straight. i mean, when it comes to the oil spill, it probably was the fault of george bush and in regard to the deregulation of the energy sector. however, this is one thing the democrats are very hesitant to do. there are very hesitant to point out the obvious kind of problems, and republicans, on their side, they are really quite sensitive to this and make quite a bit of noise. and so, i was wondering, i have not heard any democrat politician or certainly any pundits speak out about this idea of democratic unwillingness to put up these issues and then repeat them. guest: i do not have a problem with that, but i think the caller is pointing to an interesting dilemma that i have heard several times in terms of the differences between republicans and democrats, and that is republicans to repeat

the talking points that are coming from the leadership over and over and over again, and its seeds in, and we believe that is what happened during the health- care debate. they won the message argument. . y won the message. but i think it goes to the fact that the democratic party has a much bigger tent. it is a lot more difficult for democrats to say from top down, here are the talking points. here, mr. or miss democrat and you mr. or miss liberal

democrat have got to slip. >> i would not necessarily agree with the promise. what we have seen is the middle

became very large. i always argue barack obama's face was the middle. he convinced many folks and even convinced republicans to vote for him. that's how you win in places like indiana moving to colorado and this is areas that used to hold republican seats the middle was a where a lot of people navigated. they've entertained and tried advance an agenda very left of

center. we can bring them all over to our side. they are contracting what is going on. a lot of the races this year with folks like the tea party movement and making decisions for which are to run. you have a lot of representatives win

guest: and democrats are running scared. and they should be as long as they can show guest: trillions of dollars of deficits is what you will have to explain. spending has not stopped. we are going to cut taxes and increase, we will he a

wonderful november. wonderful november. this is an interesting piece ult mountainly winning the presidency. reflecting 50 years outside of the date none of us around back en. joining us from cleveland. i want to talk to kevin. i want to give him some includes. the democrats had a total majority for a whole year put in front of the senate and house, cap and trade, until scott brown came into office. they accomplished nothing.

the only way was by going to remembering sillwation at 51%. i want you to tell our republicans we are strong. we love you. you better get down to the counstution -- caller: i'm a sales man and a tea partier. host: why are you? guest: i'm so tired of both sides. host: what do you sell? caller: medical capital equipment. jean makes a good point. it makes sense that she is a

salesman. she could obably do a better job of arguing with maria than i can. they haven't adequately paid attention to the tea party. we came here in 1994 as th party of ideas and reform and didn't live up to it long enough.

that is the stainl for the last estimated 3,000 jobs estimated 3,000 jobs >> maryland has gone through some of the same big issues because of the recession i think what he has done is

really tried to look at that deficit. there are times you have to raise taxes. what you want are leaders who are going to give it to you straight they will fix that budget deficit for years to come. all you have to do is cut spending and programs. that's how you can fix budget deficits. what owe mali is going to be doing and any governor in this position is to talk about with the reality an programs in place to fix in 2009. you have the smallest tax bill americans have seen in over 60 years.

they are the lowest they have been in over 50 years. guest: he's got the fundamental world view. you cannot help the wage earners in this country by smothering or punishing the wage payers what you are doing is suffocating the growth. what happens is that the democrat also go out and derive

tea partiers as foaming at the mouth and not understanding how e tax bills are really low. i feel confide we are in a good place, come any election. about going back and talking about the bush administration and blaming the past republican congresses. when you are constantly looking back and pointing fingers, i think it will hold you accountable they have to do with wearnt they have t alternatives or ideas to move the country forward.

before, it was a little known congressman from wisconsin. how we would govern all those folk that could ee merge. guest: first of all, it's a myth that democrats do not help with businesses. in addition to 2009 being the lowest tax year in depenl. president obama's plan focused on cutting taxes and giving them incentives. that has worked very wl in

terms of job creation. secondly, we are more than willing to take to the american people, our ideas. we are focused on investments yes, making sure we continue on the right path of this economy, which was mess when we came into office. >> i have to assume looking backwards and also saying american taxes are low have to sound like nails on a chalkboard to the average voter -- voter regan -- voter. host: joining us on the line, good morning. caller: i have some issues with madden. is trying to save president obama and the democrats are trying to paint the republicans

as the party of note. well, they are the party of no. -- republicans as the party of no. well, they are the party of no. president obama has done a lot for the american people, and if people would take into consideration all the things bush did, and republicans all went along with it, and president obama had to come in and clean up all this mess, and he is doing a very to job, and i would love to hear some republican come out and say that rush limbaugh is not the head of the republican party and say that they do not go along with all of the rhetoric and the hate that he spews.

host: thank you. callerguest: i respect her opin. i will say off the bat, i am not a hateful guy, so i think when we try to put all republicans as hateful and consumed with what everybody is against, that is where most republicans are right now, which is talking about what we are for in our vision of taking the country in the right direction. >> i disagree with the party of snow, as if the electorate is a party of yes. -- the parties of no, as if the electorate is a party of yes. they said no to spending. we all agree the electorate is angry.

they are not yelling e.p.s. for more of this, so what i would argue -- not yelling yes for more of this, so i would argue americans are saying no. stay on the line, if you would. piths, i want to show you from about a week ago from utah. mitt romney supporting bob bennett who lost in his bid to get the republican nomination. we'll just show the video.

rebuilding requires going out and helping the parties. sominaody that he he worked ver hard. is that the version. if you look at 2012, it is going to be a contest of individuals whether or not that means this is a person that leads this country. 2012 is going to be about big things i think those are the big issues. i really tend to be bored with the whole endorsement game.

one of these things where we keep score inside the beltway. the biggest challenge it is becoming a smaller party. the conservatives are making sgne that the republican party is making sure that they talk to a smaller elect rat. you look at arizona and the fact that the rpewublicans are zero senators on boferede. it is the reason why we have ari rana and other states. if we could get half of the senators on board, we could get this by next we fr. we have mccain and grant. they are not going to go to the republican party any time in

the near future. they are the biggest gronal factor. if rpewublicans don't find a wa to bring them in to the party, they are done. in late august, we are talking about the republican primary on not goesdacto our last cault from pittsburgh, good morning. people in ari rana are scared. when we need is a complete audit of every government agency we dourt have the monect

agency we dourt have the monect this doesn't make sense if we get millions of illegals allowed to stay here. i lived in washington state for 14 years. i've been upset since 2000. i'm glad republicans are the psh rty of now. host: let me ask you a question. primary day on tuesday. a lot of attention on the district. also the senate race. what is g atng to happen? gues i didn't like inspector as a republican or a democrat. and i hope these pmiple up

there, the democrats in pennsylvania are not the democrats in califor froa. if you talk to them, my congressman is a democrai di ihingte called him several time about nancy pelosi. they don't like her. i don't want this state to become like california. these pmiple down there. if they keep voting these same people in all the time, they are in deep trouble in california the healthcare bill, when you see what they are d atng. you can't make sense talk about

jerry handering. >> that's one of the problems across the board when you are talking about the etorremes of the parties or the middle because of so many years of redistricting, you have these districts more engineers toward electing the extreme parties that's one of the reasons why the middle doesn't seem to be having its way in terms of the healthcare bill, you have -- no one is gooding to be taking away medicare benefits. we are g atng to make sure ther is no fraud you will be getting

30 million america who don't have healthcare to be able to have healthcare you have children who can now not be denied coverage because a preexisting condition. they will look at the democratic party. nancy pelosi will go down in history as one of the greatest speakers ever because she was able to get healthcare done. american people understandhat this is something that needed to get done. >> i think jackie's point is that government has become too eyig. we spend more and more tax dollars sent to washington from pittesdgngh and elsewhere aroun

the country so it can get even bigger that is a real big worrcto gal lop just came out with a poll the other day. poll the other day. six of the seven top issues at a time when washington continues to spend money as if it is growing on trees. that is really driving frustration out there. frustration out there. this has become a canyon.

let's begin with a look at what's happe frong in pennsylvania and some of the latest polling ny tobers a long tand ge republican switching parties last year. let's look at the ny tobers. inspector with 40%. another survey showing inspector at 44% and sestak at 4tc and another sgnvey here. trying to make sense of those p jmbers, we are j atned by tom fitzgerald. how did this race become so tight? guest: there was always a

fairly high undecided and inspector's suppo sp seemed snot gock in the midnd s0's som when his option become known. there was one peliller add abou the party switch that reminded mem people. it had inspector being endorsed by george w. bush in 2004 and next to sarah palin. there was clips of inspector saying he had switched parties so he could get rlected host: we have that ad and want to show it to our audience. e gop passed inspector.

here is the ad you referred to a moment ago. y i'm joe sestak the democrai d i authorize this message. >> for 45 years, aryien specter has been a rpewrepubliclican politician. but now -- my change in party will enable to be elected. he switched parties to save one job. job. his, not yours. >> how often has that ad been running? g.> enoug bethat aing toone who watches broadcast television is assured of seeing that a n 12 orot 3 times now that the

campaign is going to a closing spot and transitio frong away from that one to another one that has rating of various other democrati dgroups they are ki of comparing apples and oranges. he's been a very lol vote he's always done well against democrats they ve aexays

crossed over to suppo sp. he was known as a moderate re c1 eyeen trying to beat him for 30 years. there's a lot they hold an'tins him. >> this latest add features barack obama who has campaigned for him and attended a number of fundraisers but not with him the weekend before the election. why is that? he went for the ging pernor in jersey seeking election last fall. he went out for the democrat candidate in v.

tr so froa and lost that governorsp. that governorsp. the same as scof democrat in massachusetts when obama went in the last weekend. i thk they want to protect his press teeg. obama probably would have been a big list to inspector his strength in the city he has a strong lead among african american voters. presumably, he could have juiced up tgnn oui di newspapers a degree. >> i want to say a few things about aryien specter.

he cast the deciding vote in favor of the recovery act et let's you pelnow he's g atng to ãat ig4t for you. >> we have this from caroline saying i'm seeing the ad at least a dozen times. it makes me mad when i see it. sestak has his opel bridge to nowhere. >> it will be a fairly straight up i had logical campaign so

maing to republicans will kick around he'll be out of touue wit bewh you say about washington. too much spending. he's sort of said things like the stimulus was too small it would sound worse on the noopwh considering the moopri the mood everywhere in the country is showing up in pennst.sm froa. the concern and weariness about all the changes in washington

espep jmalmake s the deficit sp and the accumulated debt. people are quite worried about it. >> what's the move on this sunday? y inside that campaign, they are nervous. they figure if people work at norsecter's record and when he livered and the question of why do you peleep a veteran, th will be fine. if turn out is doe sent. eyut if people p7 ple wake up o not goesday with that feeling, they could go down tea tarred - as he called it.

