developments of the health-care debate. buzz aldrin will join us from 8- 92 mark to talk about the 40th anniversary of the apollo moon landing. from 9-930 a m, governor brown schweitzer, and by we will join -- be joined by gov. mark o'[malley. malley. see you tomorrow. . .

>> good morning. and welcome to this hearing where we will review the steps that the united states government has taken and that state governments that responded to and that we may ultimately take to achieve the important national goal of keeping fraudulent state identification cards and driver's licenses out of the hands of terrorists and criminals. i want to welcome secretary napolitano, governor douglas of vermont and our other witnesses on the second panel, and thank you for all the work that you've done on this very important matter. i always kick myself when i say i told you so, but i'm about to say -- i regret to say that i'm not surprised we are here today. when congress adopted the so-called real i.d. act of 2005,

as an amendment to a supplemental appropriations bill without hearings of any kind or any formal public vetting, it replaced, we replaced, a process for developing federal identification requirements that senator collins and i had made part of the intelligence reform and terrorism prevention act of 2004. so the-called 9/11 commission legislation. in our work senator collins and i took very seriously the finding of the 9/11 commission that, and i quote, all but one of the 9/11 hijackers acquired some form of u.s. identification documents, some by fraud, acquisition of these forms of identification would have assisted them in boarding commercial flights, renting cars and other necessary activities. end quote. and the 9/11 commission went on to appeal to the federal government to, quote, set

standards for the issuance of birth certificates and sources of identification such as driver's licenses, end quote. with that in mind, we therefore included in the 9/11 legislation of 2004 a requirement that the federal government establish a negotiated rule making committee composed of subject matter experts and stakeholders, including, of course, representatives of the state governments to propose workable identification security standards. then came the real i.d. act of 2005 which a say was submitted as an amendment to supplemental appropriations legislation. though i thought some of the parts of the act and the intention of the act were good,

i opposed the real i.d. act because i think it put ultimately -- it laid out a very prescriptive, unworkable and expensive process. and unfortunately history has born this out and that's why we're here today. if i may rub it in a little bit. i really believe that if our original 9/11 commission legislation had been left intact and a rule-making process had begun, negotiations with the states and the federal government, and it hadn't been repeeled -- repaled by real i.d., we'd have more citizens today instead of being involved with a joust between the states and the federal government. some states, including connecticut, are working to implement real i.d. but the fact is that the legislatures of 13 states have passed laws prohibiting their states from complying with real i.d. as it presently stands.

and several other states are right now considering similar legislation. and that's at the risk that their state identification documents will not be accepted by the federal government, for instance, for boarding a plane. so that's the dilemma and the crisis really that brings us here today as we try to answer the question of what kinds of changes to real i.d. are necessary to achieve workable solutions here? as always in the congress we can't let the perfect be the enemy of the good. but, of course, we want to ensure that what we consider to be good is not diluted so that we, in any way, compromise our homeland security. i personally think we could achieve both goals. today we're going to discuss bipartisan legislation sponsored by a number of members of this committee, senator.

it reforms real i.d. in an attempt make it work as intended while trying to ease the strain on our over burdened and under funded state governments. the plan retains parts of real i.d. such as the requirement of a digital photograph and signature and machine-readable coding on state-issued i.d. cards. states will still also need to verify an applicant's social security number and legal status by checking federal immigration and social security databases. but the states would be given more flexibility in issuing a new identification card while staying, i'm pleased to say, within the real i.d. timetable. in fact, if passed i.d. becomes law in this year, states must become compliant with it before the current real i.d. deadline of 2017. now, that's important i'm sure to all of us because any acceptable solution must really work with an existing timetable

and not delay increased personal identification security. pass i.d. does eliminate a requirement that motor vehicle departments electronically check the validity of some identity documents such as birth certificates with the originating agency. i know this change has been a major source of concern. and this morning i want to discuss it with our witnesses and see if those concerns are justified. pass i.d. also strengthened privacy protections by requiring procedures be put in place to prevent the unauthorized access or sharing of information to require a public notice of privacy policies and a process for individuals to correct their records. so let me thank the senators and others who joined them as well as secretary napolitano for the efforts that you made to come up with a plan that can work while not losing sight of the very

direct statement of the 9/11 commission warning that that for terrorists, and i quote, travel documents are as important as weapons. i still do have concerns about pass i.d. that i want to explore with our witnesses today. but in an age of terrorism, reliable identification is an important and urgent matter critical to our homeland security. i hope that this hearing will enable to us move forward and mark up legislation in this committee, on this matter in the veneer future. nor collins? >> thank you, mr. chairman. one week from today we mark the fifth anniversary of the release of the bipartisan 9/11 commission report. in examining how terrorists were able to attack our country the commission found that all but

one of the 19 terrorists used driver's licenses to board the planes that were then used as weapons in the attacks that killed nearly 3,000 people. the commissioners recognize that easily obtained driver's licenses were a security vulnerability. as the chairman has said, the words that i, too, remember are the commission's words saying that for terrorists travel documents are as important as weapons. and to address this vulnerability the commission recommended that the federal government set standards for the issuance of birth certificates and other sources of identification, particularly driver's licenses which had proven to be so vital to the hijackers' ability to carry out their deadly plot. to call the effort to implement

this recommendation difficult would be an understatement. as senator lieberman has recounted, he and i authored very well thought out previsions in the format of 2004 that established the collaborative committee exriesed of federal and state officials, technology experts, and privacy advocates to develop these secure identification standards. and the work of this committee was well underway in 2005 when regrettably the house of representatives repealed our provisions by slipping the real id act into an urgent war funding bill. and i use the word slipping into the urgent war funding bill

advisedly. because in the senate there were no hearings, there was no debate, there was no vote. this was a take it or leave it vote on the entire war supplemental. then for more than two years states were left to contemplate the enormity of the task of reissuing new licenses to all drivers by may 2008 while they waited for the department of homeland security to issue the regulations that would tell them how to achieve the requirement. and the states waited and waited and waited until january 29, 2008, when a final rule was issued leaving the states just 103 days until the may 11, 2008,

compliance deadline. complicating the problem, state budgets had little room for the hundreds of millions of dollars that it would cost to implement the new regulations. and, of course, a faltering economy only worsens the financial strain. another problem was that the key information technology system necessary to implement the law efficiently were not readily available. and although identity theft cost the economy billions of dollars and causes much distress to its victims, the department's regulations failed to address critical privacy issues created by the interconnected systems of databases mandated by the law. with these problems unresolved and numerous states protesting real id or even outright

refusing to implement the law, i work to persuade the department to provide states with an additional 18 months to meet the real id deadline, giving us all time to revisit the issues. the pass id act that we are -- discussing today is one attempt to resolve these problems. it refines rather than repeals the law and it targets areas where the law imposed unreasonable and costly burdens, failed to protect the privacy entrance of our citizens, and mandated technological solutions that may not be practical. one example of these refinements is in the bill's approach to ensuring that each person possesses only one valid license from one state at any one time. to meet this goal, real id would have mandated an information

sharing system that may not be technically feasible or governed by the basic privacy protections. instead of scrapping this system all together, pass id would preserve and fund a pilot program to test the necessary technology and to permit a careful examination of privacy concerns. this makes a great deal of sense. nonetheless, i recognize the concerns of those who feared that this bill in addressing the problems of real id may have unintended consequences. driver's licenses can be the keys to the kingdom for terrorists bent on death and destruction. states have a responsibility to ensure that licenses are tamper proof and issued only to people whose identity and legal status can be verified.

certain language in the pass id act may undermine that goal because it would not allow t.s.a. to prevent a passenger from boarding a plane based solely on the fact that he or she did not have a compliance license this provision would eliminate an important incentive for stailts to adopt -- states to adopt federal standards and could impose worrysome restrictions on the discretion of security officials who believe a passenger without a compliance license should not be permitted to board a plane. as we examine this legislation today, my primary concerns are whether these provisions are moving us towards the security goal set by the 9/11 commission five years ago while

accommodating the legitimate concerns of states and privacy experts. thank you, mr. chairman. >> thank you. >> to move slightly away from normal committee procedures and to invite the senators to make an opening statement if they'd like based on the extensive work that they've done and are preparing and introducing pass id. senator? >> thank you very much, mr. chairman. i want to thank you for all of these hearings to further explore the ramifications of real id on the states, on security, and on privacy. as well as the proposal that i along with senator voinovich, copper and other members have put forth to fix real id. at this point mr. chairman, may i add happy birthday to our

friend here, senator voinovich. >> happy birthday. >> happy birthday. >> i've been a long-time opponent of real id due to concerns about protecting individuals' privacy as well as a state's inability to implement the burdensome program. real id calls on a state to collect electronically stored individuals' personal records when issuing licenses and to share that information with every department of motor vehicles nationwide. this effectively would create a national database containing massive amounts of personal information. during the last congress i chaired two hearings on real id where it became clear that it was simply not workable. some of the data systems do not yet exist because so many states have balked at the high costs

and privacy implications of creating such assessments. if real id is implemented, these databases could provide one-stop shopping for identity thieves and become the backbone for a national identification card. we must act to fix real id. states simply still cannot afford the $4 billion it would take to implement real id. over a dozen states have already refused to comply, and several more, like hawaii, have expressed serious concerns with the program. without the participation of all states there will be only a patchwork system for notification security which means no real security at all. the bill i'm proposing, s1261, the providing for additional security and states

identification act of 2009 or pass id act, represents a pragmatic approach to resolving many of the more struggling aspects of the real id act. i work closely with the state holders, many -- stakeholderses, many of whom are here today, representing a broad range of views to develop this practical alternative to real id. the pass id act does exactly what the 9/11 commission recommended. it sits strong securitization of identification cards and driver's licenses. what it does not do is go far beyond that recommendation by requiring the collection of americans' personal information and storing it in a centralized repository accessible by any state d.m.v. perhaps the most important in

our bill is the removal of the mandate that states share all of their driver's license data with each of the other states. this provision created a clear threat for the privacy of all americans' personal information, posed a great risk for identity theft and fraud, and raises over national database of all americans' personal information. the bill requires states to protect electronic information. and for the first time, any machine-readable data stored on identification cards and driver's licenses themselves, ensuring it is only used for its intended purposes. another change i want to highlight is the clarification of americans' rights to travel on commercial aircraft and to enter federal buildings. the current law restrictsz these

rights -- restricts these rights by requiring a real id, compliant i.d. to board commercial aircraft and to enter federal buildings. in this building we cherish the right to travel and the right to petition the government. americans do not -- should not be denied boarding aircraft or denied entry to most federal buildings solely because they have lost or do not have their identification. instead such situation should be resolved through the additional security screening or other inquiries as needed. as is currently t.s.a. policy and is the case with every other type of security risk, as important as what would change with pass id is what would not change. individuals would still need to prove that they are lawfully

present in the united states. individuals would only be allowed one compliant identification to be used for official purposes. and individuals would need to present the same sources of identifying documents to obtain a compliant license. this compromise bill does not address all of my concerns with real id. i know that others are disappointed that it does not address all of their concerns. however, the reality we face right now is that in less than a year states will be required to comply with a law that is overly burdensome and unworkable. we cannot let the perfect be the enemy of the good, especially when we are working to address a seriously flawed law already on the books. to date the department from the national government association, the national conference of state

legislation, the center for democracy and technology, and several law enforcement organizations have endorsed pass id. i hope we will move swiftly to ensure its enactment and provide some clarity to states facing real id implementation dead lines. as always, my goal remains to protect both the security needs and the privacy rights of all americans. and i will continue to work closely with the department of homeland security to ensure that individual rights and liberties are fully protected during the implementation of pass id. i thank you again, mr. chairman. and our ranking member collins for agreeing to hold this hearing. i ask that my full statement from the introduction of pass id be included in this hearings record. >> thanks, senator akaka. objection so ordered. happy birthday, senator voinovich. i don't know your age but i'm

prepared to say you look younger than you are. i bet i'm right. you don't have to disclose anything here. >> i've got a problem because i've got to do an amendment in the committee and i've just been told i've got to get up there for it. i'll make it real brief. first of all, senator akaka, thank you very much for all the work that you've put in. we've got some great co-sponsors to this legislation. you've spoken eloquently to it but what everyone ought to understand is that real id five years late der not get implemented -- later did not get implemented. and why? it's because congress did not sit down with the people that were impacted by the legislation and get their thoughts on how you could go about making this possible. and i'll never forget when we had the hearings, senator akaka said we have to stop, throw it all out, begin, get everybody involved and let's do it right. and that's what we've done.

