset folio 41 here 71530.041
94 


Insert offset folio 42 here 71530.042
95 


Insert offset folio 43 here 71530.043
96 


Insert offset folio 44 here 71530.044
97 


Insert offset folio 45 here 71530.045
98 


Insert offset folio 46 here 71530.046
99 


Insert offset folio 47 here 71530.047
100 


Insert offset folio 48 here 71530.048
101 


Insert offset folio 49 here 71530.049
102 


Insert offset folio 50 here 71530.050
103 


Insert offset folio 51 here 71530.051
104 


Insert offset folio 52 here 71530.052
105 


Insert offset folio 53 here 71530.053
106 


Insert offset folio 54 here 71530.054
107 


Insert offset folio 55 here 71530.055
108 


Insert offset folio 56 here 71530.056
109 


Insert offset folio 57 here 71530.057
110 


Insert offset folio 58 here 71530.058
111 


Insert offset folio 59 here 71530.059
112 


Insert offset folio 60 here 71530.060
113 


Insert offset folio 61 here 71530.061
114 


Insert offset folio 62 here 71530.062
115 


Insert offset folio 63 here 71530.063
116 


Insert offset folio 64 here 71530.064
117 


Insert offset folio 65 here 71530.065
118 


Insert offset folio 66 here 71530.066
119 


Insert offset folio 67 here 71530.067
120 


Insert offset folio 68 here 71530.068
121 


Insert offset folio 69 here 71530.069
122 


Insert offset folio 70 here 71530.070
123 


Insert offset folio 71 here 71530.071
124 


Insert offset folio 72 here 71530.072
125 

Æ 


Insert offset folio 73 here 71530.073