goatee party assuming that is written tongue and >> the but in june. mark hop kins is on the phone. thanks for being with us. why is this veteran republican facing a challenge in his own party? guest: in his own version of the story he's become bob 2.0. sanding a tough rough edge of the first two-years in office in doing that, he's disappointing some of the more conservative constituents. host: what does this tel you about the state of the republican party in the country? guest: think it's an interesting guest case in how important the tea party movement and various causes of the right wing party are going to be be.

it really is a test of whether bob has lost track of his constituents. host: can you give us political demographics of the district? guest: sure. really bli republican disstakt has been for many years. carol campbell presented the district. on inc.le took it over from liz patton. gingrich revolution and committed three terms and really leaving and did leave, ran for the senate and lost and went back to private life for a while and then went back into office in the same district when jim ran for senate. >> we saw him endorse a number of tea party type candidates or more conservative republican

candidates. what's his political standing. what impact does it have on his own future in south carolina and lindsay graham who is seeking re-election? guest: sure. senator democrnt is trying accomplish himself in the right wing of the republican partner. it's a litmus test and he doesn't fit this story. the interesting part is of course if he's in trouble, then senator graham will be when he comes up for re-election. because bob inc. less is threatened as much as anything on the basis of tone. he's not as - clearly conservative as some would like him to be. ho host is lindsay graham viewed the same. guess guess i think s

guest: i think so. conversion investigations on why mate change and place him as a more moderate voice than some would like in the state and there's a question of whether that will cost him or not. host: there was a time in this town where there would be by tarty san ship. coming to some compromise on whatever the legislation happens to be. cial security. reagan administration or they reach an agreement or taxes as we saw in welfare reform in the clinton admistration. is it becoming more difficult for both parties to reach the compromises for what's happening in the primaries. guest: think that's possibility. we're seeing se tests of that now. congressman ingliinglis, he's

endorsed by thenra and taking strong anti-abortion condition positions and continues to do that. has taken republican positions that set him with the odds with the standard story of the republican party. obvious example is when joe wilson yell at the president in joint section of congress. he was one of seven to vote in a favor o a resolution that rebuked him from doing that. doesn't have political consequences but set him at odds with the rest of the republican pay. >> as you watch the lead up to the june 8th prior mare what are you looking at in this race? guest: very interesting. much of the race is happening in a way that's very hard to track. the two leading candidates of him and his leading a point solicitor and tray dowdy have

been getting individual contributions. there's a radio station hammering away at the congressman, but the racistn't getting a lot of attention apart from one of the national media. and so it's very hard to tell what's going to happen. there certainly people out there who are arguing that he should be beaten but he looks solid in many other respects. host: have there been polls in this race? guest: i haven't seen any. i'm sure there is some polling out the. the best we can do is look at campaign contributions and by that metric although there are four notable people in the race. mr. dowdy is his lead opponent and he and congress man inc.les have a couple of 100,000s based on the federal election commission report at the end of march. so you have to suspect it's a

relatively close race. there's one more dynamic that's important and that is that we have a provision for run offs, so if congressman doesn't get 50% of the vote he ends up a run off and that run off is fueled part by the probability that we'll have a run off in a gubernatorial primary as well. host: do the headlines we've follow over the last year, does his own political standing have an impact in the republican p pr any in south carolina? guest: i think very little. he's definitely his own person. he's made some endorsements and his former wife has made some endorsements. notably in the governor's race but you don't have the sense it swings a lot of votes in his case, even less.

host: mark is joining to hear congress again if the congress fails they're out in 2012. andrew is the associated press capital correspondent from will little rock. thanks for being with us. >> thank you. host: blank lincoln expected to win renomination but faced a challenge from the lieutenant governor in ariz arkansas. still up in points. tell us about the why the lieutenant governor decided to jump in this race. guest: former clinton administration server. was in social security administration and basically he gotten into the race after months of lincolnacing

criticism from both sides of the aisle. republicans and from some lib calls. lincoln had anglered liberal groups such as move on dot org and labor issues on a number of issues especially on health care. her very public opposition to a public option as part of the health care overhaul. plus, her opposition to the employee free choice act that has been a priority for organized labor. really motivated a lot of groups that in the past had supported her. the arkansas, cfo supported lincoln's re-election bid. they said after he apposing card shack they soured on her. hall fair was able to take advantage of the situation. he entered race in march. right at the beginning of the filing period and was really

embraceed by a lot of the groups that had grown frustrated with lincoln. served some employees international union that embraced him with their support and money. has really made this race unlike any arkansas has seen. >> primary is tuesday but the key is getting majority that could lean to run off. exmain the factors involved in tuesdays vote? guest guess even all the attention has been on those two, there's a third candy day. morrison that doesn't have that much money. doesn't ha a chance to win the nomination but he really threatened to take away enough votes to causes a stir. a run off. most of the poles that are out right now show lincoln leading halter but still below the 50% to win the nomination out right. halter i traveled around south

arkansas this week and had asked him about that and he seemed to indicate that - going toun off would show weakness for lincoln. incumbent senator getting below a 50% vote is a danger for her. so i think halters campaign would see a run off as not quite a victory but pretty close. >> what's a registered voters in - what do you think the turn-out will be on tuesday? guest: there's 1.6 million registered voters the state secretary expected 30-35 pcent of the registered voters which if that holds up that will be the highest turn-out since 1994. from what we've seen so far it's a state that allows early voting and we've had that for the last two-year. it's been very high so far. more than 95,000 people have

voted early or cast absentee ballets higher than the 2008 primary as and the 2006 in the last non-presidentle primary election. host: was the decision to challenge lincoln a surprise? had there been discussions or water cooler talk about that earlier this ar? guest: there had been speculation about it. when he had w been asked about it, he had been coy about the plan. one thing that added some uncertainty. arkansas is in an uncertain year. three of the four congressman from arkansas are not seeking re-elections. there's some speculation that halter would run for senate or run for congressional fete in central arkansas. but ere had been plenty of signs and a lot of groups like i mentioned the labor unions had been talking him up as can can

didate. there's been some uncertainty on which path he would choose. >> as somebody who's now talking about her political clout in washington is that a help or hindrance among candidates? >> it's a mixedbag. i traveled with her yesterday in arkansas and she pointed to her experience and stature in washington especially as president of the senator agriculture committee. one of the draw backs is she's obviously running in a year where the catch phrase is washington is broken so, bringing up her experience in washington is something halter is able to take advantage of and halter has been running back as an agent of change and point together lincoln as status quo in washington. in some areas, it does seem to help her. i talked with a cattle rancher yesterday that said, he was

sporting lincoln primarily of farming issues and role heading up the agriculture committee. he didn't want to miss the opportunity to have someone in that position in washington. there's some benefit but it flies in the face of kind of the antiincumbent and establishment move we're seeing them take advantage of wh right now. host: let me share this with you. the "washington post" article, they quote peter hart saying anyone searching for meaning from tuesday races need only to look at the grievances building for months and then he says, how many times to we need to tell the same story which is voters are looking for something not in washington right now. guest: i think arkansas will be a good test for that in both primaries. lincoln is two term in competitive bent seeking re-election. on the republican side, the

front runer for the republican senate nomination is an incumbent. john boas man. he is a front runner the polls and he still, most of the polls show him slightly below the majority needed to win the no, ma'am nation out right. this election could be a test of whether or not there is this really deep seeded antiincumbent washingtonove on both sides. boas man and lincoln have both been facing pretty similar criticism. boas man is krit sided by the 7 other republicans rning for the gop nomination who are point together him as part of the broken system in washington. some of that criticism is similar to lincoln and her issues she looks like a klue klux klan

rally. they don't present america. what do you think? host: we have phoenix and the upcoming primary in that state. doesn't take place until august. thanks for being with us. guest: thanks. host: news over the weekend your reporting a change or shake up you describe in the mccain campaign. what's happening is guest: that's right. we confirmed on friday that mccain's campaign manager is leaving his campaign as is his deputy campaign manager who was a former state gop chairman and a long-time mccain ally. they're moving out to make way. i understand for a more battle ready campaign manager. they haven't announce who had the new manager will be. but i think the idea is, that she ri didn't have enough statewide campaign eerience to kind of work in a campaign

that's going to be as intensive. this one against hey worth. host: h poling numbers show jon mccain is still ahead anywhere from 12-13 percentage points but a lot of people looking at what's been happening in pennsylvania as the race began to narrow the last month or so of the campaign. could the sh same thing happen arizona? guess guess i tnk probably lay 12-15 point race. they're internal polling i think shows that. but yeah, i guess it could narrow it. probably mccain's biggest fear. so far. hey worth hasn't been able to get out of the 30's. mccain is struggling a bit too. he's maybe around 50% in the polls a lot of poles show him in the high 40's. and that's normally a sign of

potential vulnerability. that might be a saving grace that the others are not picking up either. hey worth hasn't gotten enough momentum to shoot up the polls. host: this past week. jd hey worth came to talk about the primary challenge towards john mccain and the debate over the debates was front and center and he's arguing that john is ducking from debates and said here is a guy that's run for president and the senate before, has that been an issue? will there be debates? caller: well, mccain said he's waing for all the candidates to get qualified, which i think th tate they'll be officially qualified is i think june tenth or so. mccain assured everybody once the field is set. he'll have a debate and wants all the candidates and the debate to qualify those for the

ballot. there is third republican named jim deacon. much lesser known than hey worth but he's in the race as well and mccain is signalled he wants him to participate as well. obviously a situation that may wo wants to debate so mccain is obviously not overly eager to have a lot of debate. host: national political from the state where the primary will be held. dan nowicki. i hear some of the ads now top air in arizona. >> home innovations. murder, we're out manned. of all the i legals in america more than half come through arizona. we got the right plan? >> plans perfect. >> you bring troops. state and county and local law enforcement and complete the dang fence. >> it'll work this time.

