so when the war comes down, we simply don't have to borrow as much. so i was taken aback at the state of the union when the president said we're going to use half of the war savings to fund infrastructure. there is no money there. it just means we're going to borrow, continue to borrow half as much as we were borrowing before if you assume his assumption is right. this is the kind of gimmick that put america in this fix. we know there's no money there. we know what you're saying when you say we're going to spend war money, we know you mean you're going to borrow the money for the road program. we need the road program on a sound financial basis, not on

borrowed money. we've got to reduce that tendency to borrow money. as we have established, the president's budget is a big gimmick. it's not going to save $4 trillion, it's just not reducing our deficit, $4 trillion, but it does raise taxes by almost two. to my knowledge none of the $2 trillion, $1.9 trillion is spent on roads. so if it's a priority, why don't we use some of the new tax revenue at least for roads. truthfully if we raise taxes, they should be used for reducing our deficit not for new spending. so if we are to strengthen america, we need to create growth, productivity in america, create american jobs. we have to grow the economy fundamentally and not grow the government. we have to prioritize and control federal spending and create an environment where

hardworking taxpayers can thrive in their own private sector jobs and where their lively hoods come from. a smart road program, however, can be an asset to that. i think it can help the economy grow and create some jobs, real jobs in the short-term. so i look forward to discussing this matter. i'm just deeply disappointed, mr. chairman, in the bill moving today. i think there's some gimmicks in it. finance committee, i supported the bill in committee. it's on the floor today. we were promised there would be legitimate pay fors and this would be on a sound basis. i'm afraid that's not entirely accurate. we're looking at 6 to $12 billion. that's what the shortfall is to make the fundamental program sound. now we waltz in and are just going to borrow another 150 out of thin air to spend on infrastructure without any source of income. now we're also talking about

250, 300 borrowed for this tax holiday which really don't pay your pension -- social security pension and the government in effect gives a person making $300,000 a $2,000 check. by the way, we don't have to pay for that either. not in the short-term. not in the long-term. i'm really worried that our people haven't gotten the message that this world is dangerous. our financial world is dangerous. the chairman still thinks business as usual. new programs, new programs, when cities, counties, states acting differently. i like to blame the president but we've got some things going on in both parties that are not as good as they should be. that's for sure.

thank you. appreciate the opportunity. >> yes, sir. >> thank you, senator session. i notice, mr. secretary, you have chris bertram with you. chris is assistant secretary for budget and programs and chief financial officer for the department, as you so well know. until august of 2009, mr. berm ram was here as a senior professional staff member as the senate committee on commerce, science and transportation. i know in his previous career he also was at the faa and an important position and also served as staff director for the house of representatives sub committee on highway and transit. certainly comes with a tremendous background and so

we're delighted he's with you at the witness table. mr. secretary, please proceed. mr. chairman and senator sessions. budget proposal for the department of transportation. importantly, thank you for the kindness and your kind words about my son and what's happening in egypt and your interest in that. we appreciate that very much. as you know, transportation has been in the news a lot lately. that's a good thing. this week both the house and senate will debate long stalled legislation, as you've heard president obama and i are strong supporters of the senate's bipartisan approach. i congratulate senator boxer and senator inhofe and those who serve on the epw committee for the work they have done and also senator baucus for working very hard to find the pay for. at the same time on monday the president detailed his plan for a six-year surface transportation reauthorization proposal, which is part of his blueprint for an america built to last. here are the facts. our budget proposal has three broad goals. number one, creating jobs by investing in our infrastructure. number two, spurring innovation across our transportation systems. and three, maintaining our laser focus on safety, our number one

priority. and all of this would be fully paid for. president obama is proposing to cap the funding for the overseas contingency operations over the next 10 years there by saving hundreds of billions of dollars. then we'd used half of those savings to pay down the debt and the other half on a six-year transportation bill that let's us do some nation building at home. so let's take these goals one at a time. number one, an america built to last needs a strong transportation infrastructure. that's why the president's budget will improve highways, railways and transit networks and will continue to ensure these systems are safe. of the president's $476 billion proposal, $305 billion would fund road and bridge

improvements. a 34% increase over the previous authorization. the president's plan will modernize and simplify the highway structure by consolidating more than 55 programs into five programs. of course investing in our transit systems is another critical need. the president's budget includes $108 billion over six year for transit, 105% increase. it will prioritize projects that rebuild and rehabilitate existing transit systems and include an important new $45 million transit safety program, which we believe is critical. we've been talking to all of you about that for the last couple of years. and the president's budget provides $2.5 billion in 2013 as part of a $45 billion six-year investment to continue support of inner city passenger rail including construction of a national high-speed rail network.

