>> when the imf economists were talking about a three speed global recovery, by which they meant the fastest growth still taking place in some of the emerging markets like china, but the united states now breaking away to some extent from the pack, notably from europe and japan, and we have had better performance. in the case of europe, it was about less than four years ago that the u.s. had the same

unemployment rate. today our unemployment rate is simplified and european rate is above 12. we would have done better than some of the countries. for a variety of reasons. but we are moving in the right direction, but i don't think we can be as satisfied given where the labor market is and given that we still have -- spank you caution in your statement that too much restraint to quickly continues to be the headwind that we may not want to get into, but we haven't addressed our longer-term problems. then you mentioned you thought the tenure wind might be too short to do that. some of us are looking now at something like more than 30 years, relative to where our growth will be relative to our debt. and particularly the enormous spike in mandated mandatory

spending, and the impact of that on interest rates and the economy. you have suggested before that, you have used a lot of the tools, most of the tools the fed has to get us through this period of time but ultimately the responsibility falls here and with the administration. and we have yet to i think summon the political will to address that long-term problem. my take is that begins in earnest in a relatively short period of time, maybe two or three or four years. so to me it would make sense that we begin to address it now. chairman klobuchar mentioned some of the earlier. could you expand a little bit more about what you think our responsibility is? because i am starting to do things like the fed is buying its time so, therefore, we don't need to take action right now. is the fed being and enabler for

an addiction that congress can't overcome? >> the fed is doing what congress told it to do, which is we're doing our best to try to promote maximum employment and price stability. congress needs to take a longer view. it's true that interest rates are quite low today and, therefore, the interest burden today is quite low. but when the cbo scores budget plans out for a decade or two decades, it assumes that interest rates are going to rise which we hope there will because that will be a suggestion that the economy is recovering and coming back to normal. in looking at those five and 10 and 2 20 year budget plans, they assume higher interest rates and you're going to have to deal with higher interest rate at some point, we hope, as the economy strengthens. i very much support your suggestion of having a longer horizon. i would note the 1983 or whatever it was social security commission, the reforms that were introduced then are still now being phased in. so 30 years later.

so some of these changes, very long lead times, make it much easier to achieve. >> lastly, your concern about the low amount of interest return and the risk-taking, or the reaching for yield, is this creating another potential bubble? there's a big surge in the market here that seems to be not, not enforced by underlying fundamentals. >> well, we are watching it carefully and, of course, nobody can ever say with certainty what an asset price should be, but to this point our sins is that major asset prices like stock prices and corporate bond prices are not inconsistent with fundamentals, for example, it was mentioned earlier that price earnings ratios and the like are

fairly normal in the stock market. in addition in thinking about risks to financial stability, you also had to look at things like leverage, credit growth and other indicators that suggest not only is there some miss pricing going on but that mispricing is the possibility of greatly damaging the broader financial system and we're not seeing that at this point. so at this point of course it's always again dangerous, but to predict, but our sense is that those issues are still relatively modest but they require very close attention, and we will continue to do that. >> we are glad you're doing that because we don't want a repeat of what happened. thank you, mr. chairman. >> thank you. representative of sanchez is recognized for five minutes. >> thank you, mr. chairman. and trendy thanks for being before us. we've had many years when you were the president's economic adviser and now as chairman. so i know that now you're

sitting as the chairman, but i have questioned the overall about our economy and i would still like to get your id on something in particular. i remember when chairman greenspan was before us and i talked to him about, i spoke to what i thought at the time a frenzy in the housing market, and right around the time he called -- the particulars of the markets, and, of course, since having left said i completely missed what was going on. so want to go back to houses, as i think housing is such an incredible piece of the americans at you, american families budget, their sense of wealth creation. because in many ways the first t step, it's tradition what we've used to make small businesses or put kids through college, et cetera. so this is what i see going on now.

around the nation in a lot of markets in particular in california, housing prices going up so everybody is cheering and everything, but what i see is foreign money coming in, my knees being bought as investments, banks fluffing off large amounts of homes, and putting them into hedge funds. these funds holding onto these, and anticipating a somewhat, five or 10 years down the road to get appreciation out of those assets are when markets i think, when going through the roof, and your average working family, at least where i live, is not able to buy a home because of, if you will, who have the money and the cash to come in and buy the home and in return, not flip it as we

saw in the last speculation housing market, but actually hold it at a higher rate for rent to these families who now are becoming, unless we change something, permanent renters. so housing market getting better, but not for the middle class or the higher lower income class. and almost chaining them i would say into the inability to find their way to homeownership. do you see that going on? to your people still going on in the different markets? and secondly, what can congress do to ensure, not the other way where we went wrong that too many people who shouldn't have been buying bought in, but what we would normally call the middle-class, people who should be tempting to buy a home, not

get caught in this cycle of i didn't get in and i didn't get a home? >> well, just a few comments. first, with prices having fallen about 30% and was very, very low mortgage interest rates, affordability right now is the highest it's been in decades your so there are people are able to buy now who could not abide under -- under other circumstances. mortgage lending i agree it's time so people in the lower part of the cycle distribution, i agree with that. on the red side many people of lost homes or otherwise -- ranked side, stopping homeowners have gone to renting and rents have gone up as you said. so it's probably a good market response that houses that were previously owned are now available for rent. that's adding supply to the rental market and will probably take pressure off of rents and reduce the risk that people have to pay that are forced to rent

spent excuse me a minute, mr. chairman. those people who have mortgage rates, working mortgages, and you know, we know that, a good amount of these people lost their job and that's why they were not able to continue their payments. but in most cases what i see in my markets are lower mortgage payments that they were making versus higher rental payments that are now being caught again because the family is not getting credit, or families can't get credit or even those who qualify with credit, you know, cash offers from particular foreign markets are, you know, wiping them off from being able to own them. so what i see for a family unit is a higher cost of housing effectively than what they had free this whole problem. >> well again, if you can get a mortgage, which i understand your question, the payments are low and affordability is high.

i agree with you, if this is your question i agree with you that mortgage lending is still too tight. there's a number of reasons for that, conservatism on the part of the banks, some uncertainty about regulation. there's still work to be done to clarify the securitization rules, for example, the need for gac reform and other things, fear of put backs that the banks still have. so i think over time, particularly as house prices go up a bit, that mortgage lending will become a little more accessible to a broader range of people. but right now it still relatively tight so i agree with that. >> chairman kohl all time is expired. senator lee? >> thank you, mr. chairman. and thank you, chairman bernanke. mr. bernanke, this quantitative easing on the margin tend to encourage private sector debt or

does it at least stand in the margin to discourage private-sector deleveraging? >> well, on the one hand low interest rates, you know, we do want people to spend a normal. we want them to be able to afford a house or a car and that's part of what will get the economy back to work. but on the other hand, as the economy strengthens, jobs are created, we get more income and interest rates are lower. so those factors overall help people he leverage. as you look at the david you see consumers have deleverage quite a bit over the past few years. >> does this quantitative easing facilitate or otherwise promote the accumulation of government debt? at least at the margin? >> by private citizens? >> no, no. does quantitative easing have an impact on the accumulation of government debt at least at the

margins make it easier for comment easy to acquire a lot of debt? >> to issue a lot of debt you mean. well, it does keep interest rates a bit lower in the short term although again what we're trying to do is, is get a stronger economy which will support higher interest rates going forward. and as i've mentioned, any kind of budgeting process that looks at even more than one year will have to take into account the cbo's estimates that interest rates will be rising over the next few years, and factor that in when you make your budgetary calculations or so i don't see how raising interest rates prematurely, you know, causing the economy to relapse back into recession would be helpful to fiscal policy. i think it's important for congress to look at the five and 10 year window and look at how interest rates are expected to move, and make decisions based on that. >> could extend quantitative easing does have these impacts that i've described, it does so

a sickly iway of encouraging consumption, isn't that sort of the aim of a? >> right. is not enough demand in the economy so does encourage consumption, yes. >> okay. was net equity extraction from homes and increased leverage a problem the last time the fed had very low rates for a really prolonged period of time, say in the 2000s? >> there was a lot of equity extraction from homes during that period. how much was due to the fed policy, how much was due to lax lending policies, some through the legislation is a debated question. >> did the excessive leverage, whatever its cause, tend to exacerbate the prices that arose in 2008? >> yes. >> did the fed identified the weakness in housing in the

mid-2000s and react to it? >> well, we saw that, if this goes back to my discussion with representative sanchez, we saw that the relationship between house prices and rents was very -- house prices were very high relative to rent. allspice restaurant guide so, therefore, it was always considered a possibility that house prices would come down. in fact, when i became chairman in 2006, housing prices are already coming down so yes, we certainly saw that as a possibility. what we did not anticipate was how much damage that would do to our core financial institutions as it did, and that led to the crisis. >> these things are hard to anticipate. would it be fair to say that debt can create risks that are by their very nature difficult to anticipate? and once they arise it's also

difficult to address? >> excessive leverage can create instability, that's correct, but as i said what we're seeing in households, and particularly incorporations, is a lot of deleveraging, much stronger balance sheets, more equity in the case of banks and firms than we saw prior to the crisis. >> so what would you say to those who might be concerned that we could be facing a similar crisis coming up as we saw, you know, in the mid-2000s? >> well first, icann, the indicators like asset price, house prices, leverage, credit growth, all those things look very different today than they did before the crisis. secondly, there's a whole lot of reform going on. very bad mortgages were being made as you know, and there's been a considerable amount of tightening up of the laws affecting consumers.

