halls of congress. it's a peculiar kind of class the worst kind in my mind, the worst kind of class warfare where people who are paying good salaries who get good pensions and health care from the government members of congress spend an awful lot of time attacking a program that has brought literally millions of people out of pocket that has had a long, long, good history of support from presidents across both parties of liberals to conservative spectrum.

>> thank you, mr. chairman. commissioner, welcome. i joined with other members of this committee last year on a letter to you after it was reported by the inspector general for tax administration that more than 1100 employees had been awarded over a million dollars in cash rewards and more than $10,000 in timeoff awards. you made no commitments nor did you set any deadlines. and i know that you've talked a little bit about this already this morning. i just wanted, for the record to get you to speak clearly on this issue. it seems to me that it's awfully hard to go to the hardworking american taxpayers and ask them

to come ply with the tax laws when you have employee ins your own organization that don't comply. can you commit to me that you are going to fix this problem and ensure that that's not going to happen again in the future? >> we have already adopted policies to address the problem. not engaged in installment agreements, who are becoming compliant. but we still count those as compliant. we say if you're going to be counted as compliant, you have to be kumpbt today with your taxes, even if you're kushlt with an installment greemtagreement, that doesn't count. there are proposals and

suggestions. if you willfully d not file your taxes and the irs, not only are you not eligible today for a bonus because we look at performance awards, but as they say under section 12 of 3 of the code, it's grounds if you willfully are not in compliance it's grounds for dismissal. over 99% of the employees are kpliebt. they understand, anybody who signs on to the irs, they understand part of their obligation is to be compliant. we have gs5s. and they're capable of making the same mistakes. not willfully, but inadvertently inadvertently. we count those people as compliant. but they're not people who are willfully trying to cut corners or not pay their taxes. so our policy is in place. and it includes issues of about

other disciplinary actions. we've firmly and totally agree that for you to be eligible for a performance award you should be performing. and that includes kplient with your taxes, not willfully avoiding them. and that's a new policy. >> i would just say whether it's willful or not, voluntary or involuntary, just with absolute clarity, without any ambiguity, make it clear. as you know, the agency has a huge trust issue. they are not going to be rewarded in any way if they've got tax compliance issues. it's got to be that crystal kwleer. in your testimony, you cited the

irs decline for insufficient tax enforcement. but there's also in the budget, a request, in your 2016 budget, a request for $490 million and other 2500 employees, ftes, to implement and administer obamacare. now, it's needless to say none of these employees would be necessary if congress chose to mandate in the law. but isn't it time to admit that the increased burden on the irs is from obamacare, not simply lower if you believeding. that's what you're here to talk about. but it strikes me at least, that the resource issue is the result of a shift away from customer service and other core irs functions in for obamacare. >> as i've stated from the start of my tenure it's exactly clear that our responsibleties have grown. it's not only the implementation of the affordablecare act. it's the implementation of the

compliance act, is about to be the imp leaptation of the able act and the related organization responsibleties where we're being asked to start new programs. all of those are resource-intensive. so it is not -- if we did not have any of the statutory mandates we have to itch leapt we would have more resources available for enforcement and taxpayer services, obviously. but i have stated from the start and i agree with you, every time there's a new program that's given to the irs, it is a mandate that we will pay attention to. >> mr. chairman, thank you. and, commissioner, thank you for being here today and spending time with us. mr. chairman, if i would e could request that we get a copy of

the agency policy on this issue so we can take a look at it, i would appreciate it. taxpayers this year are likely to receive the worst level of taxpayer services since at least 23001 when the irs imp leapted its current performance measures. i guess i want to ask you if this is a fair assessment. >> all right. i'm not an expert of what 2001 looked like. but it clearly is going to be a difficult filing season. and the service is going to be, if not miserable, abysmal. whatever it is, it will be a level of service that none of us believe taxpayers deserve chlts. >> so miserable is a word that

you guys use quite a bit. now, you said mult parking light times during your hearings, that you're doing significantly more with significantly less. can you quantify significantliless? what are you talking about necessary budget cuts? what's the dollar amount of percentage that we're talking about. >> of the budget cut? >> it's been cut at $200 million. at the same time -- >> what percentage is that? >> that's 10 or 12%. >> so we would argue to the american taxpayer family that also has to deal significantly more with significantly less, that perhaps if they should, perhaps the irs should, also? >> we are doing significantly more with significantly less. it's just discussed we've got no choice but to itch leapt.

as i noted it's ironic in the bill that cuts our budget we were given to new initiatives. it's not a question of doing the same amount of work with less money. we were doing significantly more work. >> and i would argue that the average taxpayer is out there doing the same thing. the chairman of ways and means introduced legislation that would bar the irs, i believe it's called stop tar getting political belief of the irs act that would bar the irs from changing the guidelines for tax exempt 401 c-4 groups until the end of 2017. i think the irs is expected to reissue new rules. could you be more specific as to when those new rules would come about? >> we don't have a time line for those.

>> one of the inspector general's recommendations when he termed the proper criteria for organizations applying for tax exempt status said that we should review and clarify what the facts and circumstances would be that would determine how much political activity was allowable. the first proposal before i started managed to sort of aggravate people across the entire spectrum and general rated 1 6 0,rate ed 160,000 comments. our goal is to make sure that we end up with a standard that's clear, much clearer than the present standard, fair to everybody. we're looking at which organization it should apply to and easy to administer.

>> they ought to have a much clearer of facts and circumstances standard. nobody's going to second guess them and suddenly say they're no longer tax exempt because they've exceeded some vague hard-to-understand terminology. >> i want to go back to nina nina olson's report. i was disturbed in that report that in assessing the irs, it lacked resource allocation. 13e6kly, the agency has said it would not answer complex tax laws. on the phone or at walk-in centers further, after tax season, emt ploy years are being told not to answer any tax law question despite the fact that 15 taxpayer will receive filing

status. >> it's a significant challenge and one that we're concerned about. the decision was made last year that if we continue to answer, by definition if queue would get longer. the people who care most about that are the employees. the answer i gave them was if you take longer to answer a complicated call, the number of people in line gets longer. the waiting time gets longer. trying to minimize the inconvenience to taxpayers as much as we can.

>> is that significantly more or significantly less from expectations to the taxpayers. >> i think the taxpayers have a right to expect that they can call the irs get on the phone within 2-to-5 minutes and get their questions answered satisfactory so that they can file. >> and this sounds significantly less. >> it's not significantly less. what's happening now is we have significantly less resource and our service is significantly less. >> we're doing more. we're answering more calls than we've answered before with our people. but, because of the fact that there are even more calls, the demand is up. the level of service is down. and that's zimply because we don't have enough people. it's not because they're not dedicated. it's not because they don't care. they care substantially about it. >> and i'm not arguing that point. commissioner, thank you. mr. chairman, thank you.

much has been made about the three percent reduction in resources. your employees started targeting pro-life groups. members are mostly hard-working every day americans who decided to sitly exercise their first amendment rights. and in response, what some have perceived as a coordinated effort between the irs and liberal groups aimed at targeting these americans and their groups in an election year, we saw an absolute chilling effect on certain types of, supposedly, free speech. i want you to understand and know that the actions of the irs hurt my constituents. and my first question is has the irs stopped targeting churches

and religious organizations with oppressive and intrusive interference with their operations. >> i've said from the start tonight, those were mistakes that have been made and should be never made again. i said we're committed to ensuring that taxpayers are confident where ever they deal with us, that they're going to get treated fairly no matter who they are, no matter who they voted for in any election in the past. we need to be able to do that because it's critical for the fairness of the system. i am as troubled as anybody else is by the events that took place in 2010.