second innovation as we rebuild we can no longer afford to continue operating transportation system the same way we did 50 years ago with outdated processes and financial tools that were made for yesterday's economy. the president's 2013 budget will invest in research technology that children and grandchildren will need to boost economic competitiveness. for example, the federal aviation administration, as you all know, is in the midst of the largest transformation of air traffic control ever. the 2013 president's budget request $15.2 billion to support faa programs. more than $1 billion of these funds will be used to advance the modernization of our air traffic system through next gen. the next generation of air traffic control technology which we've all talked about for a long time. so the use of satellite surveillance and new methods of

routing. pilots, planes and routing procedures next gen will change how america flies reducing travel time and delays. it the vital role research in decision making by moving research technology administration rita into the new office of assistant secretary for research and technology under the secretary's office. this change will provide a prominent centralized focus on research and technology, important to the president, department's operating administrations and research programs. third and finally keeping our transportation system safe will always be our top priority. consistent with this commitment, president obama has proposed a record level investment in safety. in fact, the president's proposal will provide $7.5 billion over the next six years to the national highway traffic safety administration nhtsa, our safety administration to promote seat belt use, get drunk drivers off the road and reduce distracted driving. this will ensure it keeps dropping from traditional lows.

double investments in highway safety infrastructure by promoting $17 billion to federal highway administration safety construction programs. the budget also will dedicate $4.8 billion to federal motor carrier safety administration. these dollars will ensure that commercial trucks and bus companies maintained high operational standards and are dedicated safety professionals can get high-risk trucks and bus companies and their drivers off the roadways. finally our safety focus must also include the transportation of hazardous materials in our network of pipelines. that's why the president's 2013 proposal requests $276 million for the pipeline and hazardous material safety administration to help ensure that families,

communities and the environment are unharmed by the transport of chemicals and fuels on which our economy relies. so with that, mr. chairman, again, thank you for the last three years for allowing us to come and talk about our budget. it's a privilege always to do that. not every committee affords us this opportunity. so we're grateful to your committee for that. >> we think it's an absolute priority. i think senator sessions and i are joined in that, that transportation has got to be a priority. it's good for the economy. it is good for jobs and good for the competitive position of the united states. let me go right to that question. i've heard a number of rules of thumb for how many jobs created for each billion dollars of transportation investment, investment in transportation infrastructure. do you have a rule of thumb that you apply. number of jobs created in the united states for every billion dollars worth of investment. >> let me just say this. you all gave us $48 billion in the economic recovery plan. $48 billion. we spent every penny of that.

what we did, we created 65,000 jobs with 15,000 projects. we started the high-speed rail initiative that the president wanted. we started the tiger program. we gave $28 billion to roads and bridges, $8 billion to transit. all the money was spent the way congress said it should be spent. you haven't read any bad stories about any of the $48 billion you spent. what we did, we put 65,000 americans to work building roads, bridges, transit systems around america. now, if you use that as a gauge -- >> how much could you have spent effectively? >> a lot more. >> let me just tell you, i argued strenuously for $200 billion. we had done a great deal of due diligence on how much money could be spent. it wouldn't have ended when it did. we would have spread it -- it would still be going now. >> sure. >> we believe we absolutely could have spent $200 billion

more effectively than some of the money was spent. we all know that package was put together as the president was coming into office. actually a lot of it was put together before he was ever in office. he was at a distinct disadvantage. i remember that debate so clearly and the arguments being made it would take too much time. my argument was if you tell the states there is this money, and right now with the economic downturn there was a lot of contractors available at favorable rates. did you find in that $48 billion you got --