>> senator you're one of us. >> i'm john mccain and i approved this message. >> i helped author with senator kennedy comprehensive immigration reform and fought for it's passage not once but twice. >> hey worth was introducing the first act toupport our border. he talks tough on the boarder but what about tomorrow? had enough. endorsed by this one. he's the consistent conservative. >> i approved this because borderecurity is national security. >> it's a national issue and certainly an arizona issue. was there ahange in policy or some may call a flip flop on the issue of the fence? gut: well mccain says, no. some people say it's certainly a flip flop and emphasis more than substance of the policy.

he has been for countecttive immigration reform. his campaign isn't the border security components of comprehensive reform. you'll recall that included, you kn several, multiple miles of fencing and vehicle barriers and that thing and benefits like a guest worker programs and a pathway to citizenship. there's always been fencing in the mix. i think notnough maybe for some of the border hard liners. like,jd hey worth. now he's definitely focused on the fence and on border security and on the guest worker program and other reforms. he says he still supports them and wants the border secured first and really he isn't eager to talk about them. host: is ate closed primary? guest: it's an open

>> david chavern talks about efforts to foster job creation. george wilson looks at defense spending and what programs may be cut. live at 7:00 a.m. eastern on c- span. up next, a house hearing on the creation of an infrastructure bank, and in the speech from the president of the federal reserve bank of minneapolis, and following that, joyce apple be. elena kagan is meeting with

senators. learn more about the process in c-span's latest book. pages of candid conversation with all the justices, providing unique insight about the court. available in hardcover and also as an ebook. >> ed rendell and the los angeles mayor of year-ago so were on capitol hill testifying the creation of a national infrastructure bank. those running the bank would attract financing for transportation programs. this is about two and a half hours. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

>> the members of this committee have a lot of opinions. our part of the job involves the bank aspect, where the revenue comes from, whether the bank can utilize tax-deferred bonds, and whether the bank would be issuing debt. if we surely need to explore new ideas. today we examine options already at work in foreign countries. our witnesses will discuss the serious need for investment in our infrastructure. america's competitiveness depends on a reliable end consistent infrastructure.

some time finding can get bogged down, particularly if it involves multiple jurisdictions. recently, i was at a hearing to discuss a new high-speed rail service connecting connecticut and vermont. the transportation secretary, raise the hood, complimented us on getting everyone on the same -- ray lahood, complimented us on getting everyone on the same page. it is too often that people cannot focus on others. the chinese proverb teaches us that one generation plants the tree. the other gets the shade. now would be the good time to lay the groundwork for infrastructure improvement. we have received a message that america's infrastructure is desperately in need of support.

>> thank you for convening today's hearing. as we are all aware, an additional highway spending continues to grow. at the same time, the financing structure is according to the financial resources service, and in a precarious position. i think that is a rather generous description even without taking into account the large spending increases in the current reauthorization proposals. . bcommittee with the leadership of chairman neal met to consider long-term financing options for the highway trust fund. i found the hearing extremely interesting and informative. looking for what the testimony of witnesses on the panels today as we discussed another potential menace to fix the nation's infrastructure needs. as we proceed it's mportant to keep in mind the national infrastructure bank or any ther financing method that we look at

for that matter is not free. it would be presumably we would need to be capitalizing this initially. to that extent, it was used to disperse the total subsidies such as grants or tax incentives rather than revolving loans it would also need an ongoing revenue stream. this would result ultimately in higher taxes, user fees or deficit spending going forward. federal guarantee borrowing and lending could place taxpayers on the hook should it fail. we have unfortunately already been down this road in another area of government with fannie mae and freddie mac. my comments, chairman neal are not meant to put a damper on the discussion but i think we should proceed with our eyes as wide open as possible and recognize additional spending doesn't come without cost down the line. thank you and think you to the witnesses for being here today. i look forward to the testimony. >> thank you. now let me welcome our distinguished experts on the first panel. first we wlcome representative

rosa delauro from connecticut who filed legislation to create a national infrastructure bank and next we welcome representative peter defazio wizards as chairman of highway and transit sbcommittee of the house transportation and infrastructure committee. we are also pleased to have representative dan lipinski of illinois who serves on three subcommittees of the house transportation committee and as the chairman of the research science education subcommittee for science and technology committee. next we will welcome governor ed rendell of the commonwealth of pennsylvania, governor rendell is the co-chair of building america's future. and finally we will hear from the mayor antonio of los angeles. i will refer to them of the year. we should that alumni association. we look for to the testimony today and thank you for your participation. without objection and the other members wiing to insert statements as a part of the record may do so.

all written statements written proposed by the witnesses will be inserted into the record as well. i recognize congresswoman rosa delauro for her opening statement. -- before mr. chairman and ranking member. the members of the subcommittee, and number of the including mr. blumenauer, who have been strong proponents of infrastructure over the years. this is a timely hitting and i appreciate the opportunity to testify about my proposal. it's a proposal along with representatives keith allyson come steve israel and anthony wiener and yes, it is about to create a national infrastructure bank, and i would also say i'm honored t be on this panel with people who are such strong components of smart infrastructure investment with peter defazio, dan lipinski, mayor rendell and we've shared the podium and stage often times and the mayor villaraigosa. infrastructure crisis are all around.

in 2003 the northeast experienced a major widespread black out. we will never forget the broken levee after hurricane katrina were the major i35 bridge collapse in minneapolis. just this month we endured catastrophic pipe break that shut off water for 2 million people. as human costs there are heavy economic costs. lost opportunities for job creation and economic growth we need to remain competitive in the 21st century. china puts 9% of its gdp infrastructure. indy 500 of 5% and rising. here we spent less than 2% of gdp. down from the time when we spent 8%. these other nations are investing in 21st century infrastructure while wheat too often are shoring up old legacy systems. we know we need to invest in our infrastructure to move from recovery to long-term economic growth. yet the 2.2trillion question is how to pay for that.

that is how much the american society sibylline shares estimate we need to spend over the next five years just to bring the infrastructure up to an adequate ondition. representatives of the san impleader and i introduce a back as an important way to supplement other feral programs such as the surface transportation reauthorization which cannot make up for this investment deficit alone. and for stricter bank will be about leverage private dollars for married based projects across the country. the bank would be an independent government owned corporation modeled after the european invesment bank which has been successfully investing in european transportation, energy and telecommunications projects for over 50 years. in 2008, the european investment banks lent $81 billion to finnce projects and have a target of $112 billion last year.

our proposed bank would be managed by a five member board of directors with public and private sector experience pointed to a six year term by thpresident with advice and consent of the senate the board would be essential function to issue 30 plus year federal bonds and use proceeds from their issuance to offer loans and loan guarantees to transportation, environmental, energy and telecommunications projects. the board under the direction of the treasury secretary would buy and sell infraructure loans and securities creating a secondary market for u.s. infrastructure development and increasing investment in these sectors. under the board would be a nine member executive committee headed by an executive director including chief compliance officer, chief financial officer, chief asset and liability management officer, chief loan origination officer, chief operations officer, chief riss officer, chief treasury officer and general counsel. the executive committee would

handle the day-to-day operations and have finance infrastructure experts that would recommend projects to the board. i am aware of the concern about past experience of other entities. the bank would also have a five member risk-management committee headed by chief riss officer to create financial credit and operational risk-management guidelines and in short diversification of lending activities by both the region and infrastructure. finally, the bank would have a five member audit committee headed by the compliance officer which would work with outside auditors providing activities for the bank as a whole the banquet objectively review projects, provide financing for those with clear economic environmental and social benefits. criteria for this merit based project selection might include a transportation project ability to reduce surface or air traffic congestion. a water project public health benefit, d energy products

ability to reduce carbon emissions, or a telecommunications project emphasis on deploying broadband to the ruble and the disadvantaged communities. the bank proposes to capitalized like other demint banks that the united states has helped fund such as the world bank. it would include $25 billion in peaden capital through 5 billion annual appropriations. an ditional $225 billion would be available at the call of the treasury secretary to meet the bank's obligation if necessary with a conservative leverage ratio of 2.5:one. this is what the bank does. the bank would potentially issue up to $625 billion in bonds. i emphasize the bank that we are proposing would need to be self sustaning, meaning loans would need to be repaid including

through users or other mechanisms and a good example of a strong candidate project as the mayor villaraigosa will tell you is the los angeles plan to expand the l.a. real system using revenue from a half cent sales-tax increase approved by the voter. as the mayor said here before and government loans would enable the completion of the prject in ten years and instead of 30, perhaps even at lower cost. again, drug to the to the subcommittee faces challenges identifying revenue stream to make badly needed investment in infrastructure projects across the country. i believe in national infrastructure bank has the potential to channel private dollars from pnsion funds, sovereign 12, insurance companies and the like to create the u.s. infrastructure development market that can help meet that need. calpers spaight 700 million infrastructure commitments and is looking to make more. and so doing has the following

path pension funds and australia, canada and europe. so the money is out there. even despite the downturn. we need to make sure that gets put back to work for america. our proposal has been endorsed by mayor bloomberg, theconcept of the proposal has been endorsed by mayor bloomberg, governor rendell and schwarzenegger build america's future as well as the national governors' association, by the civil engineers, the u.s. chamber, by labour organizations that have support from across the spectrum of business and labor and has been co-sponsored by about 56 of our colleagues including members of this panel. e supplementing existing federal programs, this bank could provide crucial revenue to the infrastructure projects that will improve our lives, lead to job creation and long-term economic growth. the kind of growth america needs

to remain competitive in the future. final comment. this nation was built on a brick, mortar and fiber optics with a vision even in difficult economic times and if these kind of efforts, the transcontinental railroad, the road system are all built with public investment which created enormous economic growth in the nation and we need to begin. i think the committee very much for asking me to be here. >> thank you. i'm glad you mentionethe transcontineal railroad. that was a man of massachusetts who met lincoln bluffs on the web. the german recognizes mr defazio. >> thank you, mr. chairman and ranking member for holding this which as i understand is the third hearing on the need for additional funding for infrastructure in the u.s.. i am not going to reiterate or

bore you with the statistics on the incredible state of disrepair of our current infrastructure. but the gentlelady that spoke before me, ms. rosa delauro has spoken with great passion and i endorse the idea that she's ut forward. there is tremendous merit in having this as a part of the solution of a well constructed and for stricter bank could meet the needs of state and local jurisdiction across the country in rebuilding or building out new infrastructure an assisting them in getting their reasonable and flexible financing and i believe it can be constructed in such a way as to protect the taxpayers of the unitestates would be providing the guarantee particularly with the collapse or the difficulties in the bond

market today. it's very expensive to go forward with public infrastructure projects in the existing commercial market without some guarantees i would certainly recommend the committee looking at the experience of the buy america law bond and the unbelievable demand that's out there and the amount of work accomplished. and as she said also, this would provide a tool for this in place today to the mayor villaraigosa of los angeles would be moving forward with the ost ambitious constructionf transit projects for heavily congested urban rea in memory. it would be not only tens of thousands of people to work indirectly in construction and engineering. it would stimulate our manufacturing sector with orders for made in amerca unlike real and streetcars and transit and a

host of things and were this t be replicated across the country i would be a tremendous benefit. so i recommend it to you on those terms and the unique thing about los angeles in this case is the of a revenue stream so what they are looking for is a way to leverage that and complete the product more quickly rather than spending the revenue stream overtime and an infrastructure and would be unique and helpful in that matter. but i can't leave without sang this isn't a solution to the huge problems we have an infrastructure into the united states of america. if we just look at transportation 160,000 bridges on the federal system in the ether of replacement or substantial repair. 60 billion-dollar backlog in the legacy transit system for capital and investment.