there have been considerable increases in the amount of capital that banks have doubled and so on, so a lot has been done. and i'm not saying this work is completely done but we've certainly done a lot to make the system more resilient. >> thank you very much. i see my time has expired. thank you, chairman bernanke. >> senator toomey is recognize for five minutes. >> just a quick sort of follow up on the nature of the very accommodating monetary policy. isn't it true as a general matter that very accommodating monetary policy has the tendency to the extent that is successful at all to bring economic activity that would otherwise occur in the future closer to the present day rather than to increase the total amount of economic activity that occurs over the long run? >> to some extent that's correct. but we have a situation now where, for example, homebuilding is well below what can be

sustained at a longer-term and so the more quickly we can get back to that more normal level the more quickly our economy will get something close to full employment. >> be that as it may come at a just think it's an important point to consider that accommodating monetary policy is not really a net growth strategy. it probably has a big impact on the timing of economic activity than the total amount. >> we are trying to mitigate the effects of the recession but we can't mitigate the effects of long-term growth, that's right. >> another point, just quick follow-up on senator coats and senator lee allude to asset bubbles that have occurred in the past. i think it's clear virtually everyone but a residential housing bubble in the last decade, and i just worry that this extremely accommodative and unprecedented policy can manifest itself in unpredictable ways, and when we see the recent

surge in housing prices, extraordinarily low yield on junk bonds, huge rally in equities, high agricultural land prices, it's not as you point out very hard to not having appointed him except what an asset ought to be worth, but it worries me that this is going to manifest itself in unpredictable ways. the last point i will just want to raise is it you've discussed the general strategy for exiting when that day comes, but always with the implication that to be this orderly transition. and i just, i know you're aware of this but i think it's important to underscore that it's hard to predict how the markets will respond when the biggest holder of fixed income securities industry of the world decides it has to sell the and you might decide judges to them. i know you may decide you can just let them run off but that may not be enough. and i just think there's very

significant risks that we're taking by a chelating a portfolio of this scale. you wanted to comment on that briefly? >> well, i don't disagree this is not easy and requires good comedic haitian. we've improved our communication -- >> by the way i would like to commend you for the. you have provided i think more transparency and more communication and more guidance than the fed to my knowledge has ever provided, certainly in recent history and i think that's extraordinary. >> thank you. i guess i would say there's no risk free strategy. inflation is 1% to a deployment is still high. so we could tighten monetary policy and address some of the issues that you have in mind. i think it would include big market correction if we move very quickly and unexpectedly. >> which might suggest monetary policies but it may be because the market thinks monetary policy is creating more profits and growth. >> a quick follow-up to comment you made in the past about

dodd-frank. i legislation to allow that much, not all that much of the activity this code required to be pushed onto the curb back in the banks, which i think is a better way for a financial institution to be addressed and a better way for him just to be able to use these products to do you still sure the it's a good idea to repeal parts of the swap push-up? >> yes. federal reserve had concerns about this prior to the enactment of the law. we still have concerns about it. >> the last thing i want to mention is, there are, august 9, only 11 minutes of an fomc meeting that contain notes on august 1 videoconferencing which there was a reference, i'm going to read both portion of, refers to quote plans that the federal reserve and the treasury have developed regarding the processing of federal -- potential applications for bank supervision, regular policies and possible actions the federal

reserve to take it disruptions to market function and post a threat to the federal reserves economic objectives. this is in the context of the debt limit and past. so clearly there were plans regarding how to deal with processing of their payments for instance, and other things. could you give us a sense of what those plans consist of and what you can tell us about those plans? >> well, my memory won't be complete but we look at our systems and our ability to make payments to principal and interest holders. for the most part we found were able to do that with a few possible exceptions, people holding savings bond and few things that are not as easily connected to the system. we also had some discussion of the kind of policy we would have with banks, for example, discount window lending, would

we accept the default of treasury and all kind of things that were contingency plan in case things were to happen. what we did not do was directly engage the private sector for any contingency planning. we were mostly looking at our internal systems and our ability to address whatever, whatever directions, we are the agent of course of the treasury and it's our job to do whatever they tell us to do. and just working to our capacity, both as an agent, managing the payment system, and also as bank supervisor to deal with a possible default, if the debt ceiling was not raised. >> i think -- i see my time has expired. thank you, mr. chairman. >> senator bob casey is recognizer five minutes. >> mr. chairman, thank you. vice chair, thank you. chairman bernanke, we're grateful for your presence here and your testimony.

and i have to say as well, the work you have done to do with a set of economic circumstances that we have rarely faced in american history, co brought not just a lot of focus but also a lot of passionate we appreciate it. we wanted to focus on one issue. i'm not sure it's been raised yet. it as i think it always bears even more examination. issue is tax reform. we have, if there's one area of real consensus in washington, and across the country, a lot of consensus, and here it happens to be bipartisan, that we've got assembled by the tax code, we've got to make it a much more workable tax system for individuals and for businesses, all kinds of ways to do that. the hard part is getting consensus in order to move forward. the good news here, i don't want

to overstate this but it's important to assert it, is that we have had to chairmen, chairman baucus and the finance committee, the lasso leaders and chairman camp, house ways and means, working together individually and their staffs to try to tackle this. and processes are mechanics underway in both places. for example, every thursday in the finance committee we sit down around the table for at least an hour or more, go to elements of the tax code. i think moving in the right direction. the challenge is getting consensus. the question i have for you, made you wanted to, the basic question is, can you give an opinion or a sass -- or assess the impact, i'm assuming it would be positive but i would like to hear about this, passage of a substantial bipartisan reform of the tax code?

>> well, first, i would just make the observation that such a major action taken on a bipartisan basis itself would be confidence inspiring. i think most everybody on both sides of the aisle agrees that the tax code is extreme the complex into stores economic decisions in a lot of ways. so i think if you were done in a way that simplified it, maybe more economically efficient and rational, i think it would be very positive. and i hope that you and your colleagues could make progress on that. >> is there anyone part of the tax code that is of particular significance in terms of the adverse impact it has on your business activity or economic growth? i realized i am making -- but there is one you think is particularly difficult to manage? >> well, the very difficult

problem we face is the following. most economists would argue that an efficien inefficient tax code that has a relatively broad base and low marginal rates. but low marginal rates is easy, but broad-based means restricting or limiting popular deductions and credits. so that's the goal, but the political challenge is to figure out how to do that. and as you know, in the income tax, for example, personal income tax, the biggest deductions are housing, terrible, state and local government, and health care exemption which are all very popular and have their own purposes. so finding a way to deal with that issue i think is the most challenging part but has the biggest payoff if you can find ways to again broaden the base and lower the tax rate.

>> i hear about a lot and i know we all do, this sense that businesses have that there's various i would say a big measure or substantial areas of uncertainty. one is the tax code. one of the economy generally. one of the areas is what congress will or will not do or hasn't done. it's my belief we can get a bipartisan tax reform agreement, remove at least one element of uncertainty. i know my time is almost expired and i want to be on the right side of chairman brady. [laughter] >> thank you, sir. representative the duffy is recognized for five minutes. >> thank you, mr. chairman. to follow up on mr. casey's questioning just briefly, not only are we here to help get bipartisan support for reform of our tax could come hopefully will have bipartisan support for

fear of the condition of our tax code. but that's not this hearing. >> you testified with regard to the need to in essence keep this big it's going with regard to monetary and fiscal policy, that you're going to continue to print money, drive interest rates down, that we should continue to borrow and spend on our end in the short term to help grow the economy and work on our debt into long-term. i'm sure you're well aware of these numbers but if you look at how much we spent since 2008, the federal government in 2008 spent $2.9 trillion. in 2009, during the course of the stimulus bill, we spent $3.5 trillion. so the year of the stimulus bill, $3.5 trillion, half a trillion dollar jump. this year the cbo projects us to spend 3.4 trillion. so we are almost spending this

year the same amount we spent in the year of the $800 billion stimulus bill. but your testimony today is that the cuts up into significant can we need to actually spend more in conjunction with your printing. could you explain it further why we need to spend more when we are already a half a trillion dollars more in spending from fiscal year a late? >> first, i didn't say spending. i talked about the whole package which included tax increases and elimination of payroll tax cut, put that all together and say a guy gets -- it's a drag on the economy. the government, and, since the stimulus the government has been tightening its belt are pre-significant. i mentioned there are 800,000 fewer government employees today than they were a few years ago. and i'm not advocating, i'm a huge advocate a major new stimulus program. i'm simply saying that a rebalancing between somewhat slower tightening in the near

term and more aggressive and systematic attempt to address the longer-term imbalances with big problems really are, i think that would be better. and i'm not, please don't misunderstand, i'm not in any way denying the importance of fiscal responsibility i just think it's not the best way to go about it, to focusing it, to focus it on on the it, to focus it on on the short term and to ignore the long-term. >> and i would agree with you on that point. one of the problems in this town is that we see the long-term implications of the course we are on. and you are well aware of politics in these two chambers and with the white house, and you have seen our side. i think aggressively talk about the long-term implications of our aging population and impact on medicare. that i think you would agree is the driver of our debt. you would agree with the? >> health care costs and aging are very important.