>> people externally and internally would have a better idea of what's permissible, what counts and what doesn't count. >> i appreciate your answer. certainly, i am hopeful that we're moving in the right direction. i certainly have a letter rep zebted with 41 different conservative groups. all but five have seched their tax exempt status. one of the questions that you all face at the agency commissioner, congress gives you hundreds of millions of dollars to modernize your i.t. system.

you told the committee that the irs is operating with antiquated systems and still has applications that were running.

>> our system, all of it was customized and developed in the 50s and '60s. we've replaced that system with those expenditures. but we still have over 50 applications that need to be replaced. but to show what we've been able to do that, that refund app got 200 million hits last year. 150 million returns across just 85% are processed electronically. that was not only not possible, it was inconceivable 15 years ago. we have made substantial strides. but the $300 million on the

affordable care act are all challenges for us. fortunately, the filing season this year has been implemented. we have 145,000 foreign financial institutions about to provide us data under the foreign account tax compliance act. all of those systems had to be built and rebuilt to obama sosh that data. if we could continue with the refund -- the resources we needed, we'd get rid of a lot of these systems. taxpayers would be able to go on line, as they do with bank of america, wells fargo or fidelity and deal with us without paper, without calls. they'd be able to do all of their transactions easily and efficiently. we're talkble about can i catch up with where financial institutions are. and to do that, we have to keep spending the money. >> i certainly would like to -- >> i know my time is up. i'll make this my last question.

all of that is stoered in antiquated systems. rather than having to hunt for the return. right now, we've aut mated the return.

>> we've been investigating this since may, 2013. my staff has interviewed over 30 irs and treasury o fishls and reviewed over a million pages. last year senator widen and i were almost ready to ask the committee to release the final report. however, right around that time, we learned that the irs did not produce all e-mails to and from

the key figure in the investigation because of what the irs claimed was a failed hard drive. at that time, members of this committee will have ample opportunity to explore the irs matter in great detail. we will have to do this carefully because of the restrictions set by section 63 of the tax code which generally prohiblts specific information.

i urge all members to save their questions on the investigation of irs organizationings. and, on that matter until they've had a chance to review the final report. senator, do you have any comments? >> just very briefly, mr. chairman and colleagues. this is the only bipartisan inquiry that has been conducted or is being conducted on this issue. i just want to emphasize as chairman hatch did in his statement that we are working very closely together and colleagues, we are committed to making sure that this will be the one bipartisan inquiry on this important topic.

thank you, senator. >> senator casey? >> mr. chairman, thanks very much. mr. commissioner, grateful to have you here. probably one of the toughest in this town. we can ask for reforms and change and better service we have to be willing to support the resources to get the irs there to get any other agency where they need to go. we estimate that the agency will

lose about 1400 through attrition through fy 15 that we're not able to replace. when you go down that list of cuts and consequences, one of the results of thoo is middle class families and very vulnerable folks out there have to navigate a complex system with a little help. so your challenges in the budget become probables down the road for middle class and for vulnerable families. so i support your efts to get the resources you need to be able to do your job. it's not good enough for us to just say there's a problem we're not going to ask you to solve it. i want to ask you about the letter i sent a week ago last monday on the 26th. regarding everything has an acronym, as we know. this is a tfop. the tax forts out let program

where as many folks know free tax forms are sent out, in pennsylvania, we're getting a high, high volume of calls and communication regarding the fact that because of the budget cuts the distribution is in rural communities. we have millions of people that live in rural areas. this is a big issue. so what additional resources or tools or support would allow you to maintain the past year's level of service regarding these forms and instruction booklets.

people haven't relied on those forms. one of the things we're trying to make clear to people and we'll get you the anxious before the week is out. is that forms are are down loadble from our web siet. everybody has access to the forms. we recognize not everybody has access to the internet. and the challenge for the library is many allow you to in fact, use their computers. is that they could down load -- can down load those forms, but there's a cost to that. they have to run their printers and they're running on tight budgets. so we don't underestimate the significant e kans of that problem. overall, our concern has been as we try to figure out where to minimize the impact as much as we can we've historically set out large volumes of libraries and others as we track them only act 10 or 15% of the statements are huge. so we're producing a huge volume

of paper. we've tried to therefore figure out what forms to use so we can produce those. but it is drektly a result of trying to avoid shutting the place down where can we cut costs? as much as we can. so it's only a matter of a few myon to be able to produce all of that. we've cut back over time as mart of our 200 million we've saved. we've sent a copy of the instructions and returns. nobody gets those anymore. and we save about $60 million a year because of those and other attempts to go forward. but we are anxious to work with libraries and others. we have no choice where we are this year to try to figure out what the right mix is for them so that they can have copies for people who need them and not burden the libraries with this kausz.

>> as quickly as you can get an answer. we're getting a lot of calls on this. one of the problems is the irs gave an 800 number. they said we're going to have this problem solved in 4 weeks, 5 weeks, 6 weeks. it's not enough time. we've got something in the order of 20 million people in if country, 14% of the total that don't file electronically. the faster you can get answers is better. >> the problem is in printing forms, the tax legislation that got passed late, so that throws our printing process out. and that's why by the end of this month we'll have available for people to be able to mail them and fwr my understanding the end of february, that seems like forever. especially if people are trying to file refunds. but we will have those forms available and printed before the month is out.

i will get you the answer to that later this week. >> there is a vote on the floor now. we're going to continue to hold this hearing during the vote. i'd like to make sure all members are able to ask questions. senator nelson, you're next. >> almost 5$5 billion a year is going out as a result of criminals using somebody else's social security number you have

a pilot study going on in three jurisdictions. you're doing it in florida in larng part because i've raised a ruckus as a result of a lot of these criminals. much to the annoyance and heart ache of the legitimate taxpayer. and, unless they can get that pin, personal identification number they can be the get the system to operate because the irs says oh, you've already filed a tax return. and they can't get their

legitimate taxpayer return filed and their refund if they have one due. so i thank you for getting out those pin numbers next week. but in those three jux dictions since one of those jurisdictions is my state i'm going to apply for a permanent personal identification number and see how the system is. and i am filing this week legislation to set up a personal, permanent pin. now, the next and most agree jous part of this is that a lot of these false tax returns are being filed by inmates in the prisons. in the federal prison system, as well as the states.

we brought this to the attention of the ir zx a couple of years ago. you all implemented a -- and we passed, in law, that gaf you temporary authority of which you could then break your confidentiality and share with the prison systems the fact that someone had filed a false tax return and indeed, it's an inmate. we then followed up that temporary authority with a permanent authority in law two years ago. but it's yet to be implemented. can you help us, please?

