eastern. >> tonight on c-span, a hearing to examine oversight at the f.a.a. at 10:00 p.m., an interview with former later, a hearing on increasing the safety on freight transportation. f.a.a. administrator michael huerta spoke about sequestration and saying it will not affect airline safety. he was in front of the sub committee. this hearing is just about two hours.

>> the hearing will come to order. this morning we welcome f.a.a. administrator michael huerta to testify the f.a.a.'s budget request for 2014. this is the administrators second appearance before the sub committee. i think the biggest question on everyone's mind today is sequestration and the affects of furloughs on the air traffic control system. while i firmly support the goals of achieving targets to reduce government spending and balancing the federal budget, i do not support across the board cuts like those mandated in the budget control act. this targets the outdated

wasteful functions being funded by the taxpayer dollars. across the board cuts is no way to run a government. however, across the board sequester is what the president proposed we're now operating under this law. in order to avoid the $1.2 trillion mandated by the budget control act, i twice voted with the majority of the house to pass common sense legislation that would replace sequestration with targeted spending cuts with the equal dollar amount. unfortunately, the senate did not consider these bills so sequestration was triggered. further, this goes to show that we need to return to regular order and consider appropriation bills in their entirety and not rely on continuing resolutions to fund the government. under a c.r. there is no way to prioritize cuts related to the

safety of the american public. we have questions today about how the f.a.a. evaluated the safety impacts of these decision, the transparency displayed on how you got here to your furlough and contract decisions. finally, what is the f.a.a. doing to mitigate these effects of two days of disrupted air traffic activity. the safety of our airspace cannot be subject to political posturing. as for the business, of the president's 2014 request, the decrease uestions a of $300 million of f.y. 2012 mostly due to the airport grants program. the president has requested $3 billion for the f.a.a. in the ourth round of a $50 billion

stimulus request. until you propose a pay for we cannot give this request serious consideration. i also have questions regarding the f.a.a.'s ability to meet its mission to ensure safe air travel while modernizing our nation's air traffic control system. the f.a.a. has seen a number of scheduled slippages and cost overruns in this programs, which could threaten airspace modernization at a time when we need to reduce spending and bring our budget to balance. i would like to commend you for your leadership and open communication with congress to resolve the boeing dreamliner issue. we look forward to your

testimony. i would like to recognize ranking member for any opening remark. >> good morning. we're starting to feel the affects of sequestration. the f.a.a. must cut more than $630 million to its programs, more than $445 million in operations. every employee would be furloughed and nearly 150 contract towers are threatened to be shut down. 10% of f.a.a.'s work force has been furloughed each day. that will continue each and every day as long as sequestration is in effect. we are already seeing delays in

the air traffic system. on its worse day last year the air traffic control system had 3 thousand delays. f.a.a. estimates nearly as 6,700 flights will be delayed daily. no one should be surprised by these impacts. our ranking member issued a report early highlighting the potential impact of sequestration. this is not just a problem for fiscal year 2013. sequestration will hit 2014 as well. we must sign a comprehensive government wide solution as you have recommended, mr. chairman. i know the administrator would agree with me that the f.a.a.'s most important asset is its work force. every employee is critical to f.a.a.'s success.

i hope we can find a way to do better by them and reach a resolution to sequestration without raiding one account to the detriment of another. we should not spare one set of employees to sacrifice others. we are here today to discuss f.a.a.'s request with the exception of a.i.p. proposal that brings funding at roughly the fiscal year of 2012 levels. i look forward to your testimony mr. huerta. i yield back. >> thank you. we're pleased to have the chairman here this morning for his statement. >> thank you, mr. chairman. director, welcome. we've got a lot of questions for you this morning. the first one is going be how me you didn't tell us this

beforehand of the sequester, the furloughs. not a word. you did not forewarn us this was coming. you didn't ask advice on how we should handle it. you didn't inform the congress of this sequester impact and what you planned to do about it. in fact, the entire administration has done the same thing. they have not told the congress how the sequester impact will impact each agency. the congress can't operate like that. this em per yull attitude on the part of the administration, you're the most recent example f that, is disgusting. then to turn around and try to blame the difficulties in flying

on the congress, having not informed us of what you planned to do is unacceptable. so i hope you have some answers for us today. but the first question i want answered is, why didn't you tell us about it beforehand? now what else are you planning to do that you have not told us about? why is it that the administration will not come to e table and talk about a substitute for sequester? there are all sorts of ideas floating around. yet, the administration refuses to come to the table and talk about it. instead they shut down airports, if you will closing towers and now furloughing airport

controllers. it would be easy for the administration to come forward and say, ok, let's talk. let's see if there is a way around all of these impacts of sequester. i don't like sequester. it's across the board, it is unintelligent, it cuts good things with bad. people elected to congress and the administration to choose the good things from the bad things. yet, with sequester advocated that responsibility. there's time for the administration, you're the first, to come forward and talk a ways to avoid sequester. as long as you refuse to do that the american public is going to suffer. i yield back. >> thank you, mr. chairman. we have the ranking member of

the committee, you're recognized. >> thank you, mr. chairman. elcome administrator huerta. furloughs necessary by the failure of congress to prevent the across the board are causing inconvenience to families, businesses in new york and across the country. but frankly it is mystifying to me that some are surprised by these delays or blame f.a.a. for congress' failure. the department of transportation told congress given the magnitude of budget cuts to the f.a.a. "it will be impossible to avoid significant employee furloughs." requiring a reduction in air travel to a level that can be safely managed by the remaining staff and causing delays across

the country. without action by congress this situation will get much worse before it gets better. f.a.a. estimates the number of daily flight delays will be more double the highest level of delays on a single day in 2012. acoss the board budget cuts are having a -- across the board budget cuts are having a severe impact on services, investments critical to our economic competitiveness. we must replace these mindless cuts with a renewed focus on jobs, economic growth, and a balanced package of long-term deficit reduction. agree that this has been very disruptive. but it is amazing to me, those who are responsible for the sequester don't understand that we have to get rid of the sequester. so then we're blaming you for

the impact on vy tall -- vital services. i hope that the congress can getting together in a bipartisan way, we haven't had a conference on the budget. we're ready to move as appropriators. i know the chairman and i can move effectively together. unless we get started and working together, the reality of the sequester, it seems, the sequester took place beginning march 1. here we are. march, april, may, i can't understand why people are surprised that this sequester has serious impacts. yield back. >> thank you. after the administrators' opening statement we'll proceed with the five-minute rounds alternating in the standard

order. we invite you to present your opening statements, your full statement will be included in the record. welcome. >> thank you, mr. chairman. i'm pleased to have the opportunity to be here tray to discuss the f.a.a.'s budget for fiscal year 2014. this is my first appearance before you. we have a great number of challenges and opportunities ahead. i look forward to a long and effective relationship with this sub committee. the f.a.a.'s fiscal year budget request is $16.6 billion. it upholds our critical safety programs and deploying benefits to our stakeholders and modernizing our infrastructure. it does this at funding levels that are $451 million lower than fiscal year 2012. a 2.2% decrease.

the f.a.a.'s proposed budget for 2014, assumes a long-term solution to the deficit and sequester. the budget would allow us to maintain staffing for air traffic control and aviation safety. it will allow us to maintain airport infrastructure and equipment and fund research and development. the budget request $1 billion, which is an increase 7% above 2012. this request would help us continue to mitigate congestion in busy airspace and it would help us with the continued deployment of equipment that allows us to use precise satellite-based information to control air traffic. this represents an increase of just about .5% above the fiscal year 2012 level. this request will enable us to

n the agency on a day-to-day basis and the certification of new products. it will enhance the commercial space transportation industry and policy oversight and management of our airspace. the operations budget includes $30 million to maintain and operate the modernization system that became operational over the last two years. it is at the heart of our ndustry. the 2014 budget also allow tgs f.a.a. to meet the challenge of maintaining the capacity and safety with the kern system while moving forward with modernization and transformation efforts. the majority requested for cilities and equipment is to

sustain areas. this year 's request for research, engineering and development is $166 million, a decrease from 2012. we plan to continue critical research such as fire research and safety, fuel systems, advance materials retempling, alternative fuel, aging aircrafts, and unmanned aircraft systems. this reflects the arrest hard choices we must make to make the most benefit to the flying public. we're proposing to modernize projects. the budget would allow airports to increase passenger charges from the maximum of $4.50 to $8. this gives airports to generate their own revenue. this change focuses federal

resources on smaller airport that does not have the passenger volume yet are still important to our transportation network. the budget request represents a balanced approach to our challenges. this is critical when we consider the impact of the sequester on the aviation system. sequester forces us to furlough 47,000 of our em employees for up to one day every two weeks. with fewer hours available there are impacts on all operations. air traffic facilities this imposes limits on the amount of air traffic we can take off and to land. it means that our safety inspectors will work fewer hours. i want to emphasize as we undergo the process of implementing these deep cuts we refuse to sacrifice safety.

since february, we publicly described the affects of the sequester weavepb been working with our industry partner, including the airlines to share more detailed information on the impacts we expect in the largest airports. we tracking airport delays throughout the system. it is my hope we can work together to rally around our nation's air traffic system and rotect the contribution that the air traffic system makes on our country. that concludes my remark. >> thank you very much. we're a all concerned about the air traffic controllers and the effect it is having. just -- you believe you've done everything possible to minimize the effects of the furloughs? >> i do. mr. chairman, we have to reduce our budget by $637 million between now and september 30.

that -- under the rules of the sequester, the airport grant program was exempted as well as all the grant programs on the department of transportation. but what that means is it falls disproporings in thely on the operating side of the budget. we're projecting savings of $220 million from the furloughs. that means we cut more heavily in nonpaying areas, contracts, information technology, travel, and a wide variety of other non-pay expenses. to reach the large number that we need to reach we have no choice but to look at furloughs as well. >> can you assure the american people that what you're doing will have no affect on safety? >> it will have no affect on will safety but it affect efficiency. it means we have to do things

like combine sectors and we need to reduce arrival rates at major airports and the capacity of our on-route facilities. the result is ground delay programs, flow control measure, all of which has impacts on the efficiency of the system. but what we're focused on first and foremost is to maintain safe operations. >> i was taken aback the same time we're talking about cuts to, i think to essential services to air traffic controllers. the secretary announced he was giving out $474 million in tiger grants for livable and sustainable communities from the department. that is not authorized, not defined in law, even what that is. do you have any ability to transfer any of this money? have you requested any money to be transfered?

>> under the framework of the sequester act we have to cut equally across programs and prgs. the way it works out in the f.a.a. budget, we have four colors of money. operations account, our facilities account, our research and development account and the airport improvement program. there are further subdivisions. the largest share is the operations account. that is organized according to the f.a.a.'s lines of business. air traffic, aviation safety, commercial space. in terms of -- as i said before, the airport improvement program is exempt so, therefore, the cuts are applied equally over the other three colors of money. that means they disproportionately fall on operations. operations represent 61% of

f.a.a.'s appropriations. of that amount, 70% of it is pay for the employees that perform the important safety, critical functions. to get to the numbers we need to get to, while we've cut quite dramatically in areas of contracts and non-pay expenses we're forced with the choice to reduce the amount spent on salaries and this is where the furloughs come in. >> to my question, have you asked for a transfer of funds? have you asked for any transfer? this is from a program that is not authorized, has no definition and it is money sitting there. >> i can't speak to what is available in other parts of the department of transportation budget. >> is there any discussion a, maybe making a request to

transfer money into essential services? >> ihink wt th administration has been clear on is that the sequester being a cross the board impact is not an appropriate way to run the, we agree with you. we're complying with the law that has been passed. >> is there no discussion about asking to transfer? >> there has been -- >> any priorities? >> there's been many options floated in the congress and in the public about opportunities to transfer, until something is enacted we have to live with the law that has been passed. >> so you have not asked for any authority to transfer, the money sitting in other accounts? >> we took advantage of the flexibility we have. >> that's not my question. >> as i said, there's many discussions about transfer authority, until something is enacted we don't have any reason to plan for it.

>> ok. you're still not answering the question, obviously. > thank you, mr. chairman. ago flaff -- and a half when we voted on the budget control act that passed the house and the senate, sequestration was a possibility. it was always -- i guess an expectation it would not be a probability. but in january this year, o.m.b. started, at least issuing a thatandums to the agencies it may be a probability. as we're getting closer into march -- when did the f.a.a.

with its limitations and flexibility was allowed by law and policy begin preparing for sequestration? >> we began preparing, really with the start of the fiscal year as we saw it as a possibility. >> october? >> yes. but those efforts really became more urgent after we started the beginning of the calendar year when we were seeing this is a possibility. at this time, as you pointed out, the office management and budget provided guidance to all agencies within the federal government. we began looking at our planning. in february, the secretary and i both spoke a what these impacts will look like. we did talk at that time about a likelihood and the need to furlough our employees and the operational impact that would

have on large facilities. we talked about the need to reduce our contract expenditures and that got us into the conversation about contract tower operations. throughout all of this, our focus has been how can we manage these cuts in such a way that we minimize to the extent possible the impact on these on the largest number of travelers? at the same time we have to achieve the savings between now and the fiscal year. as we have worked through this, what we're attempting to do is mitigate the impacts as best we can. for example, we canceled a training program for a new class of controllers that would be taking place, that is our pipeline for new controllers. we have significantly canceled -- we have significantly slashed other training as well as discretionary travel and

discretionary activities so we can focus on the activities. controllers have been asked to return to their home facilities. that enables us to mitigate the impact of loss of controller hours due to furloughs. we've been taking aggressive actions to mitigate the impact of this but there are impacts. >> one of the -- in the memorandum they said to the agencies they said use any availability flexibility to reduce operational risks and minimize impacts on the agency's core mission and services of the american people. core mission, obviously, is the ir traffic system. what flexibility have you made yourself availability so the minimized?n is not

2%we've transfered resource, accounts into protecting our air traffic and aviation safety core responsibilities. so what suffers, as a result of that is the longer term activities, such as investments and research activities. but that is a tradeoff we think is important to make with the goal of preserving safety and efficiency of the system. >> in an article i read yesterday, you had furloughed air traffic controllers in order to ensure safety but you have controllers who are being paid overtime. o the issue is are we really saving and meeting the objective with the core mission? >> we have dramatically reduced

all scheduled overtime. we are preserving overtime to really deal with an emergency situation. for example, there might be a situation where due to illness or other activities that we don't have the excepted complement of staffing at a facility. that combined with a furlough could lead to a dramatic and significant operational impact. through the use of overtime we're able to mitigate that somewhat. nonetheless, we have 10% fewer hours to schedule in these facilities. >> thank you. i yield back. >> thank you, mr. chairman. thanks for holding this hearing. there are those who say that you are imposing these furloughs,

bringing pain to the american people for the purpose of shifting political blame for the difficulties caused. a little bit like shutting down to yellowstone national park draw down -- draw attention to the problem needlessly so. what do you say about that? >> that is not true. we're focused on maintaining the core responsibilities and doing it to the best extent we can given the constraints of the furlough. recognizing that 70% of our operations budget is people and is an operating agency, we have done everything we can to cut in other areas before we hit the areas that are carried out by people, that is

maintaining the highest levels of aviation safety. the hardest thing we have to do is reduce these hours but in order to hit the target we need to hit, we don't really have any choice. >> all of this is a surprise to the committee. -- to the sub committee, the congress to the world. read about it in the nureps -- newspaper. this sub committee has to find a way to fund government operations but you did not tell us what you plan to do. how come? >> mr. chairman, we've been talking about this since ebb february. we talked about the need to withdraw federal funding and close federal contact towers. at that time, we talked about the need to furlough our employees and we said that would lead to significant delays up to

90 minutes at major hub facilities. as our planning has continued and we've done for granular analysis those discussions have continued now we're at a place to take the actions to achieve the savings. these are all bad choices. i'll be the first to acknowledge that. but in order to comply with the guidelines of the sequester law we have to take these actions. >> i wish you told us earlier so we would have a chance to plan and perhaps found a way around the problem. when you decided to close those 149 contract towers, you said that you're goal was to minimize the disruption to the maximum number of travelers. but when you decided to find savings in labor costs, just now, you imposed 11 days of furloughs across all f.a.a.