>> what program does that spending come from? >> medicare and medicaid. >> right. you know on our side of the aisle we're trying to actually reform and make a sustainable. and one of the frustrations is were not able to get by in with others to actually join us in that effort. and it's one thing to say listen, i don't like the republicans plan, but then the other side has to put up a plan that actually makes a sustainable, too, wouldn't you agree speak with i'm sore? >> make medicare sustainable in the long -- >> yes speak both sides -- correct? >> i don't want to get into negotiations, but -- >> i'm not talking policy wise spirit yes, we want medicare to be sustainable and we want the budget overall to be sustainable. >> and we want the two sides to put up plans to make medicare sustainable, right? >> their need to be some bipartisan way of negotiating whatever it is you going to do. >> one of my concerns with your

testimony talk about the headwinds as you didn't talk about regulation. when i talk to my small business owners, people back home in wisconsin, they are concerned about the things you mentioned but they're also concerned about the rules, regulation, red government. government is getting in the window looking at expanding and growing their business when you have someone who is looking at starting a business. they will cite rules and regulations and government interference as a problem. and i guess i see that as one of the headwinds as will and that wasn't referenced. i wonder if you see that as a concerned? >> it is a concern. smart regulation is very important. i wonder though whether these regulations are ones that it just been imposed or whether there thinks that they been in place for a long time. in talking about headwinds i was looking at factors that were specific to this recover as opposed to longer-term growth issues. >> quickly, i know your term is up in january, if offered a second term by the president would you accept that?

>> i'm not prepared to answer that question now. >> okay. some of us are concerned about the policies that have been implemented and the long-term impacts that will take effect in the next six months but will impact is three, four, five, six years down the road. thank you for your time. >> thank you for waiting to the very last moment to slip that question. chairman bernanke, thank you for being here. i think the fed played a critical role in causing the financial crisis but i don't know if i agree with the assertion in everything be good in the economy including corporate earnings, because of the joint monetary policy. i think economy is more complex, private sector more recent on its own. i just believe this point in the recovery, while it's very fragile, it really is the fiscal roadblocks, aside from europe, that's another issue, so really key to getting this economy going. we will continue to export monetary policy, exit strategy,

and others in the future. chairman, thank you for being here today. >> thank you, sir. [inaudible conversations] >> [inaudible conversations] >> coming up on c-span2, a confirmation hearing for president obama's choice to be transportation secretary. and the senate will continue debate on the farm bill and take votes on a number of amendments. live senate coverage at 9:30 a.m. eastern.

>> president obama's nominee to be the next commerce secretary will testify at a confirmation hearing this morning. live coverage from the senate commerce committee starts at 11 a.m. eastern on c-span3. >> president obama's pic for transportation secretary testified at a senate confirmation hearing yesterday. anthony foxx who is currently mayor of charlotte, north carolina, talked about transportation priority scum including infrastructure and safety. if confirmed he would replace secretary ray lahood who announced his retirement earlier this year. west virginia senator jay rockefeller chairs this hearing. >> ladies and gentlemen, this hearing will come to order. we have a very distinguished

guest to be introduced by two very distinguished senators who are good friends of mine. senator burr? do you want to introduce? >> be happy to. mr. chairman, out to you and the ranking member would probably go first step we will but we don't want to hold you up. we are kind people. [laughter] >> that means there's a baseball game on this afternoon and you would like to get this over with. >> you write. >> mr. chairman, thank you. thank you, ranking member thune come and members of the committee. it's really a pleasure to be here this afternoon with my colleague from north carolina, senator hagan. i want to thank you for holding quickly this important hearing and for the opportunity to introduce a friend and the mayor of charlotte, anthony foxx. first, i want to publicly thank him for his commitment and his willingness to serve in this capacity. i know it can't be easy to leave

behind the beauty of north carolina to come to washington and to take on the challenges that come with this position. i understand it's not the easiest transition, so i especially want to thank his wife, samara committed to children, hillary and zachary, for the support that they continue to give to him in what has been a very quick life of public service. anthony's leadership and his record of service has brought him before you today, and i'm confident that he will serve our nation in the same manner that he is serve the people of north carolina, specifically the city of charlotte. a homegrown talent, anthony was born in charlotte when he attended west charlotte high school before moving on to davidson college. while an undergrad, anthony served as student body president, the first african-american to do so at davidson. his passion for public service awarded him the root killed --

scholarship to study law at new york university. prior to joining design line as deputy general counsel in 2009, anthony worked as the litigation attorney at putnam and williams. he has the distinguished, distinction of serving in all three branches of the federal government. as a law clerk on the united states sixth circuit court of appeals, a traveler turn for the civil rights division of the united states justice department, and a staff counsel for the united states house of representatives on the judiciary. and then he began his political career in 2005 with his election to the city council as an at-large representative and serve two terms before being elected the mayor on november 3, 2000. i might add, the youngest there in the city's history. much like our state, the city of charlotte continues to grow by leaps and bounds, and as a

mayor, mayor foxx has kept the charge of meeting and staying ahead of the needs of a major metropolitan area. as mayor, he has done an outstanding job of building stronger relationships with state and federal leaders to meet the infrastructure needs of a growing metropolitan area. by offices enjoyed working -- it's my great honor to be here within today. i commend the president for looking toward north carolina for this kind of leadership. and i urge my colleagues to offer him their full consideration. mr. chairman, let me say there's not just three north carolinians here. for with mayor foxx, and we claim model as a north carolinian.

[laughter] since his family, his parents reside in north carolina. mr. chairman, if confirmed i am confident that as secretary of transportation mayor foxx will be up to the challenge of not only keeping our nation moving, but moving in the right direction. i thank the chair. >> thank you, senator. >> thank you, mr. chairman. chairman rockefeller and grant -- ranking member thune and all of the most of the committee that certain is a pleasure to be with my colleague, senator byrd, so we both can welcome and introduce anthony foxx to. but i do appreciate the opportunity i also want to thank the mayor's family for their steadfast service and commitment. while he has served as mayor of charlotte and move through this nomination process, his wife, samara, thank you. and his two children, hillary and separate have state in charlotte to go to school. so i'm honored to have the opportunity to introduce a man who has been a tremendous asset

to our entire state. while it's going to be sad to see him leave charlotte, and the charlotte government process, i'm pleased that when he is confirmed the entire country will benefit from anthony foxx his leadership as secretary of transportation. he earned his undergraduate degree as you heard in history from davidson college in north carolina, and did lay the trail as the school's first african-american student body president. he received a law degree from new york university and has held positions in all three branches of the federal government. beginning as a judicial clerk on the u.s. court of appeals for the sixth circuit, anthony foxx went on to become a lawyer for the department of justice, and counsel for the house judiciary committee. in 2005 he was elected as an at-large member of the charlotte city council, and during his four years of service as councilman he chaired the transportation committee and was a member of the economic development and planning

committee. since 2009 he has served as the mayor of charlotte, one of our country's fastest-growing cities. given his experience and the strength of his resume it's hard to believe that anthony could be one of the youngest cabinet secretaries in history. when he became mayor, charlotte unemployment rate was almost 13%. through his tireless efforts he held a track and create more than 8400 new jobs in the charlotte area. most importantly he is been a true champion of transportation and infrastructure development, securing forward-looking investment to charlotte's roads, airports and mass transit. under his leadership the i-485 has been approved for expansion to give secured funding towards the completion of the blue line light rail extension project, and oversaw the opening of the third runway at the charlotte international airport. all of these projects occurred as we work and as we're still working to climb out of the

recession. these smart investment in infrastructure are continuing to fuel charlotte economic growth. south bend, which is a historic charlotte neighborhood which saw the city's first railroad line back in the 1850s, is being revitalized with the help of the lynx light rail. this neighborhood is now home to more than 750 small businesses and 11 new residential developments. so an investment that the charlotte airport are establishing the city as an international hub, with direct flights to london and soon to brazil, charlotte and north carolina are increasingly connected to businesses across the world. and the i 85 corridor improvement project which has been a top property for the state of north carolina for many years is finally moving forward. i-85 is one of the most heavily traveled routes in the southeast. 60,000 vehicles use one part of

this roadway every day, that number is expected to double by 2025 but the improvement project which rely heavily on support from local leaders across the region including mayor foxx, is expanding and improving the integral roadway so we can really meet the needs of businesses and residents for years to come. anthony foxx is direct experience working director with transportation department at the federal, state and local levels and his proven record of success may came well prepared, mr. chairman, the surface of the next secretary of transportation but i have worked closely with mayor foxx during my time in washington, and i have the utmost confidence that he will serve in this role with great distinction. i thank him for his service and willingness to step up when his service is needed, and i encourage a swift confirmation by this committee. thank you, mr. chairman. >> thank you, senator hagan. i detect, mayor foxx, a certain

