guest: the proposal that the administration has put out is to use pro growth business tax reform to pay for our bill. and actually our proposal actually works in reducing corporate tax rates by removing the 35% tax rate that would apply to overseas foreign earnings that currently aren't taxed as they're sitting over there but if they were brought back there would be a 35% rate that would apply to them. our proposal would be to tax those untaxed corporate earnings overseas once at 14% 21% reduction, and to bring those over here the proceeds of that over here to put to work for infrastructure would pay for our bill get us double what the gas tax now is producing and get us going.

host: have you tarbged to law makers met with them and what are you hearing from them? guest: the proposal is one that actually enjoys bipartisan support in many ways. if you remember about a year ago the chair of the house ways and means committee at that time dave camp put a white paper if you will that used this very same framework. and we think it's a framework that can work. >> at the hearing in the house earlier this week there was some members of your party and the other party that were a little skeptical about this plan? . >> pay fors are like they say about democracy it's the worst system ever except for

something else. any time you have a pay for there are going to be warts on any given proposal. we think this one meets the test of not meeting tax rates not meeting deficits but putting significant dollars into the system. >> at that hearing the house transportation committee hearing on wednesday where you testified some of the republican members seemed to be questioning the very basic principle that's been around since the early 1980s that roughly 20% of the money in the highway trust fund should go to mass transit. you've got questions from republican members from louisiana, north carolina, and a couple other states. why are we doing this? why is the system set up this way? and if you had to address for somebody who is just arriving at this and scratching his head why should drivers in ohio be paying for systems in

california? >> this gets into a couple systems that our recent study talked about which is first of all that the country is growing. we're going to grow by 70 million people over the next 30 yeerings and that means that whatever congestion we have today is likely to get worse if we don't do something different. the second fact about the report that i think is particularly jermaine to your question is that a lot of that grotes is coming in to the south, louisiana, north carolina, texas. these are places that are largely auto dependent. if i were giving you a model i would say that if you know that you're going to get 60% more truck traffic on the roads over the next 30 yeerings which we've modeled out and believe that's true and you're going to get 70 million more people that means more congestion in these fast growing states. so what's important is that we start to get more choice for

the users. and transit is one of the ways that we do that. the challenge, though, is that the communities have to ask for it and so our transit systems are largely local. and in many parts of this fast growing areas the transit systems have not matured to the point where they're really reaching out for the dollars that they're going to need for the future but part of ours is putting money in place to help get ahead of that growth curve. >> let me follow up on the question of your home state north carolina and mark the question that mark asked about what's the benefit to people in my district. right north of your hometown in charlotte there's a project to put intology on the interstate 77 and there's kind of a grass roots reaction against that. as there has been in some other parts of the country. i think last year in the grow america act the administration

proposed an -- giving governors and local officials the option of expanded use oftology on interstate highways. is that going to be part of the new grow america act? and how do you sell people on the idea of payic for a trip that used to be, quote, free? in other words,tology the interstated highway? we think again choices are going to be important in the 21st century. and that includes giving more options to governors to explore tolling if that's what they choose to do. we're not proposing to toll the whole system. if a governor has a plan to expand capacity not to use the same lanes but to expand capacity and he has a plan to do it, let's take a look at that plan and give the u.s. d.o.t. the opportunity to approve that. currently we have a ban on tolls nationwide. and getting back to your previous question the last point i wanted to make on that

was that if you get users off the road it creates more capacity for other users. so one of the big selling points for transit has always been that the gas tax gets used to help the road system improve but also to pay for those transit systems that also create more capacity by getting people off the roads. >> following up on that mr. secretary, i've heard you say as you sort of alluded just a second ago that we need to get more people out of their cars and using alternate means of transportation. but the statistics show that transit use has remained fairly flat in terms of the share of commuters that use it around 5% over time. how do we entice people out of their cars? americans seem to like the convenience of a car and doing their own thing behind the wheel and how do you get them into transit? >> i think this is one of the

most fascinating things we learned when we looked 30 years out is the attitudes about mobility are different according to which generation you're talking about. in the millennial generation which is now more populous than the baby boom generation, these young people want to live close in. they are not buying cars. they are actually using these sharing systems like the zip car and uber and these other technologies that are out there. they're biking and walking more places. and they want to live in densely populated areas for the most part. so i think as we look forward we have to think about this generation that's coming along that has an entirely different attitude towards transportation. when i was coming along, you know it was a big deal when you turned 16 to get a car. that's what you wanted. this generation isn't like that. >> mr. secretary, one of the themes you hear in hearings of