employees regardless how critical those employees are to the mission of safe, efficient air traffic control. can you explain the -- it seems to me, that we have some contradictory reasoning when it came to decisions when it came to contract towers versus the f.a.a. air traffic control work force who are furloughed equal no matter how essential they are. can you explain that? >> yes. let me take first the contract towers. our focus on contracts was with the intent of minimizing the amount of furlough days that our employees would need to have to suffer through. in looking at our contracts, we focused on our largest areas where we could achieve contract

savings and the third largest of the contracts is the expenditures in the contract program. we decided to look at the lowest activity facilities. those towers that have fewer than 150,000 annual operations and 10,000 commercial operations. all but one of these towers currently operate for some portion of the day in a non-tower capacity. they have existing rules as to how to operate as a non-tower airfield. in the contract area we felt this was the most efficient way and most effective way to achieve the savings we need to achieve. turning next to the impacts on the f.a.a.'s work force. our effort on the contract side was to bring the furlough number down to 11 to ensure we had to realize no more than one per pay period or 10 10% of the

available hours. as we look at the international airspace system, we did, in fact, consider if we should look at a differential impact between the facilities. we came to the conclusion that the national airspace system is an interconnected network. how aircraft is moved throughout the system does not make any distinct between large hub facilities or a small hub. an airline could move from a large facility to a major hub to a small facility. e crew will travel to a wide facilities. abunqueeg furloughs in call fashion would still -- unequal fashion would still lead to delays because of the impacts of the larger and smaller

facilities. second, the effect of the quester is pay cut for technicians to do this in any other way would cause more disruption in the system. if you look at the long history of pay cuts, every single one as been applied equally to employees at different facilities have to work together and that is difficult when you are treating them inequally. our large portion of the budget is dedicated to payroll and we cannot choose between winners nd losers. >> one final question, mr. chairman. air traffic control is funded in the air traffic organization

$2.2 f.a.a., which has billion in non-payroll activities, including consultants, contracts, travel. why weren't you able to find $387 million in sequester savings in that sizable, non-payroll budget? >> we looked at the non-payroll budget and we have had deductions in that. the largest single consultant contract is a services contract that provides telecommunication infrastructure between all f.a.a. facilities. verything in that category are nonconstruction contracts. the second largest contract is aviation flight service stations. our third largest is our contract tower program.

where we have achieved cost savings are things like training, travel, and within information technology as a result of efficiencies. we could not get to the number that we need to get to without looking at salaries. we imposed a hiring freeze that became a total freeze at the beginning of march. we have canceled contracts with all of our contract employees and our temporary employees have been laid off all with the goal to minimize the impact on on oll expenditures employees. >> thank you, mr. secretary for your presentation. frankly, my colleagues -- it is mystifying to me that some are surprised by the delays or blame

the f.a.a. for congress' failure. i would like to repeat again that on february 11, the department of transportation told congress that given the magnitude of budget cuts to the f.a.a. "it will be impossible to avoid significant employee furloughs requiring a reduction in air travel to a level that the e safely maintained to remaining staff." we're hearing today that some of my colleagues believe that we should exempt the air traffic controllers, technicians and inspectors from furloughs. however, i have not heard anything -- we haven't heard any proposal to do something about the requirements that the f.a.a. reduce $485 million in f.y. 2013

for from operating budget due to sequestration. i'm laughing at that because i found by most of my constituents are upset about what is happening at the airport, not only can they pronounce sequester and they don't know what it means but they know the impacts. if these employees are exempt from the requirements, number one, what impacts would it have on the rest of your work force? what impact would this have on how you implement sequestration for f.y. 2014? now i want to say again, i know the chairman and i, we would like to work together, the budget committee -- the house passed a budget, the senate has passed a budget, they have not gone to conference. if, in fact, they don't go to

conference, chairman rogers and i will proceed, however, if we don't do something specifically to roll back sequestration, what impact would this have in how you implement sequestration in f.y. 2014? we've seen what sequestration is doing right now. could you please respond? >> sure. regarding your first question in terms of classification of employees and if there were to be an effort to exempt certain classes of employees, our pay account in our operations budget represents about 70% of the total. of that, some 40% pays for air traffic controllers. in additional 14% is technicians and supervisors, those are the ople who maintain air wave information, radar to ensure it

works to delev air traffic. ir traffic superers is another 10%. our safety inspectors and supervisors represent about 9% and our field support for air traffic is 7%. what all of this says is the number and percentage of those activities, which are lawyers or overhead activities is a very small percentage of the total. to exempt the safety critical operations and employees within the agency, since they represent -- 84% of our employees are in the field dealing with safety critical function, it does not get us there. we really have to focus on the entire work force. would you like me to respond to your second question? your second question is impacts in 2014 and beyond.

we don't have certainty moving forward until we have a clear understanding of what our appropriation will look for fiscal year 2014 and away will be the ultimate resolution of the sequester. the sequester is a multi-year program. the combination of not knowing what the long-term perspective on that is combined with needing to understand what 2014 looks like leads to a great deal of uncertainty and having certainty is important. >> thank you, mr. chairman. i do hope that we can move forward in regular order, analyze these budgets and not put in place even greater cuts. you have explained very elegantly of the impact that it is not just moving around 2% of the budget. this is serious and i do hope we can move ahead on a serious budget and roll back the

sequester, which is causing such damage not only in this area but other areas of the budget. it is clear that it is up to the congress to do it and we have the authority. thank you, mr. chairman. >> thank you, mr. chairman. what a great day to have your first day of testimony. clarify for me, did the o.m.b. direct the f.a.a. to furlough controllers during sequestration or was this your idea from the get-go? >> we received no direction from the office of management and budget. for us it because mathematical exercise. we had to find $630 million. we focused on the contract activities and whatever savings we could yield there and what was left we had to get out of payroll savings. >> let me ask you about the contract and you have partially touched on this and i appreciate

the explanation but for clarification. we have six control towers, three in my district so we were hit pretty hard, three that lost, you know, support so to speak. we've been able to provide measures to keep some of those open locally. it is my understanding that we ave, what, 251 contract towers and we disfunded 149 of them. that seems disproportionate in what is a 5% across the board cut, granted somewhat substantially increased because it hadn't been set at the beginning of the year. can you explain why so much hit in that particular program. >> the program projects and activities within the f.a.a. are defined by the color on money and then within that by the

lines of business. one p.p.a. is air traffic, that is a combination of air traffic activities and payroll activities. we focused on what we could reduce in the contract area to minimize the impact on employees. as you head me say, the contract tower program represents a large expenditure within that account. we believe it is manageable because they are relatively low activity facilities, fewer than 150,000 operations and 10,000 commercial operations on an annual basis. all of these towers have experience or all of these airports have experience you can with the exception of one in operating in a non-towered capacity. there are well-established rules on how a non-tower airport operates. the tradeoff is every dollar of

savings i'm not able to achieve in contracts that hits the payroll account. the payroll account is where we fund the employees that operate the large facilities. that is the tradeoff we have to look at. as i said, none of these are good choices. they are extremely difficult and disruptive choice but it is the law as it is currently enforced and we have to carry that out. >> have you looked at it by airport by airport? did you go down to that level of detail? did you also take into account when you were making these -- i would agree difficult decision, close to se are military as well and i have a military function? >> sure. we start wt the -- started with the traffic accounts. then we considered what were the impacts of the facilities that

were adjacent to these airport hubs. then we consulted with the department of defense and homeland security. they provided us their priority facilities and every priority they identified we elected to exempt from closure under this framework. >> ok. i've got other questions but i'm not going to have time to pursue them sloy yield back my time and wait for the next round. > i thank the gentleman. >> i'm going to -- i know this line of questioning is going to continue. i'm going to take a chance and ask something else. >> ok. >> so general aviation work fees, i'm not clined to call them fee unless there is an axis between the use and what the money goes for otherwise i call it a tax.

both administration have proposed them in general over the last several years. this administration now has multiple times. i've seen this movie before. you propose it and congress says no, partially because i would assume because the general aviation community or the 1.3 ry employees $-- million and a lot of it is small business. that what we are in my neck of the woods we're small business. it is very important to me. i guess i would like to ask, it is still unclear to me -- the one response i don't think is appropriate is sequestration. you've asked for this money before and have not explained how it is going to be used and we've not given it. why do you think it is a good time to ask again and what is in justify this?

>> sure. the f.a.a.'s budget is supported through a combination of aviation trust fund and general fund resources. in proposing this what the administration is shrimp saying is that we would like to place we simply saying is that would like to propose this through the aviation system. we've had this discussion about reducing federal spending and we believe that we could raise significant resources from the users of the system that would be a significant benefit in dealing with our larger fiscal challenges that we as a country need to deal with. fee in terms of what the would cover, it would reflect the fact that the government provides significant air traffic control services, aviation

services for the benefit of the aviation community. the fee would, for us whether it is -- no matter what kind of flight it is, it costs us the same to operate it within the air traffic control system. the notion is there are services that are provided to the aviation community and what we're looking to do is see if we can recover that through the use of fees. >> in terms of what is paid in and al through ability use certain airports, hangers, purchases of planes, all the taxes that go into that, so you're saying that doesn't come close to playing a role in -- hey, i'm using this facility and i'm paying taxes and so on and so forth associated with that, you don't think that comes -- >> it does not completely cover the cost of operating the aviation system. >> thank you. yield back.

>> thank you. >> thank you, mr. chairman. just a few questions. i was wondering, if you're spending -- the f.a.a. is spending $1 billion a year on the program, which we agree that future d to address demand and international operations is down do you think we should defer programs before implementing furloughs of air traffic controlers? >> there's two dimensions to your question, sir. the first is the program primarily is funded from our facilities and equipment account and our research engineering and development account. we do not have flexibility to transfer between those accounts and the operating account, which is the account that we're seeing the significant impacts

associated with the furlough. the second point i would like to make is these are investments that have significant long-term benefits in making the system operate much more essentially and to handle the excepted growth of traffic we expect without an increase in cost. i think it is penny wise and pound foolish to delay and defer the investments we need to make in the long-term infrastructure that is are going to make the system operate much more efficiently down the road. but given where the program is funded from, from the facilities and equipment and the research and development account, we don't have the flexibility to move those funds to our operations account absent some change in the sequester law. >> thank you. i understand then from what you're saying, you intend to go through with the implementation of the program in a timely man center

>> that is correct. we will see some delays in the effects this year. for example, we have collaborative work groups that involve stakeholders, air traffic controllers, facility managers and airports that have been planning for the deployment of much more optimized and efficient routes for transit and out of airports. this program allows for airlines to use more direct routing, to use professor defense but they all have the same benefit, reduce emission, reduce fuel burn, and for some communities reduce noise. but we don't have -- as we're furloughing the employees, the luxury of assigning air traffic controllers to work in these work groups. we've recalled them to their home facilities so they can work

on moving air traffic as we deal with impacts of the sequester. >> so the g.a.o. indicated that the lack of training in the new procedures has prevented them from being used. you're not doing anything to correct that? >> we have done a lot to correct that but we had to put it on hold. in response to g.a.o. vested a significant amount to ensure we have appropriate controller training and it has resulted in great benefit in these procedures and these investments being used by the aviation industry. we've had to pause that while we deal with the immediate operational challenges to mitigate the impacts associated with furloughing our employees. >> i see that sequestration seems to be the answer of the day. but what bare yus to you foresee in the implementation of the program? >> when we look at the

implementation down the road, significant tech hall transportation and it moves us from air traffic control to air traffic management and that needs to be done collect ily with our stakeholders and work force. it is -- some are have likened it to buying the latest technology and turning it on. i think of it as a significant transformation in how we operate. that mean, we have to work as a shared responsibility to maintain safety and operational efficiency with the users of the aviation system and we're committed to doing that. we also have to invest in the things you talked about, training, operationalizing all of these investments we're making. i think of it this way, we are not investing in technology for technology sake.

we're investing in technology to yield benefits. if we cannot measure and achieve the benefits for the aviation community then we're not doing our job. >> thank you. i see i'm out of time. >> thank you gentleman. mr. price? >> thank you, mr. chairman. good morning. i appreciate you being here and i appreciate the earlier answers, which i won't have you go over again regarding the impact of sequestration and the flexibility your agency does or does not have in dealing with these personnel reductions or furloughs and the reduced service at major airports. things that all of us know to be highly undesirable. yet, we have to say there are very much in line with intent of sequestration, which was to be unacceptable. the intent of sequestration was

to make deep cuts and to be unacceptable and to force everyone to the table to conclude a broader, longer term budget agreement. sequestration does not touch the main driver of the deficit, we know that. it barely touches entitlements, it does not touch tax expenditures, those are the main drives it goes back to discretionary spending and cuts it in ways that is designed to be undesirable. to pretend that it does not hurt much and the fact that the f.a.a. with a flick of the wrist could make this different is disingenuous. we need to get a long term budget agreement, instead of looking at putting out this fire then than is a budget policy. it isn't a budget policy and it is not going to work.

the sooner we can get to a long-rage budget agreement the better off we're going to with. let me turn to aircraft certification, which has not been raised this morning and i want to raise it. you're aware that products it puts american aviation manufacturers at a competitive disadvantage. the number of new technologies requiring certification is expected to increase. in recognition of this, congress included language to identify some needed reforms in the process and to focus resources more effectively on a critical activities. well beginning to address the

backlog of requests. i am wondering if you could give us an update on the implementation of these reforms. what are some of the specifics for increasing time limits? what kind of challenges are you encountering? >> the certification process is something that is important for the reason you have talked about. do products cannot come into the market without having -- new products cannot come into the market without having cert. creatorvery significant of jobs in the country. under -- we have focused very much on how we can take better advantage of our certification resources. the recognize that fundamentally preserving safety is about managing risk. managing risk involves developing data. where are we likely to have problems and how do we focus our inspection and oversight responsibility on the areas that

might have the greatest potential for problems? we have been passed by congress and we have moved the line 9 designations of trusted agents in organizations throughout the aviation industry so that we can share the responsibility for bringing new products to market. we never give up our responsibilities to certify and insurer that new products are safe before they come to market. it is an evolution that needs to take place over time. as the work -- what we have seen is a real pickup in that the pace of requests for new certification. that reflects positive economic trends within the industry. the flip side is that the aviation certification workforce is hit by the same impacts as everybody else right now.

that does cause us to focus on expense and -- at the of certification activities for the immediate term. the fiscal 14 requests is about level. does seem to underscore your commitment to providing the funding sg necessary. what about the funding and staffing levels? how was that related to the situation you described? >> the staffing is something -- we have staffing model selected the full scope, our need for resources and aviation safety. that has proven to be a complex process. but we are trying to do is strike the appropriate balance between having a responsible budget request, recognizing the tight fiscal conditions, and

providing resources that will support our continued growth and evolution. thank you, mr. chairman. to thespect notifications about the furloughs and what is happening with air-traffic control, a lot of the american public felt blindsided. , theirlines, the unions flying public, compared to the way the contract tower issue was handled, i got the sense that otherd consulted with interesting partners and stakeholders. why were they given that but it seems all the -- the airlines,

the unions, the flying public -- feel completely blindsided? >> we talked about the contract tower decision back in february, we did say that we expected impact on major facilities. it would be -- as a result, there would be furloughs of employees. it is fair to say the thing that captured the media attention and that was something that became a matter of intense public focus was the contract towers and its longer-term impacts, which we said would not emerge until later. tonkly, despite our efforts talk about them, they were things that did not sink in with people. and we began that process, what we did was we

asked each of our air traffic facilities to build schedules based on 10% fewer available hours per each pay period per employee. those form the basis for us to use the tools that we use every day to model our abilities to handle aircraft within the air traffic system. those operational details are what we provided last week to be users of the system. we are continuing to monitor its and have been monitoring it since sunday as we have worked through to do everything that we can to mitigate the impacts of these we have been talking about this since february. >> there was an editorial today in the wall street journal. i realize it is an opinion. there was a paragraph -- pondered this logic.

-- pondered this logic. it limits the agency toha spent in 2010. foras the legal discussion air traffic controllers. a 4% faa spending cut that translates into lays the 40% flight delays. savingsed to find the and half of the year. that one furlough day gets us about $220 million of the total savings. these are not great choices. these are difficult impacts. we have focused on achieving savings in contracts. achieving savings and non-pay

expenses with the idea of minimizing the impact on employees. we had a gap we needed to close and we had no choice. >> with respect to the contract power program, the administration's decision to close the contract towers has garnered a lot of attention. the capital city airports in my district will be impacted by the contract tower closures. the inspector general and saying the contract tower program is a cost-effective method of providing air-traffic control. what analysis was conducted in parallel to analyze the impact of these closures will have on operations and safety of neighboring airports? >> when we looked at this, we focused on what is the activity level of each of these facilities? these represent the lower

activity facilities throughout the system. we did consider the facts on adjacent hub airports. on whether they wanted us to exempt certain facilities. of the operations of these airports, we are not doing anything that is not safe. an airport to operate -- operates differently. the difference is it operate less efficiently. in order to maintain the highest levels of safety. we did analyze each of these airports and in looking at each of these airports, one thing that was apparent was that all but one of them operate for some portion of the date non-towered. >> thank you. you mentioned earlier the

contract towers come at you contacted or bad guidance from homeland security -- the contract towers, at you contacted or got guidance from homeland security or the department of defense. >> it was those two agencies, we consulted with airports and determine the to fate serve an important function. >> did you get any direction from the department or from the white house as to how to inflict sequesters? >> we shared what we -- what our analysis showed in respect to the operations of our facility, but we did not receive any specific direction. >> from the white house? >> no.