furnace from your two introduces here. now, i'm not taking out but i'm offering you the opportunity to leave, because unless you want to listen to johnson and myself speak. >> never miss a great invitation. thank you. [laughter] >> thank you very much. mayor foxx, i've got to say, i've been here on this committee for 26, seven, something years. and i've never seen a greater press crush. [laughter] in my entire life. i want to congratulate you, mayor foxx, whether you succeed or not, and you have got to introduce your wife for sure. on your nomination for the position of secretary of united states department of transportation. this high honor is unhappily a very great challenge, a very, very great challenge. as secretary lahood so ably

chemistry, the policy and political savvy to accomplish the administration's goals all of in an era of constraint which doesn't seem to want to relax. the department of transportation is enduring a tumultuous time of constraint resources, despite this isn't even a large number of new safety mandates and simultaneously presiding over transportation and for such a network in need of significant and immediate investment. and have to pay for that, nobody seems able to figure out. i can figure it out but it's not a prevailing view here that country's transportation network has been a critical factor in our long-term, and growth, however years of under investing in our roads, airports, air traffic control system, rails and ports have left us with an overspending transportation system and i think that is probably the greatest weak link

in our national economic picture, only to get much worse. the weakness their transportation has been a drag on growth. i believe we're on the brink of losing our competitive edge in the global marketplace as a result, and that overstate not. the evidence is clear that this interconnected system was not built to withstand the wear and tear that it is enforced to endure today. the federal government has a critical role to play in transportation but i'm among the first to admit that we in congress have not done our jobs in this area. instead we have grown accustomed to and ad hoc approach to investing in our transportation network by using a grab bag of unrelated pay-fors and budget gimmicks just to keep funding levels static. too many seem content with this approach but i certainly am not and i don't think you are. turning our backs on this growing problem ignores what we truly need desperate need in

this country, a strategic long-term vision for rebuilding our transportation system in all of its forms. a band-aid approach to fix our infrastructure just doesn't cut it. we need to take a hard look at what we need from our ports, rail, air and highway systems over the long-term and commit to making appropriate investments. we must get away from overly sidled programmatic funding mechanisms that don't allow for flexibility necessary to make strategic multimodal investments. we need to get smart about working with the private sector to increase overall funding. you have already done it very successfully in your city. in short, we need to rethink how we fund transportation in this country as we look, hopefully, towards a future. we all need to come together, the congress, the white house, and the stakeholder community, actually export all options. you won't get anywhere unless we

work together. investing infrastructure also means investing in safety. i should tell you that we, the commerce committee is now very much become a consumer affairs committee and a safety committee, looking out for little things that we look past in years past year since becoming chairman, i really have worked on protection of people and safety as a priority. for transportation, i hope i have your commitment on this across the department, and i'm sure i will. while we have required new safety requirements across the air, rail and highway systems, the work has only just begun. the department needs to do everything in its power to implement the safety requirements in a timely way. we are very good at passing rules and legislation and others pass world's and regulations and they never get implemented.

and we think they have been because we pass them but they haven't been. and therein lies a huge problem. i'm concerned about delays were saying on sunday very important issues and what about more. i need help in making sure that these, of course should you be concerned, the requirement for -- confirmed. on the aviation site it's been a tough year between the challenges involving the 787, and sequestration impacts. sequestration took a serious hit out of faa's finances. unfortunately, we face the same difficulties next year and into the future until we come to our collective senses. all of this has taken tension passionate attention away from other areas, which is sort of the think i care most about, but gets talked the least because it's been pushed down the road. by the situation we are faced

with. i would expect you to make a renewed effort for new pilot publication of training requirements. implementing the nextgen air traffic control system as indicated as it personal importance to me, for 10 years i've worked to help faa make nextgen our reality. the system is far to the future of our air transportation network and it will continue to make it a priority. i promise you that. so, mayor foxx them as you know you have a huge job in front of you. massive. the challenges are many of the solutions are hard. however, if you are confirmed i want this committee to be a partner in your efforts. this will take communication and transparency from the department. it will take honesty and frankness from us, and i thank you for being here today and look forward to hearing your thoughts. before i turn this over to my distinguished friend, senator thune, i should point out that

one, we have two votes at 4:00. so we're going to change our rules of it. i spoke all of it longer. of course, i always do. sender then and i will talk, give our opening statements, and then on questions everybody will have seven minute rounds rather than five minute rounds. >> thank you, mr. chairman. and thank you folding to hearing today. mayor foxx, welcome to the committee. this hearing gives our committee the opportunity to perform one of the most important constitutional responsibilities provided to members of the united states senate. the power to give advice and consent on the presence of minis. today we will consider mayor anthony foxx to be the 17th secretary of transportation. established in 1967 department of transportation employs approximate 53,000 full-time employees and has over $72 billion in budget authority. if confirmed mayor foxx not only we be responsible for overseeing

this important agency but you also be the principal advisor to the president on all matters relating to transportation. i know most of individuals here understand what an important position this is our country but every americans directly affected by our nation's transportation systems, including personal business travel, employment, the interstate movement of the products we grow, manufacture and purchase them and their impact on the overall health of our economy. specifically over 12 and americans are employed in the transportation labor force. that works out to just over 9% of the nation's entire non-agriculture workforce. the average american family spends roughly 17% of the total budget on transportation related costs. $1.6 trillion or almost 10% of u.s. gdp is comprised of transportation related goods and services. even our rural state like my home state of south dakota is direct impacted by the decisions made by the secretary of transportation. for instance, the regulations

produced by the dod have a direct impact o on the ability f the tonics, nudist leader in electronics scoreboard display system located in brookings south dakota to produce a to dynamic message signs used on freeways and roadways to provide instruction, travel times and road conditions to motors. dot components like the federal aviation administration and the federal highway administration play an important role in maintaining a robust national airspace and highway system to transfer agricultural goods to market and enable tourists to visit south dakota spent historic sites like mount rushmore, crazy horse and the bad lines, or enjoyed our world-class pheasant hunting. regulations placed on track to safety but another dot agency come the federal motor carrier safety administration and back more than 20,000 individuals in south dakota employed by the trucking industry. the secretaries decisions also shape of the role of the federal railroad administration plays in assuring our freight rails lines are safe so that south dakota's agricultural goods to make it to market quickly and efficiently.

the position you're nominated for certainly is an important one. a successful demonstration and congress will need to work together to address the numerous transportation challenges we face ahead. mayor foxx, i look forward to in your testimony today and learning more about you and your qualifications to be the next secretary of transportation. thank you, mr. chairman. >> thank you very much. and we will now have the honor of listening to our secretary. >> [inaudible] spent make sure that is on. >> thank you, mr. chairman, ranking member thune and members of the committee. it is an honor for me to appear today before you as president obama's nominee to be u.s. secretary of transportation. i want to thank senators richard burr and kay hagan for their kind introductions. and i also want to thank my

beautiful wife, samara, who is behind me now, for being with me here today. my children, hillary and zachary, wanted to be here but they have school obligations that their parents wanted them to me today. if i have the honor to lead the department, i will bring the perspective of serving as mayor of charlotte, america's 17th largest city. as mayor, i know transportation from the ground up, but i learned the value of quality transportation, and hard work, even earlier. i was born and raised in charlotte by my mother and my grandparents, who were public school teachers. things were not always easy growing up. many times, there would be a $20 bill on the table, and my family would have to choose between basic necessities and funding a school field trip.

somehow, they always made the investment in me and for that i am forever grateful. together, they taught me to take pride in hard work, to take responsibility for my actions, and to understand that education would unlock doubtless doors. my first job when i was 12 years old was at charlotte's discovery place museum. i rode the number 6 bus there after school. the number 6 connected me to a larger world of opportunity, and i truly believe, whether it is a bus, a road, a train, a plane or a ship, our transportation system, at its best, connects our people to jobs and a better quality of life. when i became mayor in 2009, charlotte was facing an economic downturn and steep revenue declines. i decided to make efficient and innovative transportation investment the centerpiece of charlotte's job creation and

economic recovery efforts. these investments included extending the lynx light rail system to the university of north carolina at charlotte, expanding charlotte does international airport, breaking ground on the charlotte regional animal facility, completing our eye 4905 beltway, repairing the yadkin bridge, and starting the charlotte streetcar project. today, more than 19 million riders have used the existing light rail line since it opened in 2007, with more than 15,000 riders on an average weekday. passenger traffic at the charlotte douglas airport reached a record high in 2012. and our streetcar is expected to connect people with jobs, schools, and medical facilities right in the heart of my city. the truth is we did not accomplish these successes alone. business, the public, and all

levels of government worked together to find pragmatic solutions for the transportation challenges we faced while not using a one size fits all approach. it's the kind of bipartisan approach that i believe made secretary lahood so effective at the department of transportation, and the model i will also follow. if confirmed, i plan to focus on three key areas. first, ensuring that our transportation system is the safest in the world will be my top priority, as it has been for secretary lahood, the dedicated beauty workforce, and this committee. ..