some 40% of the road surface in poor or fair condition causing accidents wasted fuel causing costs to motorists and truckers for repair to the vehicles. it is a disinvestment doesn't come without extraordinary cost. the lost time for those engaged in commercial movement of freight on the system, the detour, that hurts american business and our competitors and we must invest. so, we have to do more than an infrastructure bank. the infrastructure bank will work well with projects that will have a revenue stream. we will not told the entire interstate system in the united states of america and fall of the 160,000 bridges we need a separate and dedicated source of revenue to undertake the projects. there is no transisystem in

the world that makes money. so if you don't have an externals or additional way of paying for the bond as does los angeles with its sales tax increment which is extraordinary in the environment that got past, the most transit systems would not be able to bail themselves. so i would redirect and direct the committee's attention to the need for additional taxes and i will use the word taxes or fees because there is a huge cost and not making these investments. the committee has held hearings on this and i think the idea which has the most from a non-scientific assessment talking to people and members of congress is taxing oil by the barrel for every dollar of tax we would raise 24 billion dollars oer the term of the

transportation bill. when you raise the tax on a barrel oil it is possible opec will have to eat some of it or bp or exxonmobil. bp brought back $50 billion worth of stock in the last couple of years. they could not necessarily pass on the tax on a barrel of oil directly to the consumers on like a retail tax at the pump. and the speculators and others are engaged. so the cost could be spread. but the benefits would be phenomenal. so i would urge the committee to continue to consider that option. the other id wld be to index the gas tax since 1993 we've lost 40% of the purchasing power of the federal gas tax. gas tax hasn't been increased and if we were to index it for future construction cost inflation, get estimates from

the cbo and then ue that to finance a ten year bonds we could get somewhere between 40 to $60 billion of the highway trust fund and i wld al recommend that to the committee. so i would recommend an infrastructure bank and recommend other sources of funding. we are going to need everything we can to bring together to begin to rebuild our legacy systems and build a 21st century infrastructure the united states of america to make us more competitive, more healthy and more fuel efficient. i think the committee for its attention to this matter. >> thank you, mr. defazio. the chair will now recognize the gentleman from illinois, mr. lipinski. >> thank you, german neal. ranking member, members of the subcommittee, thank you for the opportunity to participate in this morning's hearing. given the enormous need for infrastructure investment across the nation, i commend you for considering new ways to bridge the existing gap of the funding

for the products critical to the nation's future. and i want to commend ms. rosa delauro for her proposal for infrastructure bank's. i know that there are different ways to structure such a bank including questions about funding and eligibility. eligibility for which entiti will be eligible to participate in the bank and what projects will be eligible. i want to focus mostly on the of eligibility and as chairman neal said it's goo to have different ideas, going to put out a lot of ideas about what may be eligible and why you would be good. before i begin my want to emphasize the innovative proposals such as this should be viewed as a potential piece of a comprehensive solution for providing adequate levels of funding for infrastructure projects. if this were the only step we took we would still fall far

short of the investment the nation needs. one of the infrastructure banks play a role moving projects forward many major crital projects may never be able to generate the revenue needed to repay the loan. this is alan that must be considered instructor and financing mechanisms of infrastructure links considering the extent to which th bank cod fulfil the nation's infrastructure need. chairman neal said the american society of civil engineers said we need to invest $2.2 trillion over the next five years to bring the state of the country public infrastructure a pretty good condition. in order to begin their resting the surface transportation infrastructure needs he house subcommittee on highways and transit shared by mr. fauzi yo passed the blueprint of the transportation authorization act last june. in july chairman jim oberstar

and mr. defazio to supply in the subcommittee regarding potential mechanisms to fund the $500 billion legislation. today we are still challenging the mechanisms we can agree upon. america needs us to get that answered. the sooner, the better. becse a multi year bill which is already overdue is the best way to put people back to work quickly while making the long term investment the country so badly needs. but even when we complete this bill we will still have much work to do just on surface transportation. that is one reason why considering options like the national infrastructure bank is selling for him. to fund infrastructure state or local governments often need bonds which carried with them higher costs because overhead and risk. if they can even get these. infrastructure from states saves another infrastructure developer would get financing options that could allow projects to be built at lower-cost.

but the need to invest in infrastructure spans far beyond surface transportation. aviation, drinking water and waste water, energy counication infrastructure all the areas where the infrastructure investment is needed. we may even want to consider it infrastructure banks for financing projects such as exploration of components of the next-generation air transportation system, next-gen, are positive train controls, ptc that would increase the safety and efficiency. finally, as the chairman of subcommittee on the research and scice education and science and technology committee i want to raise infrastructure needs for research. the 2005 survey of the science engineering research facilities found academic institutions were $3.5 billion in the renovations. a hearing in the meeting with academic leaders in on the country, i have consistently

heard these gotten much worse during this concession. this under investment means we are spending billions of research dollars and efficiently. but even worse it means we are in danger of losing the position as the worldwide leader of science innovation to the countries such as china. the america competes ft that we are considering on the house floor will help address some of this issue. but certainly there will be more that needs to be done with infrastructure. and infrastructure bank can help the problem. especially when it comes to the infrastructure. we are at a point where advancement of computing power networks are revolutionizing data intensive fields like medicine and ecology. we need to be making investments that go beyond the current generation of broadband deployment and build the infrastructure we need for the remote education, collaboration and data analysis. i encourage the committee to also consider the projects as

target's for infrastructure bank if we want to be successful in the increasingly competitive global economy. thank you for the opportunity to testify this morning. >> thank you, mr. lipinski. at this time i would like to join yield to the gentle lady from pennsylvania ms. schwartz for the next witness. sprick this will be a ort introduction of the why of known governor randolph a long time so i could go on a. let me just say that i am very pleased governor windel is here not only on behalf of the commonwealth of pennsylvania. he has been a governor that has led the commonwealth on economic development and has been in the forefrt of both the state and national the really the kind of infrastructure using the were broadly that leads to economic diplomat and will lead us to the economic competitiveness we want as a state and a nation. he speaks today not only on behalf of pennsylvania but on behalf of the governors and the joint, i'm going to ensure its

worldwide as the co-chair of building america's future which he is the co-chair and has been a leading place in the need to make the kind of investment in our infrastructure across the country to enable us to be the growing international economy we need to be. so i welcome governor endell to the ways and means committee and venue committee and look forward to his testimony. >> governor rendell is recognized. >> thank you mr. chairman and ranking member. let me also, i would be remiss if i didn't think you for the passage of house bill 4849. congresswoman shorts talks about economic to go ahead. 4849 was extraordinarily important. private activity bonds and new market tax credit have been used to great advantage economically in pennsylvania and your bill protecting from the amt was extraordinarily important. secondarily, build america's bond we need to extend what has been an extraordinarily

successful program. >> with all due modesty let me take credit for those ovisions. [laughter] >> pennsylvania wento market in decber and so $00 million backed by building america bonds has 3.1% interest the lowest the commonwealth has sold general-obligation bonds since the 1960's to it in part due to the good debt rating but in part due to the building america bond program. it's an extra night program and ought to be extended and the senate ought to move quickly o about 4849. it's a pleasure to be here today to talk about the infrastructure bank and we do support the concept embodied in the build america's future supports the concept embodied in the congressman rose of the laura's bill that's a good framework. let me say i want to repeat the question of need. you heard those. let me begin by saying infrastructure isn't a panacea. congressman defazio is absolutely right. it's part of the broader

problem. and we as a country have got to come to grips with the broad problem. we need in my judgment a decade-long infrastructure of finaliation program which will do much good for us in terms of a substantive need a transportation and all other parts of the infrastructure. but more importantly is the single best job creator that this congress can do for the american people it's also the single best thing to bolster flagging american manufacturing and ladies and gentlemen if we don't do something about amerin manufacturing soon there isn't going to be any american manufacturing. let me give you a few statistics from pennsylvania. we were pleased to receive a leter from congressman oberstar saying pennsylvania is the second best state of the union spending its transportation funds. we've got $1.2 billion under contract. 99.7% of the money given to us

under the stimulus. and you talk about small siness -- and i know the committee is interested in small business. of the 1.2 billion let me give a brief idea of what the impact is on small business. $993,000,000.2 prime contractors, under contract. 67% of that went to businesses with less than 100 employees. 230 million went to subcontractors. 87% ofthe contracts went to businesses with less than 100 employees. we have a tendency to think of manufacturing construction activities as big business activities. they are not. the best remedy for small business, the best remedy for the american economy is a significant infrastructure revitalization program. and by the way, the american people agree building america's future took a toll and found 94% of americans think infrastructure is important. 81% of americans are willing to

pay additional taxes if we change the way we allocate transportation and infrastructure dollars. and we took a second poll very recently. we employed frank luntz because we didn't want anybody to think that we were cooking the books so we employed frank luntz and 61% of republican and democratic alike believe the federal gas tax is the next translation to read and they are willing to accept that. 61% of americans. let me just give you an idea what ths does for american manucturing. we did a study in pennsylvania ofthe increase in manufacturing orders and i think congressman schwartz goes about this to read the first ten months of the stimulus there were 4300 additional tons of steel ordered. of 43% increa. over the previous year when there was no stimulus to read 3.5 million tons of asphalt, 44%

increase in the asphalt that was ordered. 440,000 cubic yards of concrete. 50% increase in the concrete that was ordered the year before. so if you want to get the economy going and do something to bolster the american manufacturing let's do this. what part does the infrastructure play? and important because you can bring additional funds into the mix. private investment is leading for a vehie to invest in infrastructure. the infrastructure bank can be the perfect entity to leverage private funding. the man who saved new york, the finance your that saved new york sent me a letter to give to the kennedy talking about how important it is and how we can leverage private investment. he believes there are foreign funds would invest the american infrastructure and he's going to france next week to meet with several foreign funds about the

very subject. we do need to capitalize it and spend some government money on the and for stricter bank. but the infrastructure bank can have tools that will help without spending one federal dollar. credit enhancement, loan guarantees. those things are important. they will work without the expenditure of a single federal dollars in most cases. not in all cases but in '95, '96, '97, '98% of the cases. i do believe as congresswoman rosa the lauras that we have to catalyze the bank. her figure is right. i would double that and to 50 billion. the bank has to have its own bonding capacity. ytd de banque? because there really is no vehicle in the kuran transportation system for funding multistate projects of national significance. we have in the short time because of arra the tiger brands and tiger gransta into

consideration funding ome projects power multistate. pennsylvania was on two projects funded for the rail freight that have a stake six and five states respect to the freer to do a high-speed national rail system we can do it state-by-state because you have to have one consistent method witter it is maglev or other high speed and can only be financed through a thing like this. the public will support it because the bank will be transparent. will be merit based. there will be product review and cost-benefit analysis and experts making the judgment. this congress lose its power? of course not. in this bill you can set allocation formlas between waste water and water, between transportation. you can set the criteria the bank must consider and rank projects on a. the can be congressional oversight of what the bank does and ranking member tiberi is right about the loss of federal dollars.