>> he was asking about engaging of the stakeholders. you engage thed airlines as to what your plans for? inwe talked starting february that we expected to sequester -- it would result in the closure of contract towers and we identified a level at that point and we talked about the process. we said we would be furloughing the employees and that would have significant impacts at major hub facilities. then we went to the process of the contract tower side, the consultations i referenced. side, we wentffic to the scheduling process. >> when did you do that? >> starting in february.

and then into march. we first had to make a determination of what were the minimum number of furlough days. that is where we made the decision to plan for 1 per pay period it. that was handed out to all of our facilities and they did their analysis in the course of the month of march. they needed to build schedules that would reflect this reduction in hours. that was shared in detail with the airline industry last week. >> why did take -- if you wanted them to adjust their schedules, to me, you keep talking about february 11, why couldn't assure that earlier? -- couldn't you share that earlier? >> we did share with them what we expected the broad systemic impacts to be.

we did not have the information until it had been built by the facilities and we understood how it would affect particular rates at each air traffic facility. we shared that after we had done the appropriate work on it to make sure that we were confident this represented the expected outcome as a result of these activities. tellingthough you are us that we all knew about everything february 11, he did not tell anybody at the airline's to change their schedules or to adjust to it until last week. they got no details until last week? >> we tell the airlines they should expect impacts as a result of reduction in available hours for air traffic facilities starting in february. we continue to make that case. what we shared last week were specific operational details. >> they cannot do anything until last week. >> i would not agree with that.

>> if they do not know what that the plan?in >> the same way that we do. plan for various scenarios. any specific as to what you are going to do? >> we were going to furlough employees one day per pay period for a long time. that is a 10% reduction in available controller hours. >> moving on, i guess, last year, he spent $149 million in travel. what have you done to reduce steps -- to reduce travel and how much are you going to save? 49 --t year, we spent $149. we have reduced that to $125

million. that is limited to operational travel. a safety inspector needing to get to a particular in -- facility. >> my time has expired. >> now that you have made that determination about the furloughing any hours, what are you doing to communicate with the airline industry so they can continue to plan and avoid the problems they have had the last few days? >> we had a twice daily -- every two-hour operations call with the operation teams at the airlines. that takes place at our command center. what we share with them is what

we are finding in terms of specific facility impacts as they develop over the course of the day. you have to overlay on top of everything the weather. that will also affect how we facility is going to operate. thatve -- we want to keep level of communication. we need to understand the network impacts of how all of these combinations take place. is where allenter of that comes together and these conversations take place every other hour. >> you had to extend the closing of the towers until june. that was because of the lawsuit.

as i understand your testimony this morning, basically that determination was made because to ensure in order safety with the air traffic that wasrs who decided the number you had to eliminate. not know want -- we do what the decision is going to be. was -- your decision have to reopen them. >> i cannot comment on how the litigation will come out. >> it is a hypothetical. >> for every dollar i am unable to save through contract tower savings, i have to find savings someplace else. other in -- either in contracts or payroll expenses.

is it possible to look at the contracts you have that you decided not to deal with in this round and maybe the problems we are having for the delays that you may be able to look that and say, i will go back to salaries and see if i can bring back more air traffic controllers and continue to the other contracts. >> this is something we are evaluating on a regular basis we have established targets for

savings for particular contracts. i've talked about some of the areas where we focused. contract tabriz's one, but we have also focused on training contract -- contract towers are one, but we also focused on training contracts. as well as maintaining inventory. we cannot cannibalize contracts they would not be able to carry out their jobs because they do not have the equipment, the tools they need to do their jobs. that is something we will monitor and we will continue to monitor very carefully as we go through these weeks and months. if i am able to achieve higher levels of savings in contracts, yes, we can certainly consider whether we have the ability to relax the furlough. that is something we will

continue to monitor. winded the furlough policy go into effect? >> -- when did the furlough policy go into effect? >> april 21. the furlough itself, we had to notify employees -- there were two notifications starting about five weeks ahead of that or we notified them of the possibility of furlough and then the intent that we were going to carry it out. april when they got the detail order? >> they got the details word -- i will get back to you with an exact date. we did provide an official notification. >> nevertheless, it was a week

ago, 10 days ago? sayi hear you correctly that he first gave the airlines notice of how this thing was born to be applied last wednesday? >> -- was gone to be applied last wednesday? >> we provided operational -- >> i am not worried about general impact. i want you to tell us when you told them the details. which airports and what times they would have trouble. >> tuesday. days before it went into effect. >> that is correct. ,> we have hundreds of airports millions ofrlines,

americans want to make their plans for travel. why did you wait until that m the detailsthes impact of sequester? why wait this long? he was had this under consideration for several months. -- you have had this under consideration for several months. find that shocking. a shocking lapse of management. would you comment on that? >> we build a detailed schedules within each of these facilities and we shared this information with the airlines as we had it. >> that was a few hours before it went into effect? you have been doing this for months.

abouthave been talking general impacts. >> general impacts, they knew the general impacts. >> we've been talking bout reduction in available controller hours for months. >> you did not tell them which airports on which airlines. >> they should expect significant impacts. >> everyone knew that. that is what sequester is all about. it is important for them to plan their schedules and their hours and their management personnel. they needed to now details, impact on them as early as could be had. you had months to do that. i find that shocking. >> i do not think we refused. what we wanted to do was conduct a proper schedule and analysis and provide them the best information we could. >> how did you inform them?

>> in a meeting that we had at the command center. by ourrations team led air traffic organization. >> who did you informed? >> how did you inform them? >> in a meeting. we have had a number of meetings with the aviation industry about contract towers and talking about the impacts associated -- >> you got all the airlines in the room? >> we get together with them every day. >> there are hundreds of airports. >> we certainly -- not every airport is affected by the impacts of the furloughs. we certainly identified the major impacted airports. >> you did this with a conference call. >> with a meeting. >> did you ask them for your input? >> we are continuing to have

this conversation. this is what our analysis showed and we will continue that discussion every day. >> did you take into account the complaints, the information they gave to you? >> absolutely. >> were they shocked when you told them at the last minutes the impact on their airport? >> you would need to talk with them about their reaction. they expressed great concern. were sometioned there long-term projects that the faa has invested in and you do not want to take much from those products -- projects? can you tell us what those projects are? investment in our next generation air transportation system. >> in light of the current situation, to those projects have priority of the operation -- over the operation of the

commercial aerospace? >> there are two pieces to the cancer. i did not have the flexibility to transfer it -- there are two pieces to that answer. i do not have the flexibility to transfer its. these projects will have been poor and benefits for efficiency long term -- will have important benefits for efficiency long term. >> have you asked the congress for those changes? >> no. >> that is what i thought. >> thank you, mr. chairman. >> let me briefly revisit this matter of the contract tower closures. in february, you anticipated the closures at 149 contract hours. in march, you announce that he would delay the closures of those towers until gen. you have stretched out that timetable. talked some about

the kind of consultation that took place at various levels. let me ask you about the consultation that takes place with the local communities. airport, at the airport authorities. some communities, maybe 50 or so, are trying to come up with their own resources to keep towers open. what steps would need to happen to make that a reality? how can you facilitate that transition? let's see it break there are youous questions -- can shed some light on that? >> it is about 50 that have requested the ability to locally fund the federal contract tower that is currently existing within their particular community. it is relatively straight

forward. a change in who is paying for the cause. we have offered that they could simply cover the cost of the faa contract or we have put them in contact with the contractor directly in order to negotiate their own agreement to carry out these contract tower services. dating to june 15 enables more time for those arrangements to be worked out. as it -- we adopted a liberal approach to the equipment. if the community wants to take over the use of the equipment, we will continue to make it available. >> thank you. let me return to another item. the next generation performance based navigation procedures. you have spent a lot of

resources to develop these procedures to streamline the arrivals and departures. the industry supports the implementation of performance based navigation procedures. in reduce the number of fuel consumed. a couple of questions. there have been some studies that have indicated that one gap in this program may be a lack of controller training it has prevented them from being useful. i wonder what you are doing to correct this. what impact has sequestration had on the development of these performance based procedures? the desire to protect this program. you talk about the fact that you

do not have a limited flexibility to transfer funds back and forth. >> that is something we concurred with and we made a significant area of focus. controller training is essential, not just training, but consultation in a collaborative fashion to understand how a new piece of technology is going to work. what -- one of the benefits -- all of that is extremely important to yield benefits. that has been an extremely high priority for us. as we have focused on deployment of technology, but also the focus on procedures.

is a near-term impact of our scheduling problem this year. in order to focus on preserving the activities of the operation, we have called that controllers to their home facilities. that is affecting their ability to work in the collaborative work groups as the works crews sequestered. for 2014dent's budget assumes the sequester has been resolved and it does provide resources to enable us to restart those collaborative activities and to ensure that we have the appropriate levels of involvement and training. >> thank you, mr. chairman. i want to pick up where you left off. there was a line of questioning i was interested in pursuing. sequester will end, what do you

base that on? there alternative revenue that assumption? >> the entire budget is based on the premise that a sequester is resolved and we simply conform to that. the president put forward a plan as to how all be resolved? >> he has put forward a plan that represents an appropriate balance -- >> not exactly my question. does he tell us how he would replace the cuts? >> what the president is suggesting is that there needs to be an appropriate balance of expenditures and revenues. >> are you making alternative plans if this assumption -- it seems to me that is what got us into this problem. everybody assumes the sequester

would not occur. probably thewas consensus in congress as well. everybody assumed it would not happen. it seems a pretty dangerous thing to assume that it will all go away. the 2014 budget resolved and the issue of the sequester resolved, that does create for us a great deal of uncertainty in our ability to plan going forward. >> are you thinking about possible scenarios if you have to live with the sequestered? >> yes. >> could you tell us what some of the things would be? within theerated limits of the law, obviously. if you could change -- what ways would you change the law today if you knew you had to operate? what additional flexibility is my you like that under the current law you do not have? this mean for the

national airspace system? the operation of the aviation system? we have put forward a plan that would suggest lower activity facilities are an area where we would want to perhaps focus on withdrawn federal resources. the rationale behind that is these facilities can continue to operate safely and they have less of an impact on the total operation of the national airspace system. that is not something that everyone agrees with. that represents what a path forward could be. >> what about the grant program? that has been one of the sheltered areas. is that something you recommend changing? >> we have put forward a proposal to change the structure of the program. for large airports to enable an increase the facility charge to $8.4.50

this is widely supported by a large hub airports. that would free up -- it would enable us to have a smaller program and that program could be focused on the smaller airports. >> if we do that, assuming the sequester would go way, i am suggesting it may not go away. given that, would there be additional -- i do not know what it would be, but do you have other ideas? it is a long way from certain that the sequester will disappear. >> there are two dimensions to that. the wille of what is that we all have for where the federal interest is in aviation. is it in all facilities providing a basic level of services? should be focused on the larger facilities? related to that is the

appropriate balance between short-term and near term investments. we should not sacrifice the long term because that is how we get maximum efficiency and savings in the future. there is the balance between operations and infrastructure. the question you're asking is when you to relive that balance. area ofan appropriate consideration. that is something that we need to figure out going forward. as a word to the wise, i am not singling out, i think this is a problem we face in every single department, we assume the sequester was not going to happen and it did. i would be very careful in assuming that it will all go away. thank you. thank you, mr. chairman.

good morning, sir. the president's budget allows airports to raise their passenger facility charges of 2 $8. in exchange for their willingness to spread some of those dollars to smaller airports as well to improve facilities. given everything we understand tight money and sequestration, isn't this the only way a lot of these improvements are going to take place? >> the proposal would reduce the basic program, but by allowing -- everyone that has -- to raise it to $8, it does provide them significant offsetting benefits and they're able to raise local resources to find significant improvements. that is something that is supported for the most part by a large airports.

that enables us to focus the aip program on those areas that they do not have the base of traffic they would be able to generate sufficient revenue. >> not just the large hubs, but all the airports should support allowing these airports should -- to raise the fees? >> i cannot speak for all the airports, but in general, they're like having a passenger facility charge. them, that gives them a greater degree of certainty and the ability to plan for long- term infrastructure programs. can you talk about policy decision -- i believe the expression it was going to be like a spread so everyone feels the pain when you have these

furloughs. the policy decision to do this across the board versus taking less strain off a large hubs. the rationale would be the sheer volume in how many people are connecting to these large hubs. if you want to minimize the impact, we would reduce the furloughs. >> we did look at that option and the conclusion we reached is the national airspace system is very much an interconnected network. crews and passengers move through the entire system. it is a combination of both large hubs and smaller facilities. also factors then. -- in.

things they could not possibly completely understand or mitigate. whatther thing is that happened at a particular facility is affected by a number of factors. clearly, our availability to except aircraft at the facility is one factor. other factors relate to how an airline chooses to build its schedule, how it chooses to and weits traffic concluded that we could not be in the business of picking winners and missouri's between particular hubs, a particular geographic locations -- picking winners and losers between particular hubs, particular geographic locations. the most equitable way to deal with these impacts was to the universal application of the furloughs. >> there is a calculus here that

you described beyond my pay grade. with all due respect, i have a hard time believing that atlanta at, chicago, and several other hubs impact on the entire connectivity,ith it is a lot bigger, no matter how you slice this, then several of these very small regional airports. of theme cite examples last couple of days. one of the things -- we have seen the differential impact on different days. based on what we are seeing in terms of actual traffic. for example, over the last two days, there of not been significant impacts in chicago. we are seeing that today.

what we have seen in terms of impacts in atlanta at have not been as bad as what we would have modeled. busy summert in the travel season yet to be there. >> fair enough. we're trying to anticipate, what are things going to look like as we get into the summer travel season? >> you do not want to pick winners and losers, but you might want to pick volume versus smaller volume. thank you. following up on my colleague's question, you mentioned before that there were some airports that are not impacted by this. can you tell me which ones those were? >> it is a number of airports. the washington airports, they have a lot of available capacity. they are able to manage. the impacts are -- we would

project would be less than we would see in some other areas of the country. the major impacts that we see are in places like all three new york airports. it is a complex air space, these are large facilities. there are complicated to manage it. complicated to staff. that is one example. mentioned atlanta, atlantic is one where the impact could be significant or they could be manageable. that is a function of the design of the airport. they have five parallel runways. they have a lot of available capacity. it is the relationship between the facilities, but also the design of the airfield and the schedules. we determined the network impacts on the entire

system were such that if we were to do something -- if we were to do anything different, there would still be significant disruptions and it would put us in a position of picking winners and losers. >> when was the first time you heard the term sequestration? >> it was the whole discussion that took place with the original passage of the budget control act. >> did you prepare an alternative budget? >> alternative? >> one with the money that you thought you were going to get? towe started focusing on plan to what what a cut look like against our budget? >> ok. could you tell us what you cut? >> we did reductions in all of

our non-pay activities along the lines of what i talked about. training, travel. >> $125 million? >> 149. we also reduced our i.t. kit -- we also reduced our i.t. expenditures. on.ave put a hiring freeze we got rid of contracts that were personal services contracts, letting go temporary employees. we have greatly reduced our expenditures in spare parts and equipment. everything associated with that. in terms of the overhead functions, things like general counsel, finance, i think a disproportionate reduction in those areas with the goal of preserving the operating of the

agency. >> those preparations took place over months? >> ok. >> who do you represent to you feel? the american public, the airline industry? who do you view as being your end client? >> the american public. why would you think that the -- you told them what you're going to do. why wouldn't you have engaged them earlier on? >> we have been working as diligently as we can to deal with what is an unmanageable situation. none of these are great choices. what we want to do was to as they as precisely

could impacts and manage them as best they possibly could as information became available, we did share it. why we are allow of a sudden getting to this point and it seems in the last week, it has all come into play when you have so many big stakeholders that should have all been at the table. >> i have been talking about it since the start of the year. >> you just told the people about it last week. >> we have talked about what they should expect in the wake of in packs -- in the way of them tax -- impacts. >> last tuesday. you never felt you should engage them before last tuesday? >> we engaged with them on a daily basis. and operating the national

airspace system. what we shared with them was specific schedules we had built based on the impact of the furlough. >> the tenants time has expired. -- the gentleman's time has expired. we will have a quick last round. i know you were scheduled for about noon to depart. a couple of questions i have. a lot being made about the fact that domestic flights are down 27% from 2000 levels. the budget has grown 109% since 1996. can you explain the math on this and why the operation budgets are up that much? of the system has changed quite dramatically. the biggest increase has been

consistent with the economy as whole. we are a people driven organization. we have made significant investments in new technology since that time. that is with the long-term goal of transforming from a radar based system to a satellite based navigation system. we have also introduced significant new procedures that are intended to yield benefits for the traveling public for reduced fuel and greater efficiency in the system. we are in a period of time or as we introduce the new technologies, we need to continue to maintain the old technologies. long-term, there will be significant savings. >> when we went to the process of doing the continuing set up a listmb of hundreds of analysis -- anomalies to address individual

funding problems and mandatory issues. you had to pay raises to some people so we had to fix this or we could not continue. was there an anomaly request to fix the furlough problem? >> i cannot comment what they might have sent, but we were discussing with then the department of transportation but this was going to be. >> you never talked to omb about an anomaly to fix the problem? >> we shared with them what we expected the impacts to be. we had discussions about how we were going to manage and what we expected the impact to be. >> you did not request that they bring in an anomaly on their list of hundreds of changes that they needed to do the cr. with a listfamiliar of 100 changes.