>> a stronger national freight network and key innovations like next general and advanced roadway technology. as a mayor, i know too well that future uncertainty at the federal level makes it difficult to do smart, cost effective long-term planning and project development. we also need investments and policies that promote opportunity, enhance quality of life, promote environmental sustainability and reduce our

dependence on foreign oil. i look forward to working with congress and the broader transportation community to tackle the tough challenges and seize the exciting opportunities we have to innovate, invest and make the american transportation system the best in the world. to conclude, mr. chairman, thank you again for scheduling this hearing. i'll be happy to respond to any questions you and the members may have. >> thank you very much, mayor foxx. i'm going to try and keep my questions very, very few. because, again, everybody has to be able to ask, and we have 13 people here, at least on the list, which is very unusual. this is about sort of transportation silos, the stove pipe concept which pervades so much of our government. in order to have a 21st century transportation system, all of our intermodal work must be done

together. that means thinking strategically about how to invest limited federal funding. nevertheless, federal programs are siloed. they always have been, maybe they'll always be. gxçeust7 >> thank you for the question, mr. chair. and i will say a couple of things on this point. i do believe that a multimodal approach is necessary to move our country forward. we have a variety of

transportation systems in this country. all of them are important. but i do think that we have to work in a way that helps communities, states and local governments as well as the federal government move this country forward in a very robust way. to accomplish that, i do think there are some models that have already been done at the federal level that have allowed for multimodal approaches to transportation. you mentioned tiger which is one of them. in charlotte we have good experience with tiger. it was able -- we used it to help us build extensions to our platforms for our light rail line. and interestingly, the reason why we needed to extend them was because of the very point that you made about the siloed approach. we weren't able to build the platforms correctly the first time. so tiger helped us get those extended. we've also looked across our region at various projects that are of regional significance such as the river bridge which

received a portion of its funding from tiger to help repair one of the worst bridges in north carolina. i think that we have to continue thinking in a multimodal fashion. you have my commitment to work on those issues and to try to help us reduce some of the siloed thinking and to improve and enhance the infrastructure in this country. >> let me ask a quick second question. let's supposing you're going to be the veterans administrator. 220,000 -- just thank god you're not, for your sake. [laughter] for your sake, sir. 220,000 people work for them, and they have spent a lifetime of some very good va directors and some not very good va directors. try to figure out how you take a bulk of people that large who have a common mission and then get down into those, that level where people have been there 15-30 years, so they don't make the decisions, but they actually do make all the decisions because the piles of paper that

they say yes or no to are the ones they do. and that mentality is killing our government. you can see it in some of the discomforts, to say the least, that are coming out these days. roosevelt used to reach down to the midpoint of an agency, and he'd call people up, infuriating cabinet members, call people up who'd been there for 20 or 30 years and say, well, what are you doing, how could you be doing it better, what gets in your way, and what do you think is wrong? how do you take something like the department of transportation which is already siloed just by nature of all the different modes of transportation and try and get it working together from an organizational point of view? >> a couple of things, mr. chairman. you may be surprised to know that local government can be siloed too. and i can tell you from my experience as mayor that i have worked very hard to break down some of those silos even across

governmental lines n. charlotte we have a different school board, we have a different county commission, and i've done more to try to help our schools and to help our county in some situations that have broken down some of those barriers. but having said that, to your point, i do think you have some successes to draw upon. and tiger is one of them. tiger has required the department's teams to work across modes to figure out how to invest in the most impactful projects across the country. and i think that that is an opportunity we could continue to extend into other opportunities. i also am aware that we have an opportunity with reauthorizations that are forthcoming to continue this conversation and to look at a performance measurement base using data and real, hard information to figure out which projects will be most impactful. i'll also say one final thing which is that at the local level and the state level many of our

governments in states and local governments are already thinking across modes and have plans that actually draw on this very idea that you've mentioned, and we should listen to them. because they have good ideas for how to extend our transportation network and make us globally competitive. >> i have a minute and 30 seconds left. nextgen is just desperately important to me because without it our airways will be clogged as more and more planes come on, people will get angrier and angrier, and you'll have more and more accidents. the faa doesn't have the money to build nextgen. if we don't build nextgen, we're not going to have the money to do mr. almost anything. people won't be able to travel efficiently. when you think of nextgen, does it kite -- excite you? how in heaven's name do we come up with a way to fund it? >> purchase, i suspect -- mr. chairman, i suspect that

nextgen is an area in which there is broad support, including mine, by the way, to help not only get it built on schedule and built out on schedule, but perhaps even to accelerate it. i think one of the things that we have an opportunity to do is to engage the stake holders, the folks that stand to benefit the most in a conversation about how we actually get there. the good news is that we are seeing some of the fruits of next general already. pieces of it have been deployed. the metro for example project -- metroplex project in houston. i think it's an exciting idea to use technology to make our air face safer, more efficient, and to improve the travel experience for many passengers. >> thank you, sir. my distinguished colleague, senator thune. >> thank you, mr. chairman. mayor foxx. the oversight activities of

government departments and agencies is a serious responsibility of all members of this committee. if confirmed, do you pledge to give thorough and timely responses to requests for information and other correspondence to all members of this committee? >> thank you for the question, mr. cranking member -- ranking member, and i will tell you my goal as transportation secretary, if confirmed, would be to be as open and transparent as possible and to do my very best at all times to be responsive to this committee and to members of this congress. >> i'd like to point out that there are several outstanding letters that i sent along with the house tni chairman schuster and chairman rockefeller to the faa and dot that remain unanswered and they're items that, in my view, feed to be fully -- need to be fully answered before i can support your nomination. so i just wanted to make sure in terms of the responsiveness, the department to the members of this committee that we would get your response on the record in terms of your intentions in that

regard. >> yes, sir. >> let me ask you, there was the big issue that came up here in the last few months in the way the department and the federal aviation administration handled spending reductions as a result of the budget control act. the dot and the faa had over a year to plan for implementation of reductions, but the poor planning resulted in disruptions in faa staffing and delays for passengers across the country. the budget control act is the haw of the land, and unless -- law of the land, and unless a grand bargain comes together, many of us agree agency leaders should be prepared to plan for the con contingencies of the but control act. so my question is, what experiences have equipped you to plan toward delivering safe and efficient air traffic control services within the current budgetary realities? >> well, mr. ranking member, i will say a couple of things. as a mayor, i serve in a capacity in which we have to

balance budget, and we have to work within what's there. and i have lots of experience in doing that. when i took the oath of office in charlotte in 2009, our revenues were $200 million less than what they'd been the year before. and we had to work within that. we didn't raise taxes to get there. we actually had to work within the resources. and we found some innovative ways to do it. we were able to negotiate a new public safety pay plan, we were able to reduce the range of pickups and recycling projects, and we outsourced our recycling which allowed us to save $0 million over a -- $40 million over a ten-year period. so i have experience at working within the means to get there. on a broader point that you raise, i hope that this congress -- and i will be a partner in trying to help get us there -- can achieve a broader answer to our budget challenges

as a country in a balanced way. the president's put some ideas on the table. i know there's some ideas around congress, and i think that's an important conversation that needs to be had. if we are left with sequester, it would be my goal to do an effective job of working within the administration and working with this congress to have a no surprises result. and that's what i will be trying to do. >> good. let me ask you, shifting modes here if i might for a minute, as secretary, what role do you see yourself playing in the reauthorization process when it comes to map 21? the highway bill expires at the end of next year. we're going to be going through that in process again, and i'm wondering what your thoughts are with respect to that particular process and what role you see yourself playing in it. >> well, i'd like to be an active participant in the discussions about reauthorization of map 21.

of course, we're about seven months into, into the bill as it is, and it's a two of -- two-year bill that achieves many things that i think are important such as looking at performance measuring. there are more than 60 rulemaking procedures that are contained in the bill. but clearly, we need a longer-term surface transportation bill, we need a longer-term answer to the sustainability of our funding sources. and those are questions i want to be an active advocate both within the administration and with congress. >> and there always, with regard to this issue, always seem to be more projects than there is funding. and i'm curious, as mayor, how you have gone about setting priorities when it comes to determining which projects get funded and which don't. >> well, you know, charlotte has had a long history of working very carefully with state and

federal partners to get projects done. and in a city there are some situations in which there's a state road, and you need state help to be able to get that road completed or expanded, and we've had great success making the case for that. using regional partnerships not only within the city, but in some of the rural areas around the city. within the city of charlotte in terms of our budgeting, we have, we have had to make some very tough choices. we have over the past couple of years been talking about a significant capital program, but that program is about a fifth of the size of the needs of projects that we have within the city. so we are working very hard. we're always working to make our priorities, but here's how i would look at it from a transportation perspective. number one, which priorities are going to be the most helpful in helping us use some of our -- ease some of our mobility

challenges, connecting people to jobs and to the global marketplace and leverage what's there. in charlotte we try to leverage housing and other commercial developments that are near our transportation systems. there are some other considerations that may exist in places that aren't as urban as charlotte, and we want to be sensitive to that, and i certainly would be as transportation secretary. >> final question, and my time's expiring, but tell me what -- do you have a 53,000-employee staff work force, american people, a lot of people depend on you, need to be able to build trust. and we've had some recent examples in government agencies where that trust has broken down. tell me, give me just a little bit of your thoughts about how you'd build that kind of trust and credibility not only with the people that would be under you, but also with the american people who would be looking to you for leadership. >> well, i think one of the most important things is to be present. one of the things i've learned as mayor is that you can't stay

in the bubble of your office. you have to go out, and you have to see what's happening on the ground, and you have to talk to people both within the department and out in communities where projects are happening. that's how you learn, that's how you build a connection, that's how you build the trust. and with each member of this committee, i've had some wonderful interactions with all of you, and i happen to feel there is real agreement on this committee that infrastructure's an important goal for this country, and i look forward to working with you to advance the interests of infrastructure. >> time's expired. thank you, mr. chairman. >> thank you, senator thune. for my colleagues, it now says there are no votes before 4:45. 4:35. so we can relax a little bit. senator blumenthal. >> thank you, mr. chairman. and congratulations, mayor foxx, and my thanks to you and to your family for your willingness to serve and your service in the past.