the house is this whole theme of regulatory uncertainty. for example, the railroad industry the rail car manufacturing industry all wondering when will the department of transportation issue its rule on tank cars and new standards for tank cars. the people in the unmanned aerial vehicle drone industry are complaining about the slowness of the rule from f.a.a. on integration of unmanned aerial vehicles commercialization integrateion into the air space. they're claiming that the slowness of the process is inhibitting the growth of these industries and creating uncertainty. let's take the rail car issue. can you tell us anything about where that stands? members of congress are saying just issue the rule and then the industry will know what it has to contend with. can you give us any insight? >> first i agree with the

members of congress that this needs to come out as quickly as possible. but it does have a very rigorous process that rules have to go through. we've worked since i came in there were four days into this office i was dealing with it and up in canada that was a horrific issue. we have been working with our counter parts to craft a rule that we think is sensible and also protects the public to the greatest extent we can. but it does have to go through steps. right now the rule has been moved out of the d.o.t. over to the office of management and budget for very thorough look at lots of things including cost benefit analysis and we're pushing forward as fast as we can. >> and if there's an office within the omb that reviews these proposed regs. for people who are on the outside of this process and

looking at it, -- >> there are probably ten of us who know what you're talking about. >> when it goes through that office where they do the cost benefit analysis, is it just a block box? is it just completely nobody knows what's going on inside that black box? because again the industries that are affected are waiting and wondering what's going on. at one of the hearings on this rail car issue mr. defazz yo said the trolls over at o.m.b. are delaying this. and can you describe your understanding of that process? >> let me back up for a second and say omb is a creature of the nixon administration back in the early 70's. and the idea was that any significant rule making that occurred in government would have to go through a very thorough look to ensure that

we're not overregulating industry. so in some ways the process is designed to ensure that when rules do come out there's been a thorough look at whether there are alternatives or whether there's a better way to get there. so it's actually more out of the spirit of a regulate only as necessary environment that we have the system we have. i think one of the challenges we have going forward is that if you take the rate of change that technology is moving into, it's moving much quicker than our systems have historicically been able to move. and as we go into the future i think that's going to be an area that probably does need to be looked at. i don't know what the answers are but i know that there's an awful lot of very disruptive safety enhancing technology that is coming around the corner and we're going to have to be able to adapt to the future to embrace it. >> we have about ten minutes left. i want to go back to funding. i'm wondering with the prices

that means less money in the highway trust fund. some places are beginning to raise the question of increasing the gasoline tax which has not been raised since the early 1990s. why not? americans are seeing the benefit of lower gas prices. the argument is they wouldn't feel very much pain with a small increase in it. why not use an increased gas tax? >> let's remember -- well, first of all congress may land there. we don't know. we've said from the very beginning we've had our ideas about how to pay for a bill with you we're not foreclosing ideas that emerge from congress. so that's in theory a possibility. let me say this. we need to recognize the fact that we've had 3r short term measures in congress over the last years is telling us something. it's telling us that maybe there's not the will to do it the old way any more. and that can be a burden or it can be an opportunity.

i choose to think of it as an opportunity. and when i look at the future of transportation, i look at these millenials that have an entirely different perspective they come to this issue and they will be in their 40's and 50s 30 years from now and i look at the fact that we aging infrastructure, we have places getting more population that have automobile dependent communities. we're going to have to think differently about how we move people. and i think one of the constraints of the gas tax has been that it's been very road heavy. in a country that needs to become more multimodal maybe using a different source like this tax reform gives us the ability to unlock the potential of multimodalism in our country. >> have you given up on the idea of a vehicles mild travel tax in the sense of -- there was talk a few years ago that that was the way for all governments to do but we hear nothing about that in congress

and we don't hear anything about that from you. it was talked about as much more equitable so that cars that drive -- use less fuel would pay the same as cars that use more if they were driven the same amount. where does that stand with you now? >> well, i think that we should continue seeing what experimentation yields in terms of how these alternative systems are paying for transportation work. and i know there's a study that's ongoing in oregon right now looking exactly at vehicles miles traveled and i think it's productive to see what the laboratories of our democracy at the state and lovely level come up with. there's -- local level come up with. there's also experiments looking at taxes on the barrel. but let me come back to one critical practical point, which is that the best solution is