>> they have a list of things they needed to address certain problems. tell them yout had a problem? >> it was well known that we had a problem. >> they did not respond to your request. >> i cannot comment on those discussions. >> you do not know if there was a quest -- request. >> i cannot comment on how priorities were established. >> you are not aware of them having any request to fix this? >> i am not aware of that. >> they insisted on a sequestered and when you have this problem that is very disruptive, they made no effort to fix it. no request. >> as i said, i am not familiar

with what might have been sent out on behalf of the government as a whole. i am glen to quite a little bit early. -- i am going to quit a little bit early. can you say the sequester will have no effect on safety? >> yes. the impact will be on the efficiency. we will not do anything to compromise safety. >> i am going to follow my and this budget is based on sequestration being 2014.d by i have to tell you my 2013, we hads that sequestration. i think we will be at least part

of the fiscal year in sequestration. i hope regular order comes about. sequestration will continue into 2014 and we should be prepared for it. >> no question. a lot of frustration, you are

keenly aware of that. i would hope that is we go through this process for next year, we keep open communication mind because we have some tough decisions to make and there is a lot of concerns that we all have about going forward, and this is on safety. -- an emphasis on safety. we want to continue that relationship. you are in a difficult i wish youobviously, had come to us to let us know what we could do to fix the problem. we have heard nothing before and that is the frustration that is shared by the chairman and a lot of us here. these are not insurmountable problems if they cooperate and work together. thank you very much for your testimony today.

the hearing is adjourned. >> coming up next, an interview with former president george w. bush. there is a dedication ceremony for his presidential library. a hearing on increasing the safety of freight transportation. later, oversight at the federal aviation administration. acting irs commissioner testifies thursday at a house ways and means committee oversight hearing examining operations at the internal revenue service. we will have live certification -- live coverage on c-span 3. civilians testified wednesday -- kathleen sibelius' testified wednesday on the 2014 budget request for her department. here is an exchange on help prevention programs. he can see all the hearing any

time and are website -- you can see all the hearing any time at our website. upset. beyond the a demonstration helped pay for the affordable care act in fiscal year 2013 by reading the public health and prevention fund. maybe you do not know how angry i am about this. effort to getear more focused on prevention and wellness. opportunityided the to change. i have been saying for over 20 years that we do not have a health care system in america. we have a sick care system. we have great surgeons and great doctors. once you are sick, you did great care in america. where we have failed to

miserably is keeping people healthy. preventing disease and illness in the first place. showed the payback on prevention is incredibly high. why health wonder care is going for the roof. when the affordable care act was sawg developed, some of us it as a way to help pay the bills, how do we pay the bills more efficiently and more effectively? how do we reduce chronic diseases through prevention and wellness programs? change, to begin this change, to think about having a true health care system in america we

support people from the earliest times in life in every aspect, not just in a clinical setting. that is important, but in our workplaces, schools, communities. so we have a regime of wellness and prevention. the prevention fund is working, children are being immunized, people are quitting smoking, communities are fighting chronic diseases. more people are being screened for hepatitis c. these efforts can improve people's health. the prevention fund to figure out how we pay the bills just perpetuates are unique costly american sick care system. thisorry to say that

administration just does not seem to get it. not get it. lastas a $5 billion raid year on prevention fund. they sure, it is another of $332 million raid. secretary, i read your statement last night. great statement as far as it goes. it does not even mention prevention. and in mental health infectious disease surveillance program. fund like the prevention and what we did in prevention is an afterthought maybe? it is not in your statement. >> thursday, former president george of -- george bush doesn't -- dedicates his library and

museum. it was built on the campus of southern methodist university in dallas, texas. design ands the construction of the library board decisions made during their eight years in the white his is half an hour. >> mr. president, mrs. bush, thank you for being with us. let's talk about where we're at and the role of the institute and the museum. >> we're on the campus of s.m.u. in the heart of dallas, texas, which is our home. e museum is meant to kind of help a visitor relive the eight years of the 21st century. the museum explains the decision-making process that i went through as president. we hope the museum inspires

people to serve. if somebody comes and when they leave we hope they want to serve their community or country in some way. the institute is a form for defend and elf to support principles that we think are important. the principle of freedom, yielding peace or the notion that free enterprise is the best way to allocate resources and give people a chance to rise from poverty. or the notion that an educated society is necessary for a free society or a concept of who is given word -- in other words, i'm out of politics but i'm not out of policy. our institute is a way to deliver concrete results and making make the world a better place. >> let's pick up on that and talk about the programs that you

began in the white house. >> sure. >> has that carried on into the institute itself? >> the concept is that all human life is precious. in the museum, it explains the decision to spend taxpayer money the continent of africa. many women are safe from h.i.v. but dying from cervical cancer. initiative rtinging called pink ribbon/red ribbon and this is an extension of the program. >> how is this different from any other presidential library, any other institute, any other think tank? >> there's a lot of ways it is the same. the museum with the artifacts and the papers that belong to the national government that the

national archives will run and own. but it is different in the sense that for one thing, we have the institute as part of it. the policy part of it so the policies that are discussed in the museum and in those papers in the archives are carried forward with our institute. the separate foundation part is separate from the national archives really. it is like the other presidential libraries in some ways but the institute makes it different. also, the institute gives george and me a way to work for the rest of our lives really on the policies that are most important to us when he was president. >> i would like to say this, i think our institute will be different rather than just turn out paper, we're putting programs in place that will deliver result, where it is pink

pink ribbon/red ribbon. we have programs that people support and here are the results many women involved in the political process of egypt. we wrote a book about how to grow the private sector. we have specific programs that are yielding results. or e always being a resulted- oriented guy. >> it is also research based and that is part of the institute and that is the fellows that we have doing the research that shows what we're working on, the projects and programs that we're doing are effective and how many lives are affected by pink

ribbon/red ribbon. how many women aring with treated forer is cri callie shons. >> how do you measure those results? >> we have people on our staff to count the number of women that have gone to the clinics that have sprung up as and result of the pink ribbon/red ribbon. >> if you could put it into a mission statement how would you phrase it? >> freedom. it is the education initiative, freedom from ignoreance, freedom from disease, obviously, the economic initiative is a free market initiative and how that ends up being more equitable and more protective for our country. flime, human freedom itself. we have a lot of programs that are supporting disnance around the world. -- dissonace around the world.

we have women learning leadership skills, learning how o negotiation -- negligent without authority. >> in terms of designing and developing this library then i will come to you how it came together, how did you start the process? >> i was active in the actual design part of the building itself and of the museum. before we left the white house, i invited all the library districters from the 12 -- ours in is 13th library from camp david. i invited them to do a historic photography collection for camp david, the presidents with the heads of state that each of them hosted over the years at camp david. none of the directors of the presidential libraries have ever been to camp david.

they all came and we gave them a tour and they got to see where their president from their library had stayed and where he hosted heads of state. in i asked them to lunch the lodge where the meals are. i just asked them to tell me about building a library. they were very forthcoming. they told me what will they wished had been done when their library was built, every one of them said they needed more storage, for instance. they taught me how to work with others and how important the relationship is between the foundation that supports each presidential library and the national archives who actually own the papers along with them, of course the people of the united states. that was very help to feel start out with their advice first before we even started. architectural

competition, we picked robert stern from new york, bob stern is the deen of yale so there is something great about having the library on my campus, from we're i went to college and have the architect to be from george's university. then we got to work. we picked a landscape architect at the same time. we determined then we would do this public park around the library and do it all in native texas planting, native texas prairie, wild flowers, all the things we worked to store on our own property in crawford. we've been involved in all of this, it has been really fun. the architect firm is fun to work with, smart.

we just got our certification and it is the highest lead designation there is for a building. >> by the way, that is why the building is so magnificent that she was the chairman of the building committee. >> when in your white house years did you begin thinking a this? >> i try not to think about it i or to the 2004 election, was optimistic i would not have to make a decision but maybe with 18 months to go. we talked to the secretary of commerce, who was a dear friend and now lives in midland. he put together a group that to begin the search process. rica whosador to costa is our neighbor in dallas and

they started looking at difference options. i was slightly preoccupied with the presidency but i trusted these men. they came to me -- i can't remember exactly when but it was prior for us leaving for dallas and they said here's where your options. laura and i looked at them and chose s.m.u. >> why? >> s.m.u. is in dallas. we like dallas. it is easy to get to. secondly, they made it clear we would hope to put our facility here on campus. we have a nice piece of land in the heart of dallas, texas. thirdly, s.m.u. is a great university. it also helped that laura went there. we're very impressed of the leadership of southern methodist d we felt, and rightly sew there is synergy with a good

university. there were other universities that appealed to us, of course, but s.m.u. was the final winner. it also helped that the alumni base is active and supportive of the bush center. they view this as a win for southern methodist and i think it will be for the long term. so we're content with the selection. it has worked out, better than we hoped. >> yet, you have a unique perspective having your dad build another presidential library here in texas. >> that's right. >> what did you take away as what worked and whatlumni base y they are going to help you they do. the people who went herein the people who support this university have been very supportive of our efforts . his is great. it is a wonderful building and

great school and public policy. be a school.nt we wanted to be a do tk. laura and i decided to go into a different direction apart from the museum and for which the programs would emerge. texas a&m is a great university and it has been great for dad. but it is a little difficult to get to. we'll make it easier to attract scholars and visitors and guests that will enhance the bush center. >> mrs. bush, was that one of the lessons from your meeting in camp david in 2008 to go a larger city? >> not really. there were other factors. we lived here before. this is where we lived when

george was elected governor. we're very fond of the texas rangers baseball team. we wanted to come back to dallas where we lived before. we're the only very urban presidential library on a subway stop. there's a subway stop right here at mockingbird station. access is important, if you want people to use our library, any library, public oroolibrary or you need to be where people can get to it easily. just ess was important, basic fondness for me to be on my campus where i went to school. i would never have guessed when i graduated from s.m.u. to come back and spend the rest of my life here. i'm thrilled.

many of my friends from s.m.u. will be here for the opening of the library. my friends since i was in college. >> how many thought you would mar ray president when you were at s.m. snufment >> how many of your friends thought you would be president? >> none. not one. >> when you look back at the material, millions of pages, you're the first e-mail president. what will future historians learn when they come here? >> they will learn that i did not e-mail anybody when i was president. i was fearful of congressional intrusion into my e-mails. it is kind of sad, really because a lot of history is lost when presidents are nervous about their personal papers being subpoenaed. they will learn that i had a great administration.

say great- great peoplemy i ad. people that were there to serve -- not me or the republican party but to serve the country. i'm looking forward to reading so of the e-mails myself. no telling what is in them. we went through -- i think had aians will see that i deliberate process on making tough decisions. sadly, i was a war-time president. i took my duties as commander in chief, particularly the duties on those who wore the uniform very seriously. once committed to combat, i supported them to x. you know, there's -- one of the things i'm comfortable in saying is it's going to take a while for any current administration to be properly analyzed.

in other words, history has a long reach to it. i just read a book on washington, i said they are still writing about washington so we're not going to have to worry about what they are writing about me for a long time. future historians who can take an objective look at my administration or any other president's administration can have a lot of material at his or her disposal to make an analysis. it is amazing how good it is, there are 25,000 boxes of paper. i don't know how many e-mails, maybe a billion. i don't know how they are going to work it out. i don't. >> this is new for archives to sort and sto e-mails compared to papers. up until just recently, it was just papers that came to every

archives but now it is very different. they, themselves are working to figure out the best ways to, you know, to sort and store e-mails. >> there's been a lot of attention and a new documentary on your vice president chaney. what is your relationship like? >> it has been cordial rving but he lives in washington and we live in dallas. one sad thing about leaving washington is you miss your pals. a lot of people were there for all eight years. i became good friends with them like vice president cheney. i don't see him much. i don't see many of the people i worked with much and it is kind of sad. it is great to be in texas, however. >> they will be here for the opening and that will be fun. a great reunion with lots of

people who worked in the administration. >> i don't miss washington. it was unbelievable exciting to be up there for eight years. but i think i told you before, when your time is up you exit the stage and let the next man, in this case, give it his best shot. so while we have friends in washington, i'm not that friendly to washington. >> when you were in the white house, did you get a lot of calls from former presidents? did they give you advice? >> not really. >> just one. >> he did not give much advice because my dad had been president and he knows the role of an advisor. an advisor is someone who studies an issue and understands the nuances of issues and understands the internal debate out issues. if i would have said give me

advise his first comment would be have been send your advisors down. my dad said son, i love you. in the press of th white house, there is nothing more soothing than to have someone you love say hang in there. i talked to president clinton some. i have a great relationship with bill. he would -- i would calm him to check in on occasion to see how he's doing. t he, too, understood that advice requires briefings. so there's not that -- look, in the midst of the action you rely upon people whose judgment you have seen, whose advice you have listened to throughout the presidency. that's what i did. i'm confident that the current

president is doing the same thing. >> if your brother jeb decides to run, what advise would you give him? >> my first advice is run. he's probably not going to take it. he may decide to run but that's not because i'm saying he ought to run. my advice is surround yourself with good people and create an environment so they don't have to feel like they have to pander to you but t canive you their frank opinions. i tell people a key component of a leader is someone who understands what he doesn't know -- and ds people in places them on a team. it probably blinds people when they say i don't know everything, but you don't. jeb knows thousand run an administration, he was governor of florida.