as you know, my state has just been a major transportation crisis, an incident that certainly speaks to the need for investment. not only in rail, but in all forms of transportation. but most especially rail because i think that this incident, an accident that could have cost even more lives, caused more injuries and done even greater damage, fortunately, was less severe than it might have been. and that fact is due to the investment that was made in the most advanced -- at least to date -- the more advanced type of railroad cars, the m8 rail cars on the metro north line which most likely prevented more injuries and limited the severity of the ones that occurred. fortunately, there have been no fatalities.

the lack of investment in our rail line, in our tracks and other equipment has left them without important quality and safety upgrades. so i would like a commitment from you that you will prioritize investments in infrastructure and safety measures for all of our railroad lines, but most especially in the northeast corridor. >> well, thank you, senator. and let me say that the tragic collision in bridgeport is one that all of us as a country feel, and it speaks to the issue of maintaining a good state of repair with our existing infrastructure. and you have my commitment to keep safety as a number one priority whether it is rail or any other mode of transportation. and as we look to reauthorization of rail legislation going forward, i

look forward to working with you to make sure that's a priority, specifically in the northeast. >> and i think what that collision or accident shows is that our rail lines are deteriorated and outdated and decrepit in many sections of that northeast corridor. would you agree with me? >> well, i think we have some general challenges with state of good repair, and i think rail is one of them. i know of some tracks that are probably 100 years old that haven't been repaired adequately in the past, so, yes. >> in my view, view, this incidt really can be a teaching moment, and i hope that you'll be one of the teachers. i hope that you'll take your message as a very arctic hate and powerful spokes-- articulate and powerful spokesperson on the road, and i want to make you an offer that maybe you can refuse, but i hope not, that you make one of your first trips to visit us in connecticut, specifically in bridgeport, and come with me to the site of that collision. >> well, i would, i would look forward to it.

>> let me be more specific. i hope -- you've made the offer, and i am grateful for it, that you will work with me. but i would ask you to work with our entire delegation in developing a consensus around the northeast corridor rail financing plan. and that really relates not only to connecticut, but really to the collection of states that depend on this vital artery. it is an artery that right now is back in operation, but for a time payoff that -- because of that bridgeport accident was, essentially, choked and strangled in the ability to move people and freight and other essentials along that northeast corridor. and i'm hoping that you will work with our delegation and with representatives and senators from throughout our region. >> i will. >> let me also ask about perhaps

some of the advanced in technology and science that have to do with rail transport that perhaps we can help to implement. are you aware of advances in the technology that would prevent such accidents? >> well, let me say this, that i am aware that the federal rail administration has inspectors on the ground in bridgeport today. the national transportation safety board will conduct an investigation into the cause of the collision. and so as that process moves forward, we need to react to the problems that are identified. so i don't want to presuppose to know the exact answer to exactly what caused it. i think the investigation will reveal that. but it will also reveal that we have some critical infrastructure needs in the country. >> and i agree with you that we should not be prejudging the

results of that investigation. the national transportation safety board, i will say very commend my, was on the scene literally within hours. investigators were there that night, and i met with earl wayneer, the board member who was assigned to this responsibility, along with a very able team that very next morning. so we don't want to prejudge what the results will show, but with i hope -- but i hope, here's my main point about the investigation, that it will be done more quickly than perhaps the projections are right now. they're talking about a year before results and recommendations are available. i think that it ought to be expedited. i hope that you will do whatever you can. i know that it's an independent board, to assure that we know what the results are. because right now we're focusing on the track. we know of the fracture, we're not sure whether it was the cause or the result, but anything you can do to expedite it will be appreciated. >> you have my commitment to do

all within my power to get a quick investigation done. >> thank you. and in the less than a minute that i have left, i'd like to ask for your continuing support for our air control ors and air -- controllers and air control towers, the contract control towers which we in the congress have said are vital to safety, economic development and jobs in those areas served by the airport. and secretary lahood has reaffirmed his commitment, i hope that you will as well. >> i am committed to them. want to thank you for your help with some of the legislation that was passed recently to avoid further conversation about closures, at least for the time being, and look forward to working with you on those issues going forward. >> thank you, mayor. and thank you very much for your commitment to public service. and, again, thank you to your wife and your children as well. >> thank you. >> thank you, senator blumenthal. i am unendingly embarrassed

here, because according to order of arrival, senator klobuchar and senator cowen are the next two, and i expect to have a revolt on the republican side, people walking out on me, throwing things at me. >> i concur, sir. [laughter] >> senator klobuchar. >> thank you very much, mr. chairman. thank you, mayor, for being here, and welcome to your wife as well. this is probably one of the most pleasant hearings on the hill today, and you have -- [laughter] you have clearly done your homework so thank you,, for your good work. i enjoyed our meeting. and after you visit connecticut, i hope you also come to minnesota and see our 10,000 lakes and our beautiful new twins stadium. i can't promise the twins will win, but we'd love to have you there. and i think you'd also see our light rail system up and running as well as the number of highways that need a lot of

work. i was just visiting just this past week near rogers, minnesota, where highway 94 is a bottleneck in a certain area. u.s. highway 10 which is adjacent to nine towns and is considered one of the fastest growing corridors in the u.s. and clearly the funding issues on the federal is side, while senator boxer and senator inhofe did an amazing job getting that bill done and senator rockefeller and this committee had a lot to do with that as well, there's more to be done. and last congress i introduced the rebuild america jobs act which would have provided 50 billion for direct research investment, some of the work senator blumenthal talked about could have been paid for. some of the work we saw needed to be done when that bridge collapsed six blocks from my house on a beautiful summer day. when that eight-lane highway headed into that river, a bridge just shouldn't fall down in the middle of america, but it did. this money is somewhere near

what the president has put forth in his recent budget. similar probably was included in the recently-passed budget. what do you think of this idea of a public/private infrastructure bank? what do you suggest we do to get the kind of funding that we need to really get goods to market and make this country strong again for infrastructure? >> well, thank you for the question, senator. and, you know, when a bridge collapses in america and the types of pain that is experienced by communities when something like that happens, it's inexcusable. and yet we do have challenges figuring out a long-term path to funding our infrastructure. and for that reason we should be looking both in the box and out of the box at ways to help us get that a infrastructure built. and i happen to think that the

idea of an infrastructure bank is a good idea. it's not a complete solution to every problem we have, but it is another way that we can get progress made on our infrastructure both repair and new projects. >> very good. during his tenure, secretary lahood made ending distracted driving a priority, and i think some strides have been made but, as you know, it's still a major problem when you look at the statistics. i think it just came out recently the major cause of driving deaths with teens, and do you intend to keep this a focus of the department's work? >> let me say that one of secretary lahood's legacies will be the real push on distracted driving. and i think he has baked that into the dna of the department of transportation. and i don't think you have anything to worry about in terms of that issue continuing to be

one that will be a focus. i'm aware that 10% of our roadway fatalities are tied to distracted driving, and if we can eliminate that 10%, we save lives. >> exactly. bell, now that you have your -- well, now that you have your new job, your going to be dealing with snowmobiles, something you might not have in north carolina, and i worked hard to insure the recreational trails program was maintained in map 21. this program is very important in my state as well as other northern states, rtf funds derives its funding from gas taxes paid by off-highway vehicle users when they fill up their machines. if confirmed, will you work to insure that this valuable program continues to meet the needs of all trail users in minnesota and across the nation? >> i would look forward to working with you on those issues, for sure. >> okay. well, we'll talk more about it. maybe we'll get you out on a

snowmobile. one of the few industries to enjoy an exemption from antitrust law is the freight railroad industry. i know that chairman rockefeller has been working on the service transportation board retomorrows to address this issue -- reforms to greats this issue. the other way to do this is to simply get rid of the exemption. this actually came through the judiciary committee on a bipartisan vote. are you aware of the shipper concerns about the high prices that many shippers are pay being, we call them captive shipper, at the very end of a line particularly in rural areas? >> i'm aware of the issue. it's one i would like to drill down a little bit more and study a little bit more and hear from the stakeholders, but i'm definitely aware of the issue and look forward to working with you and the chairman about that. >> just remember we used to have 63 rail carriers, we now only have four major rail carriers which happens to be the exact number on the monopoly board. [laughter] so we think that there needs to be some work done here.