the one that can get congress to coales around. and we think there's an opportunity with pro growth tax reform to get a six-year bill with appreciable growth. i don't think that would be the end of the conversation. we would still have to have conversations in future years and ideas like the one you're talking about probably should be part of that conversation. >> mr. secretary i know you talked about and in the president's budget proposal for fy 16 there's discussion of speeding up the permitting process so that these projects can get done more quickly. i want to give you an example of and see how it would work in this case. congressman mike honda who is from san jose, california, discussed this week the delay that local officials in his district are facing getic permit that would allow the

building of a new bart station in his district. they want to extend the bart down to silicon valley as you know. but the people he needs to -- the people that local officials need to get the permit from is not your department but say army corps of engineers because it has to do with flood control. in your permitting reform what about these agencies that don't answer to you? they are a different part of the government. how does -- is there a central command center that says issue the permit? how do you reform that process? because he says it's in danger of delaying construction for a year. >> yeah. one of the ways that we've been able to speed up permitting in projects -- and i've talked about this a lot -- is through concurrent reviews where all the federal agencies are sitting at the table at the same time and they're looking at the project and they're making comments on it. and the music stops at an earlier point in the conversation. >> but that heabt happened in this case. >> not in this case partly

because we haven't been able to operationalize this practice across every practice that comes into the federal system. but title 1 of the grow america act, part of what we're trying to do is to operationalize that practice. >> one other sort of regulatory issue. it's been report that had the heads of three major u.s. airlines, delta, united, and american, met with you and other obama administration officials about the open skies agreement that allows air traffic competition between the uae, united arab emirates and the united states, and the american airlines are saying that emirates airlines, for example, is subsidized by their home government. can you tell us about that discussion? and should the open skies agreements with countries like united arab emirates, should they be reconsidered or renegotiated? >> first, it's a very complex topic. it's one that has been openly

reported that i attended a meeting, and i did. but it's a matter that we are taking a look at. i don't have any really anything to add to it at this point. we're taking a look. and that's about all i can say. >> we have six minutes left. >> mr. secretary there's a lot of discussion about trucking at the hearing that you testified at this week. you've got a big report coming up on trucking, i understand, and the impact on local roads. if i'm correct. or maybe on all roads. and also there's some efforts by the trucking industry under way to extend or expand the size of trailers on tractor trailer trucks. of course safety advocates don't care for that. so i was wondering if you could tell me a little about your report and also what you think of this idea of expanding trailer size. >> when this report was

initiated, we promised all the stakeholders that we would give them a window into the process as the report was being developed. the report has moved fairly well along the way. but we do have a few more steps to go before it becomes final report from the department including additional round of peer review and additional round of public input. so we are continuing to move that process along and i hope we can get it out as quickly as possible. >> and what about the size issue? apparently there's going to be a lot of effort in this transportation bill that congress is going to consider to extend the size of these trailers freight operators say that they -- freight is growing, they're beyond traffic report talks about how freight is going. but safety advocates don't like it. they say it makes the truck too big. what do you think?

>> we have to complete the study. what i heard loud and clear in the hearing was that there is interest in congress taking a look at this and perhaps doing something legislatively and that there is a desire to hear the department's research view on this question. so that message was received loud and clear by me and others in the department and we will do our very best to be relevant in the timing that we produce this report. >> final questions. >> mr. secretary going back to funding. if we get down to may what congress has chosen to do since 2008 is take money from the general treasury fund and put it in the highway trust fund. is there an argument that that's not a bad thing because we all benefit from having a national transportation system. i can fly to colorado and drive on the interstate there. so general funds putting them into the highway trust fund, is that such a bad idea? it seems to be the course of least resistance and we do all

benefit from having an interstate highway system, for example. >> that's basically what congress has been doing for the last several years just to keep the highway trust fund level. but let's be very clear that it doesn't establish a dedicated source of revenue from year to year congress can change its mind on what its funding lels are. and more importantly, i think that we also need to be honest with ourselves about what the highway trust fund actually is. the highway trust fund and the funding levels associated with it are not set at getting the results we want. it's set at getting us where we were last year. and cbo and others have done studies to show that the current funding levels don't meet our basic needs they do nothing to address the long-term capacity needs that we have. we have a big jump to get to where we need to get to. i think we need a dedicated source and we have one on our bill through -- >> through the overseas tax earnings. >> if i could ask you lastly