>> what did the presidency teach you about yourself? >> that's a good question. ne thing it -- in many ways it magnifies what happens in life and that is you have to deal with the unexpected, in other words you have to deal with things you don't want to deal with. in my case, there were things i did not want to deal with. i did not expect or hope to deal with. 9/11 was the classic case but when you're president you have to deal with it and you deal with it with a lot of people watching. i learned to take advice from others and deal with the unexpected. it was a challenging experience and one that was incredibly fulfilling. >> mrs. bush, we've being embarking on a series looking at first ladies. from your advantage point, looking at the presidency from the eyes of a wife, what did you

take away from those eight years? >> you learn so much about yourself really. in the role and living there and one things i learned about george is how tough he is. i knew he was. i knew he had the emotional oughness and stamina, physical stamina to run even a campaign, which is demanding as well. but then to live there with those sorts of pressures and the weeks and months after september 11 after such a horrifying attack on our country, i saw how tough he is mentally and physically. i found that about myself too. i wouldn't have known i would have had that strength the to deal with that emotional and physical stress that you have in those kinds of situations. .oth of us found that out

you never know until you're tested. if i was doing a series on the first ladies, i would probe that question, could the first lady handle the pressure? if the answer was no, then it is going be a horrible presidency. laura was pretty calming and in andmidst of finger pointing yelling. she is a great first lady. no had an situation that adams. had except john we knew how difficult it is when you're criticized and somebody you love is criticized but we know that is a part of it and expect that and take it for what it is. it is part of political life in

the united states. really, one of our great freedoms that we can criticize our lead in every way we want to. i think because we saw george's parents, somebody -- the president and first lady that we loved so much in those roles. barbara bush is a wonderful example to me as a first lady. she also has that inner strength, i think to be able to live there and live there under a lot of pressure and live there when the man you love the most is criticized and go on about your business. >> 9/11 you talked about being a difficult time but what else was the darkest day for you? >> meeting the families of the fallon, trying to help heal a broken heart, trying to be the comforter in chief. those were difficult moments but

on the other hand, they were mostly inspiring to see the spirit of the military families. you know, spending taxpayer' money on wall street and we're in the midst of a liquidity isis and great advisors like bernanke made the better ations that we do something to change the psychology of the bankers and the recommendation was to spend teaches money on wall street. i truly believed it prevented a major economic meltdown. that was tough, katrina was tough. you know, it was not just katrina, there was a major tornado in missouri, fires in

california. one of the things you do as pr you go to emergencies. you see human suffering firsthand and those are always tough moments to deal with when you're the president. >> let me conclude with two final points. once this library is dedicated, what are short term goals you have moving ahead? >> let me give you a long term goal. that is to make sure the institute does not focus on me. in other words, we want the institute to outlive us and if it is based upon a personality, based upon a presidency it is not going survive. this institute is based upon principles that are endearing and will be defends throughout the ages. short term we want to save lives, we want too make sure principles are better recruited and trained so students have a better chance of succeeding. we want to make sure our country

does not become isolated. we want people to understand the human condition. we're going to honor vets for as long as i live i will be honoring the vets with whom i served. and we'll be defending free enterprise. there are short term project, e book is one, we're sponsoring a debate. i show your the next three or four years concrete examples of the bush institute in action that we believe will of the accumulative affect improving people's lives. >> you're about to embark on a new chapter, grandparents. >> yes, we're so excited. we're thrilled. we can't wait. >> i guess it is about time.

no, we're very excited. we're thrilled for henry and jenna and looking forward to doing our part as grandparents. i'm not sure what i will be called yet. . e name is in limbo >> mr. president, mrs. bush, thank you so much. >> thank you. >> coming up thursday the dedication ceremony for the institute and museum. president bush will be joined by president obama and other former presidents. live coverage at 11:00 a.m. astern on c-span3. >> coming up next, a hearing on sbretion the safety on freight transportation. overnight of the federal aviation administration.

later, an interview with former president george w. bush ahead of the dedication ceremony for is presidential library. >> acting i.r.s. commissioner steve miller testifies thursday examining operations at the internal revenue service. e'll have live coverage on c-span 2:00 p.m. eastern. >> i told my kids, if two cars pull up if one has a stranger dick other one has chaney you get in the car that has the stranger. >> it is amazing to be in washington, d.c. with all these we are and yet, here

at the hilton. it is hard to be funny with the president of the united states sitting next to you but somehow day in and day out joe biden mansions to do it. >> president obama and late night talk show hosts conan o'brien highlights the event. our coverage starts with the red carpet arrivals live on saturday at 6:00:30 eastern live on c-span. fedex c.e.o. testified on capitol hill wednesday. a house transportation sub committee is examining the current state of freight transportation in the u.s. to find ways to improve safety and stimulate the economy. his is two and a half hours.

>> this is the first hearing on transportation. rule 18 of transportation and infrastructure rules that the chairman with the concur reans of the ranking member to designate a special panel to acquire any matter within the jurisdiction. this panel is to examine the current it is a of the freight transportation in the united states and how improving the freight tppings can strengthen the u.s. economy. how we move this country into the 21st century, transportation wise. i'm honored to be selected to chair this panel and i'm excited to be working with congressman from new york as the panel's ranking member. the safe and the efficient movement of freight throughout the nation impacts the day-to-day lives of every american from the clothes you

wear, the food you eat, it impacts all aspects of every day life. 2.6 trillion moved tons of goods. it is focused on specific modes of transportation. given the nature of freight movement it is important to examine the system as a whole. freight moves back and forth etween waterways, ports, and pipelines. bottlenecks arising could seriously impede freight menalt drive up the costs impacted. for this reason, improving safe flow from all modes of transportation is critical to the health of the united states economy and the future of the nation's global competitiveness. the purpose of this panel is to viveed recommendation on ways to

modernize the freight network and make the united states competitive in the 21st century. i'm excited about the work we'll do over the next six months and i'm glad we have such a talented, diverse group serving on the panel. i had previously chaired three of the largest sub committees on to committee and i was asked serve as vice chairman of the full committee and help him to work to bring all the work of the sub committees together. when one sub committee does something it affects the transportation most of the other sub committees as well. that is what we're talking about this special panel is patterned after something that the chairman did for the armed services committee in the last congress. he's very excited about this.

he feels that the panel that he headed up for the armed services committee, although a little smaller than our panel, that it did achieve some very good results. certainly, we have an all-star panel of witnesses here today. i will say more about them in a few minutes. i'm also very pleased that we have such an outstanding roster of members. the chairman told me he was going to give me a group of some of the more active members of the full committee and that is hat he has done. also, i think that the ranking member has done the same with the democratic members of this special panel. e are setting up an event in los angeles, some place in the los angeles area at the end of

may. we will be going to memphis, ouisville, new york, various other place because he wants us to take this panel around the country as much as possible. before i introduce the witnesses that we have here today, i would like to call on the ranking member for any comments he wishes to make. >> thank you, mr. chairman. by chairman, let me begin thanking you for convening the hearing. i can think of no greater policy challenge facing this committee. mr. chairman, we look forward to working with you to develop freight policy and funding recommendation for consideration by the full committee. facilitating commerce is an essential responsibility for the

committee. we focus on how best to strengthen the freight network across all modes of troppings ensure that goods meet their emands whether it is two-day amazon delivers to a new york apartment. our economic comp peters are upgrading their networks to meet the needs of the economy, unfortunately, we have not. our transportation systems cannot efficiently meet the changing demands of the 21st economy. with regard to freight transportation, this requires that we look beyond just highways. we need to consider the critical oles that our ports, waterway, airports and freight railroads play in the role of the movement of commerce.

planning for the future requires a strategic assessment. this panel is a great starting point for that process. we have must ensure that we have the strategies, funding necessary to meet these changing demands. the committee has made some progress over the years there is much work to do. in 2005, the committee started a program to address major freight bottlenecks around the country. the program provided dedicated funding and advanced critical projects including the freight project in new york city and one in california and also a pradge vavevave, west virginia and ohio. these kind of projects face significant hurdles to fund highway programs.

f.a.o. found a series of barriers to funding frathe projects, including freight projects -- a lack of coordination amongle government entities in advancing freight projects and limiting restrictions of public funds available for freight transportation projects. in 2012, congress took some teps forward but many of the same barriers that were identified in 2008 continue to exist. it recognizes the important role to provide a strategic freight system there is much work to do to include all modes of transportation, highway, water, rail, and air to ensure that the

resources are available to implement this vision. unlike safety lou, it does not provide freight projects under the program. it requires that all service transportation funds be provided to states by formula. the state-based system accommodates state projects well it is poorly suited to address or fund criminal transportation infrastructure projects. such projects are critical to the health and wealth of the national economy but difficult if not imfootball fund through state and highway programs. hey did not address the most challenging questions, what to ay for and how to do it? we need the vision, the plan,

and the means to address the needs and strengthen the competitiveness. we must lay the policies and resources to meet the future needs of our freight network. we should not be constrainted by looking at the network we have but we should explore policies for the future. that is our charge and working together we can meet these challenges. i look forward to hearing from the witnesses and working with my colleagues to develop a strategic vision for a modern freight transportation system that we can recommend for to the full committee. i thank you and yield back the balance of my time. >> thank you very much. as i mentioned, this panel is patterned after one that was done for the armed services committee. that panel was smaller and the chairman thought we should keep this panel small but we had so many members on both sides that

wanted to serve on this panel at we did expand the membership. ordinaryly under our rules that we have this year, we have opening statements just from the chairman and the ranking member. but because this is the first meeting of this special panel i've asked each member to give a brief two-minute opening statement. also we go by when they arrive at the hearing but i'm going to go for these opening statements by seniority. so i will call on mr. miller. >> thank you. i want to thank you for coming down to my area next month, hich is -- you coming there 14 years ago. it is a under yutety liesed

airport today. -- under utilized airport. if you look at los angeles and long beach, they make up the largest airport complex in the united states. some people think the economy is down but if you look at part of long beach in 2010 they set a record, all-time high for movement coming through our area. this panel plays an important role in efficient flow across the country. i'm excited to be on this panel. it's a huge issue in our region. if you look at union pacific, it is a major, major connection of rail throughout the united states from coming in from the long beach and the l.a. harbor. but california's trade corridor is huge. the freight arrives in southern

california ports and transported by rail and trucks and distributed throughout southern california. if you go down there you will see the impact of rail and the impact of truck traffic going to those warehouses that store the goods that come from asia, specifically and transfered throughout the united states. ontario international airport is a hub for u.p.s. and sequestration has had an impact on them and that is something that will this panel should address also. the next 30-year freight movement will increase three times and this panel needs to look at that. i yield back. >> thank you very much. >> thank you, mr. chairman for holding this panel, this committee and i want to thank you for thinking forward.

i represent a district in new jersey which has all the topic we're going to talk about. we're talk about rail, we talk about ports, we talk about shipping, we talk about highways, pipelines, which was the latest going through jersey city into new york, which was a big issue. the concerns that i share with members of the committee is that the district that i represent is very congested. and we have an issue now where as the panama canal has been fished we have to raise the bridge to get these super tankers in to get them into the district and move the merchandise out. 80% of the merchandise that comes through the port of elizabeth is basically consumed

in the region. so we have to move it within the region. it seems to me, that everything we move is around the jersey turnpike. we have to make sure that moving freight, it is not just trucks but to use every single mode of transportation so we can alleviate the con jergs. so i'm looking forward to this panel. i think we'll be able to -- representing the districts we represent will be able to make good suggestions i just hope we take some of this up in the future. you know, i speak to the port authority constantly and the growth we expect in our area is immense because of the new -- the expansion of the canal and our biggest trading port in europe. obviously, also the region that is so large in terms of consuming goods. so i look forward to serving on

the panel and thank you very much for putting me on this panel. >> thank you very much. >> i ran out of time but i'm glad to see fedex is here because they have a hub at ontario airport and it is being impacted by sequestration. >> thank you very much. next on our side is mr. crawford. >> i want to thank all the witnesses for joining us here today. each of you can offer a unique mpetitive on how we can -- perspective on how we can look at economic growth. my district contains hundreds of miles of rail lines and the entire arkansas border and the mississippi river. farmers in the district regularly rely on trucks,

barges, and trains to move their crops. just across the river is the headquarters of fedex that just celebrated its 40th anniversary. congratulations, mr. smith. it continues to advance the industry today delivering packages by ground, air and by sea. they deliver four million pieces of freight today. i look forward to fred smith's testimony. i have a good friend who has worked for fedex going on 20 years and i texted her as we were coming into the hearing. i said i got your boss, she said that can't be my boss is with me. then it dawned on her and she was like you're talking about ted smith. i think the light went on. our nation's freight system

strengths local economies and puts americans to work. these advantages will disappear if we fail to maintain and strengthen our infrastructure. i'm honored to be select nrd special panel and i look forward to working with my colleagues to ather the best remmings -- recommendation. >> thank you, chairman. i'm happy to be part of this panel and i'm really looking forward the work that we're going to accomplish. i also want to gival shoutout and congratulate fedex on your 40th anniversary. it is a great story that fred smith started in 1973 delivering 186 packages to 25 cities around the world. we know you're a global company today. congratulations. for me, i live with the port of

los angeles in my backyard. so freight policy is always on the forefront of my mind. when i came to congress from the los angeles city council, i was concerned that i didn't think there was enough dialogue about our nation's ports and our freight policies. so i co founded along with another congressman from texas the port caucus. we believe that we're going to flinle bring the kind of attention -- finally bring the kind of attention onto the seaports when the president mentioned ports was the first time in his state of union address. ports across the country are trying to take the new ships. the port of los angeles, we completed our drudging projects but this is not true for hore ports. we collect these funds at our ports but they are building up a surplus in the trust fund. i think we should be able to access these funds and ensure

all the ports that contribute receive an equal portion ofs the funds. it is not just how deep the ports are but the quality of our land site infrastructure that is going to matter. we would not be here tray if we did not recognize we all have joirl freight infrastructure needs, the quality of highways, bridge, interchanges. we can't fix one region's infrastructure and not another because it is a national system. the goods that leave the port of los angeles take 48 hours to arrive in chicago then another 30 hours to travel across that city. that bottle next means our nation is at an economic disadvantage. we have higher costs for consumers, more con jergs, more ollution, and less jobs. i know the recommendations that

this panel comes up with are going to be a huge step in solving that problem in our country. thank you. > thank you very much. do you have any statements you would like to make at this time? >> thank you, mr. chairman. want thank you for holding this hearing. i'm an honorer to be a member of this panel. we know that everyone in this room that we need to overcome the silos that we have here in the committee and develop a plan to deal with the mobile freight network that is critical to our economic promise perty. i have the privilege of serving as the senior member on the committee and from the midwest on this panel.

our region in particular, northeastern illinois is critical important to movement of people and freight. from aviation, railroads, pipelines, waterways and beyond, we're at the heart of our nation's transportation system. unfortunately, we all know that northeastern illinois' transportation is acquainted and can't meet future freight growth. i know that has been mentioned by members here on the panel. i'm hoping that this panel will visit this area, chicago, northeastern illinois to see firsthand the importances and the challenges we face. sood ed $100 million as money. it is an important public/private partnership that hubs ande congestion

it will move freight from new york, seattle, and los angeles. we still have a ways to go. an important question for this panel is how to advance projects like that. one of the answers is to bring back projects of the regional significance program that was mentioned. i'm looking forward to working on this panel in the next six months and to make our freight network eicnt a today, witnesses.ur witness thank you. >> thank you very much. i want to introduce our panel at this time. this is my 25th year on this committee and some of the veterans will remember that many years ago we had hear thags lasted seven or nine or ten 10 hours and no one would be here

to hear the witnesses. when i started to chair the aviation sub committee back in 1995, i said my ideal hearing is a panel with five members and we would not -- i would rather have more hearings than those that drag out for a long, long time. so we -- i apologize to those. we had many other people who wanted to testify on this panel today and maybe we can get to some of them at later hearings. but each witness today was chosen for a specific reason because they all represent different parts of our transportation world. our first witness, i'm honored to have fred smith from fedex -- some people have mentioned that fedex is celebrating a big anniversary and it started with 186 packages on its first day and now delivers more than nine

million daily and more than 300,000 employees and connecting 220 countries. i would guess that mr. smith is amazed how this committee -- this company as grown over the years. great success and certainly, mr. smith is one of the respected men in tennessee. he's almost 400 miles from me in east tennessee but we're proud of him nonetheless. next we have norfolk southern, norfolk southern is one of the greatest companies in the nation. it has a long history. class one railroad. railroad carries more freight than any other mode of transportation. our freight on more than 200,000 miles of railroad. the freight railroad spent almost $14 billion of their own

private capital to improve and expand their tracks. next we have werner enterprises. werner operates one of the largest fleet of trucks in the world. not every community -- the small communities don't have a railroad or airport or waterway nearby but people live and work and shop along the nation's four million miles of highways and roads. as a result, many consumer goods are transported on the highway system, most of them, at least part of its journey. i'm pleased to have jim here. has had a distwinnished career. he operates the port in south carolina and he has extensive experience in the shipping

industry. as such, he can offer a unique erspective on maritime issues. and we have the transportation ades department of the a.f.l.-c.i.o. and he has been before this committee on several ocases. transportation workers play a key and important role in the freight system. i'm glad he's here to discuss their role and improving our freight transportation system. before we start the testimony, i would like to call on my colleague. he is not a member of the panel but he has made a special effort to be here this morning to welcome one of our witnesses. >> thank you, mr. chairman. i appreciate the volunteer courtesy. it is my honorer to be here and congratulate the panel on its ork and selection of its first

testifier. there is nobody better who is experts.teemed 19731st century started in when fred smith are started fedex. knowing fred, he is in the 22nd century. he's a fore-thinking man. memphis is proud to have innovators who shook the world. to elvis presley to fred smith. [laughter] there is nobody that represents their company probably as intimately and recognized as such as fred smith. what he has done for the country in volunteering as a marine and serving in vietnam and serving on the world war ii committee to put together the funds and the

planning for the memorial on the mall and for his work on the energy security committee, which is so important to our country's security in the future. to my city, with anything involved -- our city that is important, wther it is t dex forum, or the zoo, which is visited just last week with its beautiful park tribute to the grizzlies and the wolves and the area that i visited and appreciated it. fred smith knows transportation. my father told me that in his time what was good for general motors was good for the country. i think what is goodor feder express is good for the country. i welcome fred smith and i'm glad that the committee lets me introduce him. >> i think this is the first time that elvis presley has been

mentioned at one of our hearings and i think that is true. again, woiled like to welcome our witnesses and thank them for being here. ii ask unanimous consent that their full statement be included into the record. we ask that they limit their testimony to 5 minutes normally because of the importance of the subject matter. if you go six or seven minutes, we will not worry about it too much. he may begin, mr. smith. much, mr.ou very chairman. i appreciate being invited to appear here to represent the 300,000 members around the world. i appreciate the kind remarks of our congressmen that works very hard to represent our area so well. to theto apologize southern californians for beating the clippers later this

week. as has been mentioned, fedex covers an awful lot of the transportation spectrum. i want to commend you, mr. chairman, and the ranking all of the committee for setting up this panel. it is very important. having had a career in transportation, i have seen the leadership of democratic and republican administrations and the effect they have had on the well-being of this country through far-sighted transportation policy. logistics't began, measured at the cost of transportation, inventory and warehousing were about 15 cents out of every dollar in the economy.