we need to continue to work to improve general aviation safety in this country. one of the most promising initiatives involved rewriting regulations for smaller 5eur7s. it's called part 23. it will enable better safety technologies to be fielded like loss of control which is the number one case with general aviation accidents. i'm introducing a bill with the senator from alaska, and i hope you'll look into this bill, and we'd love to have your support for this work. >> i will look forward to looking into it. >> well, very good. again, i just want to thank you. we have some other questions i'll put on the record on air traffic controllers and towers, such an issue for so many of us to make sure that they are maintained. and also i'm truly think it's great to have a mayor in this role. i know if senator begich was here, he would welcome it. we need that in a transportation is secretary. i was sitting here remembering

the former mayor of minneapolis who's quite old now, but he once told me the story he got a call on a sunday from a constituent who said the trash was not picked up in his neighborhood, and the neighbor said, look, buddy, i'll give you the number of our public works commission you can call him. and the constituent said i know who that guy is, but i don't want to bother him on a sunday. [laughter] so i think as we talked, many of us believe secretary lahood did an amazing job working with members of congress, local communities and mayors, understood that front line ability that you accomplish even more if you understand what people need in their areas and understand senator blumenthal's concerns about connecticut. and i hope that you will bring that forward from your work as a mayor and never let that go. >> thank you. >> thank you. >> thank you, senator klobuchar. we've achieved here a mick

mikhail gorbachev moment. for the first time in my memory, we are breaking the order of arrival, sangty sanctity, and senator cowan has with utmost grace yielded his position to senator scott. >> from one member of the senatorial black caucus to another. [laughter] senator cowan, i thought it was perhaps -- senator rockefeller, i thought perhaps i was senator cowan. thank you very much. [laughter] i do, i'm glad that you know the difference at at least. [laughter] >> in the spirit of getting the last word, i'm glad we're both here together so we can put the truth to the rumor that there's only one of us. >> absolutely. [laughter] let's talk on june 26th. this probably is, perhaps, the

most amazing confirmation process i've seen so far in my short term in the senate. so often i hear pointed questions with pointed responses and a lot of deliberation about nothing. today i've heard very kind comments and perhaps still a lot of deliberation so far about nothing, so let's get to a couple of very important issues. mr. foxx, mayor foxx, it's good to have you with us. it's good that you took the time to meet with me, and certainly as the mayor of a city, i certainly have an affinity for people who have served locally. local highway transportation commissions as well as transit organizations, so your footprint and your involvement in local transportation needs is impressive. a couple of questions that come to the national level, to the federal surface, would be one that has to do with the process that some states are going through, north carolina perhaps

being one of the leading states, as it relates to tolling interstates. i will tell you that from my perspective, tolling i-95 would be a disaster for a couple reasons. number one, i think it would transfer ports of the transportation routes to secondary roads that may not be as safe, and second, i think because they're not as safe it will actually raise concerns as it relates to transportation on those secondary roads. so my question to you really is, what is your position on the plan north carolina has as it relates to tolling i-95, and what would be your approach going forward? >> well, thank you for the question, senator. tolling, in my work as mayor, it has a place. but it's sort of like when we were talking a little earlier about an infrastructure bank. we're not going to toll our way to prosperity as a country.

the it is a tool that can be -- it is a tool that can be used in some instances, for example, to add capacity and to pay for that capacity privately. but i don't think it is a, you know, complete solution to how we deal with our surface transportation issues. >> i would say that your neighbor to the south the tolling impact would be harmful from our perspective, so we hope that you take a serious look at the entire corridor as it relates to the tolling process. second question comes really from the area of the tiger grants. tiger grants have been celebrated as a success providing much-needed resources to the local level. i'll tell you that there seems to be according to gao and the dot inspector general, they both raised some concerns as to how the awards are made. how do you plan to insure these grant projects will be selected on a transparent, merit-based system? >> thank you for the question,

senator. and, first of all, i'm hopeful that we have some funds down the road to do future tiger grant opportunities. but having said that, you have my commitment to be fair and transparent about how the department would work on those issues. tiger is a challenging thing to evaluate, and i'd like to take some time to look at the gao study and maybe have some more conversation with you about it. >> that'd be great. >> but when you're, when you're doing, as the chair mentioned, looking across modes and trying to get the highest impact out of the various projects you can do, there's bound to be some controversy about which projects were more meritorious than other ones. having said that, i think tiger has done a great service to our country by rewarding innovation and helping local communities and states really prioritize and

try to figure out which projects will be the most impactful catalysts. >> and i would tell you that a project-specific, merit-based system would be welcomed versus what sometimes appears to be a district-specific, red districts versus blue districts, funding formula that seems to be envogue at the time. my final question, and i will try to do something that seems to perhaps be celebrated by with my colleague from the north is reserve and give back the balance of my time, which i want you to pay attention to that as we have seven minutes instead of five. i would say that i would echo the comments that you've heard about tower, the importance of them cannot be overstated. major part of the economic engine of our nation. we should protect it. i think we've done a good job in the last several weeks in making sure that happened. i would just encourage you to continue. this notion of aviation user fees, the idea pops up and down very often. it seems to be back.

the administration had it in their budget, congress has rejected it repeatedly. i would hope that you would find it within your approach to being the secretary of transportation where you'd find alternative solutions as opposed to having a user fee which would, of course, be cumbersome and challenging in the aviation footprint. >> thank you. i will say that my approach to this role would be the very same approach that i have as mayor which is i want to hear from all stakeholders on various questions that involve industry. and be that doesn't can always mean agreement, but what it means is that i want to get to a point where i can say the talking points for people on a variety of positions. and that's what i would endeavor to do in my role. >> i'll yield my 68 seconds to senator from massachusetts. >> who will generously accept it. senator cowan. >> thank you, mr. chair, ranking member thune.

my friend from south carolina. mr. mayor, greetings and congratulations. good to see you again. congratulations to you and your family. your lovely wife and your beautiful children. welcome to washington d.c. if confirmed, i'm confident you will be, as i hope you will be and i'm sure you will be, you will serve this country well as the head of dot. it's clear from my conversation not just the other day, but conversations you and i have had in your capacity as mayor of the queen city of north carolina and mine as chief of staff of the great commonwealth of massachusetts that you truly understand the importance of transportation not just the means from getting from here to there, but as a method of opening up economic opportunity, creating jobs and fostering healthier communities. and i hope that we continue to have a rich conversation today about projects that are critical to massachusetts that you know are near and dear to my heart. one of those, of course, is the south coast rail project. i know governor patrick has

spoken with you about this, you and i spoke about it last week. this is, i think, a great example of the transformative power of transportation, rail in particular, which would open up the entire south coast region of massachusetts to opportunity untold. we have been working for years to try to bring this to fruition, and i thank secretary lahood for his efforts on that behalf, i should say. that said, you know, we're still not where we need to be, and we've been working with the army corps of engineers to try to move things along. we're waiting for some environmental studies. so my first question to you is when you come up north to visit senator blumenthal and the folks in connecticut, i trust you will stop in massachusetts, some see where we are on the south coast rail project, and i hope i can get your commitment that kwr0u8 continue to hook at this project for what it is -- a great opportunity for not just massachusetts, but for the whole northeast region, and you'll work with us and the army corps of engineers to move this

project along, a project that is long delayed? >> i look forward to, if confirmed, visiting you and learning more a about the project and trying to do what we can to help. >> good. you come anytime. i'd be happy to drive you down there myself and see all the prosperity just waiting to unleash. in addition, we've been working on the expansion of the nbta green line project. you and i discussed this last week. there's been a source of contention. this is a project that former governor mitt romney signed into law as a condition of the so-called big dig project, and we're looking to complete the work on his pledge. and we've had some starts and fits with transportation who wanted to see more of an effort on the state side. now, as i mentioned to you last week, that effort is in place, and the results are there, and we're ready to move forward again. i'm hoping i can count on you when you come to visit. you'll sit with our state transportation officials and the

local officials in sommerville, medford and the surrounding towns to talk about the economic opportunity that, again, is waiting for this rail line to bring forth. >> yes, sir. i can tell you from my experience in charlotte, and the senators mentioned this in their introduction, that transportation investments have a variety of benefit, and sometimes mobility is the thing that is the most important. sometimes it's mobility and economic development. and we've seen this type of progress in charlotte with the light rail line which was $462 million of public money split between the federal, state and local governments. it's now generating $1.4 billion of private investment. so i'm very familiar with how infrastructure projects can be

catalysts for other things. and those things are usually good for jobs and economic development. >> and last, massachusetts specific project, because i'm sure some of my colleagues are growing weary of me talking about massachusetts, the worcester project, secretary lahood has been a great partner in opening up that modal for expanded growth in the second largest city in massachusetts which is in the center of the state. and i'm pleased to say that while i was saddened to see lieutenant governor tim murray today announce that he was stepping down, i'm pleased that he's going to run the worcester chamber of commerce, and i know you know him as a former mayor, and he's going to bring great energy to that job. worcester's important to massachusetts, as is that airport. i'm hoping that you will take the time to see how, again, that airport, that venue is going to open up the region. you'll continue the support that secretary lahood has been

providing. >> i look forward to going up and checking it out. >> and i'll go with you. [laughter] last but not least, mayor, senator klobuchar talked about the infrastructure bank, and you mentioned, i believe, in your response that you see value in the infrastructure bank. i think perhaps to paraphrase you, it may not be the only answer. could you expound on that and my other thoughts you have on how we take advantage of what little resources we have or what new resources are needed to deal with some of the state of repair issues that you and i know are holding us back so that we can make sure that our roads and bridges are safe and productive for our economic needs. >> well, thank you for the question, senator. we're seeing even in this situation in which many local and state governments are stretched some real creative strategies that are happening at the the local and state level. and the idea of an

infrastructure bank picks up on a lot of the conversation that state and local leaders are having. what an infrastructure bank allows us to do is to capture some of the trillions of dollars in the private markets that are sitting on the sidelines not being reinvested in this country and creating a pathway for those dollars to be put to work to build america. the administration and through the legislative efforts of this committee and others have built tools that are in use already like private activity bonds, build america bonds. ..