thank you for the national governors association, you've come together to figure out how we can get this done. weaver working together -- we're working together. we want a secure america. right? the way we do that is by working together. and that's what this legislation, i think, accomplishes. now, there may be some things yet that need to be added to it fine. but it's a good lesson for this committee and for congress. when you go out and you don't dot the i's and cross the t's and spend time with the people really involved with it, what happens is it doesn't work. and then what happens? you got to start all over again so why not do it right the first time? so we're going to do it right the second time. thank you. >> thank you. thanks, secretary napolitano, governor douglas, for being here, for your patience while we did the opening statements. now i'm happy to call on our secretary of homeland security, janet napolitano. >> thank you, mr. chairman, senator collins, members of the committee, for the opportunity

to testify on pass id. i have a longer statement that i'd ask be included in the record. pass id is a bill that i support. the department of homeland security worked with governors and other stakeholders to provide technical assistance in its drafting. and so the approach that pass id takes to fix real id is one that i support. i think it makes sense. this is an important piece of national security legislation that is designed to help fulfill the 9/11 commission's recommendation that the federal government sets security standards for driver's licenses. as has already been commented on, the first attempt to do this, the real id act, was a start that badly needs to be fixed. pass id is a fix for real id. the states agree that real id is

too rigid and needlessly expensive in mandating how states meet their security goals. as you noted, chairman lieberman, 13 states -- i think missouri being the most recent last night -- have actually enacted legislation, barring themselves from implementing real id. and 13 other states have passed resolutions opposing real id. we cannot have national standards for driver's licenses when the states themselves refuse to participate. now, the practical problem with real id is one of timeliness. and that sets the urgency for pass id. because under real id as of december 31 of this year, states of required to attest that they are implementing real id for their driver's licenses so that they can be accepted for things like boarding a plane. by december 31 of this year no

state will have issued a real id compliant identification document. no state will have a real id compliant document. >> so if i may interrupt you, that means that assuming nothing else happens in between, that is under the law, the driver's licenses issued by the states would not be accepted by t.s.a. to gain passage on to airways? >> that's correct, mr. chairman, not without additional screening by t.s.a. and one can only contemplate just the inconvenience in airline travel that could occur and everyone has to undergo additional screening because they don't have a real id compliant driver's license. >> in other words, they kind of -- the kind of secondary screening that goes on now if for some reason you forget your license of something -- or something of that kind that would have to happen to everybody? >> that's right, senator.

so that sets the urgency for real id and why it's so -- or pass id, excuse me. where i'm so appreciative that the committee scheduled this hearing today and is moving forward. i'm very pleased to be sitting next to jim douglas, my good friend, the republican governor of vermont. he is the incoming chair of the national governors association. later you will hear from sheriff lee baca of los angeles on why law enforcement supports pass id. now, we get to the fundamental reason why we have these laws in the first place. we go back to the 9/11 commission report. we need secure identification to thwart potential terrorists. law enforcement needs to have confidence that an i.d. holder is who he or she claims to be. and as the 9/11 commission report said, to terrorists, travel documents are just as important as weapons. states very widely in the

standards they employ. now, the system is too open to fraud. national standards are necessary. but national standards are embodied both in real id and in pass id. secure identification certainly won't thwart every terrorist attack, but it can present an obstacle and give another counterterrorism tool to law enforcement that we need. now, as has been mentioned, there are lots of similarities between real id and pass id. the main similarities between the two are the physical requirement -- requirements for physical security of driver's license production, the premises must be secure, background check on employees must be conducted, there must be fraudulent document training given to all employees involved in the process. requirement to show pass id. at the end of the implementation

period, noncompliant identifications would no longer be automatically accepted to board planes, enter nuclear plants, government buildings and the like. document validation. both laws would require states to validate the legitimacy of the underlying source documents such as birth certificates or licenses from other states. further, under pass id, the requirement for electronic verification of social security number and lawful status remains. now, the differences. why isn't it easier to implement from the state perspective? first, pass id eliminates the blanket requirement to use untested technology for electronic verification of any and all source documents. states still have to validate documents, but they can pursue different ways to reach that

standard. second, they are required to electronically verify social security and lawful presence through the databases. but unlike real id, under pass iz they are exempted from -- id they are exempted from paying the fee for doing those checks. third, there is greater flexibility under pass id in terms of how you reenroll -- re-enroll existing driver's license holders. because under real id you've got to re-enroll everybody under the age of 50, three years earlier than everybody else. under pass id, we give the states flexibility on how to do the re-enrollment so longs -- so long as everything is complete by 2016, one year earlier than the final completion date for real id. and lastly in terms of differences, as has been noted

by senator akaka, unlike real id, pass id actually contains within it specific insurances that states and privacy advocates have sought for the protection of the information that is garnered in the process. so these differences which are designed to make the goal of real id a reachable goal and designed to move us toward reaching the goal of the 9/11 commission report, these differences contained within pass id make it a bill that if passed and implemented before december 31 of this year will fix a bill that was flawed from the outset. thank you, mr. chairman. >> thanks.

[no audio] >> that's certainly what we need to do. we need to reevaluate it because it's not working. we have to come up with some solutions that will help us accomplish its goals. past several years at our meetings, as the secretary knows well, we've been talking about this. and all the conversations seem to end the same way, with a great deal of frustration. governors are frustrated because every governor is a security governor. every governor wants his or her state to issue licenses that are accurate and secure. every governor wants government to work. every governor is vif yently aware of what happened on "booknotes" nine and wants to do what he or she can to make sure

that it doesn't happen again. as you noted in your comments, and senator collins did as well, the two of you crafted a negotiated rule making process as part of the intelligence reform act. that was designed to bring all the parties to the table to craft meaningful standards for driver's licenses. ironically if that agreement had been left in place, we probably wouldn't be having this discussion today. but, instead, the renegotiated rule making was replaced, as you've noted, by real id. as of yesterday, 13 states have enacted laws prohibiting its implementation and a number of others have adopted joint resolutions opposing the law. it seems to me that security systems only work if people are willing to use them. real id doesn't work because a lot of states have just said no. so i'm committed to providing the driver's license that's accurate and secure. and i know my colleagues are in their states as well. but while the objections of real -- objectives of real id are laudable, the law represents an unworkable and an unfunded mandate that fails to make us

more secure. i really believe we need a better mousetrap. pass id provides a solution and a path forward. want to thank senator akaka and voinovich and our colleagues for introducing it pass id builds on the strength of real id. it solves its weak ntion and delivers more cost effective, common sense solution that can enhance the security and integrity of all license and state identification cards. pass id is consistent with the 9/11 commission recommendation that's been cited. it increases security, facility tates participation by all jurs -- facilitates participation by all jurisdiction and addressings one of the largest concerns, how to allow states with anti-real id laws to come into compliance with a workable, national standard. the pass id act was written as the original act should have been with states, homeland security department and other interested groups at the table. that's why n.g.a. supports this proposal. that's why i'm happy to join my former colleague, herself a former chair of n.g.a., secretary napolitano, and offer my endorsement of the bill.

we fully understand the need to ensure the integrity of security and security of the process by which we issue driver's licenses and i.d. cards in my state. we're work towards compliance with the law and want to assure the committee that we're one of the states that is not resisting. we're doing everything we can to comply. but as enacted, real id poses significant challenges for implementation. pass id will also present some real challenges, some changes, at least, in the way we issue licenses. but it's elimination of unnecessary requirements and it's cost -- its cost effectiveness make it a pluch better alternative. there are significant challenges in developing the electronic systems that real id requires, as some of you have noted. and frankly a great deal of doubt about whether they're going to be ready on time. and whether they will be reliable, nationally deployed so that we can begin issuing fully compliant licenses by the deadline. in contrast, our state's processes for validating documents like birth certificates and ensuring only

one license per driver are rigorous and reliable. in vermont we feel we can achieve the same level of security called for in real id and do it sooner under pass id. it's more cost effective. the key considerations, especially in these difficult fiscal times, the present cost estimate for states to implement real id nationally is $3.9 billion. in vermont we estimate it will cost us at least $20 million, which is a lot for a state our size and a real roadblock to its implementation. vermont has not completed a detailed cost analysis of pass id but it's clear that it eliminates unnecessary costs and authorizes some of the funding necessary for states to implement the program. that's an important first step toward recovering the cost of compliance. pass id eliminates unnecessary costs like the transaction charges for linking to and using federal systems. it authorizes some of the funding necessary to implement the program. these are big steps toward recovering those costs in fact, the n.g.a. with the assistance of stakeholders estimates that

pass id would cost states about $2 billion, approximately half of real id. pass id strengthens privacy protections. it requires privacy in security protections for the personal identification that's collected and stored in data bases for the program. it requires states to establish safeguards against unauthorized access and use of such information as well as to creates a process for card holders to access and correct their own information if they find an error. one aspect of pass id that we particularly appreciate is the bill's explicit recognition of the enhanced driver's licenses. since we're so close to the canadian province of quebec, that we very much value the importance of having an open but secure border, i have my enhanced driver's license. i've already used it in returning to vermont from across the canadian border. it's convenient, faster, and i appreciate the work of the homeland security department in facilitating our approval of

this document. our businesses retain jobs and grow because of -- just don't look at the weight, janet. i'm not under oath on that. vermont businesses retain jobs and grow because of opportunities to sell products and services to our neighbors to the north. the united states and canada enjoy the largest bilateral trading relationship in the world with more than $1.3 billion in goods and services crossing the border every day. thousand of people in my state cross the bored we are quebec every day. our border station is one of the busiest on the canadian border for commercial truck traffic in today's economic climate a free and open border for vermont manufacturers and retail businesses is more crucial than ever. the importance of our e.d.l. being recognized is compliant with federal driver's license standards, can't be understated. our economic, environmental and cultural relationship with quebec is a paramount importance. the e.d.l. costs us about $1 million to implement. but more importantly, the ease

of border travel that it allows is key to our economy and our relationship with canada, our largest trading partner. since the passage of real id governors have consistently offered constructive suggestions for implementing it. we have encouraged d.h.s. and congress to fix the act by implementing statutory or regulatory changes to make it feasible and cost effective. we have called on the federal government to fund it by providing support to offset our state expenditures for meeting federal standards. i really believe that pass id represents the kind of common sense solution that governors have long sought. pass id represents in contrast with real id a workable, cost effective solution that could increase the security and integrity of all license and identification systems. i want to highlight the critical deadline that's facing us at the end of this year. by december 31 all states must meet 18 specific requirements to be deemed materially compliant with real id. with a quarter of states, legally prohibited from meeting

these requirements and almost every state if not literally every state, as the secretary noted, unlikely to achieve compliance by year end, we really need to address these challenges if we're going to continue to have the kind of access to our borders and to our transportation infrastructure that we all seek. so i urge your support for passage of this legislation. i want to thank you for the opportunity to appear on behalf of the nation's governors. and i look forward to continuing to work with the committee to address any issues that may remain. >> thanks very much, governor douglas. so we'll start with a round of questions from the senators. while we're on that enhanced driver's license, for those who don't live in states that have them, how do you use them? just give us a quick report on how you get across the border and back. >> there's -- as you pull up to the border, i roll down the window and there's a screen that's very close to the driver's side of the vehicle,

similar to ordering something at a fast food restaurant. you hold the card right up to the screen. and then the information goes to the border agent in the border station so that he or she has that readily available without having to take it off the document manually which is what happens now. there have been some concerns about the security of these documents. and we provide little security envelopes that makes sure that they can't be read if people are concerned about it. but it's that easy. >> and it's quick. >> absolutely. >> thanks. i mentioned in my opening statement that i was great for the work that's been done by the two of you and others and senators voinovich and their co-sponsors here but that i had some continuing concerns. i want to ask you a question or two about those. i worry that the identity verification procedures may have

been weakened. i know i've heard that from some critics of the pass id and that will wind up where none of us want to be, which is back where we were before 9/11 when state authorities could accept an identity document without checking the validity. in other words, the license itself would be valid but the documents -- the identity documents on which it was based were not. and as we know, a number of the 9/11 terrorists used falsified source documents to get valid state i.d.'s that allowed them to travel in and out of the u.s. ?rntion so the question -- >> so the question is, if pass id becomes law, will the next group of terrorists planning an attack on the u.s. be able to evade our laws in that same way? secretary? >> mr. chairman, let me respond

at several levels. one is, because the states by and large are not implementing real id, you cannot assume that it sets a higher security standard for reader documents than pass id because real id in a way is d.o.a. it's just not being done, as governor douglas said, by so many states. i do want to clarify a statement i made earlier in our colloquy which is to say that it is absolutely true that no state by december 31 will have a real id compliant document. the only exception will be if a state comes to me and certify that they are ready or willing to comply with real id and are making material progress to comply. >> such as vermont? >> perhaps. >> maybe. >> you retain discretion. >> nonetheless, they still wouldn't have a real id compliant document. they would just get a extension. you have 12 states covering