>> we're working with state prison authorities. it's in they're interest as well to find out whether prisoners are actually engaged in illegal action. and so the statutetorial support from the congress was critical to us. and it has already made a big impact which you're right we need now to have all the state prison authorities enter into the memorandums of understanding with us to go forward. >> so you had the memorandum in place with regard to the federal prison system? >> yes the federal prison we exchanged data with them and that's been able to give us -- we know what the roles are like. we are there. it's really at the state level when we need state authority and state agreements. >> then i want to utilize this hearing here today for the word

to go out to the respective 51 prison systems. that if you want your folks to get mad just let them know that prisoners are filing false tax returns getting lots of money back and the state prison systems ought to get on the ball and sign this mem randing of understanding. and if i also want to use this hearing to encourage your people to get those mous when the state steps forward and wants an mou, get it done. >> i would like to correct one thing. just because if you go online you'll discover, we are actively pushing the pilot program in the three states, you'll note. when you get an ip pib e pin, an identity protection pin, we'll

give it to you fr one year. it's a permanent process. each year you'll get a new pin so that it's -- because otherwise, we're concerned that the pins will be stolen. so what it is is a way of updating every year. so when you get yours, some ways i know personally me, i've discovered it's a very good program. the reason we haven't launched it nationally is because we want to see how efficient it goes. we hope this year, as many people as possible in florida georgia and the district of columbia will sign up for ip pins. >> you just had another person sign up. me.

beginning again in 2011, at the same time the irs began targeting 57ly cants. the irs gab gift tax audits and began makes contributions to various tax organizations. these audits are contrary to congressional policy and legal pres debit e dent when we got wind of this the irs stopped auditing these contributions. this is a very complicated area of the law. would administer guidance to ensure that the audits would not be ramped up again. it's been about three years and we've yet to see any guidance or information. it's important to provide certainty to our citizens that the irs is no going to select gift tax assessments based on politics. so my question is when do you plan to provide guidance on these audits or would you be in

favor of guidance codifying with respect to application of the gift tax to c 4rks and other tax kpecht organizations. >> it is in consideration we're taking a look at it across the board because they are related to the whole question of the tax exempt status and organizations across the spectrum. but in response to your question, any time congress would like to legislate in this area, it would be fine with us. it's clear and easy for people to understand.

so it is tied up with the entire question of okay, first, organizations across the board. >> i understand you want 67 million bucks more. is that the number? >> actually, the president's budget for this year would be -- our present buchblgt is 10 pbtbudget is 10.9 billion. the president's request is 12.9 through an integrity cap adjustment. >> according to senator balm and senator carton that were here they really want to use the money that you are not receiving now for 9,000 enforcement em poi yees?

we've lost 5,000. it would allow us to hire 3,00 employees in the service centers answering phone calls so our level of service would go back to 80. >> so this is phone calls. this not knocking on doors with regards to audits and so forth. >> are you going to just aim at sophisticated rich people? >> i know some rich people that are not sophisticated. everybody wants to talk about middle class class warfare. and the idea by my colleagues

would focus on rich, who's rich? is that 250,000? i'm thot worried about what you said. i'm worryied about whether or not your words are feeling down. particularly if they're at the office of chief counsel. so what i'm going to do is not

ask you to answer questions from me right now but i would like to raise with you questions and points about that program and submit them for answer in writing and give you an opportunity to give very complete answers. and i would just ask now for your commitment to provide complete and thorough response for the record on that issue whistle blower. >> i'd be delighted to do that. obviously, since those in the united states were undocumented are not legally allowed to work, it makes no sense to provide them a subs sill day tour.

current policy reflects this by requiring those claiming the eitc to provide a social security number for themselves, their spouse and any children. however, the irs chief counsel advice issued march of 2000 not now, 2000, suggests that individuals granted deferred action would be able to amend returns for the previous years to claim the eitc for years they worked illegally in the united states once they obtained social security numbers. so, mr. commissioner, can you confirm that those granted deferred action will be eligible to benefit from the eitc for years in which they were wokking without papers in the united states once they obtained a -- once they obtain a social security number? >> yes, if the way the program works is those without a social

security number and there are thousands who file with it tins every year and people paying their taxes even though they're not legally here, they are not eligible for the earned income tax credit program. once you get a social security number, however, whatever the programs are then the program allows you to file for an earned income tax credit program in terms of whether you can do that retroactively, the normal statutes of limitations would apply as to when you can apply, file abamended return, in effect. underneath all of that, you would have to file returns in the past now, i'm not going to argue what you said because i think you stated the way it is.

but this is a problem you get into. the irs is an interpretation of the eligibility requirements undermines congressional policy of not rewarding those for working illegally in the united states. does the irs have any intention of revisiting the 2000 chief counsel advice? >> at this point i'm not aware that we're going to do that, but i'd be happy to get back to you. >> i'm suggesting to you that it should be done because congressional policy is that ewe don't reward those who come here undocumented.

>> so i would ask you to look at that and respond in writing. my last question will have to be in. i've been investigating charitable hospitals that is suing its low income patients when they can't afford to pay for care as part of the tax exempt status. charitable hospitals are required to offer a community benefit. what is the irs doing to meet hospitals that aren't following their own policies when it comes to low income care? >> we take this issue seriously. as you know, we've had additional regulatory guidance for hopts as to how to meet their riemts, which are required.

one of the hopes is streamlining for the 5013 c organizations. we make it much easier to qualify and give us more efficient use of our resources to audit at the back end. so that we think the points you've been raising are very important ones. these are, in many cases significant financial institutions that are tax exempt, to some extent, to e because they have a requirement to provide community sfszs. and it's an important area for us to be aware of for hospitals to understand what their responsibleties are and tgs our responsibility across the entire tax code that we've taken up audits and enforcement activities to reenforce the need for compliance. >> senator, you're next. >> thank you, mr. chairman.

and thank you, commissioner, for being here. i was here for bart of your testimony and in response to questions. you've got a tough job. they took some of the reforms of people on this side oeft aisle and that side of the aisle and i think we're in a situation now where people are looking for a commitment by the irs to do a better job on a dozen things today. after that process i know that the image of the agency improved

is a tough agency to love because it's taking away your hard-earned dollars. i'm very concerned with what i hear. i think we do need the irs to figure out how to run more efficiently. it's before the internet was used as extensively as it is now. and one of my concerns has been a specific program that would help in terms of this budget issue that you have taurked about today. there is a decision made by your managers that has significantly raised cost for the inc.en sill. but also for taxpayers, it's resulted in an additional 3470,000 calls your decision to shut down the authorization electronic account resolution applications.

i would think with your manpower being stretch and your resours being stretched that you would not want to make a decision like that that would cost the agency so much and be harmful to taxpayers. my question is this type of internet based that the program provided something that you are intended to bet back involved with and are you going to implement it more effectively next time? why did you shut it down?