but if you eiv, european investment bank, when you have the private sector involved, namely ensure the projects invested are good produs, sound projects and are not going to be felt. there are ways of doing this and of protecting the federal dollars. but can bring all of this together in such a way that we can help, absolutely help just by allowing us to use the treasury interest rate as opposed to normal interest rates. that will help make projects doable that previously were not doable. that doesn't cost the federal government any money in fact we get a rate of return. so e banks capabilities are i think with the bank can do for us is very difficult to understand. it's necessary. we have got to move quickly to get this done. but again, i reiterate what congressman defazio says. let's get together and figure out a long-term way to finance

the infrastructure needs of this country. the american people would support it. as congresswoman schwartz has said we've done it in pennsylvania to a great degree. and people are supporting it. it's one of the reasons pennsylvania probably has the most robust economy, not a good economy but the most robust economy of any large industrial >> thank you. i invited congressman the sarah to introduce the next guest. he was busy at a leadership meeting but indicated to me that he should be described as a good guy. [laughter] neyer villaraigosa. >> thank you, chairman neal. a great pronunciation by the way. a ranking member tiberi and members of the subcommittee, thank you for the opportunity to address you today. it's indeed an honor to be here with america's preeminent advocates for and infrastructure investment here in the united states and your leadership

supports an interest in transportation infrastructure are crucialto the future of the country. and your focus on leveraging federal investment comes at the right time. i don't have to tell you american cities continue to grow and as we grow we are struggling with congestion and burdens our economy and increases the cost of goods movement and affects the mental and physical house to veto health of the community. the same time we are facing staggering unemployment. in los angeles, the unemployed in every case at 14%. in the onstruction trades that number is about 35%. we believe it is a way to address both issues head-on through an innovative federal and local partnership. now i don't have to tell any f you as you have visited my city you know it is famous for being the car capital of the world. this also makes us the most

congested city with some of the worst air quality in the country. though we are doing something abo investing in carpooling, synchronizing traffic signals and most importantly investing in public transportation. o current transit program includes the construction of 12 major new lines over the next 30 years. we will double the system in that ime. however overall goal was to connect the communities where we live with a major job centers of the region. building these projects will create 166,000 high-quality construction jobs. 2800 permanent operating and maintenance jobs. it will take 570,000 pounds of pollutants out of the air each year, save 10 million gallons of gas per year and increase transit board by 77 million. it will secure our energy future by reducing our dependence on foreig oil. we can pursue such an aggressive and far reaching transit program

because of the measure. the measure was approved overwhelmingly by 68% of the voters on a bipartisan basis. one among every demographic group and every part of the company in the midst of an economic recession. we were able to make the case this isn't just a tax it was investment on the future, an investment in the creation of jobs and the public house and moving the goods and people in the second largest city in the united stas o america. measure r is a 30 year transportation sales tax but it's also the third transportation sales tax approved by the voters. measure or a loan will generate $40 billion of new revenue to cover the three local sales taxes generate almost $2 billion in your money that we are investing in transportation infrastructure.

now, we have a unique opportunity to build transit projects sooner and create the jobs and capture the environmental benefits in the future. we want to build our transit project in ten years instead of 30. we call our exhilarated plant fi 3010 initiative. it is 100% consistent with consens transit proram adopted locally and approved by the voters. it accelerates the transit program, accelerating the transit program will save billions of dollars, reducing the cost from 17.5 billion to 13.7 because by accelerating these projects in the tenure period instead of the out years we are reducing the increased cost in construction that we project over time it would cost. we also believe it would cut costs even further by taking at vantage of markets. currently because of the unemployed and a rate in the construction industry because of

the down market we are seeing that in the city 20% reduction and that the state it's even higher. at the metropolitan authorities in the middle between us. it's between 20 to 30% -- 27% reduction in cost becuse of the down market. we also think we can to get a vantage of the public-private partnerships for design and construction. right now we are working to identify funding strategy to build the projects even sooner the feasibility of existing federal programs such as tiger grants but there is insufficient capacity current to accommodate the 3010 and a shift. we also follow with great interest and unequivocal support recent proposals for establishing the national infrastructure backed by representative rosa delauro and senator crist dog and i noticed you mentioned the folks have gotten behind it add me to that

because it is one of the many tools we need right now to make e kind of investments of infrastructure that will have the economic benefits online. likewise we've noted the president's fiscal 2011 budget proposal to establish a national infrastructure innovation and finance fund designed to assist major investments of national regional significance. each of these programs would substantially expand federal lending capacity beyond the existence of the levels. we support in the approach that can provide lendable funds of the same rate of a flexible terms asthe existing tipia program. we also believe there is a special opportunity through in infrastructure precourt fondital allocate new congressional the authorized tax preferred bonding authorities for transit investments much as the denver schools. we ought to do it for transportation as well. together an expanded tipia

stifel critical demand targeted specified tax credit bond program for the transit investments of the national significance would make 3010 possible. the specified new tax credit bond program could be administered by an infrastructure bank. one to end with this. i was the speaker of the california state assembly i guess now a little more than a decade ago. when i was the speaker it was actually a time when california had some money. but everybody came with their hand out. and i would say to the mayors and i would say to the local officials to come to me if it is such a great idea, how much money are you putting up? and what we did it through those exercises is we expanded and leverage with the state was willing to do by encouraging and incentivizing the local jurisdictions to invet their own money as well. when you look at what we are doing here we are no only are

doing for the infrastructure investments that have been made on the federal level. we are seeing is a template for the future at a time of spiralling deficit and stored debt that mr. tiberi, ranking member tiberi talked about. that is in those times w have got to encourage local governmts to put their own money. we have done that. this i believe on the vice president of the u.s. conference of mayors i am suggesting for my colleagues this is a template. we know that local bonds, local tax are preferab to the electorate. they trust local coverage higher degree than the to the state or the federal government. and to the extent that we can encourage the locality to make these kind of investments, this kind of partnership with the federal governmet will only leverage the kind of resources that all of the speakers have

spoken to that we need if we want to ompete with china and compete with europe in terms of the kind of infrastructure investmentwe need to make. and so i would humbly ask you to consider all of these things as you address the issue of whether or not we need a national infrastructure bank and as has been mentioned other tools to mak these kind of investment. thank you. >> if i could add quickly that is the duty of the bill america bond. federal government guarantees one-third of the interest-rate payments with state and local government have to put up the rest. so it is something where we leverage all of the governmental funding tother. >> thank you, governor. there are airports across the country right now that are expanding exponentially because the built america bonds. it was weld met by mayors, governors and people of a variety of political opinion. governor, let me raise this question because i think the mall that you have spoken to is

entirely pertinent. i'm curious as to you how you got your bloomberg and schwarzenegger to form the coalitio what have you seen at the local level cost you to take this up and what impact on jobs do you foresee as we move forward to fund infrastructure but emphasizing the fact that you have a i believe republican governor and independent mayor and a democratic governor as well to put the coalition together? >> back at the beginning of 2008 when we formed the coalition i was looking for other public officials who had potentially put their money where their mouth was and governor schwartz and maker had gotten a significant bond issue passed by the california infrastructure and mayor bloomberg probably has done more for the new york cy infrastructure than the last five or six before him. so we reached out to them and was a unique coalition because of the political affiliation of the three, one independent, on

republican and one democrat and we thought alike that this is an imperative this is not a question of should . the answer is we have to so we built the coalition and its our long-term goal to convince the country to dojust what the congress and defazio said to make a major and significant investment in doing this and i'm not surprised that people of los angeles even in these difficult times voted to increase their taxes to fund what they viewed as an important and for structure development. the american people are way ahead of us and way aheadof the politicians, state, local and federal. they understand the ned. infrastructure is something they can touch and feel and see. they can experience. if you give someone back one hour of their life by getting them out of control and to nd from work what is the value of that? it is significant. so i think that our ability to

act if we act forthrightly and courageously portability to solve the problems exists. we have to be innovative and creative and the infrastructure bank is a model for doing that but we can get there. i just think it is a question of whether we have the political will and i think this is easier in terms of public perception than anybodythinks. we have senator inhofe who is one of themore conservative members of the united states senate said when i appeared before his committee where he is the ranking member he said he believes infrastructure spending is the second most important thing the fderal government should spend money on behind the fence. and i believe we can fashion a bipartisan coalition to invest in our country's infrastructure to build jobs. you know the statistics better than i do. 25,000 jobs for $1 billion of infrastructure ending. even if that is 50% and weighted

it is still 12,500 great paying jobs and i know people ve a tendency to prove through construction jobs as temporary but if we did a tenure revitalization program those are not teporary jobs. they become the foundation of the america revitalized economy. >> thankmr. chairman to have one comment to that because i think the governor tald earlier on about amercan manufacturing. one of the things that happened to this great country is we don't build anything anymore. we consume. and we have sensible building in the technology to other countries. and in that respect, this effort of the kind of jobs that can get created and in addition to the long-term construction jobs and revitalizing and laying the foundation for economic growth you are looking at new technologies whether you are looking at environmental

infrastructure, energy and for stricter, telecommunications, water, it is a vast new system of a technological breakthrough that once again could put the united states on the forefront of the cutting edge of chnology recapturing what our past history has been in this area. that creates a new and different jobs and opens it up so we need to be quite frankly thinking out of the box in the way that the past others have and watching this nation grow and become economically prosperous and creating a middle class of people who can sustain themselves economically for themselves and their kids and into theuture. today, we are looking at only short-term measures and that is

what we need the short term measures and the combination of what my colleagues have been talking about with regard to supplementing what already exist with an infrastructure bank to put us on a path to a plan for the future and once again revitalizing the technological base of manufacturing base and again, this long-term sustainable growth and prosperity. >> we thank the gentlelady. i alerted we will have seven votes on the floor and those will be the final votes of the day so i would ask indulgence of the committee as we proceed to the questions along. mr. mayer, your experience with asking the voters to raise the saes tax is fairly unique and certainly courageous ad the reminder there is an element of american public life that is faithful to every grod breaking for been cutting and faithful to opposing every expenditure tell us how you did. >> we went out linked to go to

every part of the county as you know i represent a city of 4 million. i county 10.5 mlion. we got a bipartisan support for the measure. we made sure that the projects were identified the people would vote on that represented the need of the entire region. i think the fact frankly that we have as much people were bought into this for those reasons as well and then finally we said to them there would be some oversight about how we spend the money because the concern is we are going to tax and how do they get killed and how we make sure they get built so there is an oversight committee that looks at that will oversee how we spend this money.