40 million people plus now missouri which is another six million that are barred from even seeking such an extension so it gives you a sense of the problem. [no audio] >> there are a variety of way that states can use to do that. and we can give you greater detail on that. but they still must validate the underlying documents. >> under pass id. >> under pass id, yes, mr. chairman. secondly, they are required to electronically verify the social security and lawful status with the federal databases we have. >> that would be with the social security administration and with immigration. >> immigration, correct. so that that is added. the difference is that we don't charge the states a fee for requiring that they do that verification. the third thing is, and this is

a difference from the pre9/11 world, your driver's license can only be issued for a time period that is consistent with your immigration status. in other words, let's say you have a visa that will permit you to be in the united states for four years, a normal driver's license period is seven years. your driver's license can only be issued for the period that your lawful status is now issued. that difference would have picked up some of the 9/11 hijackers. >> ok. that's helpful. let me ask you the second part of this. and i'll ask governor douglas to get into this. there's also concern about eliminating the provision in real id that mandates information sharing among states and transfers it through the pass id. legislation to a volunteerry pilot program. as you know, the 9/11 hijackers

held multiple driver's licenses and i.d.'s from multiple states. and, of course, it's not just terrorists but drug runners, counterfeiters, other criminals, even bad drivers with multiple offenses can exploit this lack of information sharing between states -- in other words, they have a license in one or more states that may be a problem. and they exploit the failure to share information between the states to help them hide from law enforcement. so tell us about why this change was made and why not compelled information sharing among the states just to avoid this loophole. governor, do you want to started? >> well, i think as some of you said in your opening statements, there was a great deal of concern about protection of personal privacy as we consider these issues. and a lot of concern in the real id legislation about this

national sharing data base among all of the states. so with so many states declining to comply and with concerns with b the flow of information around the country, pass id to have a pilot program i think makes some sense. >> is the privacy concern explicitly that the more people who have access, the more data, the possibility there is of a violation of privacy rights? >> i think that's exactly right. there are a lot of concerns that come up with various contacts, as you certainly know with respect to privacy. i didn't believe, for example, that there was really a need for a privacy sleeve on our enhanced driver's license. but to satisfy the concerns of those who wond fever somehow -- wonder if somehow information can be electronically captured, we make them available. i think there are some concerns that may not be well-founded but

are there so what we're trying to find is that right to middle ground between access and to information that's necessary and respecting the rights of privacy of the american people. >> this is a classic in this post 9/11 world of our responsibility to weigh those privacy concerns against what i would assume was the advantage to our national security from mandating information sharing among the states about whether the individual coming in for a driver's license has had a license in another state that has been compromised. i presume there's also a cost concern here, or is there not, secretary? >> mr. chair, yeah. there's a significant cost concern. this is where the concept that there would actually be some conceptualized hub that would have to be created, that somehow the states would have to pay for a rose -- arose.

and the issue of privacy, the needs of infiltration of a hub, one place where all the information is gathered. the technical feasibility of some of these things also needs to be explored. it's easier -- from what you watch on television, would you assume that all of these things can happen with the snap of a finger. but, in fact, technically some of these things are very, very difficult. that's why under pass id we continue with what i call the mississippi pilot project, which has several states participating in because as we move forward, there may, indeed, be cost effective solutions to some of those issues that have been raised by the states. but as we stand right now, we really don't have the capacity to say that we're going to have it in one place easy electronic verification of every type of license and document.

>> i thank you. my time's up. i'd like to work with you and my colleagues on the committee to see if there's some way we can strengthen this section of the pass id without going over the tipping point where we continue tone courage the states not to comply, because we obviously need them to comply. senator collins? >> thank you, mr. chairman. governor, all of us are concerned about the looming deadline in the current law and the ability of states to comply with the law. under the previous administrations and, indeed, in the current regulation there is some material compliance standard that the department of homeland security uses to assess whether or not a state is complying with real id. and i remember very distinctly

secretary chertoff telling me that vermont was an example of a state that is in material compliance with real id. and he pointed to your enhanced driver's license as an example of a compliant driver's license. he also cited washington state, new york, and michigan as being in material compliance. so, therefore, i'm very surprised to hear secretary napalitano assert this morning that no state is in compliance with real id. so i first want to ask you, governor, do you consider vermont to be a material compliance with real id? >> i do. at this point. but on december 31 there are 18 benchmarks that states have to meet.

and even a state like mine that's doing its best to comply is not going to be able to meet all of these 18 benchmarks on that date. because of the requirement for the national data bases that are not yet up and running. now we are, but we're going to find it virtually impossible to meet all of these 18 dead lines by the end of the year, 18 benchmarks. so that's why the urgency -- the urgency the secretary noted is critical. >> which is an excellent point and why we're gathered here today. but i don't want to leave the impression that there has been no progress in this area that states are completely unable to make improvements in their security when virtually every state has taken steps, including my state of maine, to make sure that we're giving licenses only to people who are lawfully in this country. my state was one that did not have that requirement.

we had examples of people who were here illegally coming to maine, renting a post office box, and being able to get a license. and that, obviously, is frought with problem. secretary napolitano, i want to ask you about a provision in pass id that you and i have discussed that i find troubling. and that's the provisions that says that an individual cannot be prohibited from boarding an airplane solely because of the lack of compliant driver's license. a strong incentive for states to comply with the law has been the fact that they want to avoid problems for their residents in boarding airplanes, yet this bill would appear to undermine that incentive by including specific language that prohibits

federal security officials at airports from denying a passenger access to a plane solely on that basis. now, i wanted to make clear that t.s.a. has always had the discretions to exercise judgment. if that individual shows up at the airport without sufficient identification. they do that every day now. but that's very different from putting specific language in the law that tells states that they're not going to be inconveniencing their residents as much, at least if they don't have a compliant i.d. and i find that troubling. are you concerned as one of our subsequent -- as is one of our subsequent. [whistle] s -- first, let me ask you.

do you support that provision? >> senator, i think that what would happen under that provision is basically the same as what would happen without that provision. in other words, t.s.a.'s operating procedure would be that if someone appeared without a real i.d. compliant document, they would be subjected to additional screening so that it would not be an automatic where it's just the same as you described it but they would have to be looked at or other things would have to be evaluated by the t.s.a. employee to ascertain whether they should be allowed to board. >> do you think that language should be in the bill? >> we would be happy to work with you on that language. >> are you concerned that that provision could become the basis of lawsuits challenging the

decisions of security officials under that standard? here's the issue. let's say the individual does not have the compliant i i.d., that there's now a law that says that that cannot be a basis for keeping the individual off the airplane. secondary is screening is done. it finds nothing. but the security official still believes that individual should not board the plane. i think you're creating a situation where that security official is going to feel he or she has no choice but to let the individual board the plane because you've now put that specific language in the bill, in the law. >> senator, yeah, i think there may be a point there that we can explore with you between now and markup of the bill. but i want to go back to the

fact that with the language or without the language the guidance from t.s.a. is going to be if you appear without a real iz-compliant document -- id-compliant document, some additional exploration is going to be need to be done before you're allowed to board a plane. .

as you know, for your previous role as governor of arizona in 2007 they issued something for the compliance of the act. you testified that did just would grant states and other extensions, but only if they improve the benchmark by december 31 to dozen 9. this was raised by the governor. many men not meet this deadline. will happen -- what will happen?

will there be facility restrictions next year? will the be another extension for compliance? >> year of just described -- you have just described being a rock and a hard place. -- in a hard place. millions of americans are not prevented from travelling or entering courthouses. the other option would be to enforce this thing cost the effects. -- in force this and have those

effect. the whole goal here is a begin -- is to begin reaching the goal of the 9/11 commission which is to have a secure form of id. if it has to be continually extended, we are not actually getting to the system that reaches the security goal that we are striving for. with a better law, we will be better able to enforce and get to the standard that we want to reach. >> thank you. i know it is difficult. thank you for your response. one of the biggest problems with states implementing the real id act is inadequate funding. states simply cannot afford to

put the bill for with billions of dollars in an unfunded mandate. not in this uncut -- not in this kind of the economy. many things are required for other pressing security needs. the written testimony for the next panel states that the federal government should insist that states give highest priority to driver's license security rather than state level homeland security priorities. my question is would you like to address from your experiences as a governor the the financial burden of real id in its current

form and whether states are properly prioritizing the homeland security grant fund? >> i feel good about the power hesitation of vermont. you may want to ask other states to respond to that. there is a great deal of accountability when we receive those homelands to carry resources. we believe that we have deployed them responsibly. i think we have done a good job. you have identified one of the key concerns that all states have especially in this challenging fiscal climate. we are facing tremendous pressure to balance our budget and meet the the just one -- legitimate needs of the people. i am sure you have heard stories around the country about dramatic service curtailments the states are facing because of this economic crisis.

we have additional responsibilities throughout realize the, which means something has to give in terms of state finances. for most of the last century, driver's licenses that were first issued as been exclusively a statement of ability at state discretion. the states decide how to do it. now the federal government has imposed some requirements. i do not object to them, but i think it is fair that it not be in unfunded mandate. i appreciate the resources that have been proposed. the more cost-effective approach that the bill recommends, we believe it is half as cost -- costly as it is currently. it is a very important feature. >> the past id act requires that

they issued regulations to implement it within nine months after the bill is enacted. some have expressed concern that they cannot meet the deadline of a substantial portions of the regulation could be used to craft pass id regulations. do you believe that they will be able to meet this deadline? >> yes. it will be tight and tough, but we believe that we can. we are not starting from scratch. the past id is a real eye defects. we have the building blocks on which to work. yes, we believe nine months can be met. even with some slippage, we

still could get it out prior to the effective date. the timeline would give us one year before will idea would regional real id would. >> thank you. >> i apologize. these questions may have been asked already. regarding birth certificates and social security numbers, confirmation is required. can you speak to any concerns you have with any other real id requirements using verification by online? >> as you noted, some of the

requirements are the same as they are in passed by the as they are in real id. -- past id as they are in real id. the problem is these national databases such as vital records or the passport verification data base or the driver's license information sharing referred earlier are not available. they are not up and running. the requirement is not there and does not give anyone a sense of security. i think past id is equally strong in these areas of document verification and the pilot project that the secretary mentioned in terms of driver's

license verification will give us a sense of weather that can be done on a more universal basis. >> secretary, can you speak to the status of efforts to develop the system's and the databases that we need to verify passports and birth certificates? >> i can, although those questions would be more properly discussed with the department of state and h h s. i believe something like 13 states now offer to satori in -- participatory in at this program. i do not note the schedule for the full implementation of for surgery get validation at age 8 s beyond what we provide -- h h

s beyond what we provide. >> i hope they keep track of that because it helps to achieve the goal if we have the best driver's license that we can have from a security point of view. >> i am sure that you and other governors are going to take advantage of these when they come on board. >> i am sure we will. i was talking with people in our vital records office before coming here yesterday. it is quite a process to get all of those data entered in a form that can be accessed in a particular way. some of our vital records prior to 1950, are in a different media then those later. we are working at it. we are doing everything we can to comply with real id.

we are not going to meet the benchmarks that have been established. we will take advantage of what is available when it is. >> thanks. welcome to the senator. >> thank you. i was just trying to figure out where to start on this issue. i am holding up here and illinois driver's license and then and illinois id card. they will issue an id card if you requested. i use this to go through the air for securities. i am just wondering if a person does not drive, they issued this car for id purposes.

we are seeking to do it based on driver's license. is that correct? >> under both bills, when they use the word driver's license, they also include in that na identification issued by and motor vehicle division in lieu of a driver's license. >> if a person does not drive or is 14 years old and does not have a driver's license but has an id for getting on that vehicle. the past id will also encompass some identification. why then cannot we go to a national id? the states do not have the burden of trying to process this cost. have you ever been to o'hare airport?

i go to midway airport. if they do not have the will id after december, o'hare airport will probably shut down. you probably would have to be at the airport three hours earlier rather then two. i see a big mess that would happen. i am wondering is there something with the verification can be done on a national level of rather than a state level? >> i do not know about a national id. there are a lot of pros and cons on that approach. we are not looking at that right now. , december 31, -- we do not want to make the jurors between

enforcing the law that congress has passed. it could create a lot of confusion at our nation's airports. >> we know we can pass this. we may want to take this another step further. i look at what the tsa is doing now. to put that burden on a tsa worker -- what they go through now is unconscionable. it has gotten acceptable to the travelling public. i left home the other day and did not have my id with me. the process i had to go through to get on an airplane and everybody knew me from chicago -- i just wondered what would happen to john doe out there who shows up with no id.

they took me through a process. i had to show a few places where i lived. and they knew me. the tsa staff is doing their job. i want you to know that. they put me through every test. i did not complain. i do not want anybody else getting on that plane without proper id. i am just wondering, what burden are we going to put on the tsa screener that is looking for a raise by the way. and they estimate that. are we taking that into consideration -- even with the real id or the past id. are we taking that into consideration?