you're going to reestablish those applications? >> i'm happy to take a look at it. we don't have any flexibility left this year. i think this is an important area. we heard the same concerns. you have to understand we're dealing with criminal as i understand syndicates here and around the world. we have almost 2,000 people put in jail. we are concerned overall about

the practictioners. our priority line is almost an oxymoron because it takes so long to get through. they're at the highest level of our concern. whatever we can do the make the system work better for them, we will. we can't get the forms we used to get. i think there are certain things like the e-services program that will save you so much money over time. in terms of identity theft this

is something i have strong concern about. let me give you an example. we get call from a constituent, it's a mom with a child. she's claimed that the child on her filing, she finds out her child has been claimed. if we're going to work that out with some of your folks but the social security number got into the wrong hands. what's the agency doing to combat that type of identity theft? what options do we have to help you with that? >> if we can get w-2s earlier that will help deal with some identity theft fraud. we'll be able the see returns on

children's social security numbers are attractive to children because children aren't filing a return and not claiming them on the return. it's an easy thing. there was nobody filing a return. we have filters designed to identify where those returns are coming from. we stopped about $15 million worth of fraudulent returns from going out last year. rather than once a year which is where we were two or three years ago. >> this is a very important issue.

senator menendez has been patient. >> thank you. i know the irs isn't the most popular agency of government. it's politically popular by some to take shots at you and your workers. at the end of the day the main purpose of the irs is to enforce the law and serve the american people. when we try to punish the irs as some do by cutting their budget it's the american taxpayer that suffers the collateral damage through reduced service and efficiency. according to the national taxpayers report to congress and i'll quote from it, the budget viert environment of the last five years have brought about a devastating erosion of taxpayer service harming taxpayers. report goes onto estimate that taxpayers will have to wait 30 minutes on hold before they'll be able to speak with someone and less than half of those calling in will be able to reach

a representative. less than half. like you i think this is completely unacceptable. not to mention that for all who pay hard and support our nation it allows those who cheat to get away to some degree when you don't have the ability to enforce the law. let me ask you, is there any way to reduce wait times and increase customer service by reallocating resources to that critical purpose and if so, what would be the consequences of reprogramming funding away from other functions? >> it's a big part of our responsibility. part of the limitation of saying turn everybody into answering the officers aren't trained to

deal with call center operations. we have critical investigators at the same time we have the people answering the phones and we have 2,000 fewer temporary people available for the phones. we only have 75% of our budget is people. they're spread across enforcement, operations, taxpayer service information technology. there's no magic hidden pool that we can take that would move some people into taxpayer service that would go unnoticed. >> people who calling and trying to find out exactly how to abide by the law get information so they can be a responsible filer get delayed.

let me turn to another subject i'm concerned about is the child tax credit. it's being criticized. while fraud in any tax program must be addressed focusing on one anti-poverty tax program is threatening to deny an economic lifeline is not a solution. there's a lot of talk about combatting fraud in the child tax credit amongst low income immigrant families. i have a couple of questions you can answer. is fraud in the ctc and atc a significant contributor to the 50 billion tax cap. >> it is not. it's not at the core of the tax cap. >> by what percent would the gap be narrow there was zero fraud

in the ctc program? >> it might be familiarnarrowed by a percentage. >> we're very concerned about unscrupulous tax preparers. the vast majority do a good job. >> do you believe it's fraud prevention or a significant policy change that will deny this important credit to family. >> obviously, we'd love to move everybody off social security numbers. this juncture the issue of fraud is one that implies to i-10s and people are forever stealing identification information from

taxpayers to generate fraud. >> i find it interesting businesses under way taxes by approximately $122 billion in 2006 alone yet we don't seem to hear the same level of out rage in that regard. wa >> thank you. >> commissioner, i have one question. i think you want to correct something for the record in a discussion you had with senator nelson. >> senator nelson focused on an important program which is our

exchange of information with prisons. we're working on developing mous for states. we're able to cut down significantly on prisoner fraud but we don't have an mou as such with the bureau of prisons. >> okay. i want to talk to you now about what i consider to be a decades worth of foot strategying at the agency. i'm using that word having deliberately because it's just not been possible to get some answers and get this resolved. there are some hedge funds that masquerade as insurance funds.

the irs has been on this for over a decade. there's responsible hedge funds who have offered suggestions on how to correct this. every time i bring it up, you all say it's the treasuries doing, they're not getting at it. i'm going to bulldog this until this is resolved. i think this is outrageous. go back and forth between you and the treasury as i have just unacceptable. these are people that are taking advantage of the law-abiding taxpayers that we talk about. what is it going to take to get this resolved? >> we have prepared guidance and are working with treasury on putting this in final form.

within that context we ought to be able to move this forward. we're committed to doing that. we're working with treasury to get those regulations out. >> guidance was issued in 2003. when do you think this is actually going to get accomplished. can you give me a date this morning? otherwise it sounds like more of the same. more of what everybody's talking about since 2003. we're talking to our colleagues. they're going back and forth. yes they're legitimate hedge fund companies. give me a date when i can expect this will be completed.

>> as you know i don't control that. the regulartions come out of both agencies. >> 90 days? can i expect this will get done in 90 days? >> 90 days has a nice ring to it. >> let's get it done in 90 days. after ten years ten years plus 90 days seems to be enough time. thank you. >> thank you for your patience here. we appreciate you coming to the committee and being open to all these questions that have been asked you have. let me just say a couple of things. i have a couple of questions. the president indicated he would be for corporate business tax reform. has anybody in the administration contacted you about how you think that ought

to occur? have they contacted you or talked to you about it? >> i'm not aware of any contact about that. we have with an ongoing set of reviews with the treasury office about regulatory device and development of programs. as such, we're anxious to cooperate with anything thinking about tax reform it has to be administrative. >> they consulted with you about these tax proposals that the

president is making. >> we don't have communications with the white house. >> why not? it seems you know more about it than they do. >> for all the reasons we have talked about over the last year and a half we're involved in tax administration and discussion about tax policy at the higher level of policy levels not the drafting of the statues we're not consulted. as you move forward, whatever the policy is that people are considering it has to be administered. anybody looking at reform or simplification of the code. >> we appreciate you being here today. it's been a good hearing, in my opinion. any questions for the record shall be submitted no later than tuesday, february 10th.

with that the committee will go into remission until further notice. >> thank you. >> appreciate you being here. on the next washington journal, congressman gene green, democrat of it can on the gop efforts to repeal the affordable care act. later, c-span's tour of black colleges and universitys kicks off at howard university in d.c. our guest will be dr. wayne frederick. you can join the conversation with your calls and comments on facebook and twitter.

keep track of the republican led congress and follow its members through session. james chairs the senate environment and public works committee. this is 2:15.