>> thank you. but i recognize mr. tiberi. >> thank you. just a question forhe governor and the mayor. over the last year we have heard from -- let me back up. we have heard over the last year that we need more revenue with respect to transportation infrastructure and with respect to the highway trust fund. during the last year we heard from secretary lahood and we heard from president obama that now is not time to raise the gas tax. mr. governor, mr. mayor, do you agree with the president and of all, why not? >> i am not speaking for build america's future right nw because that is an issue that like many your wrestling with but in my own and, for my own part i think the federal gas tax should be increased, number one. number two, we will submit both poles to the committee. the american people believe it isndexed for inflation.

61% you can hardly get 61% of americans to agree on anything these days. 61% believe it is in the inflation. i told the would be an additional seven or eight tenths right now if it had been indexed for inflation. i think the public understands infrastructure spending is investment. the mayor used the term investment and i got into a little bit of a disagreement with representative pence on fox about investment. e american people understand no business grows without investing in its own future and the understand that for this country. of this country will stay competitive e have to invest in the future and the future growth and the thing that people understand most is investment infrastructure because as i said they can see it, they experience it, it improves their quality-of-life. they are safer on it and it makes us economically competitive. so the answer in my judgment is guess we ought to do a and index

it to inflation. the congressman says we ought to bond of the index. that is not a bad idea. there's a lot of good ideas. it is going to take a little courage. but the american people get it. above and beyond what we in the government seem to understand. >> i unequivocally report an increase in the gas tax. this is something that has had bipartisan support for generations and if we are going to -- if america is going to continue to maintain the highways and bridges and infrastructure it's crucial. but one thing i want to make clear with respect to what we are proposing locally this actually leverage is all of that. what we are seeing is that the cities and the county's, we are creating a template for cities and counties to put up their own money as well to make all of these investments which frankly

have been laid low for a couple of decades to leverage them even further so that we can catch up with china and europe so i think it's important for us to raise the tax to do the reauthorization of also to create an infrastructure bank and also to create opportunities for localities to put in their own money and lverage those efforts as well. >> and i would add just real quickly the surface transportation reform and policy and revenue commission stated first of all although the mayor is right of local and state should be more. we do 75% of the overall transportation infrastructure state and local. that's number one. number two, all told state, local and federal, $80 billion that goes into transportation infrastructure. approximately 80 billion on a

yearly basis. the surface transportation subcommittee said that needs to go look to 225 billion. we are doing abt 40% of what we need to do. they made specific funding recommendations i think there were 13 or 14 specific funding recommendations. some of which were hardly cause a ripple so the answer is yes we need to do that. state and federal have to give it to. >> one more question before my time runs out. i'm from ohio and i drive on your rhodes and they're very good roads. thank you. with respect to a stimulus bill, to mention i spoke on monday to a group of transportation engineers and construction folks in central ohio and they said the need of the stimulus bill was a failure because it wasn't enough infrastructure. number one, do you agree and number two, would you think it would be wise for congress to look at the time spent stimulus funds and redirect the transportation infrastructure >> absolutely. i think we should have doubled

or tripled the amount of and for stricter spending in the original stimulus. interestingly, senator boxer and senator inhofe tried to run the bill in the senate to do that d they got defeated. absolutely. and secondly, i would support that the more we can do for infrastructure the better it is for the country and the better it is for our economy and for american manufacturing. >> i would agree 100%. thank you. >> thank you, mr. tiberi. what i recognize the gentleman from california mr. thompson. >> thank you to all the pan members for being here and i agree with much of your testimony today. governor, if you are right. we need to make these investments. i think it is an importance. but right now it is an interesting time and the poll numbers that you gave are equally as interesting. i think we would have a hard time passing e gas tax increase in the democratic delegation

i would think we would have a hard time passing it in the pennsylvania democratic delegation. people are finally becoming aware of the debt and problems coming about as a result of that while i think one way to deal with it is to make these investments we need an infrastrcture. i just think the polls may not be as telling as we would like to think. and i would be interested in your comments. and mayor rendell, good to see you. i'm interested to know if you are able o get expanded financing and the ability to leverage on the local dollars for transportation numbers were impressive. when you are doing is outstanding wor and i wouldn't have expected anything less from you. but what out transportation versus water infrastructure? argues thinking about using some

of that new leverage fund to expand your border infrastructure? you know well the serious problems we have with the very scae resource and some of the problems that is causing both economically, pot hols from the polis perspective and the potical perspective up and down our state. i would like to know what your thoughts or on that. >> first of all, thank you. with rspect to -- i think we are currently talking about transportation and infrastructure obviously is a much larger issue than just transportation and water in for stricter is critical. i supported the governor's water bond package. i did not becau it was perfect and i didn't want to let it get in the way. >> you are from southern california and i from northern california. >> one of the things we are

doing to address the water infrastructure needs doesn't cost a lot of money as we are engaging a great deal of conservation. we are using the same amount of water today in l.a. that we did 31 years ago when we had 1.5 million people. i have reduced the ability to water the lawn for two days a week. not for a popular in southern california but necessary. what i said is we live in a desert and there is no question the kind of programs we are talking about here ould apply to water infrastructure, to the other, you know, important needs we have and i am very supportive of them. >> let me say that, congressman, before you got here, ngresswoman rosa delauro megin her bill includes more than transportation. we think the infrastructure bank

should include mo than this transportation therefore it shouldn't be in the u.s. it should be a freestanding or if you have to put it somewhere on the treasury number two, again, the polls are interesting and i will get them over to you to the chairman, but the polls are very clear the people to support additional funding but they want reform with it. they want more transparency. they want more accountability. they want a cost-benefit analysis. they want some discipline on how we stand at the performance measures and that is why i think the bank fits perfectly into what the national mood is. we do want to spend more money to feed the people get infrastructure spending. i agree with you about your political analysis but i think respectfully your colleagues are wrong because if we don't do the gas tax by the way the gas tax is part of the puzzle as everyone sit here but if we don't do the gas tax what are we

going to do? are we going to let the american infrastructure slid further into srepair? onof the points the mayor made is absolutely true. the longer that we wait the more expensive it gets with of the brief exception of the last year and a half, construction prices were rising in pennsylvania at. the american society of engineers announced as we have a $2.2 trillion for stricter deficit just to repair and maintain what we have. five years ago i was 1.6 trillion. the longer we wait the more expensive it is going to get and what is the alternative? what is the alternative? give the american people some credit. i think we need to do that. they understand that if you buy a 24,000-dollar car it is going to run better than if you buy a 2004 car from the used car lot. they understand you get what you pay for it infrastructure is no different. what they want to see is the funding go for the right project is not based on political clout

and i say that respectfully. .. l. what projects, they wanted local control. they wanted a local component to it. they supported public-private

partnerships. we said we would encourage that. so, to the extent that we worked hard to kind of figure out what do people want, because everybody generally wants infrastructure, but how do they want it delivered? we were able to sell it and in the end virtually, or at least the majority of elected officials, both democrat and publican can, supported the tax increases. >> thank you mr. mayor. i would like to recognize mr. blumenauer who is a longtime advocate on this issue. welcome. >> thank you mr. chairman and thank you for your continued effort at focusing on how we are going to rebuild and renew america because nothing is more important to restore the economy, revitalize our community and protect the planet that our effort to rebuild and renew america. i appreciate congresswoman delauro's championing this focus on an infrastructure bank, a critical tool in my colleague

from oregon, putting it in a context that it is just one tool, and a panel i think has laid forh the case that i hope we can get into every american home. we have gone 15 years without a super tax. we have no mechanism for broader infrastructure similar to the highway trust fund, and the highway trust fund where we have not increased theas tax since 1993 is in deficit for the first time in history, and it faces a 400 billion-dollar deficit between now and 2015, making mr. defazio and mr. oberstar's problem with reauthorization critical. and on top of it, as the governor mentioned, we have a $2.3 trillion infrastructure deficit overall and it is growing. today's hearing on the infrastructure bank is a critical tool to solve the infrastructure challenges.

i am hopeful that there are ways that we can engage and leave this into the olution. it is a good way to stretch resources, to have public private partnership that everything still hinges on resources. we need to capitalize the bank. i would hope the subcommittee will consider new revenue sooner rather than later. i appreciate mr. thomson's notion about people's attitude right now but there is no reason that we have to raise a gas tax this year or next year. as long as we establish a revenue tax going forward within the 10 year budget score, we can leverage it. we can borrow against it. we can put some inn infrastructure bank. we can take advantage ofhis unparalleled low interest rate environment and the best or

worst bidding climate in probably two generations. i would hope that we think about dealing with this prospectively, make sure that it wouldn't kick in, that revenues wouldn't kick in until after the economy has bounced back, but i would hope that ts committee start exercising its role to help realize the vision that has put here. and while we are considering new revenues, new flexibility, the infrastructure bank is a part of it that xisting bonding mechanisms that have been refereed, there is a lot of tools that can be advantaged, that can stretch, and i hope that we are able to think out how we do that, to be able to actually save the federal government money.