>> the past id would indicate that eliza's or identification card is compliant. s restart to make a more straightforward and simple 5 for the public identification necessary while helping us to meet our security goals, i always retreated to the 9/11 commission report. i think my job as secretary of homeland security is to take those recommendations and implement them and move us towards implementation which will give us a greater safety and security in our country. s remove forward, we reached some of these problems. it is not a surprise and that will id needs to be fixed. for a worker at an airport making more straightforward --

what kind of id is acceptable, that should help us reach our 9/11 commission goals overall. >> i had a couple of grandchildren born. they were issued a social security number. they are in the database summer in the federal government. i am wondering, should we look at a master data base that would give the edification of the american and the individuals in this country. has anyone done any studies in reference to that? i am sorry, i was not here at

the time. do you having any knowledge? did your state look at that at all in past actions? >> we have been discussing past id. the urgency is getting something done before the calendar year. we have to work together to find some consensus so that this process is done without getting into an area -- >> this past id is not going to be as secure as we think it is. the documentation databases are the same we use for real id. how secure is that going to be?

we want to get this in place so that we get a little bit more security. i hope and pray that we will look at taking it to a higher level without of the invasion of privacy. we still have the privacy issue that we have to deal with. i do not see how you're going to deal with illinois and ohio. it is a different issue. is this what they are planning? this process here, the real id process? >> it would be something like that to indicate that it is compliant. it is very easy for someone to and noticed like the tsa worker. >> is that 01 to be the

solution, this type of special identification? a person could produce false documents and still get a start. -- star. >> we would be happy to brief you on other protections built into the document to inhibit forgery, false id, the other things that will be built into driver's license that make them more difficult to manufacture in a fraudulent way. it is never 100%. it is much more difficult than years past. >> thank you. >> we are glad you are not enjoying life as much as you

used to reduce injury to the work of the committee. we thank you. -- used to. we appreciate what you contribute to the committee. we thank you. i want to challenge each of us to work together urgently. our goal is to get this passed by the before the markup on july 29. bernanke very much. -- to get this passed it id befe the markup on july 29. and he very much. -- thank you very much.

thank you for being here. i really thank you for your continuing interest in our homeland security.

i welcome your testimony. >> thank you. i feel very strongly about making this a success. anything i can do to contribute to that, i am delighted to do that. it is a pleasure to be here. i have raised four concerns in my prepared testimony. i will talk about one of them. that is the source document problem. the easiest to understand is if you heard the story as i heard it from the relatives of one person named kevin. he was a carpenter. he took a vacation in the virgin islands around 2002. his wallet was stolen during that trip. two years later he started hearing that he was wanted boris speeding tickets and other

abuses of a licensed in florida. someone had walked into the florida department of motor vehicles, presented his social security card, and they made a paper certificate from the virgin islands in his name. and this trend of that they gave the imposter a driver's license in his name. he tried to cure that problem from new york. he was unable to do that. he moved to florida. by living in florida, he asked for a driver's license and the state said no because you already have one. he said it is not me. they ask for more paperwork. he provided it. a year later, he was wanted by the police. he had committed numerous speeding tickets an unregistered vehicle violations.

he was arrested every time he drove his car because of a bad birth certificate that had been accepted by the florida department of motor vehicles. that it's very aggravating. it was only the beginning of the nightmare for him. dot the guy that the police knew as hemp -- the guy that the police knew ism was pulled over. as hammett -- as hamm was pulled over. -- the guy that the police knew him as was pulled over. he pulled out a gun and shot an officer. they say they got a photograph of the guy who is the real kevin.

they put it up all over the state. if he is stopped while driving, he risks going to jail. you can imagine what the reaction of the police force in jacksonville would be if they pull over somebody that they believe is a wanted killer of a police officer. he is driving the car and looks like kevin. they ask him, are you kevin? he says yes, i have my license right here. i do not think the chances of him surviving this encounter is very high. the guy they really wanted was killed ocean a gunbattle with police that evening. the risk to kevin from that bad birth certificate is astonishing. what is difficult is that florida is still accepting birth certificates without doing anything to check the validity

of them. that is something that real id would have a fix. past id deserve some credit. has worked hard to make sure the documents are not easily forged. i think we should acknowledge the value of that. given a choice between having a license that is hard to forge and a birth certificate and other source documents that are hard to forge, which should be choosing to make the birth certificates more checkable then the driver's licenses. if you are stopped by the police, they are. to check a data base to see the driver's license was really issued to you in that name with that identity. even a fake driver's license will not get you past the traffic stop. whereas if you bring in a birth certificate, there is no check

at all. what we should have or working towards is that having the same capabilities with a burst -- with birth certificates as we do with driver's licenses. that is one of the requirements of real id. the other three atoms i talked about in my testimony -- -- the other items i talked about in my testimony, it should take 10 months not nine months. i appreciate the comments that the secretary has. i do not believe she can do it. this committee should try to make sure there is some form of insurance so that if the deadline is missed, the provisions of real id that are

equivalent to past id remain in effect. the other issues, i agree with senator collins with having a statutory id such as for flying. making the expenditure of state home as security funds something that is a priority particularly for driver's license is very valuable. state a homeland security funds come from all taxpayers. it should be used for things that benefit all taxpayers and make all of them more secure. driver's license security does that. as to be the highest priority. i urge that you would enact a priority for that use of the fun. -- funds. >> thank you.

what you're saying is that we ought to be investing money in setting up this national data base system deck -- ? . this system is beginning to come together in the states are not willing to contribute. >> i agree that we should be spending money on that. i do not think it is a central data base. each state will put their own data base together, but it ought to be possible to inquire whether the driver's license was really issued. not a centralized database. the cost of that is a few million dollars. probably a couple of million dollars per state to clean of the databases roughly. our guess is that this could be done for a total of a 7 $5

million spread over three years. -- $75 million spread over three years. >> thank you. thank you for being here. this is the share of los angeles county. he has endorsed past id. he leads the largest sheriff's department in the nation which has over 18,000 officers and staff. it is an honor to be here. thank you for coming here. we appreciate your testimony now. >> thank you. but morning. -- good morning. i appreciate the opportunity to be here today.

in support -- as the witnesses have address the challenges associated with the implementation of real id, , my testimony will focus on the critical need for a national identification standard that is secure. we want to integrate what we are doing here to insure that homeland security is secure. hopefully my testimony will strengthen the core message of the secretary and gov. douglas. together we recognize the proposal to issue a national standard for identification security has been a contentious one. however, we believe that past id adequately addresses the cost and privacy concerns to protect the citizens reserved.

nothing will ever be perfect. one from a law enforcement perspective, it gives us that much more confidence, that the identification we are looking at is the core of reality of the 9/11 permission -- commission. if someone is sending this is who i am, i may provide an identification card or driver's license, that is who they are. that is the ultimate goal. it provides one more tool to ensure public safety. it is designed to make it much more difficult for terrorists, criminals and illegal aliens to tamper with offical identification. i like to close with a few points here. as you have stated well, the 9/11 commission is concerned that some state standards

created security gaps that were exploited by the 9/11 terrorists. the commission recommended national standards not national id cards. past id provides a cost- effective solution that the balances critical security requirements with input and practical needs of individual states. it provides flexibility to the states for implementing the security requirements. it provides flexibility for validating some documents. the next point is that it requires them to develop procedures to prevent the unauthorized access or sharing of personally identifiable information. it mandates public notice of

privacy policies and the establishment of the region as process for individuals who believe their personal information should be amended. it restricts the use of personal information contained in the driver's license or an id bar code. but it supports federal and state local laws and prohibits states from including social security numbers in the bar code. it removes the blanket requirement to electronically verify applicant documents and protect against the creation of a national identity data base containing all driver's licenses and id information. that is the key point. citizens and non-citizens who are lawfully present in the united states are eligible to receive a past id.

millions of context are made with people in the united states who are legitimately -- illegitimately here. and i system -- the authenticity of these documents is what past id will ensure. >> thank you. the director of federal relations is next. we thank you for working closely with our staff to put together past id.

>> thank you for having me here today. i will reiterate some of the instructions that were given to us by governors. governors were coming together to talk about this issue. it is remarkable when governors come together. without that -- they are able to talk just as the governors. there are unique things about that position to make everything work. we now have a 13 states who said they are not going to participate. governors are concerned about making investments in driver's license to increase security and integrity, but also making investments that make sense.

what does the future look like? real id has not created certainty. past id has tried to create that and allow us to move forward. someone said let's try to find a fix. fullfil the 9/11 commission. that is the starting point as the commonality for everybody involved in this issue. we want to encourage participation by all jurisdictions. and now the 13 states who said no a way to come back in and participate because security standards only work when people are willing and able to use them. when you have some states not participating, it is hard to put verification systems together when the entire northwest is not participating, for instance. how're you going to verify the information if they are from one

of those states. enhance the security of all licensed and id cards. i think he said real id is too prescriptive. that is a big fear. states want to do more. they are happy to have federal government -- they want to innovate beyond it. i think it shows the commitments that they have to take security standards and move beyond its. address critical privacy concerns and reduce unnecessary costs. this is important to view some of the systems that past id does not include it in this context. privacy was a key driver in a lot of the states. it was a concern that there

were database is being set up that threaten personal identity and encourage id that by providing information in databases that can be hacked. there are questions about whether this can be done. there are talks about this being an unfunded mandate. sending bills to the states -- those are some of the issues. some say this is a bad idea and we are not going to comply. what past id does is stop kicking the can down the road. let's solve the problem and create certainty. let's do what we can now. verification is increased under past id because all states will do verification.

49 states do at one and the other does something else. the three systems the governor talked about are questionable. they would not be required right away. it is very difficult to implement. past id says a pilot them not to get rid of them. we want to see if we can make these things work. if we can make them work, governors will use them. as one governor said to me, can you tell me today out any of those systems are government, how they are paid for? the answer for all of those was no. he said how can i signed up for

that system and put my state online? he cannot move forward until the questions are answered. many of the applicants who participate in this process -- no one is completely satisfied. we need the right solution in washington. thank you. >> thank you. here is our final witness. we welcome you back to this committee. he is the vice president and chief operating officer at the center for democracy and technology. >> thank you. thank you for having this hearing an inviting me to testify today. i want to thank our colleagues

for making this a non-partisan place where we can have this discussion. i was on the intelligence reform committee that worked on a negotiation. they are trying to come up with flexible rules that protect privacy while still meeting the 9/11 goals. flexibility -- the standards for issuance getting information on the card to be standardized. that is what the 9/11 commission is all about. making sure that we have this ability to improve the licensing system and use it and rely on it for purposes of national security but also that we had privacy and flexibility built in. it is very clear that civil

liberties issues are of great concern to the 9/11 commission. we have had a discussion to the extremes. one side is committed to this discussion where privacy has been removed when need to have privacy standards in place. those were taken out in real id . it was noticed. that seemed to be congress's consent. we have taken a step back from that. on the other side, you have groups and other public policy officials that prefer to do nothing. they feel the problems that could come from messing with the

current situation could be worse than where we end up down the road. we do not think any of those possibilities are the right solution. it is in the middle. we need to find the answer. we think past id does that. it retains the current regulated system it also does other things. it would require states and law to create privacy and security safeguards including internal fraud. we have seen time and time again that the greatest weakness of the driver's license system internal fraud within the dmv. we have seen cases of workers selling licenses for $1,000 to individuals that should not be able to get them under current

law. we have seen cases where employees have sold the entire database to identity thieves. we should ensure that these problems are being addressed by the state. we have to ensure that privacy protections are not weakened moving forward. we want them to do several things such as limiting access to a certain zones. congress should reject any technologies that can lead it to information being easily cloned. they need to prevent fraud and theft of source documents.

i look forward to answering any questions you may have. thank you very much. >> thank you. i have to ask one question but then i have to leave to go to a meeting. i think the witness is very much. senator collins will go on in my absence. you heard in the first panel about the importance of the state balloting source data -- source -- validating source documents. two reasons were given why they were opposed or skeptical. one was the privacy concerns. the other was the cost.

it has to deal with in putting the information. do your privacy concerns about that kind of system -- the mandating that states cooperate and provide data to one another about the source information -- do you have great privacy concerns about that, whether they can be taken care of? how you feel about that? >> we support the idea of as a pilot and moving forward that way. the main reason of the concerns is that the quality of the information in these databases are of a very poor quality. my wife's date of birth was wrong on my son's birth

certificate. when i went to change it, the day appended it but they did not change the form itself. every locality had different standards about how they make changes. if you say, we will connect this information together, i think the cost of correcting the information in getting it linked so that they are standardized is very expensive. putting the security protections on top of that is questionable as well. people could go in and correct it. identities pretend to be these people. they say they want to correct the record, but they pretended to be somebody else when correcting it. we need to deal with that situation. we may be able to do it, but not

in six months. >> can you give me a quick response to his comments? >> he is correct that there will be problems with respect to errors in the data base. for 95% of the records, you'll get a quick check which means you will eliminate a big amount of fraud. we need to solve the big problem first. the secondary problem and be addressed by picking up the phone where you have a problem and saying to the state, can you tell us whether this for certificate is good or not. that is what the social security administration does today. it allows cit to take care of notations on the bourse certificate and other things. you have to find a way to make those adjustments to the database.

today we have a problem like kevin's. >> thank you. we have ttalk about terrorists using driver's licenses. more secure driver's licenses also application for preventing or making more difficult for counterfeiting to take place. you address some of that in your written statement. could you talk more about the benefits of more secure and authentic driver's licenses to you as someone involved in law enforcement? >> yes. a big key point of authenticity

of driver's license or id cards -- identity that is a large problem. a lot of people are roman marble with databases out there in the internet world that are tapped into -- and lots of people of all hon. -- are vulnerable with the databases out there in the internet world that are tapped into. the volume of what people are fearful of in america is that their id will be stolen from them. wheat and local law-enforcement along with our fellow partners are very wrapped up in a huge

amount of identity theft and was not enough resources to check -- chased down all of the offenders involved. this is an and a national and national problem. part of the reason i think the discussions with the city chiefs along with the national sheriffs committee members on this issue is to see the value of this not purely from a prevention tool for terrorism but for preventing all forms of crime where people acquire other people's id. my driver's license and one of my credit cards were taken. within one hour they were trying to purchase some products from a department store. fortunately the clerk asked for

my driver's license, but they did not produce it because they did not look like me. this is a far more reaching a solution to an ongoing problem before 9/11. 9/11 accentuate the need now. >> thank you. i think that it's an important point. we should not overlook this. i appreciate the approach you have taken. there is a provision of the bill that i would like to get your thoughts on. it is the thought -- provision fed looks at the act of scanning the information contained on the driver's license.