. meeting will come to order. the whole right side back there is oklahoma. i came in last night and they were having a dinner. i thought two or three people. i knew gary ridley would be there. he's always there. i looked over and all familiar faces there. we have this concern there's a lot of things about is government really spoedsupposed to be doing. and quite often -- the reason i

got on the committees i did 20 years ago, was because this is what we're supposed to be doing, defending america, building infrastructure. that's it. so we all understand that in oklahoma. we know that we have gone through a process that most of us -- some of us remember, most of us have not been around that long, but i do rare over in the house on the t. & i committee, at that time, sfm commissioners foxx, you know the problem we had then? too much surplus. we all know what happened since that time, and we all know we can't continue to do as we have done in the past. i think i do have an opening statement, which i will submit as part of the record. i think the significance of this meeting, i say to my friends on the left and right, is that we want to do it right this time. we've done patchwork, put together things we think are a good idea, and i have to say this, we've had successes.

i didn't like the way things went back in the 27-month bill we had. i didn't like the idea that a lot of republicans, my good friends were demagogging it, and not realizing that what they were doing -- they were thinking they were doing the conservative thing, but it's not. the conservative thing is to pass a bill instead of having the extensions. secretary foxx has been out in oklahoma and we've talked about this at length, the cost of extensions. i think it's somewhere around 30% off the top. well, the good in us is that the house, when we went over right after this bill, and told them, talked to them about this thing, about our constitutional responsibilities, every one of the 33 republicans and the democrats on the house t & i committee voted for it. that was a major breakthrough at that time, and i see that happening again here.

we are going to be doing the right thing now, and as we know -- we decided to do, that we're going to make one change in this committee. we're not going to have everyone with opening statements, because we have numerous witnesses in. i will just yield to senator boxer, and then we will start -- continue the hearing. >> mr. chairman, thank you so much for making this your first hearing. nothing could please us more, because we know this is an area that there is bipartisan support for, and i think senator vitter and i -- it's no big secret we don't see eye to eye on much, but we were able to get a good bill done through this

committee,and i have to make a point, mr. chairman, we were the only committee to act last congress. no committee of the senate or the house, but this committee. with your leadership we're going to be working together here to get this done. i'm going to ask unanimous consent to put my statement in the record and make four very brief points. first, we can do nothing more important for jobs, for businesses, for this economy, for this middle class than passing a multiyear highway bill. that's the first point. there's nothing better that we could do. secondly, we have a great record of bipartisanship on that issue, so nothing should stop us. again, i point to last year, when we acted when no other committee acted in the senate or the house. there was bipartisan paralysis except for us in this committee. and i'm so proud of that. and we need to take the leadership again and hopefully this time it will be emulated. three, we have to have the courage in the senate and in the

house to find a multi -- to fund a multiyear bill. we cannot leap over that idea to an extension and that leads me to my next point. we are getting perilously close to the bankruptcy of the highway fund, may 21st. rhetorically i ask if you to the bank and want to buy a house and the bank says, great, we'll lend you the money, but only for five months. you're going to walk away. you won't buy a house if you know that many that's what they've done here. when i say they, the vast majority of our colleagues. punted this, and this is awful. this is the greatest country in the world. we will not remain so if our bridges are falling down, if our highways are crumbling, and so many other ramifications of not investing. >>. so we need certainty.

today i learned from my staff, i don't know if your staff has informed you, that the deficit in the trust fund is less than we thought it will be. we are anticipating $18 billion a year over six year. it's $13 billion a year over six years. >> i thought it was 15. >> now it's a lot less than we thought it would be. $13 billion a year. if we can't find that, that's a $1.2 trillion budget on discretionary spending. if we can't find that to build the infrastructure we have failed as a congress. so with your leadership and with all your strong support from oklahoma, i think we're going to get things done here. and i look forward to it. >> thank you. it's my honor to introduce and present -- not really introduce secretary foxx. he's been a great secretary. it's been a difficult job.

we've had a chance to break ground on a lot of great things, so i'm thankful that you're doing what you're doing, and you'll be in on the big kill, and we're going to do it together. secretary foxx. >> thank you very much, mr. chairman, for your kind words and for your leadership as well as the leadership of ranking member senator barbara boxer. the work you have all done and will continue to do is vitally important. i want to tell you that we appreciate your service. i also want to thank the entire committee here. we are in a new year with a new congress, but i'm here to discuss an old issue as has been celt a multiyear transportation bill with funding growth and policy reforms, focused on america's future. america is in a race, not jest against our global competitors, but against the high stids of innovation and progress our nation has shown for generations. we are behind in that race.

when you're behind, you must run faster and do more than just keep pace. the transportation system itself does not care about the political challenges of addressing its needs. from its perspective and from mine, we are either meeting those needs or we aren't. in the past year, i've been to 41 states and over 100 cities. mr. chairman, you were kind enough to invite me to oklahoma, where we saw a stretch of i-44 just south of tulsa that needs to be widened, but the funds just aren't there. there are thousands of miles of highway projects in oklahoma that the d.o.t. has said are critical, but they're either not being built or they're not being repaired. unfortunately, oklahoma is not alone.

i've also visited the bridge that connects kentucky and ohio. it's carrying more than twice the traffic testify designed for. chunks of concrete are now falling from the bridge's ramps on cars parked below. it must be replaced, but there's no real plan right now on how to pay for it. or you can look at tennessee, the state d.o.t. there has postponed $400 million in projects, and the thousands of jobs that come with them, because of quote/unquote funding uncertainty here in washington. now, tennessee is not the only state to slow or stop projects, but it may be the first state to tell the unvarnished trust about

what's happening to our transportation system, about how gridlock in washington is now creating gridlock on main street. last year we sent you a comprehensive multiyear proposal, the grow america act, which included 350 pages of precise policy prescriptions and substantial funding growth, all focused on the future. what america received in response was a ten-month extension with flat funding, which while averting a catastrophe, falls short of meeting the country's needs. it was not the first short-term measure or patch that has been passed. it was, by my count, the 32nd in the last six years. and as a former mayor, i can tell you that these short-term measures are doing to communities across america what the state d.o.t. says they're doing in tennessee dish literally killing their will to build. at this point we must concern ourselves not only with the

immediate situation that confronts us, but with the cumulative effects of these short-term measures. i urge you to make a hard pill volt in and out, from the rear-view mirror to the front windshield. look at ouring system. look at the opportunity we have to grow jobs and the economy. look at our own children and grandchildren. in order for the system to be as good as the american people, we must do something dramatic. to hell with the politics. that's why we sent you the grow america act last year and why we will send you a new and improved grow america act this year. we certainly know that the grow america act is not the only approach to solving the infrastructure and mobility challenges of the future. we look forward to fully engaging this committee with -- and with others on both sides of

the aisle to chart this path together, but we believe there are some essential principles that any bill must have. first, we're going to need a substantially greater investment. we're also going to need a larger -- not just -- if we want communities to build big projects that in some cases can take five years or more, we need to ensure funding for roughly that amount of time. i think senator boxer's analogy with trying to buy a house with five-month loan is a great analogy. we believe we can do that while assure better outcomes for the environment. we also believe in opening the door to more private investment and in giving communities and npos, freight operators, a louder voice in what gets built. we believe in strengthen our buy

america program to make sure tax dollars are being invested in american project built by american hands with american products. and we believe we must do everybody possible to keep americans safe. that includes obtaining the resource and authority that we need to combat threats we might not expect in this new century. in the end my entire department has great respect for what the committee has done and the challenge ahead. looking forward, a huge achievement, and now it is time to build on that work. when i was sworn in, i took the same oath that you did, to protect and defend. for me that means protecting and

defending americans' fundamental ability to move, to get to work, to get to school, to get goods from the factory to the shelf. but i can't do that. they could do that, and we can't do that unless we take bold action now. i'm here to work with you, and i'm also looking forward to your questions. thank you very much. >> thank you, mr. secretary. >> i've often thought in that particular job, in your job there's no better background than to have been a mayor of a large city. you and i have talked about that in the past. when you see the things that you know are -- that you know that work s. you wonder sometimes, how can we build on these, because i know the press whether we walk out of here, the only thing they want to talk about is how do you pay for it? and we don't know yet. we're going to work on it. but there are some areas that are sometimes controversial, and i have to appreciate both sides