one of the problems is that our budget horizon is one year. the federal government doesn't know how to calculate the value of present value accounting. so that some of the things that happen with the infrastructure banks, some of the achievements -- mayor villaraigosa, i am just fascinated on how much you would save the federal government, because many of these projects are on the hook for 50% federal funding, and if it takes 30 years, the increase in inflation, and interest, in a worse budget or a bidding climate, thefederal government will be on for more of a hook than would be required to help you jumpsrt 3010. i would wonder if any of the panelists would care to comment on our ability to be able to use

the savings, to be able to finance, to capitalize an infrastructure bank or to be able to make 3010 a reality. >> the whole notion of the 3010 initiative is tha. we will save as an example about $4.5 billion by accelerating from 30 to 10 years alone on construction, not to mention what we could save because of the down market for construction bids. not to mention the more innovative private public partnership that could also drive down costs here. we have seen th design bill as an example. we reduce costs 20 some odd

percent. >> mr. mayor, the bell has gone off and i don't want to take any more time because i know some of my other colleagues might be able to get him before a 15 minute boat that will take 20 minutes but let meust say i would like to work with each of you to identify the savings, which i think are actually your conservativeand see up there some way that we can route them back into be able to accomplish least part of the capitalization. >> thank you very much. >> thank you mr. blumenauer. i do believe we can accomplish our goal if we limit our questions but i would like to recognize at this time the gentleman from kentucky. >> thank you mr. chairman. before i answer the question i would like to yield briefly to my colleague from new york. >> for the purposes of setting the record straight i think it is important, regardless of the position of our friends on the panel, just to make the record straight for observation purposes. the last time this congress took action on a gas tax was in 2007.

by colleagues on the other side would have raised the gas tax by $800 million. the house ledership is not for most movement on a gas tax. i just want to make that observation clear, that not a singleemocrat supported that motion to recommit. my colleagues on the other side propose that back in 2007 for the purposes of clearing the record on that. thank you. >> i think there has been a lot of discussion abt infrastructure as a job creator and economic stimulus and so forth and whether or not the recovery act was adequate in that regard. i am curious to hear from the governor and the mayor as to whether the cost of not making these investments was part of the public debate, and if you both could maybe talk about that

aspect of selling the idea of additional revenues for infrastructure, whether that is important to do or whether it is positive. scare tactics sometimes work. >> well, you want to tread lightly on scare tactics. pennsylvania has the highest number of structurally deficient bridges in the country, congressman. we are at about 5600. when i took over as governor, we were at 6000, triple the state funding from 252 over $750 million a year that we put it on bridges, to spend another half billion dollars on top of it. after one year we actually had gone up in the number of structurally deficient bridges, notwithstanding all of that because their bridges are so old. are bridges average more than the life expectancy of what a bridge to b&h. we are starting to make a dent in it. again, people do understand the

cost to their lives. the biggest factor in these is congestion. if you can people find that they sit in cars idling and waing gasoline in wasting their time, if you can give them back a half-hour going to work and in a half-hour coming back from work, that is an hour they can spend with their kids. there is no price tag they wouldn't pay for that. there is no price tag they wouldn't pay. it is not a question of scaring, although it is very important. we had a pure that supported i-95. an inspector saw a crack in it's about half the size of my hands right now, and i-95 were shut for three days, 180,000 cars a day over that bridge, and we buttressed the bridge but to just repair the bridges in the city of philadelphia, for i-95 is $4.5 billion price tag. the state doesn't have the money, the city doesn't have the

money. we had bette get on the stick and i think people do get it. i understand the reluctance to do anything that is revenue enhancement, but people get it more than any of us think and i think california is a perfect example of. >> congestion also drove a lot of this debate, and so did public quality, job creation but more than anything, the fact that it was war transparent and that it was locally driven probably was what got us over the threshold. we had just passed a state bonds for transportation, and a number of other things. and then, because of the state's budget, they use the money for the budget instead of for transportation, so there was a lot of locally, a lot of anger about,hey we just passed that and it didn't work so the fact that it was local, and locally

controlled had a lot to do with the success is while. >> i yield back now so we can expedite the discussion. thank you mr. chairman. >> i would like to recognize the gentlelady from them so they need, ms. schwartz. >> thank you mr. chairman for doing this hearing and i want to thank congressman delauro too for her vision for the future and her passion for these issues. this is one of the most important. we are all impatient to create jobs and make the right kinds of decisions for the near near-term, but this really is speaking about the investment into the future as well as jobs right now and the combination is extremely important. certainlyto my area, to my state into the nation. the issue i want to raise and i don't know if he will have time for answers on this, is as we do infrastructure and my question comes from senator delauro and i want to ask governor rendell as well, i am concerned because we have tried to move infrastructure projects quickly.

the hovel-ready investment act, we actually been said we really can change these problems to be attentive to what many of us are concerned about and thats issues of flooding and drainage, green infrastructure, of course light rail. the way we build roads and bridges and all other and the structure can either be done attentive to complete streets-- the notions of the way we actually build our streetsnd build communities and reduce flooding. my area, governor rendell knows this, major issues in terms of th the interest in building it differently and and the need to in terms of not having been spending millions of dollars on repairs, but also, we also have a lot of state roads and our state and not local. and we have plan in philadelphia for green works to do things differently and then

bend pen that comes in and builds a road the way they did 10 years ago. what about this infrastructure bank? it would either create requirements or incentives are a relationship between building infrastructure and the concerns we have about, i am not just talking about crbon emissions which is a big issue but it is also about stable communities and major concerns that they have together. not to say that is roads and we do differently and break up all this as bold waldman do it differently. that is my question. how can we build a san? >> i will say that, as you craft the infrastructure's bank statute, as you craft e statute you have the ability to put in criteria that have to be applied and followed in the evaluation system and the sustainability thing, the carbon emission thing that you talked about congresswoman, those are things you can absutely build and to the criteria.

remember, infrastructure banks can have far more applications for projects that you have the money to do. the criterion raing system are iortant and you can do that but i know senator boxer also hares your concern. she wants to do the exact same thing. >> if i could? actually my subcommittee is going to be holding a hearing on this very topic next month. there is something that is called, has a horrible name, it is called sensitive designed for lack of a better name but i call t practical design or appropriate design and i intend to include language in the authorization bill which could provide a template for correction to the infrastructure bank, but that would be up the road in drafting map. >> we need a plan. we need to move forward on this. instead of dealing with the way in which we stovepipe all of these projects, that also

addresses the issue the governor and the mayor had been talking about in getting people to accept their participation in this effort as well. we have nothing to show them at the moment that is a plan. we can develop the criteria, the regulation. what does that mean in terms of being environmentally sound? what is the result of that? we have got to get out of our view that is done in the committee. this committee does this, this committee does that. that should not be the blueprint for moving forward in this direction. that is primarily at the core of a national infrastructure bank is about, and we can build it, design it and do what it needs to do. i would make one point to you, that we should hae included additional funding for infrastructure in the economic recovery program.

there wasn't the appetite to be able to do that, in order to get it passed, but as well, our short-term efforts, which we need to do, cannot get in the way of the long-term view of how this can sustain us over the future, and if we don't utilize the criteria, new regulations, sustainability, all of that we know, a green bank, a green effort on this, then we really are not moving in the right direction. >> i look forward to working with you. this can't be a separate discussion. it has to be a part of what the federal regulations are in whether we incentivize this are required to soething we have to work together on. >> these are the criteria. that is the intent. >> thank you gentlelady.

a brief statement from mr. t. barry. >> thank you mr. chairman. just to set the record straight, i'm not sure what he was talking about in terms of setting the record straight. as advocates of the gas tax increase, the motion to recommit was not-- and i hope to have more debate on that later. >> let me recognize my friend, mr. larsen. >> i want to thank chairman neal and raking member to barry. this is extraordinary important panel. i want to commend the governor and the mayor for your participation. i wholeheartedly support the efforts of my colleagues and especially the efforts of ms. fazio as it relates to making sure we have a transportation infrastructure system that is needed now. but my colleague from connecticut has long been a proponent of what i thinis

game-changing collation, visionary, a if you could congresswoman delauro underscore for us again the importance and how you achieve through ivate sector initiatives and pensions and greater participation in general to leverage not just government funds but to take the private sector in order to have buy-in across the country. i think in your remarks you alluded to the fact that love, american-- america has to get back to making things and a 10 year pn is the governor pointed out her bites us an opportunity not just for short-term employment but a long-term visionary employment. >> thank you and i appreciate colleagues commented by thank you or your support of these efforts. the fact of the matter is, and governor rendell mentioned this, he spoke with the ambassador who was supportive of this effort. the ambassador not only turned new york around, but his whole

experience about eating investment. he goes to france, he calls and says we have people there who want to make an investment now. much of the investment of u.s. investors is going going to oversee infrastructure efforts. we need to bring that here. bring it home. make it profitable for them to be able to invest in u.s. enterprises, with a return on that investment. we have pension funds. calpers is ready to do this effort. you have got sovereign wealth funds and some will say are you going to privatize their infrastructure? no, we want to get the private capital into this market so that we can do to multistate projects, and do the regional projects to get us where we are going. there is money that is available. we have not been making it possible for those investments

to be made in the united states and i would just say in order to do that, you need to have an independent agency, one that is under the treasury which can go to the capital market and have projects besides these investors know they will get a return on investment and are willing to put millions of dollars into this effort so that we can grow. that is wt is at the core of this effort. thank you very much. >> i thank the gentlelady for her passion and for all the effort she has put into this legislation. >> i thank the gentleman. i want to thank are distinguished panel for testimony and comments today. we now have a vote on the house floor which may take up to an hour. we will convene on conclusion of the last vote and again, if there is no substitute for the knowledge we have extended today. the committee stands in recess.

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>> the build america bonds are designed to be smaller for the more local projects. there is not the kind of oversight criteria in choosing the project. so, again, this is why we say that i think they should be considered in tandem. these are not either or. there is enough smirt in that they are innovative and new financing tools but not enough overlap where they would be mutually exclusive of each other. >> thank you. under the deloro bill $25

billion could borrow up to $225 billion from the preas treasury and lend out $625 billion. it goes on to state that the bank would be backed by the wh full faith and credit of the fefrl government. two questions related to that. the criteria which the bank would choose projects. you talk about political autonomy. does the structure in the bill concern you, number one, the way it chooses projects, and does the structure of the bank itself concern you? tuesday it remind you at all on how congress set up g.s.e.'s orphan fan and fred fred -- or fannie mae or freddie mac?