it would be a crime to use that information to track the use of the cart -- to store information that is collected or reselling it to a third party. im understand what this provision is trying to get at. i support the desire to curb the unauthorized use of this private information. some business organizations including the national retail association have expressed the concern that this language is [unintelligible] they a look at an earlier version with regards to the language. they have given us the example of a business that uses that information to identify someone who is repeatedly returning

merchandise at different locations in order to commit a fraud. what is the concern about adding an exception if the information is used to prevent fraud, misrepresentation or other illegal activities that was in one of the earlier versions? >> thank you. this is an important provision for us and for privacy advocates. people want to understand what is happening when they give their license to someone. the issue with fraud exception is to look at how broad the fraud exemption is. they're created for one purpose and use for many purposes down

the road. there are many concerns over that issue. they are concerned about how this may be used down the road. we have seen cases where cards say they are swapping information to get the age of individuals, but then use that same information to give to tobacco companies to market information. that happened in oklahoma last year. we know for a fact that people think it is being used for one purpose, but is used for many other purposes. how do we stop that? we are ok with saying, this is the same card that we saw over here with this person. they tied in basic information about the individual so when

they come back and swap it somewhere else, it can populate itself at that point. we're not talking about -- the major swiping of the card is ok. the question is about using it to populate information that can be used for other purposes. >> thank you. senator, i am not sure which one of us is chair right now. >> thank you. as you may have heard in the first panel, i asked governor douglas about the state's use of grant funds. you expressed concerns in your testimony about the prioritization of identification security. and he recommended that past id

include language to ensure grants for licenses which are a higher priority than other state product. would you recommend that the federal government requires states to comply with secure identification standards before they can use funds for priority such as first responders or disaster preparedness? >> we all recognize that one of the biggest concerns is that states are being asked to spend money that they do not have. .

i don't think it is necessary to say you cannot spend money on anything and you have fixed everything, but i do sinkage should be one of the tops three priorities, and states should have to spend some of the money improving driver's license. >> thank you.

i have a question relating to some of the electronic databases that are required, and slowly being implemented by at a handful of states. i am interested in the electronic verification of vital even records. as i understand it, some states are using the system to help electronically verify birth certificate information. only a few states currently scanned birth records included into the system. can you speak to the current status of the state's use of this, and whether it is feasible for dmv is to use this on a widespread basis to verify

it birth certificates in the near term? >> thank you for the question, senator. with regard to this, i know the organization that runs that system-about 15 states participate. only three dmv is currently use the system, 56 jurisdictions, only three currently use it. the organization believes 85% of birth records dating back to 1935 are in electronic form. i would like to see verification of that number. i have no reason not to believe that. i know the several states had

great difficulty in transferring, especially old records into electronic form to make a consistent, accurate, and usable, there was one state recently who move to a legal precedent standard. that state had to set up a board room just on the birth certificate issued, because for all of those people coming in, those who are in the u.s. legally had no problem showing that. a person who had the problem showing that they were citizens happen to be the grandmothers that was in the house had burned down. that person had a problem showing that record and proving that they were citizens. the spent -- the state spent more of their time with those

then in the utilization of these records. transferring these per certificate to electronic form is not an easy task. they have should be done slowly. the questions i heard from the governor's were not about should we do it. they want to know about the privacy protections and the accuracy. one of every 10 people will get a false reading. that means delays and additional time, perhaps another trip to the dmv. you could be one of those citizens who could be in the same house and the present county and the same state all your life, but you can be rejected if this does not work well and is not 100% viable.

let's see if we can get it up and running and solving these questions and make it and if you build it, they will come type of things. we need to do this on a cooperative basis. >> thank you. you testified that these could probably be digitized and made searchable for $100 million. in addition to a total of $4 million to get these activated in all states, what is the basis

of this? >> that estimate is derived in part is based on the but experience of the states who had actually digitized their states. >> thank you. >> there are some states who have real idea and have passed legislation in compliance. there are other states that has been a great deal of money and effort and have taken steps towards compliance. vermont is one of these states. if this were to pass and we

have new implementing regulations, is there concern that the investments made by states towards seeking to comply with the law would be for naught? or would this be put to good use? >> because pass i dd you will se security increase. most state investments have been made. you will keep the value for those. even in some of those states to ban such opponents some of

those governors have said, i want to use driver's license. but their systems are actually fairly close. >> i have noticed that the fact that some of the states that are protested are in fact close to compliance with all law. but understandably they did not like washington telling them how, and they were in some

cases resentful of the financial burdens. does every state currently have the requirement for legal precedent? >> i believe we are almost there. when real i deep first went to place, 10 states did not have it. there may be one left who does not have the requirement. everybody else now has it. >> do any of the other panelists not the answer to that question? >> i am under the impression that mexico -- new mexico and hawaii do not have the protection. >> that is something that we will check with the departments for. i know my state of maine was one of the last. the governor recently vetoed a bill that would have repealed the requirement for for a

showing of legal presence. i salute the governor for doing so. i am sympathetic to the situation that was described, because we have had situations in maine, because of our closeness with canada where the great-grandmother came over from canada many years ago, married an american, fog that made her a citizen. she did not have proof of her being born just across the border in new brunswick. a requirement for legal precedents is very important, we should not be giving driver's licenses to people who are here illegally. it does get more complex when one tries to comply with the

law. let me ask one final question. i am troubled by creating a loophole and how it would work in the real-life application. in addition to creating the possibility for endless litigation, my concern is that security officials are being trained in behavioral recognition techniques that the israeli government has used for airport security for decades very successfully. an individual may present themselves at the airport without a compliance id, holsters secondary screening, --

go through it secondary screening. there are no red flags. he is not on the terrorist watch list, he is not carrying anything that it wanted -- of one picks up. through the training, the security guard has in behavior recognition techniques, the guard may believe that this individual poses a risk under the provisions of the pass id legislation, with the prohibition that exist. are you concerned about this? >> i am.

the 20 hijacker was turned away on 911. it is critical that these security guards use their judgment and intuition. i predict that once we write this into the law, the courts will be asked to enforce it. i think the courts will save that we have to make sure that this is not -- they are not does making up a creepy feeling to deny people because he doesn't have id.

i think you cannot over impact the problems. no one wants to go through that. >> i want to make clear that i am not talking about irrational prejudices or profiling. i am talking about a trained security guard using this specific technique that has been used in israel for many years, and which is being used today in some of our airports, i believe logan in boston is one of the airports that is using this technique. this is a trained guards assessment.

my concern is i think the burden of proof is shifting from the individual presenting himself at the airport who has to prove that he is who he says he is to the security guard proving he is not the person he says he is. there really concerns me. i hope the members of the panel will work further with us in this. it is the reason that i did not join as a co-sponsor of this bill. i feel so strongly that this undermine the security and the purpose of having secure identification. i look forward to working with the panel's.

i want to thank you for your leadership, and i want to thank the panel. senator, the hearing record will be open for another 15 days for any comments. i will turn it over to you, and think for our leadership. and i would like to thank all of our witnesses today. thank you. >> thank you very much. i would like to think our ranking member, who has provided great leadership in this area and sinking into some of the issues that we have been facing. he has been helpful in doing that. i have a few questions here.

the testimony suggest real id act increases privacy protections. and the repeat of the real id brings more cases of identity theft. over the years as we have worked on oversight of this ,cdt has been an advocate for additional privacy protections, both in real id and in other issues. would you address the conventions that real id adequately protect privacy, and why you believe that additional protections are needed? >> thank you. the issue of whether we like the improves privacy you can look up and the record.

there is a footnote that says that they cannot add privacy controls into the law -- the regulations, because the law removed the words privacy specifically within the intelligence reform act. while i do think that the dhs can take steps to improve security about personal information, they did not go as far as they could have even according to dhs, is if it had the privacy protections built in. we are moving in the direction of coming to the right balance. real id stopped them from its work.

put as many steps back from privacy protection. well you can say that license reform would protect privacy, i think that is true. we need important licensing reform. we still feel that the move towards reform is important, or to put in the privacy protections into law an issue due in pass id. this idea that real id would be better than those other two solutions or the original negotiated rule making is false. >> i would like to ask you

about an especially important issue that was made more real by an enactment of real id. this is personally identifiable information from a machine readable zone of driver's licenses and identification cards. cdt has been a long-time advocate of additional protections. it was put into a common mish- readable format. eliminate the ability to store electronic data from licenses could be detrimental to fraud and identity theft. >> of a think we should look at

what is allowed on the pass id. any retailer is allowed to take the license and swept it and do a comparison of -- to make sure it is a real driver's licenses issued by mistake. they can make sure the confirmation in the machine readable sound, they have the database, that is the same person. they cannot store that information in the database. we are getting the ability to to put more and more information in the zone. in the future that will not be the case. the real concern is making sure that what we have this

opportunity to discuss security on the card, that we are also looking to the future and saying that as we put more information into the machine readable don't we have to make sure the data is secure. you can see what is on the front of the car, you cannot see what is in the machine readable zone. you can only use the front of the card to type and information, we know there are only using that information. if the person swipes the card that can only read the information on the front of the card. that is why we should be focusing on. i had a conversation recently and i was told that while a person was in washington he put

up in number from prevention matters to ensure that tmz workers could check only against the database, could only verify the information in the database. that was security and privacy protections put in place to limit information. those same type of rules should go into effect, they want to use a machine readable ozone. >> thank you. your testimony asserts said pass id would return us to pre 911 standards for the issuance of identification documents. the pass id act contains many of the same security requirements of real id, including requirements to provide a photo id document showing a person's

state of birth, proof of the person social security number, documentation showing the person's name and address of their personal residence, and prove that an individual is in the country unlawfully. socials occurring numbers and lawful presence would be checked electronically. identification documents would be documented. none of these federal standards were in place pre 9/11. my question is, what is the basis for your claim that pass id would move stays back to pre 9/11 standards?

>> but we take a running jump at that. i don't mean to suggest that the items that pass id are not useful. they are useful. they are the elements that we thought should be done as a part of material complaints pyrrhic one of the big problems here is that under this these items are due to be ended this year. you might have to do some additional time because of the crisis they find themselves in. states knew that was the deadline they were working toward. even the ones who said they reject real id they were expected to do those things. what pass id does is they say you know those 18 items? if there is some litigation or delay, that is a terribly long

delay for something that most states are being close to real to do now. we should not accept what i think will be much more than five years of delay. for the next five or six years, we are getting nothing. you talked about the electronics checks that were done? they were useful. but the lack of ambition is astonishing. we have a verify program for employers that the two administrations have now embraced. they should check social security number so that they do get matching names. then, if they don't match, you don't get the job. there is nothing in here that says you don't teacher license if your name and social security number don't match.

people should be required to produce their id, if they're not american citizens, if they produce a passport it should be checked just as every employer will check to see if the photo on the passport matches. those systems are available now. there is no need to say i don't know if it works. this bill does not require that. in most respects, we should step back from real id. we did not deal with source documents, we did not kill what -- with what people thought was most important. thank you. >> thank you for response.

you have any comments about this? >> thank you, senator. mr. baker, to say that all this will not be done until 2016, we will need every minute of the five-year window to put drivers back in. they are not waiting until the end. they want the system in place so that they can make the investments in start the process. they want to do it as soon as they possibly can. there are verification systems that are not used today. the fact is pass id takes the best parts of los workable

parts and brought them over. governors were interested in finding a solution, not starting at 0, starting at where we are and then get the job done. i believe that states will believed to aspire to do better. pass id was set a floor that states will go beyond. states will come -- they would like nothing more to have the systems that can provide proof -- privacy, so that you can get to that line quickly. they know that the idea they are given represents exactly who they are. we all share that common goal. to say that we do not is not correct.

pass id offer solutions and more verification. because it can be done,pass id beats the 9/11 recommendations. >> thank you very much any other comments from the other panelists? if not, i would like to thank you very much. this has been very helpful. thank you for your support, and all that you have done. i want to thank you for working with our staff, the people who have put this jury together. i want to thank you again for moving us this far. we will have to move on this as soon as we can. we will try to do that.

the hearing record will be open for 15 days until july 30th four additional statements and questions for the record. again, thank you very much. the hearing is now adjourned. >> a live picture this afternoon from biloxi, mississippi where the nation's governors are meeting this weekend. we expect this to start shortly. this is live coverage from c- span. cour

we are live at the national governors' association from biloxi, mississippi. they will discuss china's investment in infrastructure, also a public financing of transportation. several of the nation's governors will be on washington journal tomorrow. the will discuss the economy. tomorrow afternoon at 3:30 p.m.

we will have live coverage of the plenary session on the emergency preparedness with janet napolitano. live coverage of that at 3:30 p.m. tomorrow, going until about 5:00 p.m..

it will be a few moments before this gets underway. while we wait for it to start, we will go back to this morning's washington journal. to hear your reaction to the death of cbs news walter cronkite.