working together on some of these enhancements. we've doth done a lot of good things. what more is out there that's obvious to you, that could make it go faster, and yet get off the ground quicker? >> thank you, mr. chairman. it's a very important question. we do have experience in the recent past building on some of the work of map 21, of doing concurrent reviews in the permitting process, which effectively allows all of the federal agencies to sit at the table at the same time in the earlier point of design and construction of a project to comment on that project at a point at which the project can still be changed to respond to the permitting. there's a project in new york

called the tappency bridge. we were able to reduce the permitting time from what could have been three to five years to 18 months as a result of doing that concurrent process. we do bled there's an opportunity -- >> it's really a direct result of the changes that we made in coming to this point? >> it was building on a lot of the work that map 21 contained, and there was also some administrative work that went into putting that on dashboard and assuring the agencies worked together. but we think there are additional tools that could be provided to enable that to happen more. the good news there is that when you do concurrence reviews,

you're not sacrificing it is environment. you're actually putting the environment at an earlier stage and actually getting better results there, too. >> that's right. senator boxer? >> thanks, mr. chairman. mr. secretary i'm going to press you on what's happening on the ground, because we have failed as a government to give any certainty to this process. so we know that tennessee and arkansas have already delayed hundreds of millions of dollars in highway projects for this year, and last summer over two dozens states had taken similar preemptive action, as the highway trust fund neared insolvency, this whole game of waiting, and then somebody steps up in the house or senate and said i'm going to save this for five months. this is a disaster. and can you discuss the likelihood that we're going to see these cutbacks continue if we don't take action soon to shore up the trust fund? >> thank you for the question.

this is a crisis that is actually worse than i think most people realize. your point is very well taken. we have a may 31st 2015 point at which the funding of the ten-month extension runs out, but the state departments of transportation are having to figure out what their plan of work is going to be during the height of construction season, which starts right about the same time that the extension runs out. so i predict that over the course of the next few months you're going to see more state departments of transportation start to slow or stop projects, because they don't know what's on the other side of may 31st. so from a timing perspective, i think we have a problem sooner than may 31st in terms of the

situation on the ground. i think you'll see states pulling back even before may. >> that's basically my question. i'm not going to take any more time. the one point i'm going to make over and over again to anyone who will listen, and some will and some won't, is this is our duty, this is our job, this is the best thing we can do for the country. this is the most bipartisan thing we can do, and this committee i'm urging, and i know the chairman feels as i do, that we need to step out here. i would say to colleagues here, we have a really great role to play by stepping out again and doing the right thing. we have the blueprint that senator vitter and i put together with all of your help. that may not be the exact blueprint we go with, but it's a definite start. so thank you for -- in your very calm and collected manner, for letting us know that lack of action is already happening, and having a result and impact on the ground. the impact is bad. it's bad for businesses, it's bad for jobs, it's bad for communities, for our local people, and that's the point i think i wanted to make, and you made it very eloquently. thank you, mr. chairman.

>> thank you senator boxer. senator vitter? >> thank you, mr. chairman. i want to echo the comments that having made about the bipartisan work of this committee on infrastructure. last congress this committee on a completely bipartisan basis produced a really good water resources bill, water infrastructure bill that was very important for our ports and waterways, and that infrastructure, maritime, commerce, and as senator boxer mentioned, we put together a very good highway bill in this committee. now, we have an easy part, quite frankly, so i don't want to overstate it. we put together the transportation part of the

highway bill, good bill, very bipartisan basis, but the financial committee has the hard part, which is the financing part. and i want to cut right to that. so let's cut to the chase. i agree, we need to get this done, we need to get it done on a medium to long-term basis, not another band-aid approach. my suggestion for all of us who truly want to do that is to cut right to the chase, and to really dive into those discussions about low we finance it in a realistic way. folks on the left, including the administration may have ideas that are perfectly valid ideas that just objectively are going nowhere in this congress. folks on the right in this

congress may have ideas that are perfectly valid ideas that are going nowhere with this administration. my suggestion is we blow past that, don't waste time, and cut to the chase of where we may find a common solution. i believe realistically there are three realistic categories to focus on. one is a traditional gas tax, a traditional means of financing the highway trust fund. i believe that is only realistic, only a possibility, in my opinion -- and this is just my political judgment, you can't prove this, but i think it's only a possibility if we give all middle class and lower middle class taxpayers a tax offset. something off their income tax, withholding, something, so they are held harmless, so they do not pay a higher federal overall tax bill. second big category, i believe, is tax reform, maybe focusing on business tax reform, and using elements of that, namely repatriation, that is not a truly permanent solution, but those are big dollars that could fund a significant bill of a significant duration. and then the third big category is some domestic energy

production with the additional royalty and revenue dedicated to the highway trust fund. now, i would like to see that to a much greater extent that i'm sure is realistic, given the sensibilities of folks on the other side of the aisle and the administration. so in the spirit i began with, i'm not suggesting, i know david vitter's lease plan for the ocs, which is a great one, by the way, but i'm suggesting some expanded production, which is good for american energy independence, good for our economy, and would produce significant new revenue, at least when the price of oil gets to a better place, more stable place that could be dedicated to the highway trust fund. so my question is -- what's the administration doing to cut to the chase, as i said, and

explore those three cad goirs? categories? >> let me answer the question directly and also make a point the administration has put forward a proposal to use pro-growth business tax reform to pay for our infrastructure, and what we would basically do is put in addition to what the gas tax is currently spinning off, of course it's less than what the highway trust fund needs to be level, but we put another amount of a like amount into our infrastructure to not only replenish the highway trust fund, but to do more than that, which leads me to the point that i want to make, which is that i think there needs to be a conversation about what this is. what number are we trying to get to? and what is it going to get us? if you think about me and our department as contractors, we can try to go out and build what congress urges us to do, but i want to make it very clear we

could go out and build a great big mansion if we have the resources to build a hut. i think that our system really needs a substantial injection, the long-term bill, but also substantial growth to counteract the cumulative effect of the short-term measures in the recent past. >> i want to follow up specifically on that point, is there a version of that proposal you're talking about that doesn't have the big tax increase on successful folks as part of it? because going back to the spirit of my comments, i'm suggesting that, you know, we get real and cut to the chase so we actually solve this in a meaningful way by may. if we're just talking about that version, in all due respect, i don't think that's meeting my test. >> the green book last year

published three specific ideas. one was eliminating lifo. and a second one was depreciation. and a third one was pulling some of the untaxed corporate earnings overseas, and brings those back home. and those three ideas very specific ideas are ones that seem to be within the parameter that you have mentioned. let me also extend to you, senator, to the committee and to the entire senate and house the full measure of my attention to help you get to yes on a solution here, because i think it is vital for the country. >> thank you, senator vitter. >> senator?