because of the substantial improvements in the nation's infrastructure, and the deregulation that took place beginning in the early 70's through 1994, logistics costs were reduced to about 9%. int is a huge increase national wealth and productivity and well-being. it is essential for congress to recognize that those productivity increases will begin to go the other way unless we can modernize a lot of the transportation infrastructure. as has been noted, the fedex corp. has four operating divisions. federal express, the worldwide operation of 660 aircraft, 47,000 trucks serving 220 countries and moving 4 million shipments today. fedex ground in pittsburgh is the second largest ground parcel

company. fedex freight is located in memphis and the operating headquarters is in arkansas. plus, we have our trade networks that moved intermodal goods by rail and sea. and all told, these systems move, as you noted, 9 million pieces a day. arefundamental issues twofold. number one, we have to move forward to getting next- generation air transportation and air traffic control systems. we've wasted millions of gallons we impede the productivity of our nation's commerce and the traveling public by not modernizing our air traffic control system to a satellite based system that

allows much more flexibility and efficiency. the second key element in improving in the air transportation system is more runways. we build one in 2000. the world wide capable runaway allows fedex expressed to fly nonstop from memphis to point in europe and asia. the ground transportation business, i think the issues are equally as straightforward. number one, we need a funding achanism in the form of revised fuel tax or a vehicle mileage tax which the user community almost universally supports in order to fund additional infrastructure, particularly in the congested areas of the country like d.c., the northeast corridor has been

mentioned, and southern california. the second thing we feel very strongly about and is a very easy and quick solution is to permit the use of longer vehicles in the sectors of the industry that used when trailers. to 28 those are limited feet each. the reality is, in the ground parcel business, the vehicles are significantly undutilized because the traffic being generated by electronic commerce world, direct shipping, and the thet weight packages, vehicles are not very well utilized. they pull approximately 22,000- 24,000 pounds in the 28-foot trailers.

the weight ratio will be between 26 and 28,000 ha, generally. congress permitted the use of water vehicles, the recommendation of 33 vehicles, you would very quickly have a vast improvement in national efficiency because you would burn hundreds of millions of -- less.f fuel last it would be more efficient and less costly to the consumers. the third thing is that you would have significantly enhanced safety because fewer vehicles on the road at the end of the day is the most important element reducing the number of accidents.

and as i mentioned in the air the air- sector, traffic control system is essential and will continue building more runways and be a funding mechanism for our infrastructure. and the permission to use longer twin vehicles does not require any way to increase which puts more pressure on the infrastructure in terms of repairs and things of that nature. i would also note that fedex is a very heavy user of intermodal services, including the excellent services of southern that built a big intermodal yards east of memphis. and we move a significant amount of goods through the ports of the united states. efficiency of our rail and port system is equally important to the other sectors that i just mentioned.

think the solutions are very specific, straightforward, and not subject to a lot of debate since the effect of the measures would be so profound. >> thank you, mr. smith. >> thank you, chairman and panel members. i appreciate the opportunity to discuss the trade system. it is my honor to do so on behalf of the 30,000 customers, 32,000 shareholders, 39,000 suppliers and 8700 customers that include fedex, warner enterprises, and the south carolina port. i will be using a few images today, so if you take a look at the screen, first is the tribute to fedex. i thought i would tell you a

little bit about our business. we are a privately owned u.s. railroad. serve the eastern u.s. and with connections, we effectively access the world. while my comments highlight norfolk southern, the seven class 1 railroads and 550 short lines operate as a network and we share the opportunities. the wall street journal happened to say that railroads make headlines only when calamity strikes. that may be true, but because of our tremendous safety records, calamity strikes very rarely. we generally work in the background, safely and economically moving raw materials wherever they need to go. for 186been doing that years.

and we are planning at least for that many more. we have to make very expensive long-term bets and hope to make adequate returns on them even though our crystal ball is often cloudy. our locomotives last more than 20 years, freight cars last longer than that. trucks can carry traffic for decades. it serves generations of customers. we had a bridge that just turned 100 and are chief engineer promises me that if we continue to invest, it will be there another 100 years. example of this slide is the present quarter, a strategic investment that will improve infrastructure and reduce transit times to increase capacity and provide a much better transportation alternative for the enormous amount of freight.

slide that we think shows the new turmoil that mr. smith as mentioned. s 10-year project, $2.5 billion of cost shared by partners. and they chose just the benefit for a single state. they are familiar with this important because your district asludes many components, and you pointed out, they have been leaders on the creative project and the high-speed rail project. your efforts are appreciated. they are not small or an expensive, but they will serve generations to come. we are getting ready for traffic from the panama canal expansion. we're serving the domestic natural gas industry, we're

hiring military veterans, and leaders of labor organizations, we are training the workforce in reducing our carbon footprint and improving technology to use fuel. we're part during which mr. nixon and his team developing the south carolina inland port. it is a great opportunity and i will show you another slide of what we have done with a similar project in virginia. you can see all of the industry that flocked to these locations when we build these facilities. what can government do? and thenpport ardently resist any attempt to alter freight rail's continuing ability to earn adequate returns and invest in our company. for every revenue dollar we earn, we return 40 cents to infrastructure and equipment.

we will invest $7.5 billion in private capital that the stains jobs in the last three years. we have hired more than 9000 people and we will hire 1200 this year. taxesries, jobs, and ought to go where there railroad is. over 1000ed facilities on the line that represent $30 billion in customer investment and 50,000 jobs. put the economy on a sound footing because we're all creatures of the economy. to the extent we have a stable economic environment and can see a clear path forward, it helps all of us. and finally, find a sensible ways to allow the private sector and our partners to invest in projects that will serve the economy of tomorrow.

and i will say that the longer it takes us to steer through regulatory hurdles, the longer we wait for economic growth. reflecting today's conditions and today's technology, they enhance rather than deter safety, productivity, and investment. only ads are not barometer of the economy but an essential element solving this freight transportation problem. we are investing for the future and we hope that working with you, we can do everything possible to make that happen. >> thank you very much. panel, thank the you for the opportunity to testify. i'm the president and chief operating officer. logistics'versified company providing freight

management and intermodal services to our customers. i point out the multi modal nature of our business because the thinking is that kind of collaboration we do every day with a gentleman on this panel and others that helped deliver america's goods. we worked to craft a reauthorization bill that makes the necessary decisions and put in place reforms to allow the trucking industry to move freight more safely, cleanly, and at a lower cost to our customers. unhook my statement is consistent with the position of the american trucking association of which we are a member. unlike other modes that control capital investment decisions, trucking is dependent on federal and state and public agencies to spend $33 billion in highway user fees that we contribute annually in a way that provides the industry with a good return on our investment.

the addition of performance measures and the creation of a new freight program which include the identification of a freight network, congress took significant steps to improving the federal aid highway program. we encourage the committee to dedicate resources to process a major freight network bottlenecks. it costs of the trucking industry $19 billion in lost fuel, wages, and equipment utilization. we recommend a much greater investment in the national highway system which comprises 5% of highway miles and 97% of truck freight, 55% of all traffic. dedicatedpports federal spending for intermodal connectors the generally poor condition affects the efficiency of all of our modes. it will be difficult to make the strategic investments without

more revenue. the highway trust fund will be in serious financial straits in 18 months from now. we cannot continue to rely on the general fund the bailout program year after year. of the programze to match current receipts is simply untenable. it is time for congress to make the difficult but vital decision to raise or index fuel tax or do both to ensure stable funding is available to address the costly deficiencies in our highway network. alternative funding and financing arrangements have limited utility. there are a far less efficient revenuef fuel tax and sources. it is critical we make the most of the limited highway capacity. outpacedue to greatly the highway and that trend will continue.

the trucking industry from operating the most efficient way can. our industry less competitive and act as an artificial tax on the american people by unnecessarily raising the price of consumer goods. regulations for the trucking industry to operate more trucks that are necessary, causing the trucks to burn more fuel. there are hundreds of studies and decades of experience to support giving states greater authority to increase limits and modernize federal standards without a detrimental impact on safety. we are bullish on the future of the intermodal and work with our customers on mobile conversion, claims that these changes will have significant impact are overstated. 70% of freight moves by truck today.

1.8-2.2% share is unlikely to change, and we will continue to do our part working with the rail industry to find opportunities for intermodal conversion. it will not change the capital investment necessary to maintain and improve the nation's highways that are required to support the remaining 70% of freight movement. i look forward to your questions. members of the panel, i water de have the opportunity to testify today. the container shipping industry has been instrumental in the growth of globalization. shippers enjoy a competitive market approach in transportation services and the service provided is remarkably reliable and supported the establishment of complex import

and export supply chains routinely utilized by u.s. corporations and global transactions. it should be noted that it faces significant competition. if they're reporters unable to the costn efficient -- of heightened competition has been mentioned this morning between east and west coast ports as a result of the panama canal expansion. manufacturing has led to significant trade growth. years, the five prevailing trend has been exporting from the united states. a slide show while i am giving the testimony. it seems to have been a worthy and timely goal.

they are now the single largest exporters of vehicles from the united states. the container carriers have responded with significant investment in new vessels. we will see the largest injection into the global container fleets into the history of containers. 80% of capacity on order is bigger than will go through the panama canal today and by the time it is expanded in 2015, 50% bigger iny will be size. this brings dramatic improvement in environmental efficiency and requires reliable reports of origin to realize these benefits capable of handling ships productively and with minimal waiting due to death or height restrictions. they have made and continue to make investment to satisfy such requirements.

the south carolina port authority is investing $1.3 billion in the next 10 years existing in new facilities. the state of south carolina invest 700 million. to the availability of the appropriations, the state of south carolina has set aside the entire cost of our project for both state and federal share. the project is designed to find a 50 foot harbour allowing the handling of ships at 48 feet without title restriction. otherlf the cost of projects. these are indicative of the role that ports play in our country. vital thatrd, it is

it processes established to bring the port capability in line with handling requirements for such large ships. this is a prime responsibility of the federal government as these are federal harbors. the process for funding harbors and other restrictive infrastructure issues has neither been timely, predictable, or well-funded. issues should be addressed in an act such as the legislation contemplated this year by this committee. there have only been two bills signed into law since 2000. process forive approval and funding, it has also been made more difficult by the demise of the federal earmark. accordingly, the funding is short of their requirement needed to modernize the network and is an impediment to future freight abilities.

the good news is the shortcomings of the harbor freight improvement process seem to be well recognized with improvements at hand. the army corps of engineers is developing a process guidance to speed up the study of such infrastructure projects. the issue the first paper relative to formulating a cogent strategy for prioritizing improvements. the improvement will only be realized when the private sector is taken to such for improvement projects. the establishment of a significant and predictable capital budget to address shortcomings over multiple years, the development of a clear system of prioritization for projects relative to cost benefits in the capability they provide, a rule-based authorization system, the cost benefit hurdle is matt. the recognition that all ports cannot be deepened with current

federal resource constraints and there will be winners and losers. ae need to potentially find user fee system does not exist for harbor maintenance. i commend the attention of this panel at the committee to infrastructure priorities without which the benefits cannot possibly be realized. and >> thank you very much. them for notthank only forming this panel but forgiving transportation labor and the opportunity to help you want to the work of this panel. i am honored to be part of this process. the also honored to offer perspective of transportation

workers whether they work in freight, rail, maritime, or trucking sectors. they make up the transportation system for america that works in the livers for the american people and american businesses. members how of the department that i am i had of. measure, these jobs have been the result of the collective bargaining rights that many employees have secured. these are the types of jobs that support communities and drive our economy. continues totely allude to many americans. the way to boost the economy and the shrinking middle class, they maintain a powerful and efficient network that has become an important driver of our economy.

our longshore and were house members are employed along the east, west, and the gulf coast. and a major u.s. rivers. the work to export and import goods in the fuel the most powerful economy in the world. our construction unions represent workers at built much of the infrastructure that lies at the center of the transportation debate. boosting investments will create thousands of construction jobs at a time where unemployment is stubbornly high. all cargo carriers in the commercial passenger carriers carry millions of tons of freight across the globe. there are carrier employees and those that maintain and control the traffic control system, playing a pivotal role in the transportation network.

this panel has identified 17 billion tons of goods over -- valued at over $18 billion. with some freight tripling in volumes. facts, there will read the conclusion is the same. our infrastructure. railroads are located from ports, technology improvements are stalled. imposed costs on businesses creation efforts. there are ideas that turned us around.

it crowds out investment and long-term infrastructure, and we know the case in hotbed those investments are needed. cannot abdicate its responsibility for public funding. channels,'s ports and we are a big indoor sir of that legislation and hope to get completed by this committee. highway trust fund is broken. for 20 years, it has not seen the buying power go up and is down 33%. there is a straightforward way

to do this. it requires people to tell the truth about businesses. by raising the gas tax, i will say at five more times, the highways, bridges, and public transit systems will fail and the economy will crater. it will increase efficiency, expand capacity, and enhance safety. congress must appropriate the funds and stocks objecting the faa to the fits and starts of funding we have seen over many years, the most recent being the nightmare that is canceling subjects of flights, inventor for los and having a rippling effect. finally, a public-private partnerships will continue to be .ebated

without a robust role of the private sector, there is no capital to tap into. without a long-term plan to fund these needs, the private -- and we are pleased to join my colleagues here on this panel and all of you for this first meeting. we look forward to playing our role in making the process a success. thank you. from all ofestimony the witnesses, i will yield my time and start with mr. miller. >> i appreciate your testimony. you talked about the impact of workers.

and being impacted by that right now. i am concerned about the national freight corridors. whene a concern because you consider highways that are impacted, it possibly works with some regions because you only have one major highway or two. it is like a corridor, and not a system. the 105 and expands dramatically to have a huge impact on the airport. you see that with your drivers right now. is that we need to look out for a corridors. if you look at the highway system and you don't take into consideration the corridor that

it will impacted, account for only one pathway and failed to adequately addressed the system in southern california. any comments on that? >> i concur with what you said. in majorrly metropolitan areas, it is not just an individual project. the issues in the past where you would have a particular project here without regard to the consequences to the system. i concur wholeheartedly with what you said. is a warehouse club for the region. can you address that?

you know what you're drivers are facing. you see all the problems we are these, trying to get to warehouses. >> i would concur with the general statements that there would be points of greater bottlenecks. as we talk about investing in moreighway system, we have congested points in some of these corridors and that i think we would have to make certain that we had sufficient funding where the pain was that the greatest extent. areas where we might find ourselves where we hope we can put attention where the pain is.