host: many of the papers this morning have pictures of broadcaster. this is courtesy of the baltimore sun. some of the editorials weigh in on the spirits -- on this. it is titled walter cronkite. they say what was it about him in particular? members of the youtube generation might want to look at a video clip. particular?" his town, always respectful of subjects of viewers, told of the death of john kennedy, martin luther king jr., and lyndon johnson. he simply seemed like the right person to carry those tidings. like many editorials this morning. to join in on the conversation,

it is one of these three lines. as you can imagine, many profiles of the anchor man this morning, including the pages of the "washington post," talking about how you'd competition when it came to looking at his own broadcasts. as a front page spread, a picture of him during the tet offensive, 1968. lower down, something on how we viewed his news cast. he was always a fiercely competitive news man off-camera. and recollection of a day being spent with him for in 1979 magazine. throughout the day, she was calling subordinates, editing

copy, deciding the stories of the plate. at one point, when someone had edited questions, cronkite exploded. he watched nbc nightly news every evening after finishing him own and his staff lived in terror of the explosion of anger that we are leaving washington journal right now i go to the governors' annual meeting in biloxi, mississippi. >> we will have a presentation from a distinguished fish from china in a few moments. i would urge you all to pick one of those up.

we will be talking about a lot of issues over the next few days. we will get under way very shortly with hour opening session. we will talk about infrastructure. we will make the presentation, as we do each year, the distinguished award service winners. may i have from my colleagues adopt the rules to the annual meeting pus? we have adopted the rules. i want to remind you that any governor who wants to submit a new policy or resolution for

this meeting will require a 3/4 rules suspension of vote. it should be submitted by no later than 5:00 p.m. tomorrow. i want to welcome a new colleague at the annual meeting. gov. janet bore from arizona. welcome. -- jan brewer from arizona. we are delighted to have you. we want to put you right to work. i will point the nominating committee, who'll make a recommendation to the plenary session on monday for executive committee members and officers. i would like to appoint governor brewer. i want to help you with your resonate. -- with your resume. we have a number of distinguished guests from onset

of the united states. i mentioned the chinese delegation. we are also honored to have members of parliament from our nearest number -- member from the north. we have the head of the caribbean governors' association 'korean governor's association. we have a number of former governors here at our annual meeting as well. are like to thank you all for being a part of our meeting. i would like to recognize our distinguished post. someone who is provided tremendous leadership to the people of the great state of mississippi, along with his wonderful wife, marsha, and has worked tires loosely for the last year to prepare for this meeting. our host, gov. hailey barber.

>> thank you very much. i take no offense by that joke. we in mississippi, and i speak for all of us welcome the national governors' association back. the last time we have this conference was in 1935. we just had the opening news conference over in gulf port. from the room you could see the markham building, which was read the governor's conference was held in 1935.

it got three stars of water through it when hurricane katrina cancer here. some of you said you had not visited mississippi since the storm. we are very proud of the progress that we have made. as you can see, we are not through. there is still more to be done. strong, resilience people of mississippi are up to the task. we are delighted to have a chance to show you. every one of our sister states are going through this. so many of you sent national guard and lot in sportsmen. -- and law enforcement. they came from every state.

the first time that i realized how americans were pouring out there for -- pouring out their heart for our state, after the storm when president bush was here and we went over to the feeding station. the feeding was so crowded whenever the president, i would usually try to be as far away as i could because of the crowds. i saw these seven guys standing over and i want over to speak to them. they said they were from vermont. they said they drove those. tractor-trailer's down their full of food. i said that is so fantastic. and a man named pettitt who is older than i am now but said, this is my third trip. just spectacular what people did, what the states did. we will never forget it.

i mean that sincerely. i want to thank you again for coming here. i told everybody who was here last time that this will be a great conference. we have a lot of business to deal with, some serious issues to talk about and share ideas about solutions. but we intend for you to have a good time. if you don't have a good time, -- we have mississippi grammy winners who are coming in to play. your spouses are packing packages for our men and women overseas and for their families. pall over st., a grammy winner came over early to do this.

tomorrow morning there will be a gospel launch -- brunch. it will be fun. we have a several time grammy winner who will entertain. it will be a good way to start your day. come and have a good time while you are here tonight and tomorrow night. mississippi is known as the hospitality state for two reasons, and we want to show you that. this building was devastated by katrina. we had water 20 ft. deep in the coliseum part. much of what you are saying has been built since the storm. this is part of our recovery. we are very proud of it. we want you to enjoy it.

on behalf of all mississippi for every governor, welcome and we are glad to have you here. [applause] >> thank you very much. all the american people are privileged to assist when any americans need this type of assistance. thank you for putting this together. it is not a small tester raise the resources necessary. as all of you know, the chairman of our association is unable to be here because of the fiscal and economic crisis in his home state. gov. rendell is doing a great

job leading our association and we will miss him. he is here through the magic of telecommunications. we will start with a video message from our chairman, and then invite him to offer some other remarks as we get into our discussion on infrastructure this morning. chairman rendell. >> let me apologize for not being with you today. we are experiencing a budget crisis as many budgets are. yesterday was the first payless payday. eventually our employees will be paid for every moment that they were, but they are not getting paid right now. negotiable -- negotiations are

somewhat heating up and i could not leave. i apologize for not being with you. let me just say a word about the organization. it has been an honor for me to serve as chairman for the past year. we have accomplished a lot is in the infrastructure agenda. i would like to say what a good organization this is. i think many of you are aware of the incredible work the executive board of the state -- staff did, coming together in shaping the stimulus bill, helping us to protect our most immediate needs. we would have been swamped financially without the stimulus. our work in philadelphia was very meaningful.

i don't know if any of you have heard but you will during this meeting of the incredible worked in staving off the senate finance committee's proposal which would have required us -- many states would have needed a constitutional amendment, bonding our share of expanded medicaid under the health-care proposal. the health-care task force headed by gov. granholm , in a 20 minute conversation we turned it german baucus around paris -- chairman baucus are around. it was a lifesaver.

as your ongoing present, so let me say stay involved with this organization. it helps us accomplish the things we want to do for our people in a meaningful way. thank you to all of you for giving me the honor. it has been a pleasure working with all of you this past year. i have one request which leeson to the plenary session. that is to adopt a proposal as a resolution. i think this is very important in the continuing battle to improve america's infrastructure. right now in washington, there are a lot of things happening on infrastructure. the transportation bill, the president has asked the senate and the house to extend transportation funding and not do the bill for 18 months. there is some opposition to that in the senate and house. i believe the president's bill

will prevail. there needs to be stop-gap legislation to do this. we need to create a national infrastructure bank, not to change the basic way of funding transportation. that will still come to the existing formula. having that infrastructure bank for projects of national regional significance, or to have the it infrastructure bank ready to finance major national initiatives like high-speed rail systems would have independent funding, and it would be awarded by a strict cost benefit analysis by experts not by politicians. it will be determined by what is the best product. we are not just talking about transportation. we will be asking for resolution

here supporting the infrastructure bank. it is out of the ordinary way of doing things and for that reason we need a three-quarters vote approval. i am asking you all to cast a vote on monday. the reason that it is important is the obama administration has asked the congress in the resolution that will continue to fund transportation funding. they have asked the congress to create the infrastructure bank. i think we want to support that idea. it is not a democratic idea, both democrats and republicans support the bank. we want to support the administration's initiative. the bank can be a source of flexible -- flexible funding, private funding and government funding.

there are so many things the bank can do an accomplished to give us the wherewithal to do our projects that we have. i am asking you all to support this resolution on monday. it is moving fast. congress woman from connecticut has put in legislation which was latest -- legislatively create the infrastructure bank. she will talk about her legislation. she has been fighting for this. she has been fighting for this legislation for over a decade now. i strongly support her. she makes a great advocate for the need to change infrastructure and infrastructure spending in this country. i am truly sorry that i am not

with you. aleksei is a great town -- bullock's sbiloxi is a great to when this video and, i will participate in a first plenary session on infrastructure by telephone. i will be talking to you a little bit. thanks for the opportunity to serve, and let's keep pushing for. please, pass the infrastructure bank resolution on monday. thank you. [applause] >> thanks so much for leadership and great work. it has been a privilege to work with you during this past year. thank you for your hospitality in the centel -- centennial meeting last summer.

we will get into our speakers in a few minutes. are you there? >> i can hear you loud and clear. it was a pleasure working with you this year as well. >> thank you. we are sorry you are not with us physically, but we are glad you can participate. we will jump right into our discussion of the importance for preparing and in enhancing our infrastructure system. we will talk about how we can get it done and perhaps more importantly, how we can pay for it. we are really facing a once in a generation opportunity to address our nation's infrastructure needs. the challenges could not be greater. after a century of build up our roads and bridges are in disrepair are water infrastructure has not kept pace with growth and our electric grid is a little different from the one that was envisioned by thomas edison. we've face enormous cost to bring our infrastructure to the

21st century. an estimated 2.2 trillion dollars is needed over the next five years. while the recent stimulus investments have started the journey, we have a long way to go. where fortune two -- we are fortunate to have several different speakers this morning. zhang dawei comes to us from china to tell us how they're improving their infrastructure. we will hear from the congresswoman from connecticut's about the prospects of the national and for structure bank to help provide much needed support

robust ininfrastructure. they've been investing on the order of highways, ports, rail roads, in recent years. as part of these investments, china is also exploring the role of private investment to help design, build, operate and manage 106 kilometer in the province which is part of >> key

passage to the southeast coast. china's tackling many of the same issues we face with meeting the needs of the rural and urban communities through financing strategies, while also considering sustain ablity. they create a solid platform for a global commerce, keeping to build the bridges -- well, that too, perhaps, but a worldwide economic recovery. we'll be doing simultaneous translation. at this point, i would invite you to put your ear piece in, and begin to listen to the vice governor's presentation. what a pleasure it is to well, bell, welcome, the vice governor to n.g.a. [applause] >> mr. chairman, ladies and

gentlemen, i'm absolutely delighted to be able to come from the yellow river, which is the cradle of chinese civilization. to come to the gulf coast of mississippi, on on the other side. i'm honored to be able to represent the government of henan province of this annual session of the n.g.a. i thank you all for the invitation, and also for the great hospitality and considerate arrangesments you have made for us. i look forward to having this opportunity to exchange thoughts with my colleagues on infrastructure. i've given you copies of my remarks in english. this is in the packs that you have. but i would like to take this opportunity to just tell you very briefly something about

henan province. a bit of our history. our present and our future. we have a very long history. we are in central china and located right where the cradle of chinese civilization is, based on universal accepted criteria. the people who first settled in henan were the first to enter human civilization. the earliest cities in china and the earlyliest dynasties in china were all there. so for 5,000 years in china's history, henan was the center for some 3,000 years, and 20-plus dynasties set up their capitols in china in henan. and four out of the eight most famous, eight chinese capitols were located in henan province. so, this unique geography means

that henan is full of historical relics. we rank number one in china. even above ground relics, we rank number two. the earliest written characters in chinese were found in the haw north korean ruins. we have the height of sculpture, part of the heritage sights. now, many of you have heard of chinese martial arts. the world famous center is located there and queen elizabeth, former president puten of russia and the president of the international olympic committee all have fond memories of visiting the temple in henan. and we hope that all of you have a chance to come to visit the

temple, and to see it for your self. tai-chi boxing was found in henan. famous for body building and considered one of the marvels of chinese martial arts. like kung fu, it has spread all over the world and is now another bridge for us in our exchanges. the henan of today is growing explosively. we have 167,000 square kilometers of land. we produce grain, oils and meat abubbed dabbedly. we're the biggest grain producer. we produce one tenth of china's grain. we also have armle energy resources. because we have such rich resources, we have a pretty complete industrial system.

we produce chinese food products, none ferries metals, raw materials and equipment. also, we are very centrally located, so we connect north to south and east to west. our capitol is the heart of the chinese rail ray system. we have 4,000 kilometers of railways and three east west railways which cut across our province. we're a we have tops in all of china. we have three civilian airports. our international airport is one of the eight main regional hubs in china. now our province is almost 100 million, we're the most populace one in china.

in recent years with the stepping of industrial zation and urbani zation, last year, our g.d.p. reached $280 billion u.s. dollars, which is fifth place in china. the same is true, our industrial added value is fifth in china. therefore, we are both very old and very young, and very vigorous. now, what about henan's future? we have very good potential, because we have good conditions. and a good environment for development. since last year, the financial crisis has swept over the whole world. this has been the worst dem the economy since the great depression of the last century. in order to hope with these risks brought about by this economic down turn, the chinese government has issued its own

stimulus package of about half of this package is going to improve the peoples livelihood, and for major infrastructure and environmental conservation. this is not only going to help china fight off the effects of the global crisis, it will also stimulate domestic demand and stimulate the development of the economy. prove convincens and cities in china are using them as a key product to drive our economic growth. this will be investment lead. last year, our total investment exceeded two and a half trillion u.s. dollars. right now, $600 billion are already in place. and our overall economy is on its way to recovery. in order to fully utilize this opportunity, our province has

now passed various supporting, including housing, people's livelihood and environmental protection. so while although this crisis has affected us to some extent, thanks to this investment driven growth, our g.d.p. growth in the second quarter of this year are still going to keep going at a 10% rate. ladies and gentlemen and friends, global experience tells us that economic development requires lots of investment in order to promote industrial zation, urbanization. with our population of almost $100 million, every year, as we accelerate, 1.5 to 1.7 million will be moving to our cities.