all right. senator cardin? >> thank you, mr. chairman. i appreciate that. secretary foxx, thank you for your work. i strongly support a robust reauthorization long term of our transportation needs, needs to be long term, as has been pointed out our states and counties cannot plan without the long-term commitments from the federal government as their partner. it needs to be robust, because it's not only the new roads and bridges and transit systems that we need, but also maintaining the infrastructure that we have. so we have to focus on this. i do want to maintain, and i

think this is an important part, the flexibility. i represent maryland, the bald more, washington area is the most congested area in the nation. we need to invest in transit, and we have a game plan to do that. we want to stay on that game plan, but a large part of it depends upon the ability of a sustained federal partner, and that requires a long-term reauthorization of a robust bill. i also want to emphasize the need for giving our local governments flexibility. i've worked with senator cochran on the transportation alternative programs that allow locals to make decisions, our mayors, our county people to make decisions, as to what's in their best interests so we have livable communities, where you can walk and bike and keep cars off the roads when they're not necessary. then you emphasize safety. i just want to emphasize that point also. we had a tragic bike accident in baltimore just recently. it's critically important that our local governments have the ability to keep their people safe. we recently have another tragedy on the metro system here in washington, and we've been working with -- and your staff to make sure that we find out as soon as possible how we can make the metro system safe. in other words, that we don't

wait a year for the full review before we. and we want to have the resources to modern i'd our transportation systems. i -- i had the honor of living in baltimore and commuting to washington every day, and never know whether it's going to take me one hour or three hours to get in. so it's -- it's a challenge for people in our regions, challenge for people in our country, and i just urge you to be bold. i think this committee is prepared to be bold. it seems to me the price of energy today, we should be able to to get the resources we need, in order to do what you're constituents want us to do, have a modern transportation system, be able to maintain that, and create the economic engine that will create jobs for the people of our community. that's our goal.

that's what we're trying to do. i just want you to know that we appreciate your commitment to this. you have a lot of partners on this committee. thank you, mr. chairman. thank you. senator fisher? >> thank you, mr. secretary, for being here today. i appreciate it. if your testimony you state, quote, too often projects undergo unnecessarily lengthy reviews and we need to make the types of reforming that will exceedate high-priority projects and identify best practices to guide future efforts. i couldn't agree with you more. as you know in nebraska, our department of roads, or cities, our counties, they have been very frustrated with the federal highway administration's what i would call unpredictable

approach to the environmental review process. you know that we have been trying to work on that. i don't believe that it comports with the performance base, data-driven approach of map 21. i think they need those -- those reviews need to be performance oriented, not solely processed based, and certainly not inflexible. i appreciated your earlier comment about a concurrent review process, where you can cut it down from 3 to 5 years to 18 months, that would be great. that would be great if we can do that. i hope that the federal highway administration is going to tip to work with nebraska so we can get there. as you know limited resources become even more stretched and stressed when we have a process that i believe is not working

the way it's supposed to. what do you think we can do to be sure that that state of good repair projects within existing. >> reporter: right of ways are -- with regulatory agencies. what's the value added to environmental protection by conducting even a ce-level review on a resurfacing project, or another project in an existing right of way, where transportation facility already exists. do we have to study and documents things over and over again that would be great. that would be great if we can do that, and i hope that the federal highway administration is going to continue to work with nebraska so we can get there. as you know, limited resources become even more stretched and stressed when we have a process

that i believe is not working the way it's supposed to. what do you think we can do to be assured that that state of good repair projects within existing rightaways are exempt from what i would call a counterproductive consultation with regulatory agencies and what's the value added to environmental protection by conducting even a ce-level review on a resurfacing project or any project in an insisting right away. i want to emphasize that i think that through a new bill congress could give us additional tools to enable us to operationalize con current views. i think you get better environmental outcomes. doing it that way because the environmental considerations get brought up early and dealt with early. >> i would be very happy to work

with you on those with my office especially so we can stop the redundancy that i believe is happening. if we can move on to tiger grants, do you think you're being distributed in an equal manner. i know that when we look at rural america, open country, small towns. it seems that we're not getting really tiger funds in those areas. can you tell me why that would be? >> well, a couple of points. the tiger program requires a minimum of 20% of each round to be distributed into rural america. >> and the definition of rural america at that point is? >> i would have to have my staff confirm this, but i believe it is a community of 50,000 or fewer people. >> i'm talking about very sparsely populated areas where in many cases there's one person per square mile, but yet in a state like nebraska we have

miles and miles of roads that are necessary for commerce, for safety and i would think we could look at a new definition of rural america. >> you know, we're following the statutory definition, but if there is a new definition we will follow what this congress tells us, but what i would also say are a couple of other points. we in the last round exceeded that 20% minimum. we think of it as a floor, but not a ceiling and we are looking constantly to make sure that we see good transformational projects across the country wherever they happen to come from. secondly, we have done more outreach to extend technical assistance to rural communities because in some cases it is the communities that have fewer tools and help prepare their applications that sometimes don't get through and so we want to make sure we're as equitable as possible from that standpoint

so we will continue to work with you and others and i will continue to applause nebraska for the tiger grant that last round for the rapid transit system, the very first in the state of nebraska. >> it was great. thank you very much, mr. secretary. i appreciate your work. >> thank you very much, mr. booker. >> thank you, mr. chairman. >> first and foremost i want to echo some of what's already been said. you are an extraordinary public servant and one of the best cabinet members that the president has and i'm also your friend for many years and former fellow mayor, and i want to thank you also for your numerous trips to the state of new jersey and for your partnership on a number of very specific important projects. as you know, new jersey is the most densely populated state in america. it's home to the most valuable freight quarter in this country.

it's home to the busiest airspace in this country and has the third busiest sea port in the united states. we have 39,000 miles of public roads and 6,500 bridges and nearly 1,000 miles of freight rail. in many ways, when it comes to the economic prosperity of our state, new jersey is a transportation hub that really drives our economy, and i don't want to restate anything that has been said already in terms of the importance of moving a long-term funding mechanism forward, first and foremost, delays in adequately funding our infrastructure actually costs the taxpayer more money. in other words, it will drive the expense of this transportation deficit even higher. so in other words, all of the fiscal conservatives -- in that and i include myself having been a mayor and you, as well having to be fiscally conservative and we are delayed in our lack of funding and our short-term

actions actually are driving more cost to taxpayers over the long run, is that correct? >> yeah. absolutely. we have estimates, the american society of civil engineers estimates on a state by state basis the cost of poor infrastructure on our roadways and in most cases the amount people are actually paying into the highway trust fund, for instance is less than the cost they're experiencing as a result of poor road conditions whether it be having to buy new tires or get a new axle fixed or the cost of gasoline or whatever. folks are paying more than what they're getting. >> it is the height of responsible from the dollars and cents balance sheet analysis for us to do nothing or short-term

fixes, not just for the public treasury, but as you said already, motorists in my state on some estimates are spending over $2,000 a year because of poor road conditions. so our inaction makes people pay twice. once with the taxpayer dollars and also with their own dollars out of their own pocket for direct payments because of repairs to their cars, congestion, lost productivity because you're sitting in traffic. so really, our inaction in congress is making people pay twice. >> yes. money is one thing, but time is something none of us can create more of. when folks are spending 40 hours on average more a year in traffic that's time they don't get back. that's a soccer game or a work hour or whatever, and i think that we have just -- we as a country have stopped thinking about our transportation system as something that gets us there fast.