>> we got bids below what we anticipated which gave us additional money. and also, jobs done way ahead of schedule also, because there was a pent-up demand with contractors and availability of workers and the great partnerships that we have with the states, whether it's the governors or the state dots or commissioners ready to go. and it worked very well. it really did. like i said, not one bad story written about any money -- any boondoggles, any earmarks, none of that. >> i would join you in saying i made several speeches in one of my prime concerns about the bill was that it did not do enough for highways. our basic bill is about $40 billion a year. so to have $200 billion could

have been a transformative act for our infrastructure. but nobody would listen, moved forward as they did. but i thank you. you did say that at the time, mr. chairman. i thought you were right. >> i appreciate that. you know, as i look back, it's one of the things i regret the most was that i was not able to persuade certain people who had this idea. i know the economists. i've heard it 100 times. it takes too long to get infrastructure bought bloodstream. second question i wanted to ask you about, do you have any measures for how improved transportation strengthens america's competitive position? >> well, we know now we are

being outcompeted. your chart shows that by a lot of other countries. china is right now building roadways, airports, runways, high-speed rail, transit systems. i mean, 10 years ago that would not have been the case. today it is. we're being outcompeted by lots of other countries. you look what's going to be happening in brazil, particularly in rio, what they are going to be doing there with their infrastructure. we need to keep pace. we don't keep pace by extending the transportation bill. we keep pace by passing a five- or six-year bill which is a blueprint for what we do to put americans to work. build roads, build bridges, build transit systems. that's what america has always done. congress has done that. >> i want to go back to my first question.

you gave an answer. the thing that's in my head, i've been told many times for every billion dollars of road expenditures, it creates 18 to 20,000 jobs. is there some rule of thumb like that that you apply? >> you know what, senator, i'll get that for the record. i'd rather do that than say a figure that won't be accurate. >> next on my list, high-speed rail, $47 for high-speed rail. what is the status of high-speed rail? where is it being taken up in what are the prospects? what does that offer us in terms of enhanced competitive position, jobs, economic activity. give us your view of this expenditure of $47 billion. >> well, we start from the premise that anybody that's ever gone to europe or asia or ridden the trains over there comes back and says why don't we have this kind of transportation in america. because we've never had anybody with the vision or willingness to put the money into it. president obama stepped up real early in his administration, put $8 billion in economic recovery plan, which jump-started our opportunity to implement

high-speed rail, which, by the way, many of the states were way ahead of the federal government on. california has been working on high-speed rail for two decades. we know along the northeast corridor people have been using passenger rail for decades. and so what we did, we took the $8 billion and did like we do with all of our partners, we partnered with groups around the country that have been working on high-speed rail. so we've invested $3.5 billion in california. i just spent a week in california. i met with the governor. he's totally committed, on board. i met with stakeholder, people in agriculture, met with small business people. they have a good plan. in the midwest they have a good plan.

the governor of michigan, governor snyder has accepted almost a billion dollars for a connection to fix up the tracks between trial and chicago. the governor of illinois and the governor of missouri have a good plan. we've invested more than $2 million in the midwest. we just made significant investments in the northeast corridor. not just between washington and new york but further north in other states that want to get into the high-speed rail business. so the president had a vision. he put the money in the economic recovery. you all gave us some additional money. so totally we've invested over $2 billion. the important point to make here is, there are a number of companies that were building high-speed rail in california, illinois, along the northeast corridor that want to make

investments i've said all along not enough money in washington to do all we need to do with private rail. we need private investment. the private investors are in america, california, illinois, along the northeast corridor, making investments, partnering with states in order to make th california. partnering with states in order to make the kind of investment, this is the next general ration of transportation, for the next generation. this is what we're doing for our next generation, the last generation left us a state of the art interstate system, thank goodness they did. took us 50 years to do it. what we're going to do for our next generation, we're going to leave them with -- >> i have seen what japan has done, i have seen what china is doing and i see what europe has done. and we can't fall behind in that area east effort. anybody that travels in the northeast corridor knows we're way, way behind.