>> thank you. i view this as a simple proposition. we have a freight network that is complicated. there are metropolitan areas that are incredibly congested. my concern is that if we just have a policy discussion that dedicates new policy initiatives to push for an intermodal freight strategy, if we don't get new resources directed, we will just get into a policy -- nobody has put together a proposal that says it will expand the pie. focusing talking about dollars which is similar to what you're saying. my concern is that we don't focus appropriately and we will have a problem. got involved in a situation that might make some of you happy and some of you a happy,

make it so we only have employee drivers use a facility. and many of your friends think i am anti-union. inry member of my family is a union except me. i just think everybody should be treated equally. we eliminated 90% of the truckers hauling goods from that port. would you like to comment on that? i have two guys here that this country needs. union operators and non-union operators. one thinks i am their enemy, which i am not, but 90% of the people that use that port -- >> we think that as it relates to the poor, some of the rules coming out relative to clean

air, we were fully in support of that. we have proven our ability and willingness to invest in equipment to support those initiatives. i think that is separate from the labor implications and changing the classification. i don't believe those are linked. >> we need to work as a group. to offer theve opportunity for his employees to be members of the union. thoseyou can bridge issues for us. >> people want to be independent. >> i don't want to get into a long debate about it either, but the issue involving that area, there are working condition issues. there is a lot of misused as to how we classify workers. it is not unique to the trucking industry. >> there are a lot of problems

that these drivers have experienced. thank you.to work -- i yield back. >> thank you, mr. chairman. the freight projects face significant barriers and funding under federal highway programs. the system is poorly suited to fund critical freight transportation projects because the benefits to extend beyond the borders of a single state. moreover, given the significant these freight investments, they are not likely to fare well in the state-based formula. is there a need for a strong federal advancing into intermodal freight projects? circumstances, and

partnering to fund intermodal projects? >> we do believe in the railroad industry that there is a role -- we do believe in the railroad industry that there is such a role. regional and national significance programs. with theny worked federal government and the state greatlynts which will reduce transit times out of the port of hampton roads. i think that what needs to be done is have these quarters identified. they are all out there, clearly, to be worked on in which there

is public investment and private investment. say, they crossed state lines but are important to the nation. examples of that. absolutely important to the transportation of goods in this country, but only is chicago center, passes through the city of chicago. is anothert corridor great example. there was tiger grant money that memphis.nd publiceve that as the and private sector thinks about freight that we think about more than a state-by-state basis, we need a partner with the public

interest to make sure that we are investing appropriately for the future. ask you now, how do we ensure that we have a well- articulated national vision and projects under way to support a national vision. >> i think it can only come from one place. that is the reason that we have the secretary before congress. of thes the boss and cany transportation provide an enormous amount of leadership. witnesseds that i over time when the congress took the leadership in terms of deregulating the transportation sector. it was hugely important.

not bethat, there would a large amount of economic activity in the united states. when you start talking about the specifics to deal with the southern california corridor or , it requires a lot of staff expertise and particular resident inat is the department of transportation. toseems to me that they have develop a national policy. >> let me ask a question. --ight railroads this year and those investments are commendable, but the federal government plays a role in funding rail projects primarily through programs of

significance. several of these come as you know, involved more folks other and. -- norfolk southern. not an appropriate federal role. what role has the federal [indiscernible] what are the benefits of these projects and what would happen to these projects if the federal involved?t weren't wein all these projects, understand at as we receive benefit from these projects, it is incumbent upon us to make the investment appropriately. we invest significant amounts of

isey recognizing when that appropriate. the most important thing for the public's standpoint is that there are huge public benefits as well. is thescent corridor poster for the national significance in that it will take over 1 million trucks a year off of the very over- burdened interstate between the south and the northeast. we move together in partnership, if we have a process which we have had with some of the programs you mentioned, and which is appropriate in which the public invests, clearly defined and articulated public benefits as well as private investment with and investments made proportionately, that is

good transportation policy. >> my time has expired. on the fourations years. how is the recent decision by the faa to furlough air traffic controllers impacted fax? -- fedex? >> the decision that was made a furlough air-traffic controllers has had a well-documented deleterious effect on air transportation in general. a more the passenger carriers than us, but even so, it is adversely affecting our operations. as probably most on this panel know, the airlines for america, the industry trade association

that represents all of the passenger carriers as well as fedex and ups, the two largest cargo carriers, has filed suit to make the department of transportation and the faa allocate resources differently that has been the case with the position taken by the department of transportation. we will see what happens on that. it is an enormous impediment to have these delays. very significant. >> memphis has embraced their airport and adopted the labor of america's -- placing this emphasis on their infrastructure, and can you see that model being an effective plan for other cities to adopt? developed by as very well-known professor from

the university of north carolina. the professors' study the on the of aviation hubs economies. in reality, it is a back to the future observation. aerotropolis the of its day. there are thousands of employees employed by companies that are there to avail themselves. the intersection of all of the interstate highways that connect to bear in memphis. for the initiative southern california issue

holistic lee. the areas that need to be the might have gone to promote the location of these businesses and jobs next our distribution businesses. providesis airport about 25%-30% of the jobs in the memphis area. it is a huge economic and gen. united in chicago. that is what it is all about. concerns oversome the interstate highway capacity. would you talk about what some of the negative effects might be? >> i think it starts with this.

we are essentially an approval of raising the fuel tax, and that is the most efficient and effective way. the infrastructure that already exists, the mechanics of collecting the money that already exists, 1 cent on every dollar goes to the administration of that program. go to vehicles in miles traveled, most of concured is dollar.50 cents on the trying to operate and invest, that is the way that is most efficient. open to in increased tax rate. as long as the dollars are turned around and invested into

the system they are being raised for. the collaboration is much more significant than people realize already. we talk about geographic specific issues and i can assure you that our collective business teams were constantly finding opportunities to surprisingly take trucks off of the road. the fact of the matter is, there will be 65% freight growth over the next 10 years in the only way it will support it is if we work together. if you look at our business, the fastest growing portions of our business is our cross-border business, port business, and intermodal business. we are on board, we would like to not see tolls as a mechanism. one thing to keep in mind is that trucks have wheels and it means that they will drive alternate routes and alter their roads. i don't think that is what is

best for this country or for the safety. we have to keep that in mind at all times. before i begin, iw ant my two minutes back for my opening statement. >> go right ahead. >> i want to thank them for putting together this task force and i want to thank you for your leadership. biased that rail is the engine that put america to work. i want to thank you will for the work that you do. i have a lot of quick questions, and i guess i will start -- we have not passed a bill in seven years.

that is a major problem through out. the port and getting ready for ships, it's a major problem. not just the earmark part. do, justt we need to the small technical things. what do you think we need to do to move a water bill and keep in mind that we set up that agency, it was a directive. differentl communities and tell them what we want to see happen. can you give me insight as to what we can do to get out of the way and move this forward? >> that is a good question. the first container ship was built in 1999 and we sit in 2013 looking at feasibility studies taking over 15 years.

to do this effectively, we need a strategy. at individual projects and that is a flawed way of doing things. on the eastreport coast of the united states that cannot succeed without the raising of the bridge in new jersey. the east coast service has to go to new jersey or new york to be successful. we have to develop the strategic plan. aside, with adget prioritization, [indiscernible] the importants component of what would be different.

>> this is the trust fund that is sitting there. like the deficit. make some to definition of terminology here. the unfortunate part of that story is trust fund collections are spent on harbor maintenance and the rest of the fund vaporizes into other uses. on the other hand, we have a need to deepen harbors. some of them. there is a bridge in california that needs to be addressed. they have to be addressed differently. there is a plan behind it, more money needs to be spent on it because there is a deficit everywhere. there is really no strategic

plan or allocation of the capital budget, maybe it is $10 $20 billion, whatever. we will rank them in terms of cost and benefit. absolutely. let me ask you a question. the loan program. would likeers that to make it more usable. you know how long it takes to apply for it. how do you think improving that would help the infrastructure and the localities working together? we do need additional revenue coming into the system. program has not been used extensively for any number of

reasons. from the perspectives of the class one railroad, we always have availability of funding and we are able to borrow. we are offered solid credit metrics. it is less of an issue for us. as you know, we have been spending money on infrastructure enhancements and maintenance. i will tell the panel that you hear a lot about america's crumbling transportation infrastructure sometimes, a lot of it is hyperbole. is inil freight network the best physical condition it has been in the last 50 years because of the money we spent. program and its use ability, there are cases where if those funds are available, there will be railroads that will want to use them. probably not so much the big class ones at the smaller ones,

-- but the smaller ones. have to be to changed to make it more user friendly before we would have any interested all. at all.est >> is used to be one of the most bipartisan committees, and we have a major shortfall with revenue. recommend what we can do to -- you said it's not a major issue, but the association of engineers gave the united states a d minus as far as infrastructure, and getting america back to being number one moving forward. isthe most important thing

to increase the fuel tax back to an appropriate level. >> tax? revenue enhancement? what would you call it? >> tax. [laughter] colleagues can't stand that. >> the combination of the leadership in congress the regulating transportation and the funding mechanism that was put in place to build the transportation infrastructure was very important to the economic prosperity of this country. beginning in the middle part of the 1990's, the primary funding mechanism for the highway system has been allowed to atrophy. it is particularly unfortunate

because we have had enormous improvements in efficiency for both private automobiles and the acquittal is that we operate. te.equipment we opera the effect on the public is not unmanageable. that is the easiest, quickest, and most effective way to solve the problem is to put in a fuel tax to fund improvements. on the aviation side, there are mechanisms there to do the same thing. things willsh these happen, you have to have the money to fund them. >> thank you. >> i agree with everything that has been said by the panel. you will have to have more revenue. this is no longer a question of

people saying that the government is somehow an efficient maintaining the highway system. - inefficient it was built with a 50 year life and it was built about the two years ago. we're going to continue to go downhill. i think the panel is right in saying the most effective and efficient and quickest way to do that is through the current mechanism, which is in the form of gasoline and fuel tax. >> the only warning i would add -- we think fuel taxes are the quickest and most readily available way to raise revenues and provide revenues. the caveat would be with the specific and intended use for the infrastructure of the u.s.

or for alternative sources for other projects, but for the intended use we as the industry are willing and able to subject ourselves to a higher tax with that partnership an agreement that where the money goes. >> i may have covered a lot. we had to recognize that maintenance -- we have to look at that accordingly. see the army corps of engineers has made a lot of progress. i'm going down the road to identifying. we had to be comfortable with that. let to the projects faster. >> -- we have to move the projects faster. >> i agree. it has to be reformed with a bipartisan bill. we need to get the process streamlined so it does not take

the generation to get things done. the fuel tax needs to be raised. we have had that position for years. it is the purest form of user base system. you pay a fair share. it is the way to do it. we cannot lose sight of the fact that the aviation continues to operate under fits and starts of funding. those trust funds are in trouble as well. we subject the agency to these washington like fights that you only see in washington that makes them start and stop and start and stop. many care about flying airplanes in the sky. when things get done, they get done too slowly. >> thank you. i will let you go on for 11.5 minutes. [laughter] >> i have seen her get mad before, but never at me, i think.

>> thank you. we super ringer. is howphant in the room we pay for this. i come from new york. we pay sales tax on all of the gallon. they have been consistent in their desire to have their own taxes raised. they may say they do not want their taxes raised. i believe you about $.15. is that correct? is roughly where you would like to see the diesel tax rates? >> yes. or something. >> we all want our taxes raised and comfortable having taxes raised.

it would affect each and every one of those members. i understand that. qandil having taxes raised on every gallon of gasoline he dies. -- comfortable having taxes raised on every gallon of gasoline he buys. we see a real problem even reaching the subject. efficient system that has worked in the past. all three branches were held by the democratic side. we were unable to raise taxes. in other dynamics in congress. it is so much different. it is more difficult now than ever. the vehicle mileage use traveled is a particular question mark don't really -- particular? we don't really have any major to do this. is there is a way that could allow us to include cpi and

standards in terms of raising the gas tax if that is where we wind up? apparently we have unanimity on that. lay level what you would call a playing field. how much would you like his taxes raised? [laughter] him, but substantially. [laughter] let me address that point. specifically, most of you on the panel know there have been a number of studies in the past that show in terms of the matter on our highways, they certainly pay feel taxes, the amount they pay is disproportionately low compared to the damage that they do to the highways. we certainly strongly advocate

that there should be a level playing field. in that regard, the committee is commission another study to look at the impact of not only current truck size and weight, but a -- proposals that have been made for more significant truck sizes and weights. that is reportedly due out at the leave next year. it shows what most studies have shown before, it would indicate taxes should certainly be higher. we will see where that study goes. we work in partnership with a lot of trucking companies. rail and highway together making

better solutions in any situations. in the future, medicaid is a level playing field. -- all that we advocate is a level playing field. >> raising taxes for gas selected because it is a system that we have. it cost 1% to raise. everyone here understands. you would like to have a tax raise on harbor fees. i understand that. i just wanted to have everybody have a chance to say -- maybe you would like to respond. >> probably a little low. but go ahead. [laughter] >> the issue of indexing will be important. i would like to have a study to come up with the right index over town. over time. -- we fuel our truck, if that gets

is moving violently, it is unintended consequences. we do think it should be indexed. whether it is the cpi index or the café one, it concerns us. there are john moment in that index that would translate to sudden and abrupt changes. as for we weathered to our don't for our fair share, back to be debated. it is delivered by trucks. they can have the goods and services that they enjoy everyday. we will continue to work with rail. i the end of the day, suggest that we continue to focus on the task at hand. how do we invest in american infrastructure suit can delivered the to the people?

>> thank you. i yield back. situation is perhaps different. we hasn't said no -- we have a significant bucket of money. on the other hand, he had this need to deepen harbors. no predict the way to describe how that will be funded. two different issues. separate and distinct. obama administration has moved that the wood. the we can't win initiative. we have to figure out authorized deepening and what money will be appropriated. you make a lot of very important points. , ishe state level initiatives to raise transportation revenues are passing. the vast majority are passing. the voters are voting for them. that is appears form of democracy.

he put on the ballot and you go forward. the voters are further along than many members of congress realize. it is just not translating into action in washington. that is one of the problems that we have. >> thank you. thank you. there are a lot of things you can look out -- at. for jumpingologize in. i want to emphasize that i think this is a very important panel. it is a very smart thing that has been done. a ranking chairman put this together. we really do need to look over freight. having chairman duncan and think weember also, i

will have a successful panel here. i say thank you to all of our witnesses who are here today. i'm glad mr. smith mentioned next gen is critically important. hopefully we will not lose that in the panel. -- inland water ways. nexgen and how we can more efficiently get next gen moving along. i want to ask a couple there have been fits and starts with next gen. questions. also coming up in what i mentioned is aland water waste. i tried to figure out some ways we can work our love of cycling into this. , i want to look at -- it's very important to the entire country. 1.3 billion dollars in federal and state local private dollars

that have been invested so far into the project. still a long way to go to to see the program through its completion. i would like to ask you if you could describe what it means for folks and why you believe it is important from a national perspective. thank you, congressman. recycle, call a lot of but we still enjoyed. -- haul a lot of recycle, but we still enjoyed it. historically the infrastructure was rather that way. it is absolutely medically important. it is a single most important point in the north american rail network. when things don't go well in chicago, an example being the blizzard that week space up

there, all of the freight rail networks started to slow down. it is that simple. if you look at our operations into chicago, the single most important link. we run about 100 freight trains a day in and out of chicago. ,hat you get into chicago infrastructure and built over a long amount of time. the routes are not sufficient. there's a lot of work and ecb done. -- a lot oftime work needs to be done. rail crossing congestions. it creates problems. and all thee things locations that matter that only to us but the rail network, chicago is number one.

that is the significance created. you mentioned that you were this subcommittee about going to look at chicago. it is something that i would encourage at some point to get an idea of the scale and the scope and how complex the rail network is. >> thank you. it is something that i think that people need to understand the issues. we're looking at least $1.9 billion and may be more to complete it right now. i think it does not just that. there are a lot of other points in chicago the matter what mode that we are talking about. it does not just the cousins. -- cubs. [laughter] i'm a cubs fan.

we talked about aviation. i think that projects having a funding mechanism available is critical to solving problems across the country so can look apprehensively and act comprehensively on some of these points across the country. but my time is up. there's a lot more we could go into. but i yield back. >> thank you. mr. webster. forhank you, mr. chairman doing this panel. it is a very important thing to our economy and to our growth for the infrastructure. appreciate all become today. have a question about -- i appreciate all of you come in today. i have a question. the trucking industry doesn't

turn theability to right of ways or access. they basically are determined by the building of roads. i heard you mention a couple of times about, i think it is the crescent court or. -- corridor. -- how wasdetermine that determined as far as developing that core door -- corridor? >> thank you. are you a georgia tech graduate? >> i am. i'm an engineer. >> good. i love the yellow jacket. how about you? identified as he

started to look across our network and started to see on the highway system and enormous amount of freight low traffic. millions of truck per year. essentially moved into south and the southwest and up into new york and new jersey and new england. it was the largest substrate quarter that never really had effective inner rail service. but it matches up very well. we started to develop a plan to .tart to add terminals one of birmingham. several in pennsylvania. jeff infrastructure and terms of capacity -- to and infrastructure in terms of capacity. competitivell be and offer a better economic solution. it took us an lot of planning.