>> it does concern me. first on the second point first. keeping in mind if we are going to capitalize this bank, then that will leverage essentially loans and liabilities of several00 billion dollars, -- several hundred billion dollars. that's not free money. i think that it can help us do some creative work on the federal level, that can make some sense. but if we're just going to come up with extra billions of dollars some place, someone is going to have to borrow it from somewhere. so we have to be concerned with issues of the private market. in our view the private bank should be interested in capital or try to supplant it in one way

or another. so we have to be careful how those projects are selected in the criteria. the criteria in the bill, whereas i believe in order to get the best bang out of a bank it needs to focus on core infrastructure, whether it is transportation, energy, or whatever. when i have looked at the criteria in the deloro bill, what concerns me -- one of the one of the primary concerns is infrastructure. in my opinion the idea is to provide the highest services at the least cost. and job creation might be a nice outcome. and clearly i'm an economist, i'm an urban economist, but the goal is not to employ people. the goal is provide infrastructure that provides a

foundation. to the extent we have written into the bill that job creation is most important criteria, i think that's taking us off what the core infrastructure of the bank would be. >> thank you. i'm sorry to cut you off. i just want to ask two more questions, too. one that i would like everyone to answer this question, that being the gas tax increase. if you think the gas tax should be increased now or if you agree with the administration that it should wait. you also mentioned this issue of concern about political autonomy of the infrastructure bank. can you just expand on that and have the rest of you talk about the gas tax? >> sure. i think one of the generally agreed-upon plans is that we're not making those decisions for projects that matter to the

nation as a whole. it is mostly these grants that come down from the federal government and this is for all of the infrastructure. 3/4 of the infrastructure is through the federal and state grants. so the government doesn't have much say. there are no penalties for bad work. so we're trying to establish some kind of entity that can transcend those parochial needs which are certainly important, but we need some kind of entities that can invest in those matters that matter to the nation as a whole. there are a lot of things that transcend state and local boundaries that we don't have the ability to do right now. >> can each of you answer the question real quick on the gas tax? is now a good time?

>> well, as an appointee of governor schwarzenegger, i would just whatever he said. and i don't recall what that was. i can't recall him saying that he would sow important -- support a gas tax. >> the state is opposed to broad-based tax increase at this time. we'll defer to our delegation up here. >> there is no question that the federal transport program is running a deficit and it needs funds, and the gas tax is the work horse of the federal funds and there are little options that can replace it at this time. however we have strong enough criticisms about the way the program is structured today i personally would not consider pursuing the gas tax until it comes to reforms with the program. once we can be assured that the

gas tax is reformed, then it is vieable. the long-term sustainability of the gas tax is questionable. we have to start thinking of other sources of raising revenue for the trust fund. so it is a gas tax in the short term but not did have before we have fundamental reform. >> i would agree with the statement mr. puentes just made about this. i think we need to see accountability about how federal transportation funds are spent, particularly that they are not exacerbating our dependence on foreign oil, our greenhouse gas emission burning and to make sure that we're getting better accountability to improve the performance of the system.

with that, we need to make sure as we did that that we focus on investments that can better operate the roads and public transportation for much higher eefficiency before we go about building vast amounts of new capacity. and so that is part of the equation of getting a better managed system out of this. i think we ought to take advantage when the prices of oil drop to put a floor on the price. mr. blumenauer set a perspective for putting out a roadmap for how to finance transportation and hold it accountable for national goals. >> i am in agreement, but not completely. i think our analysis of transportation and finance is that current distribution of funds in transportation in particular are simply very infish. they are not going to the right

projects and pursuing the right goals. to really justify adding more revenues to an added gas tax to this point. we are less concerned about energy security issues, but we are more concerned about the fact that we are not goating the investments that are improving mobility or improving the long-term sustainability of the infrastructure. if we add the increased gas tax we are adding revenues to a system that is broken and we're going to waste a lot more of that money. >> thank you. the chair recognizes mr. blumenauer to inquire. >> thank you. the irony, of course is that we're involved with a catch .22 because we're spending more money in position, and we're unable to break the gridlock on rethaurgs. we just heard from chairman

defazio. chairman obestar is has an initiative that is moving in the direction of the narrative captured in the testimony of three of you and we're hearing good information from chairman a -- chairwoman boxer. we can't do that because we don't have money. we're facing a $400 million deficit for the current system between now and 2015. i guess i would like to affirm the thread running through your narrative about accountability and focus. i would like to take off where my friend mr. teaberry said

said, isn't there a third alternative? which is not increase a levee right now when most states are still coming out of the recovery, we have high un employment, and we're still trying to stimulate the economy. and one of the problems is the systemtive effect of the recovery act is wearing -- the system lative effect of the recovery act is wearing thin and there wasn't as much infrastructure in that as many of us would like. isn't that another alternative which would be to establish where we are going with transportation finance in, say, two years after the economy has recovered but within our six-year window so we have resources we can count upon which could be used in part to cap flies an infrastructure bank and to fund a reformed transportation infrastructure

system while we -- my favorite, of course, is to expand the vehicle mile pilot project to every state that wants it so that we can refine it, test it, and actually find applications that will make people voluntarily want to do it? i know i'm family with -- familiar with some of your research with some of our witnesses. i think you could help us refine some things that would have every major trucking company in the world voluntarily move in this trex in the course of the neck two years. of course they already have the software and hardware to be able to do this. isn't there a third option here which is move us in this direction with the overall refinements that you want, not have it impact for a year or two until the economy recovers, but

be able to fund the rethorgs -- the reauthorization and the reform. would any of you care to speak about this third way? >> when i spoke of praising your ideas about concreting a roadmap how we could finance transportation in the future, that's exactly the idea that i was alluding to. i think you have laid out a compelling vision for how we could increase spending in the short term using some deficit spending, using some investment and things like infrastructure bank in the next two years, and with a policy adoption of an increase in various revenue measures, fuel tax, b.m.t. fees, and other measures that will take effect that we can use to

borrow against. >> interrupting just for i a second, what i'm talking about would be deficit neutral. in fact, it would improve on a deficit situation, even if we used some short-term borrowing. over the lifetime, it would be positive. >> immediately we want a reform bill, we want to pay for it. the alternative is to do nothing, and that is obviously not acceptable. i completely agree that we need to get moving in some form when it comes to having a finance program, not just in the short term. as you mentioned, this is being funded through general funds now. it is an un tesm nnable -- it is an un10able situation, so we need to deal with that short-term problem and lay out a roadmap. no question about it. we also need to take advantage

of things happening in metropolitan areas across the country. many mayors are not waiting for the federal government to act. we had the recovery package which was helpful, but as you know, the money is running out and there is not going to be another one any time soon. there are a loot of -- lot of things happening across the country. the federal government could help those because people are being presented with a real tennable option. >> go ahead. i think you had a statement. >> i think the problems in the infrastructure system are so seff -- severe, i'm reluctant to

vote in favor of an increase on the gas tax until we straighten that out. i would be trying to focus on getting that straightened out in order to create a foundation that creates something more transparent, more accountable, and more performance driven. then you can think about revenue raising and have it be much more effective in terms of promoting it. >> thank you. >> thank you, mr. blumenauer. >> first of all, let me say, i am willing to defer to him on that. i am sure we will be seeking the guidance of our state officials when we make those decisions. in our state right now and in my district we have been in the process of trying to finance a mega-project. i think it is one of the three

largest projects involving an sneat -- interest state highway system -- interstate highway system now on the books. it is a $4 bill bill project. two bridges over the ohio river connecting louisville and southern indiana and then realigning the area of downtown louisville where three interstates -- converge is probably too mild a word, collide is probably a better word -- because it affects the flow of goods and services on a northwest actionis and also east-west axis. secretary, i know you have been involved in helping to find ways to fund this project. i guess i would like to know how you feel a national infrastructure bank could help

finance this. i know we have received help from federal sources. would you eelaborate on how this might help the project. >> sure. a national infrastructure bank would be helpful to helping finance a project like the ohio river bridges project which is a high priority of the governors. i think what we've seen in the last few years is a dead gated bipartisan effort from federal officials such as yourself, congressman, state officials such as governor basheer, local officials, and then a variety of private business folks who recognize that building these bridges is critical to future economic develop many as well as enhancing transportation in that area. what a national infrastructure bank could do with some sort of grant and credit support is it

could boost its overall feesability by leveraging federal resources currently being marshaled and accelerate the delivery of the project so that in the coming years it would be able to reduce, potentially eliminate the need for tax increases as well as perhaps even more importantly, for those of us who are growing impatient, how long it's been taking, it would help accelerate the timing of the project. so we really would look forward to national infrastructure bank being a valuable partner in this kind of effort. >> getting to the green banks for a second, back in february we had our features was the testimony from a man who created a new form of window pain which

increases the did of windows by about three. he said they could go in schools, do that, pay off the bond, and realize an energy savings of 20% overall. swr you seen anything like that kind of potential savings? it seems almost like imagine camp and found money. >> no, when i have been digging deep into energy efficiency improvements, the weather zation program that congress dramatically expanded during the stimulus package, it is amazing what a win-win-win this can be. in that by making these improvements, in the long run, you are saving real dollars you

pay off in just a few years' time and all energy savings goes directly into your pocket whether we are talking about taxpayers or individual homes. we're protecting the environment by reducing our carbon footprint and we're creating demand for this whole new green collar jobs sector that we're trying to be at the forefront in kentucky. so efforts like the green bank in kentucky and efforts like a national green bank or a national infrastructure bank, when the money is dedicated to energy efficiency, it will lead to budget reducing at the state, federal, and local levels while having all the other benefits that we already understand. >> that you very much, mr. chairman. >> thank you, mr. yarman. >> i want to thank the panelists for your testimony today. you might receive follow-up from members. i hope you can respond properly. i also want to thank you for your patience today for the

scheduled conflict on the house floor. in is very little we can do about that and the best-laid plans. so i do have great regard for the expertise that you bring to the discussion, and at the same time a word of personal thanks for your patient. and with that, the hearing is adjourned.

>> next a speech by the federal bank president of the bank of minneapolis. after that, "q & a" with joyce appleby. then at 7:00 a.m., "washington journal." today a senate hearing on the oil spill off the coast of louisiana and clean-up efforts. they will hear from b.p. president and homeland security committee leader janet napalatano. >> defending the united states against cyber-attacks.