let me briefly go to the question of funding, you mentioned overseas contingency operations. there's much skepticism here. let me try to capture why there's skepticism. there are many of us that believe that while we understand the cbo says this is a savings, we understand that, but here's what troubles me. it just strikes me that what we commit in terms of war funding, has very little to do with with what we write down on a budget table. what we commit to war funding as a nation, is guided by the national security interest of the united states, and it is very unpredictable. when you're going to have conflict and what that conflict is going to be and what it's going to cost. and so i understand, you know,

that cbo says, you know, if you cap overseas contingency operations because we're drawing dawn in iraq and afghanistan. i have always been reluctant to use overseas contingency operations to pay for stuff. well that's a bonus for bringing down deficits and debt. the commissioner of a group of six, they did not use it as an offset. what's your -- what's your position? >> my position is this, the idea that the president didn't want to pay for these things for the

last year, we were criticized royally by that, by a bunch of people on this side of the capitol and the other side. so the president came up -- no more excuses about how we pay for it. we take the highway trust fund, we take half of the money from the iraq-afghanistan fund and we pay for what we're talking about here. i'm proud of that, i'm proud the president came up with that and i'm also very happy that nobody around here can criticize us for not having to pay for it. >> all right, i have exceeded my time, senator sessions. >> well, you don't have to pay for it in any realistic sense and mr. elmandorf told us there's no money in the war. but the way, cbo stores money,

if you had $100 million far the war last year, that's going to continue for ten years and if you reduce that trend, then you save money under their scoring, but it's realistic in terms of the debt of the united states, it's totally unrealistic, because there's no money there, there's no fund of money there, and it's not paid for. this money that you're saying is going to be paid for from the war funding, is going to be borrowed. it's money we're no longer borrowing for the war, instead of having able to take a deep breath and relax because we didn't have to borrow that money, you propose so spend half of it on the roads. and that's just not common sensicsens sensical. i remember asking mr. elmadorf, christmas eve, when the vote was

the night before, weren't we double counting $500 billion to justify the health care bill and make it look like it's going to making money for the government instead of cost money for the government, he said yes. i asked him, would he put it in writing? and he works for us, he said, i'll put it in writing, so he put it out the next morning. he said, you're double counting the money, even though the county could suggest otherwise. you may say you've paid for this, but it's not reality, even though the conventions of accounting might suggest that it is. all right, well. the roads bridge improvement

discussion has -- that's a pretty substantial increase at base level, is it not? at a time the country is suffering -- >> senator, we have not paid attention to our roads and bridges, we haven't. >> i know that. >> we could fill a lot of boyfriends. >> how far official we are for nixing up our roads and bridges, because it's significant, it's billions of dollars, we're way behind. >> with regard to california, i see the numbers that are coming in, instead of early estimates that it's going to be 30 billion for this plan, it's going to be 100 billion more. this is a plan that's being rejected bring governors all across the country.

we are not going to start out a -- it's death on arrival, it's not going to happen, we don't have the one, and we're not going to see and we're not seeing any numbers that will justify such a massive program. there are parts of the country that could certainly benefit. with regard to the $50 million programs, i think that's a good step, but it's mainly your headquarters in your argument as administration as i understand it that will be improved that could save money and i think that's important. but what i'm hearing is, a real problem out there is the long arduous, expensive, regulatory planning processes that are driving up costs for our state, county and local officials when they try to execute a project

that is now from planning to cutting the ribbon as much as 13 years, the chairman made reference i think to some of that, how can we reduce that time. do you have any plans that you believe will actually reduce that time and any statistics that would back that up? >> we have -- a plan that was mpmented more than two years ago and it does speed up highway projects, we have had lots of complements and kudos from our partners on that program. the transit edadministrator suggested a way to speed up the starts program. we reduced the amount of time dramatically from which somebody submits a new start to when it's approved to when we so alled --

both of those plan of those every day counts has been in place, the new starts is just being implemented, and i believe that it speed up. >> i think we'll see the road work will take too long, some of that is maybe unwise by management in certain state and local governments. but i do hear a lot of complaints and i'm glad you're focusing on that. and it would be a way to get more highway capability sooner at less cost and that's one of the things it would make the taxpayers have instead of just spending more money. on the high-paid rail wisconsin, florida and ohio have given back their money, realizing it's too costly to participate. from florida, the