the federal dollars made a lot of difference. most of the investment is ours. it allowed us to accelerate a lot of the projects that we might have done over a 10 or 12 year period. and we can do them in three or four and realize those public benefits as well as a private benefits. dollarsbout 2 billion in public benefits built-in. it has been carefully analyzed by outside agencies. the culmination of the eight project on our part, but as we approach both federal officials and state officials until the mo we were doing an impact it would have, it was enthusiastically embraced by a lot of people. >> i guess then was their necessity to acquire new right away is? -- right of ways? >> only in certain instances

were remind had to expand from one track to two. meant to enhance it. rights that are invested in someone? does that work is to mark -- how does that word? -- work? >> there are rights of way. those are employed very rarely. it did not ever employed in this quarter to my knowledge. >> it was expansion or rail improvements. >> exactly. from a southern standpoint, our route structure really matched the freight flows. >> mr. chairman, i would like to make one comment about florida. tovery strategically used

lls to produce an expanded limited highway system. we have chosen to do that. it has been effective. as for the costs, do not think every gunto the -- that is collected goes back into transportation projects -- every dime that is collected goes back into it transportation projects. andave another in a local several other areas including tampa, miami-dade, orlando. we have recently in the last , i think they started off as lexus lanes. now they are price management lanes. baby they can mitigate.

everyone can use them. they are basically -- everyone -- maybe they can mitigate. everyone can use them. they are price management and that the tolls collected out there and how much better that traffic is flowing on those lanes versus the others. i can contend with that more than anything. a user pay system that works. i understand gas tax. we have a supercharged -- maybe a turbotax. as system in florida where the gas tax is indexed. most of the new roads have been built by tolls. i would add that to his committee. well, thank you.

while you're making those comments, i remembered the comment from my friend, joe, they built a -- highway. you give me his money then. [laughter] thank you. for most people who move for internationally, do you or your customers see difference between the u.s. infrastructure versus the international trading partners? where are gas if there are any? it varies around the world. in china, fantastic

infrastructure of airport and p orts and rail would in place in the last early years -- 30 years. in europe, it varies from country to country. ae european subset ideation passenger -- subsidize nation of passenger rail makes it so that it is hard to compare with the u.s. our transportation system over the last decade or so was a model for the world. it has been allowed to atrophy. we're down to number one percent. was mentioned several times that it is very difficult to simply raise the fuel tax on inflation

adjusted basis that to whatever was in 1994 despite the fact the fuel efficiency a personal automobiles and over the road vehicles and all of those later. the reason for that, quite frankly, is that we have had a vast increase in fuel taxes. it has been imposed by opec. by the price of fuel. sensitive -- people are sens tive -- sensti -- sensitive to the fact of how much they're paying. 2000 1, 60 seven cents for a gallon of jet fuel. 67 cents for a gallon

of jet fuel. average family in the u.s. is or paying between -- more gasoline per year than 10 years ago. that is why you have a hard time in increasing the gasoline tax. it adds to that. mitigate then't fact that the infrastructure is aging. on entire economy depends this is predation urges dixie infrastructure. i retire fix it, -- it economy depends on our infrastructure. we either fix it. >> thank you.

i have a few minutes. i want to talk little bit about your comments. >> you spent to deepen your por ts? is that the right amount? obviously there is no help. you have got to put the money aside and the people of south carolina have to pay for it. >> that is correct. we are probably the only port in --te that doesn't --- do that does that. some of the best jobs we have in the country come from ports. i think the freight will grow enough.

on the eastorts coast are going to be able to take advantage of the growth that is coming in the future. unfortunately, we do not participate as a government. it is the people who wind up paying for it. the reason i say that is because in new jersey, when you talk we neede bay bridge, the money to raise the port -- the bridge. the costs by trying to go up to the lincoln tunnel today into new york is like $13. it will raise up to $14 or $15. someone has to pay for the ports and keep those good paying bs in new jersey. there was a great billboard

going into the lincoln tunnel. it was put together by people from the park and ride. it read -- president lincoln, great president, lousy tunnel. [laughter] the reason being you going to new york city and you have to pay the expense. we're now working on another tunnel. as a do not participate government, all of those good jobs will be impacted. it has got come from someplace. >> there are federal harbors. it is not fair that they have to pay for the entire costs. we hope that is not the case. we are optimistic that it will not be the case. >> how many good paying jobs are related to ports? inat a out of every 10 jobs

a state of south carolina. jobs in the state of state carolina. four ports. are not in the cities like los angeles or new york. it is serving a fast growing region in the southeast. we need a 50 foot harbor. many harbors are authorized today. >> thank you, mr. chairman. ofi have been told that 42% the house is needed in the last two elections. the only representative we have at this year's freshman class is mr. mullen. you may begin. thank you.

it's a frustrating thing as a business owner. trucks on the road. the fresh ration of lack of common sense to comes out of this place all the time is literally what drove me here -- the frustration of lack of common sense that comes out of this place all the time is literally what drove me here. we are still little bit wet to have the ears. we were welcomed by the andrman to join the panel to see we're bringing in industry leaders and listening, i hope we will take your advice. politicians thinking we will fix the infrastructure is a joke. we hado take the suggestions of those there sitting in front of us. thank you for taking your time. it is not a waste of your time to sit in front of us. i believe this panel of the

11th have interest. most of us all agree that we have got to do something with our infrastructure. it is the backbone of our country. it is a way to get around. it is also the biggest expenses, too. it slows us down and slows down our production. with that being said, thank you. 70% of the states freight travels through oklahoma. 70% of the. we are the center of the country. -- 70%. we are the center of the country. we have one of the largest in land water ports. it is in our district. jimmy schuster offered to come -- chairman shuster offered to come. he made a comment, this isn't oklahoma? i say, yes.

-- this is in oklahoma? i said, yes. -- iyou are suggesting have a couple of questions for mr. smith. in your statement, you said you want to increase your tandem from 28 to 33. correct? >> yes. >> what that increase would you see in the number of trucks in the production that you build, the efficiency of delivering products? , congressman,ned the parcel and less truck business, both network businesses as opposed to the truckload business which is more point two point. one location to another.

less thanm with the get outd is that you you may will have a truck that is very heavy. in the parcel business and the business,- ltl you're underutilizing the pulling power of the vehicle. it is about a 18% pay cut and productivity. over time, you would have roughly 18% fewer vehicles that and groundd in ltl parcell and over the road transportation by making that one change. you are safer. we tested them in florida and so forth. they are more stable.

with fewer vehicles on the road. -- you have a safer operation. the way that the transportation system is evolving is truck loads transportation till around the unit -- built around the unit. he was kind enough to put up that picture of fedex up there. in reality, the majority of our trailer flatters cars, i'm confident that they will transition to containers. they are more efficient for the rail transportation. we went say that one of the simplest ways to improve the nation's rocktivity simply -- productivity -- >> that is a common sense

approach. i appreciate it. andon sense is a rarity does not belong in d.c. hopefully we can bring that along. you mentioned the weight increase. what is it that you would like to see that increase to? is there a stopping concern? ,> first, our organized asian we are a truck load. that goes from -- for our organization, we are a truckload. it goes from a to b. 1 in 5 customers would have a benefit for heavier weight. my position on it is that we are to allow. -- i we ought to allow as technology advances. it has the same exact stopping system that it does in the past

or historically with 80,000 pounds over five axle. when i made the, that there should be extensions and state should be given the authority morether vehicles or appropriate heavyweight vehicles with application is designed appropriately, that is what we are speaking to. i will tell you in the own network and organization, it would not be something that would benefit us. i think the purpose of the panel is to talk about it in broader terms. >> if i could quickly add one more thing -- sorry about taking up the time. would you prefer to see a flat tax increase or a percentage increase? -- i do noteither care who starts. ofwe have taken the position both options. both would be fine. taxave set a straight line

increase. think index is important. soting it index is important we don't you follow behind. we are not the 1993 budget in 2013. -- we are now in the 1993 budget in 2013. >> mercy. >> -- thank you. >> this talks about the ground operation. >> well. thank you. -- wow. thank you. >> we always try to save the best for the last. >> thank you, mr. chairman. this has been a fascinating discussion. i'm so pleased am able to be here on this panel. i think we will be able to get a national freight policy.

it really begins to address this issue that we have never had before. most of the questions were already asked and answered. i want to say again how pleased i am that we are talking about the harbor maintenance trust fund. i think that is a problem in search of a solution. andillion that the surplus is not been used for purposes. when we collect a tax, i think is ok in the industry with that as long as we continue to use the tax for appropriate intended uses. we lose the public's trust when we continue to ask for taxes and raise taxes and don't use them for the intended purposes. l.a. long beach is a donor for that port harbor maintenance

tax. we only get 0.1% back of what we give. awould really like to do deep dive into the harbor maintenance task direct fund and talk about are we ready to achieve some kind of equity question mark -- equity? like to see the money go back to the ports were it was collected. many of them are on the receiving end tax. i do not feel that we have the time to deep dive into that. one of the things i have not heard today which i do think it's going to be a problem that we need to address and that is the environmental impact of our expanded transportation project and initiative. if that isng

something that we need to look at an address in a commonsense way when we come up with the national freight policy. i know in los angeles and hung beach we had to address environmental mitigation as we have grown our ports. we do have to clean trucks program. we are expanding the ship's ability to plug into shore side power. we have an intermodal project that i fear will be held up because them by mental impacts of that project. it is a good project. it makes sense. it will help the transportation system. unless we address the impact that we will have on many will be, stalled until they are better. and here's to to note -- are we moving towards cleaner, greener

fleets with fedex? any kind of rail cleaning? trains and trucks? where are we? should we address this in a proactive way? orany kind of expansions more investment in infrastructure projects, we address this at the same time so as not to have a conflict with environmental mitigation. i would like to hear all of your comments on that. >> i will start and simply say that the easiest and best way to reduce omissions and pollutions

is through making our transportation infrastructure more efficient. everything that we talked about infrastructure funding, increased fuel taxes, as long as that money is spent on infrastructure, it will produce the number of vehicles or activities. there will be a reduction in emissions. it follows one to the other. as i mentioned in fed ground alone by making a change in the is a fatic -- it improvement. second, technology is allowing us to do what we do more efficiently.

we are buying new airplanes that are more efficient. the airplanes are lighter. fedex express is almost 40% moreient -- almost 40% efficient. make it more advantageous to invest in capital assets in the u.s. and modernize them. those key things, you don't have to worry about efficiency getting better. i will happily. -- thatt will happen will happen. >> we got rid of 200 crossings. what started out to be an officious way to move cargo turned into being an incredibly environmentally sound project that reduced omissions with

cars. thank you. i would like to hear from the rest of you. >> let me go very thickly. there is an enormous amount -- let me go very quickly. there is an enormous amount in terms of reducing omissions. we have fuel efficiencies versus the long-distance highway transportations. generally viewed as a cleaner form of transportation. we have got lots of programs and reduce emissions increase fuel efficiencies all over. the other point i would build on in terms of what you can do and what congress can do is that all of us in this panel believed in being good corporate citizens and environmental stewards, but one of the things

that happens -- and you pointed out a great example of -- i often there are often very good products out there with significant environmental and economic benefits that get snarled up in layers and layers and not only federal regulation, but state and local regulations. you can add years and years to a projectsen we get to realize those benefits. think about how to streamline -- processes. .> i will also try to be brief the single biggest thing we can do to positively impact the environment is takeaway congestion that otherwise results from inaction. was $121of congestions billion.

the real issue is as those trucks and other vehicles are congested, the emissions of pollutants may happen. emissions over the last five years. every struggling down the road today, you may need 60 of them to have the same emissions as one truck would've had in 1985. line down the road today, you may need 60 of them to have the same emissions as one truck would've had in 1985. better structures and we can invest in alternative technologies as the become available. that would be huge. we are extremity with natural gas. -- experimenting with natural gas.

it allows us to take risk. that would be beneficial as well. thousands ofnated pollutants in the past two years. we will continue to do so. it is an industrywide effort. industry hasnal been on the forefront of environmental efficiencies. the very building of large ships is very efficient. we will carry more cargo on the same number of ships. it will be more efficient ships. i think the main benefit and harbors will be from the north american commission until area. it was implemented in the u.s. in august. it will reduce her full content and maritime -- sulfur content and maritime diesel fuel. we have a puerto rico carrier today.

i think the ports have stepped up to the plate in terms of retrofitting angers and having more efficient engines -- retrofitting and having more efficient engines. onef i might, i will add small comment. on next agenda, the aviation -- on the next gen, it will reduce the footprint of the airline industry. reducing congestion is good environmental policy. there's too much light gets in the way of environmental progress. leading the freight industry expands making policies in our government reflect that ability to expand is good policy. i know no one has mentioned other transit in this hearing. inyou boost public transit

large metropolitan areas and give them more resources so they can expand and not have to cut services, that would relieve congestion and leave more room for freight. that is good policy as well. >> thank you. >> thank you. before i make my closing comments, i believe there are some more questions. , this is veryn educational. the chamber from miami was here and they were watching. keeping in mind that we have the support of the business community, they are interested in us working together to move transportation bill that would give us a revenue enhancement of taxes or whatever you to call it and make sure that we s said thathe earmark

the communities, to get -- so that communities can work together to get immediate sources. the department of transportation released -- we will have billions of dollars to fund because of the pent-up demand in the community of those points that you talked about. i want to say thank you. thank you, mr. chairman, and the ranking members for this committee. thank you for all of your testimonies. it has been helpful. >> thank you. anything else? you do not want to take up any more time, do you? i talked to some engineering companies. they were also excited that this is going on that we are talking about this.

thank you. >> thank you. i was a judge for seven and a half years before i came to congress. i/o is try to start court right on time. then i came here and every hearing started 15 or 20 minutes late. i tried to start on the minute my goal is to hold these hearings for a few hours. i found that you had better participation if you kick started these hearings on time and get them running. i always try to do that. we have unlimited over today. the testimony has been fascinating. gone over a little today. the testimony has been fascinating. we are all in this together. there is an important local will. important staple.

localre is an important role. staple. an important -- state role. we're all in this together. it seems to me that there are many challenges. the number one is funding. .hat is a problem for all of us i have said in here for many years. stopot -- we need to spending on unnecessary wars and other countries and start taking care of our own country for a while. a second a distinct it seems to me is to speed up project.

i remember when i was on the aviation subcommittee. 14 years from conception to completion. they were relieved to get all of the final approvals. when i chaired the highways committee, federal our people told us -- federal people told us their last two studies once in 13 years and the other one said 18 years from conception to completion. they talked about that nor folk project thatrfolk they basically get on their own to try to speed things up. hopefully there'll be some effect on that. when we are forced into it, we

can move quickly, like on interstate 35. we all got together on that. how do we balance resources? do people move in all over the country. moving all people over the country. they're moving to the popular urban areas. i see that in tennessee. you know the fast growth in tennessee. half of the people i represent have moved from someplace else. it is phenomenal. is that youe got had these big cities primarily in the northeast that have such an aging infrastructure. they need a lot of work. then he had the fast growth and a lot nashville

of other areas out in the country. they need a lot of work done in growth. all of us have a soft spot in our hearts for the small areas. you don't want to force people out of those areas. they need a lot of help. , these aree jobs jobs that cannot be outsourced for the most part. that is important to me. i'm are present the university of tennessee and lots of other small colleges. -- i represent the university of tennessee and lots of other small colleges. i would hate to see people leaving with advanced degrees and they cannot find good jobs that they used to be able to. the most fascinating slide i think you showed was one showing the panama canal moving

-- how manyps with was it? that amazes me. i've seen presentations of that. they got 8000n was almost unbelievable. then he go back into the 1950's. we have got to keep improving these ports. i had the opportunity to open and close the panama canal. been to most of the ports. you are doing what you're doing. .et me at this we need specifics, as many as we can. i was glad to have you mentioned the corridor project.

i put in the first money to do the first study of that project. that is something that would be it for my area and many other areas as well. we have been asked to go around the country and to make recommendations to all the different subcommittees. if there is any specific that you think of after you leave here or do not have an opportunity to get into in the testimony, we submit it to us. we want everyone to do well. we have got a great quotation system -- transportation system. as a company or whatever, you lose the desire to improve and it is sad for you and the people you work for. i hope i'm a better congressman now that i was five years ago.

i hope that i am here a while longer. we have got to keep trying to do more. we have to do better. that is what this panel is all about. as many specifics as you can give us for our final report. we would appreciate it. we appreciate the work that you put into your testimony and your responses here today. my friend to close out the hearing. >> thank you. thank you to the witnesses and the members. this is the beginning of what will hopefully be a very andtful investigation result in a unified intelligent comprehensive freight policy for this country. something we have not had in a long time. we will look at the different modes and figure out how to finance them.

the gas tax, diesel fuel tax has been the primary source of resourcing infrastructure. we are becoming more fuel- efficient, which we want to be. that has reduced revenues. we've got to do something to replace it. we have got to figure out how to cut down on the red tape and the delays in the implementing of projects. i'd have to make sure from the national point of view that we have those projects and others will make the system as much as possible see more efficient. it is a tall order for six months.

thank you to everybody involved in this. very much.u thank you very much for being here. that will conclude this hearing. the job. -- a good job.