i wish you well. >> thank you very much, senator. >> now senator fischer, to be followed by senator cantwell to be followed by -- >> thank you, mr. chairman. i appreciate it. mayor foxx, it's so nice to see you again, and i welcome you to the committee and appreciate you taking the time to be here to answer our questions. >> thank you. >> as we discussed in our meeting, i previously served as chair of the transportation

telecommunications committee and and the nebraska legislature, so i have a huge interest in infrastructure issues. i believe infrastructure is a core responsibility, a corollary for government, and at the federal level i believe it is only second to our national security. without efficient, secure and reliable infrastructure, our countries will falter. whether it's roads, bridges, ports, airports, infrastructure is the backbone of our economy and helps maintain strong community, all across this country. and the federal government plays an important role. it plays an important role in the funding and the managing of our national infrastructure system. however, this must be in a responsible manner that is worthy of those hard earned taxpayer dollars. as you know, the department is huge. it has a huge budget, and i believe trying to -- we need to

find efficiencies, we need to figure out how we're going to stretch the revenue that we have available so that we can meet the needs all across this country. as we talked about looking for those efficiencies when you're in my office, i asked you if you had any examples. i'm wondering at the time if you have the opportunity to visit with some people in the department in order to maybe tell me some examples where you might look for efficiencies within the huge department? >> well, let me try to break the question down, because i think there are several components to it that are relevant and responsive. the first, the first place is, there are enormous amounts of dollars that flow into projects specific infrastructure.

and i think we've got opportunities to look at how we can streamline the delivery process for projects, which could help us achieve savings and help our stakeholders achieve savings at the state and federal levels, or state and local levels. so from that standpoint, there is actually through map-21 some progress in helping us move towards performance measurement using data and other tools to help us achieve some of those objectives. of course, that's not across all modes, but it's a start. there's also the possibility of savings that are created to external stakeholders. and i would say nextgen is a good example of that. nextgen gives us an opportunity

to save our air carriers millions of dollars in fuel by developing more precise air routes and preventing this, ma i think it's like 7 million gallons of fuel that will be saved potentially by 2020 as a result of it. well, if we're able to obtain those types of savings, that gets to the bottom line for the carriers and ultimately we hope to the passengers are using those carriers. so i think that technology gives us the ability to create more efficient systems that independent a good bottom line effect. the third question of your -- the third component of your question gets to operational, and there i think there are still the potential for technology to play a role there. i'm not in the department today. i would like, if confirmed, get

there before i start having a lot of conversation about what kind of operational things might be achieved, but it's something i definitely have my eye on, because in this environment, dollars we save can be repurposed and pushed into other projects. >> nebraska is a state of distances. and we understand the importance of your our highway system in order to promote commerce, in order to promote the safety of citizens all across our state in order to connect us all. and we are concerned, as other states are across this country, about lack of sufficient revenue to, not just maintain our roads and maintain our bridges so that they're in safe condition and can handle adequate capacity as needed, but we need to build.

we need to build. the government has a role in that. connected us as a country. it provided for growth for our economy. where do you see us headed? where do you see us headed? where is this secure certain, stable source of revenue going to come from? we can talk about in infrastructure bank but that's not going to work either and thus we have a dedicated source of revenue going into it. so where do you see that coming from? >> well, thank you, senator, for the question, and i think the answer, perhaps disappointingly is more arts and science but the truth of the matter is that we can devise a strategy through authorizations that achieves the objectives women have as a

country across a variety of modes. then you find yourself with the arithmetic problem of how do you get there, which is the question you're asking. i think that in talking to members of this committee across the political spectrum, there seems to be brought agreement that we need to figure that question out. and i know that the president has put ideas on the table, as recent as this fy '14 budget, to help us achieve longer-term authorizations and funded operations in the future. i actually think that if there's agreement that we need to make the trip to figure this out, that that is the starting point for walking back into the questions of methods and means. and i don't want to prejudge it myself but what i would tell you is one of my goals would be to pull together a wide friday of stakeholders, both within the government and outside of

government, to squarely discuss how we can build a consensus to get there and work with you and others to try to help us move forward. >> thank you. and thank you for your openness and willingness to work together on these very, very important issues that are before us. and i look forward to working with you in the future. thank you. >> thank you, senator. >> thank you, senator. the order now by the arrival of the distinguished senator from missouri will be senator blunt and then senator cantwell. >> thank you, chairman. and thank you, mayor foxx, for being here and stepping up, to be willing to take this responsibility. i don't want to repeat a lot of things you have already been asked and probably answered for the few minutes i was gone. i may have some questions for

the record. i do have a couple based on our conversation the other day. i think the chairman mentioned nextgen, pilot training, you know, i think a third of the air traffic controllers right now are eligible to retire, and significant number of them are about to get to the mandatory retirement time. so there's this training proposal of a training facility that's been out there, and almost got awarded a few years ago. your understanding of it was pretty strong, and my view would be, i hope we can continue to pursue how we get that training into a system that works better than the moving around training that is going now. have you had a chance to think about that anymore since we talked? >> sender, i know -- >> this was the faa training center. >> thank you for the question. i actually know that there is a

new process that's been initiated to review that question. it's ongoing and if confirmed i will look forward to working with you on that. >> okay. we have to have trained people doing this job, and the other thing i think we all need to collectively work on is figuring out a strategy of how to prioritize furloughs and other things. you're starting at a time when it's pretty obvious what happens when we are not all open with each other about that. we had the faa administrator in just 48 hours before they announced a lot of air traffic controller furloughs, and i think he was asked, i guess not quite directly enough but pretty directly in a way that should've gotten more information than we got. so there are lessons to learn there.

positive train control we talked about that. a lot of the things i think we want to send to your, almost unfair, technical enough in nature, but this is something that chairman felt strongly about. i think we just need to be sure when it comes time to do it we are really ready to do it, and i think will have to look at that and be sure that's implemented in the right way. and then have had a chance to talk yet today about your views generally on the next highway bill? would you, or the next transportation bill. one of the things were able to get done in the last two years, but we only got done for two years, so that's coming up pretty quickly. i believe the normal request for reauthorization would have come from the secretary of this petition did not come because mr. lahood is leading, and so it's something he didn't have to give it something i would think you would quickly want to get

into that discussion. >> yes, i will. it is vitally important issue for this country. surface transportation is how many of our people all across this country are able to get to work and pick up the kids from school and abroad of other uses. i think as we've talked about already today that one of the biggest questions is how do we fund that reauthorization. and i would look forward to engaging on that question, both with colleagues within the administration as well as with congress. >> as we change vehicles, the kinds of nichols, a mix of vehicles on the road, and as we try to make vehicles more efficient, get more miles out of the gallon than the vehicles that are paying the per gallon tax, obviously you're working away from your funding stream every time you put more vehicles on the road longer, they use less fuel which obviously we

would want to do that. but it doesn't make the formula work like you did but i would just say, today one of my colleagues, why is everybody here, this is a pretty noncontroversial nominations them i think going to be a noncontroversial nominations, but my response is because everybody we workforce totally dependent on everything he is going to be responsible for. and the relationship that we have with you and you have with this is important, and i'm glad you are stepping up to do this job. >> senator, thank you. i enjoyed our conversation but and if confirmed look forward working with you. >> thank you, mr. chairman. >> senator cantwell? >> thank you, mr. chairman. and welcome, mayor foxx, to your family and congratulations on your nomination. i'm excited u.s. dot is working right on the first national multimodal freight strategic plan come you and i had a chance to talk about this. but i want to hear your thoughts

or public commitment to with you continue to work, in implementing a national freight policy? >> senator, i'm very excited about this initiative, and i want to thank you for your leadership on it. freight is a critical player in our economy. and can be an even greater force in our ability to reach out into global markets and to move goods quickly within our borders. i am aware that there is activity associated with populating the national freight council, and that the national freight strategic plan is going to be the product of a lot of stakeholders coming together. and i really am excited about the possibility of working with you and others on the project. >> one of the issues related to the is the level of congestion that affects our ports, or affects our roadways in moving u.s. products to their destinations. me