about freight. in your beyond traffic report you spend a lot of time on freight. and the numbers of anticipated growth are pretty impressive. there were some suggestions this week, and i think that one congresswoman has a bill probably has a bunch of cosponsors too, that say, ok we have to dedicate a certain portion of money just to freight. what's your thoughts on that? do you like that idea? is it important to have a dedicated source for freight bottlenecks? or is the it -- do they sort of compete against everything else? >> i think congress first of all at least has to get you know highway trust fund replenished. so that's like minimum. that's not even getting us out. if we grow the program like we're suggesting with the grow america act, then you should create new programs that dedicate dollars to freight

just like we do and as the congresswoman is suggesting we keep that dedicated funding within the pro growth business tax reform. shuffs suggesting another potential source. but i think the idea that the country needs a dedicated freight program is spot on. >> let's bring us full circle as we close here. and that's on the viability politically of your plan. overall you call for 29% increase in highway spending, 8776% transit over six years. is the republican congress going to respond to this plan? >> i think there is a lot of interest on a bipartisan basis in getting a six-year bill done. and i've talked a lot with chairman bill shuster on the house side. i've spoken with chairman paul ryan on the house ways and means as well as their counterparts on the senate side. and i think folks realize we've got a problem. it's been accumulating because of the short-term measures in the past. and do i expect them to digest

and pass whole hog our proposal? i hope so but i'm not going to hold my breath there. but what i do think is that we put some ideas ornt table that advance the ball and i think we're going to be able to work together to get something done. >> thanks for being with us. and as we suffer in the cold here in washington good work in picking southern states for your bus tour the coming week. >> thank you. >> thanks for your time. >> "newsmakers" is back. after our conversation with transportation secretary anthony fox depnch. -- this is a $478 billion proposal covering six years. we've got republicans in control of the house and senate who overall are smaller government, lower government spending oriented members of congress. however, transportation bills are historicically of a

different sort. it starts to bring home the bacon to home states. so what really are the politics of a bill this big and how the spending might come out even if you have a republican controlled house and senate? >> well, the problem is that there's no easy source of money to pay for all of this. it's very -- historicically we've depended upon the highway trust fund which is funded by gasoline and diesel taxes mostly. and they haven't been raised in over 20 years. and they're buying less each year in terms of construction and what they can do with it. so in trying to find the money from the general fund is very -- is increasingly difficult. all the low-hanging fruit has kind of been plucked. so they're just basically hasling over how to pay for it. when you get down to the policies, there are differences. there are nuances between democrats and republicans.

some of them significant. but in general they both like the idea of a transportation bill. it's the pay-fors that are the hang-up. >> well, i think it's important that chairman of the transportation committee bill shuster has made it clear that it's important for him and for the republicans that this bill get done somehow. and even though at that hearing that secretary fox testified at on wednesday before the transportation committee in the house there were some skeptical questions from some of the republican members especially thomas massey from kentucky, mark meadows from north carolina. keep in mind that there are a lot of republican members also from places like syracuse, new york. they represent suburban districts and urban districts. and for their own political

support for the the balance

drops below an acceptable level where they can cover the obligations, the amount of money they promised to send states. when that happens they start slowing down payments to states. they may not get paid the same day or the same week. it just depends on how bad it gets or how low it gets. but already states are putting off projects because of the uncertainty. they can't just suddenly make a decision in at the end of may to fund a road reconstruction or a new lane on a highway. they have to make those decisions way in advance. and if they don't have the federal piece to that which is not 100% usually of the project but a portion of it, then they have trouble figuring out how to pay for the whole thing. >> we were talking about funding. the question you asked the secretary about increased latitude to and exact tolls on federal highways.

people watching should expect that's their future? >> in the grow america act last year the administration proposed to give states more flexibility to toll their sections of the interstate because apart from grand fathered sections, like the pennsylvania turnpike many parts of the united states tolling is not permitted under current law. so the secretary fox and the administration support this idea of giving governors and state h legislatures more freedom to do this on their interstates if they want to and there's some states like florida and texas that on the state highways have already done a lot of tolling. and to the point in texas where it's getting some pushback from people. but i think he's saying give governors the option and let them fight that political battle at their state level. convince people that it's worth doing as a way of paying