it means we have to advance in infrastructure and service. we must provide apartments and housing, public transportation, running water, and so on. at the same time, we have to provide lots of job opportunities so these people have jobs, have incomes, and only then can they enjoy the fruits of development. to do this, our government has proposed a basic thought for our future infrastructure development. that is we will be moderately vansed in level. we will start from a starting point, sustaining and enhancing our development in the long term. but we also have to tackle key areas and weak links in order to establish a modern infrastructure, and a basic industrial system.

it will become an international aviation and cargo hub and will have 60 million people. rail is also important. both for and this has been a bottle neck in previous years. the next few years, henan will establish or rebuild 4,000 kinchnch lometers of track. on this, part will be high peed rail and we will have traffic between cities of rail transport exceeding 2,000, so that in one hour, we will have a one hour travel time economic circle covering the whole province. we want to focus on other forms

of new and recyclable energy. we want to have an energy supply infrastructure that is clean, efficient, safe and reliable. in terms of infrastructure, we have to beef up electricity, water supply, heat and gas. particularly, we have to build up rail systems like the metro, and improve public service facilities, which affect people's livelihoods, or production, like education, medicare, cultural and sports. and only then can we give comprehensive support to our development. in environmental protection, henan will take the lead in china for building sewage and trash processing. by the end of 2007, every single county and city in our province has been quiped with its own sewage and garbage treatment plants. in the next phase, we will further invest and improve crucial drainage areas and key areas. we need to transform old boilers

and kilns. reduce carbon emissions, and there by make a contribution to reducing the greenhouse effect and cut back on global warming. right now, henan province has started investments in all of these areas and we already begin to see results in some of them. as a whole, henan province is also a developing province. our infrastructure, service systems, light rail, etcation, health and environment are still very inadequate when you compare it with the huge demand. therefore, we still will need huge investments in order to improve these systems. this huge investment will be guided by the government, but also requires active participation from various social capitols. and this provides many opportunities of mutual benefit and win-win for the united states and for henan province. ladies and gentlemen, and

friends, this year will mark the 30th anniversary of the establishment of diplomatic relations between china and the u.s. for the past 30 years, both china, u.s. and the whole world have changed profoundly, as the biggest developing country and the biggest developed country. china and the united states have both experienced ups and downs, and yet we still continue to progress. we've had exchange in dialect at very senior levels and at other levels. and this is now covering the areas like politics, diplomacy, economic trade, we are over 60-plus mechanisms for change. bilateral trade has risen to over $300 billion last year. we're now each others second biggest trade partner. and in the early years of diplomatic relations, there was very little nongovernmental exchange. now, we have 2.1 million people exchanging travel each way, and

every day, 5,000 people cross the pacific. there are now 35 sister province state relations and 145 sister city relations. the u.s.-china relations are now one of the most influential and exciting relations in the world. this is good not only for the people of our two countries, but also good for world peace and development. henan is the sister province of kansas stay of the u.s. to celebrate this 30th anniversary between the ties of our two countries, to promote better relations, our government, the chinese people's association for friendship with foreign cities, the governor of the state of kansas and the midwest u.s.-china association is going to conduct a u.s.-china midwest cooperation forum in the henan province this coming october 10. the topic will be exchanges, cooperation and development. we'll be having a high level

summit as well as cultural exchanges. we'll be govering topics like how the midwest can better corporate with china to deal with the financial crisis, how it can corporate in agriculture. how we can have more education. how we can have invasion and regional developments. how we can have more cooperation in future and modern low giss ticks. by doing this, we will help address the financial crisis and we will build a new platform to promote. now the n.g.a. was established in 1908, and it's ab important place where u.s. govers can influence ideas. also an important vote in american society. my colleagues and i have been paying great attention to this year's meeting, and we have

great expectations for what you will achieve here. i would like, on behalf of the governor of my province, to extend our sincere invitation to all of you to bring delegations to attend our forum, to celebrate this event. and our invitation letters are already in your packets. we look forward to welcoming you. finally, i want to express my hopes for broth progress in america. my hopes for happy lives for chinese and american people. and good health and happiness to all of you here. thank you very much. [cheers and applause]

>> thank you so much for your presentation and your invitation. it's certainly clear that a lot of challenges faced by our two countries are similar in terms of rebuilding our infrastructure, and putting in place the road bridge rail, electric and telecommunications systems that will be necessary for success in a global economy. as you pointed out, we are large trading partners and many governors have led trade mations to your country. and we look forward to building. are their questions of vice governor? again, thank you so much for taking the time to be with us and bringing your delegation with you as well. like to now invite haley to come back to the podeyoum and introduce our second speaker. >> you can certainly have that back.

it wouldn't do me much good. it's my pleasure to introduce whit mormon who is the chairman president and c.e.o. of norfolk southern railroad. whit joined the railroad in 1970 and has had a number of senior positions since then. norfolk southern is one of the leading rail roads in the company. operates more than 20,000 miles of tracks in 22 eastern states. coal shipment but they're critical in trons porting cars, medals, chemicals, to paper products. n.s. appointed the rail industries first corporate officerser in 2007, released the first report in 2008 and is working to intergrate sustainability practices across its business. part of the sustainability initiative, as part of it, the company has developed an in

house green machine that enables shippers to instantly calculate the carbon savings from greater use of facilities and freight rail. nor folk is the heart land corridor and one of the critical transportation rights between norfolk, virginia and columbus, ohio. the corridor was recently upgraded through a public-private partnership and increased freight by raising vertical clearances in 28 tunnels. finally, the n.s., their leadership on sustainability is the use of advanced locomotive technologies to reduce eyeding. norfolk southern has expanded the use of new, known as gin sets. they're multiengine that can reduce particular matter emissions up to 80%.

the reason i'm here to introduce wick is because he's a native of hattiesburg, mississippi. wick moorman. [cheers and applause] >> thank you, governor barber. i grew up about 70 miles per hour from here. when i get down to this part of the world, i call it mississippi, too. up there we say mississippi and spell it out. thank you for the opportunity to be here, and thanks to the n.g.a. for making this opportunity available. i feel very privileged to be able to participate in this discussion this morning about our nation's infrastructure. and i'm obviously here today to talk to all of you about the critical nature of rail, as a vital part of the solution to what i think i see, and i know

many of you see, as a luming transportation crisis in this country. and i think that the fact that i've been invited here, in itself, speaks of the recognition that all of you, and the public policy leaders at all level have and a growing awareness that rail has to be part of the solution, and that rail roads offer significant economic and environmental benefits, while helping to relieve the stress on our nation's highways. and as you know, highway congestion is fast becoming public enemy number one in a lot of cup. certainly all of you and the nation state houses are key to helping provide relief for transportation gridlock. and i want to say, that i am here to speak on behalf on all of my rail c.e.o.'s, in saying thanks to all of you for the leadership you've demonstrated and for the relationships that we've built with all of you.

i should also say that while he's listening on the phone in governor rendell's absence, that he is a long time supporter of railway development programs. we appreciate that greatly because we have more of our 21,000 miles of network in pennsylvania than in any other of the 22 states we serve. we certainly commend governor rendell for his leadership in initiating this national dialogue in effort to strengthen all of our nation's infrastructure at such a critical time. well, i don't need to tell all of you -- i made him hang up apatiently. that happens all the time. i don't know what it is. i don't need to tell all of you that our nation's transportation network is a very complex system and it demands the most creative

efforts of all of us to operate it on an efficient basis. in our experience at norfolk southern, which is what i really want to talk about today, has shown that by walking together in public-private partnerships, we can achieve far more and far less time, and with far greater public benefits, than any of us can as working, while working alone. now, in some sense, that's not a big mystery. it's not a big secret. we've been doing this individually with a lot of you over the years in terms of economic development, where we partnered with you to bring new industries into states, as well as expanding the existing industries that are there. these efforts, as all of you know, are all about new jobs, raising tax revenues, creating local business growth. and creating business for the railroad. and there are great things for all of us. let me give you a few norfolk southern numbers. i'll give you numbers all the

other rail carry yers after their numbers. i'll talk about a couple of norfolk southern projects, all the others have projects that are almost as good as ours. but, working with the states we serve, just this past year, we located 830 new industries. we expanded 35 new industries. that represented about a $2.2 billion investment by customers, and by new citizens of this state. and we created about 3600 new jobs. and those are major headlines, particularly in the economic environment we're in today. if you look at the past 10 years, just on norfolk southern, we've participated in the location or expansion of more than 1,100 new facilities. that represents an investment of $23.6 billion and created nearly 555,000 new customer jobs just in the territory we serve.

by expanding that partnership concept across state lines and broadening, we can maintain public benefits associated with transportation infrastructure improvement, as i said before, none of us can do by ourselves, in any kind of reasonable or practical time frame. this is also a concept that works. i want to talk about something that governor barbar mentioned. we see this as a great example of how they can be leveraged to provide additional capacity on our network with the public benefits of job creation, less highway congestion, lower environmental emissions, and fuel savings. the heart land core dor, is a norfolk southern rail route, it connects essentially the virginia ports in hampton roads with the heart land of america. columbus, ohio and then onto cleveland and chicago what we've

been able to do is rage cleans and tunnels to allow them to stack railcars through that corridor. it's going to be open next year, and when we do, it will save about 00 miles on the route, in terms of existing rail transportation alternatives, and we'll take a lot more trucks off the highways. a model partnership in which we've had federal, state, and local support. substantial local support, as well as state support from west virginia, virginia, kentucky and ohio. we open the western anchor of this route last year. we built in partnership with the columbus regional airport authority. what's happening in global trade is more and more international trade is entering the country through east coast ports. and we've seen this trend for

some time now. and the challenge for us and for the ports is to get that traffic inland and to be more competitive by running quicker over shorter distances, and the heart land corridor is a great example of how we're doing that as a partnership. let me say that the federal fund from the heartland corridor came from the 2003 safely bill as part of the corridor's of regional or national significance. of all the pro john kerries authorized in that bill, there are only three now underway. we'll be finished in 2010 and we'll be the first project finished. we think that's an absolutely great example of how the private sector can work with the public sector to really leverage investment and get the job done quickly. now, let me also mention there's an even bigger and better

example on the way, now that we know about heartland and we have done that. we have a bigger project with a lot more public benefit, in what we call the crescent corridor. a 2,500 mile route that stretches from new jersey down to new orleans and memphis. and we'll you will mately take it from new england down into texas, or as we like to say from austin to boston. we don't have the infrastructure and capacity to provide the truck competitive service that's really needed to take a substancal portion of the now, more than five million truck loads that travel every year in that market. it will ray low us to build the service to take those trucks off the highway. now, let me be very clear about this. we're not against trucks. in fact, they're among our

biggest customers. governor barber mentioned what cole is in terms of our business, but an even bigger percentage are containers and running on the railroad. we're trying to address what they see as an infrastructure crisis. trucking industry, as all of you know, has its own share of problems. fuel efficiency problems, particularly with higher energy cost. big problems with driver shortages, growing problems with highway congestion and they want us to help them get the long haul trucks off the highway. the crescent corridor is an idea opportunity. the average length of the haul would be about 1200 miles. so, very quickly. what are the public benefits? well, first, it creates jobs. we estimate over some 41,000 jobs just in the five states that are mostly directed by

phase one -- mississippi, alabama, tennessee, virginia and pennsylvania. these are green jobs. i want to say that green. these are green jobs, that ultimately help relieve congestion on the highway, conserve fuel and reduce environmental emissions. just two days ago, we ah nounsed construction near birmingham, alabama and memphis, tennessee that will anchor one end of the crescent corridor. we'll also be building new terminals in charlotte and in franklin county, pennsylvania. and in all, we'll have to expand or build 13 new terminals and 11 different markets. now, i mentioned the big environmental and safety advantages, as well as creation of job and raising tax revenues. you've heard a lot of these numbers, but i'll say them again. rail is far more fuel efficient as a form of transportation than truck. that's reduced fuel consumption, lower emissions, one train handles the equivilent of 280

truck loads, and a train can haul a ton of freight, 436 miles on a single gallon of fuel. here are some of the numbers for crescent. more than a million tralks taken off the highways every year. more than 150 million gallons of diesel fuel saved annually. carbon emissions reduced by nearly two million tons a year, because we're nearly four times more fuel efficient than trucks on a 10-mile basis and emegses basis. the public will also say costs related to highway congestion. right now, it's estimated that gridlock cost this country about $80 billion a year, in wasted travel time, and in increased fuel consumption. crescent corridor will save $123 million a year in reducing highway delay. now, for the customers and communities, that need the

dependable delivery of comboods, of raw materials and finished projects to grow, expand and economically thrive. they provide them a superior form of enhanced tran poor tation to do that. well, so how do we do this? i'm telling you all about this because norfolk southern can't pull this off on its own. we've down all the numbers. if we could build it on our own, we would build it. in some long period of time we'll continue to work on it. but there are huge public economic benefits, and we just see this as a perfect opportunity for public contribution, for the public benefits. but stan dard benefits to make it a win-win solution. and as you know, we're already working hard at the state level. we appreciate your support. and we're continuing to work at the federal level as well.