>> i know the importance of finding the mechanism is really important and it's almost like saying we either pay now or we pay much more later, and so the last thing i want to ask you to comment is one of my colleagues did something that many people might think is radical. senator sanders called for a trillion dollar investment and far more than what the administration is asking for. did you give your opinion on that and knowing that it is far more than a trillion dollars and how do you view senator sanders, a call for the trillion-dollar investment. >> it's a bold step. it's a bold step and a statement about where we are as a country. we need to invest more, and i think everyone strains to figure out how to pay for it, but to your further point, what happens if we don't. we're going to pay probably more anyway on an individual basis and we'll lose opportunities to

bring jobs to this country. for every billion dollars we invest we estimate 13,000 jobs come as a result of it and in the transportation sector at large, only about 12% of folks that work in transportation have transportation have college degrees. so you look at that versus the long term unemployed this is also a jobs issue. so we're not capturing opportunities as a country because we're not investing as we should so i think it's very important and i applaud senator sanders for taking a bold step and talking about the needs we actually have. >> thank you mr. secretary. thank you mr. chairman. thank you senator booker. it gives me an honor to introduce the senator for the first time in this committee. she'll make great contributions here. >> thank you mr. chairman. thank you secretary for being here with us today. i was able to meet you first when i was over on the transportation committee on the house side.

and i was also on the conference committee with ranking member when we did a lot of the streamlining of the environmental permitting for projects and i'm glad to know it's moving along. i understand there's things still yet to be done so i appreciate that effort. you know, also, i would tell my colleague senator fisher that west virginia rural community town was a recipient of two tiger grants for economic investment and we're very appreciative to that. they've been very innovative with that and i think it's really going to grow that local and regional economy so i am very appreciative of the set aside for rural america because we were the beneficiary of that. you know the big question is how do we afford all of this and what we're all trying to struggle with. so i would ask you in the

private/ private/public partnership arena. are you finding across the country that states and local communities and business entries are really stepping up for this private/public partnership. we see some of this stuff in west virginia. i wonder how some of this stuff is going nationally because i notice in your written kmemtcomments you talk about expanding the tifia opportunities. >> thank you very much. we do see a lot of promise in public/private part shernershippartnerships. there's some really clear examples in the last few months of ones that we've been able to move forward. one of which comes to mind is in pennsylvania where there were 500 some odd bridges that the state of pennsylvania needed to update. many of them were deficient. and not one of those bridges by itself would have necessarily attracted private capital but they pooled those bridge projects together and we were

able to issue, i think it was $1.2 billion in private activity bonds to support getting all of those bridges done. so we're looking at creative ways to move forward. having said that i think we've got some problems. i want to be very clear about. number one this issue of the cumulative affect of short term measures, has hurt us as a country because it's hurt our planning process. states and local governments in a haven't had the luxury of counting on federal support over a long term period have pulled back on their planning. and so the big projects that are most likely to attract large scale private capital in many cases aren't actually being planned. they are not going through the review process. they are not teed up, if you will to rapidly move into a public/private partnership. the second challenge we have is the programs we have within usdot are relatively stove

piped. tifia works through some agencies within dot but not all. riff works through the federal rail administration. pabs works through our office of policy. we think one of the things that additional policy could do is to help us pool those resources together so that we can have a deaddicated team to really focus on private/public partnerships. >> thank you for that. i share your freftustration certainly in west virginia, there's a lot of frustration at the local and state level about the inact for us to do a long term highway bill. i'm certainly committed to that. i think where the frustration for a state like ours falls is because the money comes in smaller chunks, you end up really just doing maintenance. you don't do anything innovative. you don't do anything that really is telling your population that we're moving to the next century and so we see

that in our home state. i think that's very frustrating to local citizens, businesses and people who are trying to grow the economy at the same time so i share that frustration. so i would join with you to try to make this work and to find the magic formula that we can give the confidence to the states and local folks that we really can get this done. i think there's a great impetus for this. and i look forward to working with you. thank you. >> thank you senator. senator marquee. >> thank you mr. chairman congratulations to you on this first and most important hearing that we will be discussing and i know that you and the ranking member boxer are working very closely together to advance on this legislation and i think that if we do it correctly we can have a great success this year and i thank you for your work on it.

mr. secretary, if i may, i'd like to talk first of all, transit oriented development. you came up to the rugal station in boston. >> yes. >> and we're having great success there with the help of the federal government to encourage development in an area that historically has been under served but is potentially could be explosive in terms of the growth and the use of public transportation. could you talk a little bit about that and the role that the congress can play in partnership with the department of transportation to continue to advance it and what role do you see that in terms of it being built into the legislation that we're considering. >> well thank you very much. it's a very exciting project in boston. you know, what's happening in boston and across many of the metro areas around the country is population is starting to concentrate there. if you go to some cities i was with mayor garcetti in los

angeles actually and he mentioned to me that they literally don't have more highways that they can build. they need to integrate transit choices into what they do. when you build a station like rugals what that does is it captures the imagination of real estate developers and they start to build dense developments and bring amunities into communities that might not traditionally have them. i think the challenge for us is right now if you look at amount of money we're putting in to transit, i think the demand for it will increase substantially over the next several years because of shared population movements. that's one of the reasons why i would urge a more robust investment in transiptt first of all and secondly, urge that we do more to partner with local communities whether it's npos or mayors or even governors in some cases to help them develop the tools to utilize the land use

countries that come about as a result. >> yeah. you know, boston had 800,000 people who lived there in 1950 and drifted all the way down to about 600,000. but now with increasing transit oriented development, boston has gone back up to 640,000 and the arrow is stit upraight up in the terms of the number of people who want to use public transportation live closer to all the amenityies of the city but also the jobs that are being created around this transit project which has reduced the number of vehicle miles driven by automobiles all across the country over the last five to six years, it's just going down and down because people want to live and work closer to their mode of transportation and increasingly, it's public transportation so thank you for all of your work on that. could i talk with you a little bit about the complete streets program as well?

>> sure. >> that i also find to be very, very exciting where pedestrians bikers, children seniors. >> everyone is included in kind of a project approach that insures that all of these facilities can be used by everyone. can you talk a little bit about that and again, the role that congress can play in the authorization in partnership with the department of education. >> through our transportation alternatives program we've been able to be a bit of a catalyst in helping communities develop best practices around the greater use of complete street it's. what that really means is creating ways in which all users on a roadway to safely use those facilities so you'll have a lane for vehicular traffic, you'll have places for pedestrians that are safe and bicyclists as well. we found that it not only helps

with safety but people actually use the entire roadway in different ways. it's healthier it's cleaner in some cases. i think that continuing to support the transportation alternatives program and helping us build additional tools to support states as they measure safety of bicyclists and pedestrians and bring it up to a standard that we expect of every motor transportation. >> yeah. so right now we're seeing that upwards of 3/4th of children killed are killed in urban neighborhoods the more we can reduce the numbers and make the streets safe for everyone, i think the better off we're going to be and i am looking forward to working with you. i think it's a very exciting way and by the way, i think you're just doing a fantastic job. i think you understand cities having been a mayor and i