long-term increased rail transportation has to happen. they are projected to grow 88% by 2025. and we have to improve our national freight transportation infrastructure to handle that. the railroad industry is prepared to do its part. and to do its part largely with private dollars. to give you an idea of that, our industry has spent for infrastructure about dr. $440 billion since 1980. it's a record that's unparalleled, i think, by any other industry. but i tell you as we look at the demands on our system over the next 10, 15, 20, 30 years, we're not sure that we can expand enough on our own to keep up. and we're working with you on a lot of that. now, at the risk of not overstaying my welcome, i will just say that i could stand here, i'll be happy to answer

any questions about our view of the economy. but i'll just say it looks like maybe it's a bottom. if we want to get more depressed, we can talk about that as well. but better days are ahead. rail is going to be an important part of those better days. we at norfolk southern, as well as others at the industry, are prepared to help the country move forward, as we have for the past several years. thanks so much for inviting me to participate today. great to see all of you and i look forward to working with all of you in the future. thanks. [cheers and applause] >> thrau very much for being with us. i know all the governors in all parts of the country are interested in doing what we can do include rail infrastructure as part of our economic future. the new england governor's recent he articulated a division

for our part of the country. are the questions for mr. moormann this morning? haley? >> wick, can you share with us thoughts about the panama canal, which as you know is being expanded, widened, deepened, because of the congestion of the ports on the west coast? are they going to be prepared in 2015 or so to take this huge increase of container threw put and some of them go around to the east coast? >> well, that's a great question. as i said, we are seeing the migration of traffic already in the east coast. and to give you an example of that, i think in 2001, 2002, of the international container traffic, we handled into this

country. 80% came to us from the west and 20% came to us from the east. this year it's more than 50%. so i think it's already done. you read about widening the canal, but i think it will accelerate that, but as much as these enormous ships. in fact, some of them are in service. we are doing a lot of investment right now to get ready for that. the heartland corridor is a big, big part of that. another big part of that, is the port of savannah, where we've already seen substancial. one of the good news about rail infrastructure is we can't do it

overnight. but we can respond a lot more quickly in terms of building rail infrastructure than you can highway infrastructure. lot of times we have the existing right of way to build on. we work through the environmental benefits, i mean, environmental issues fairly quickly. just because there's already a railroad there. and so, it's already property that's in a certain use. so, if we have two, three years vision out in the future, we can handle it. i think that's what we're doing very effectively right now. >> the other question from mr. moormann? >> shower, just quickly. what was the total cost on that corridor project? and how was it split between private and public? >> the heartland -- my experts are sitting here with all the

numbers, but i'll make them up. we in all got about $95 million out of safety lou. the state of virginia was, state of virginia was almost 10. west virginia was a little bit less than that. ohio, primarily came in through the facility. but some other as well. that and the balance which is going to turn out -- you'll notice i said the project was on time. i didn't mention the budget. we will put eight? yeah, the total project is over $150 now. we'll be around $70 to $80 of it. but, still, a great cost effective project in terms of the benefits.

>> any oirs? mr. moormann, thanks so much for being with us, and best of luck. governor rendell began to introduce our next speaker by videotape, a few minutes ago. but it's a pleasure to welcome fellow new englander to the podium. she's been focused on the need for transparency and accountability in infrastructure spending. and new sources of funding, sort of national capitol budget for some time. it's a real honor to have her with us this morning. please welcome kong woman rosa delauro. >> thank you very much governor douglas. i'm really delighted to be here this morning with all of you to take part in what is a very, very exciting and important conversation. and if i can, just for a second.

i would be remiss. i have former colleagues who are now in this exalted positions here. governor who i served with. governor richardson, both served in the house together. and, also, truly do want to acknowledge governor culver, thank you for parities pilotting in the leadership immediatings in the house in helping us find our way. a thank you to our host, and mare for a couple of hours i can take advantage of that hospitality before i jump on the plane and get back to connecticut. it's also great to see governor o'mailly and governor patrick. thank you. and all the rest, who i don't, you know, don't know as well as

i do. but thank you for the wonderful work that you do. to governor rendell, i want to say really a very special thank you. to you and governor douglas are doing about refocusing all of us on the improve of national infrastructure. but for the invitation to be here to have an opportunity to talk about the infrastructure bank. a pleasure to listen to the vice governor, and to you mr. moormann. i thank you both for your insights, and the exciting work that you are doing. i think we could really work together if we got this bank off the ground and helped to try to make a difference. in terms of infrastructure, we are at a time of both great peril and great opportunity. everybody here is aware of the economic troubles we face right now. as governors, you are on the front lines.

you know what you're forced to do, and what the every day suffering, if you will, that's been wrought by this recession. and governor rendell has been in pennsylvania today trying to deal with this difficulty. it is the longest recession that we have seen since the great depression. the unemployment rate climbed to 9.5% in june. a 26-year high. tragically, american families are lost 18% of their net worth in 2008. but with these challenges comes a chance to make big choices about our national trajectory and to get serious about improving aging and decaying infrastructure.

it is when our nation has been truly tested that wise leaders have taken the long view. and they have made strong investments in infrastructure that have both brought about a renewed and continued prosperity. even as a young republic, reeling from its first major financial crisis, the panic of 1819, governor clinton of new york held fast to his vision of a grand canal. connecting the hudson river to lake eerie. and here is a clinton that even our host, governor barbour can get behind. and thanks to his perseverence, what had been derided as clinton's ditch, when ground broke in 1817, instead became the eerie canal. which transformed the economy of the empire state. paid divedands throughout the rest of the century. and the town alon that canal did

not peak until 1872, nearly 50 years after it opened. when america faced its greatest crisis, congress passed and president abraham lincoln signed the pacific railway act of 1862, donating the land and issuing the bonds that would come to form the trans continental railroad. by wisely planting for the future, even as our nation was rent asunder, lincoln helped tie post america together from coast to coast together. after the economic depression of the 1890's, president and former governor teddy roosevelt came into office avowing a renewed commitment to infrastructure. he vastly expanded the national parks service. and with typical enthusiasm, he brought infrastructure not only to america, but to the world. the panama canal, transformed global trade, and yielded tremendous economic and

strategic benefits for our nation. and when the great depression put one fourth of the nation out of work, president and former governor franklin roosevelt coupled short-term solutions, and then unprecedented investments in our national infrastructure. roads, bridges, highways, tunnels, parks, public buildings, were constructed all across america there you the works of progress administration. the r.e.a. wired rural areas for electricity. the t.v.a. build dams in the tennessee valley to our north. time and time again our wisest leaders have kept their eye on the big picture. and even during, short term crisis have made long term investments in our infrastructure. and for good reason. whether you serve at the local, state or national level, we know the economic value of infrastructure. for every one billion dollars spent on transportation projects. for example, $47,000 jobs that

cannot be outsourced are created, and $6.2 billion in economic activity is generated. meanwhile, the capitol markets, including central banks, pension funds, financial fusions and others are looking for sound, investment opportunities. and have a growing interest in financing infrastructure improvements. and the fact is, in america, we suffer an infrastructure deficit at the moment, ads you know in your states. the american civil engineers estimates that we need $2.2 trillion over five years just to bring our infrastructure up to good condition. traffic congestion creates a $78 billion annual drain on our economy and loss productivity and wasted fuel. the united states ranks 15th in the world in broad band access. electric utilities need to invest in annual average of $28

billion for generation. $12 billion for transmission, and $34 billion for description of electricity, to keep pace with demand. the numbers, jarring as they are, do not even take into account the wider opportunity costs of failing to invest in infrastructure. the educational rewards of rural broad band wasted. the environmental benefits of a clean energy grid squandered. the chances at economic growth sorely lost. as of 2007, brimming collapse in minnesota, the failure of the lev yis after hurricane katrina, as the citizens here know all too well, taughts, sometimes the consequences of neglect move beyond the economic to the catastrophic. we are at a fork in the road and the paths before us are clear. when we modernize our public

transportation snls, or ensure we have safe drinking water. we are paving the way for new growth and for opportunity. and when we fail to do those things, when we neglect our air traffic control system, or fall drastically behind other nations in broad band adoption we create a costly drag on our economy. as vice governor zhang's address reminds us, our friends around the world understand the critical importance of infrastructure to economic growth. and having invested accordingly, china invests 9%. india, 5% and rising. here, in america, we spend less than 2% of g.d.p. if it is true, that a civilization is measured by the quality of its roads, then we soon face a reckoning. if we are not careful, we will fall behind.

we can continue to be a nation that mainly consumes, or we can try to move back to being a nation that invests and produces. and to do so, we need a 21st sentry national infrastructure policy that makes us more energy efficient, reduces our reliance on foreign oil. that means constructing smart power grids, designing buildings that consume less energy, making alternative fuels accessible and making public transportation systems more efficient. all of which will create new markets, for new jobs. and jobs that cannot be outsourced. for these reasons and many more, it's time to prioritize, but we need to be smart about it. simply throwing money and resources at the problem willy nilly will not pay the dividends we seek. in this moment of peril and possibility, to paraphrase a beloved president lincoln, the

dog mas of the quiet past are inadequate to the stormry president. we must think anew and act anew. which is why i, along with my colleagues, have introduced the national infrastructure development bank act. the bill establishes a development bank for america. a new inindependent entity that can provide financing for those of regional or national significance with clear nick, environmental and social benefits, such as high speed rail, clean water, waste water systems, a smart electric grid, broadband deployment to rural and disadvantaged communities. the development bank would issue 30-plus year public benefit bonds, and provide direct sub siddies to infrastructure projects, from amounts made

available in the issue of the bonds. funding from the bank would supplement, summed, i add that, supplant current. it would add $25 billion for congressional appropriations, five billion a year over five years. and the rest, sunlight to the call of the treasury secretary, as well as a conservative leverage ratio of 2.5-1. that's based on the european development bank. the bank would have an ability to issue up to will over $600 billion in public benefit bonds, providing for an unprecedented infrastructure development across this country. after 19 years in the hourps, 15 of which have been focused on promoting this concept, we don't move very quickly.

i've developed a keen and first hand sense of why this bank is desperately needed. the way the things are set up now, a big multistate project, and you know this, passes and it comes before the congress. it usually has to contend with multiple subcommittees, overlapping jurisdictions, all of which can work to slow highly useful new plans, or critical improvements. quite frankly, infrastructure projects that do make the congressional cut are all too often chosen on the basis of port, padding the home district, as it were, rather than utility. ultimately, this bill aims to

depoliticize, while creating new opportunities to directly support and accelerate the kind of projects that will make a significant and long-term impact. in other words, the creation of a national development bank would make it much easier for states to get the important transportation, environmental energy and telecommunications project they need to get off the ground, without getting them tied up forever. or drastically alt er thed by the congress. how would it work? i know some of you have had experience with the idea at the state level. and a national bank would function similarly. the bank would include a five member board of directors, chosen by the president, with the advised consent of the senate, with authority to consider projects based on objective criteria, and to provide financial assistance to qualified infrastructure products. after they set out the criteria,

a committee would prioritize them for the board. the executive committee members headed by an executive director would also serve as chief financial officer, chief operations officers, general down sill. that are needed for the day-to-day operations of a bank. at the same time, a risk management committee headed by a chief risk operator would ensure a diverse, portfolio by reading project type. and an audit committee would work with independent auditors to ensure the bank is functioning properly as a bank should. the plap is modeled after the european investment bank. it's the european union's long-term lending bank which for 50 yearses has raised private sector capitol from around the globe to leverage investment in

telecommubecations. it is working for them, including a trans european network strategy that is integrating the continent with high speed rail and other modes of transportation. it could work wonders for us. we have support from many groups in the business and labor communities, including the american society of civil engineers, the national construction alliance, the building and trades, af lrve c nch o. the u.s. chamber of commerce, the association of general contractors, transportation for them. when you can get the u.s. chamber and the a.f.l. and c.i.o. on the same track here, i think we've got something that we might be able to see come through. the bank concept apse enjoying the support of president obama

and many in the congress. in fact, it has already been budgetted. it provides five billion dollars annually, a total of $25 billion as in our bill. the house budget provides two billion dollars in fiscal year 2009, five billion dollars in fiscal year 2010 towards a national bank. and the appropriationses bill that's now moving through the house makes room to fund the bank should it be authorized. so, after a long and hard fight, i'm really pleased to tell you that we are on the cups of making this happen. we're going do it, we need to do it right. frankly, i've just seen a draft of an outline that looks to me like a peace meal version of the banks. and in that plan, the bank would be set up as a piece within the

department of transportation. it would only focus on projects in my view. this is foor too narrow a vision. we not only lose all the enormous benefits a bank could bring to an environmental energy and telecommunications, projects under the proposal, we lose the ability to attract investment, and to leverage private dollars. as a former treasury secretary, mary peters as observed, there are up jards of $4 billion available in the private sector for infrastructure infrastructure vehement. since the treasury, this is important to keep in mind, the treasury department is the sole entity that borrows on behalf of the frl government and can do so more, the bank