[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: RAIL STAKEHOLDERS'
PERSPECTIVES
=======================================================================
(115-27)
HEARING
BEFORE THE
SUBCOMMITTEE ON RAILROADS, PIPELINES,
AND HAZARDOUS MATERIALS
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
OCTOBER 4, 2017
__________
Printed for the use of the
Committee on Transportation and Infrastructure
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available online at: https://www.govinfo.gov/committee/house-
transportation?path=/browsecommittee/chamber/house/committee/
transportation
______
U.S. GOVERNMENT PUBLISHING OFFICE
29-828 PDF WASHINGTON : 2018
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Publishing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800;
DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC,
Washington, DC 20402-0001
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska PETER A. DeFAZIO, Oregon
JOHN J. DUNCAN, Jr., Tennessee, ELEANOR HOLMES NORTON, District of
Vice Chair Columbia
FRANK A. LoBIONDO, New Jersey JERROLD NADLER, New York
SAM GRAVES, Missouri EDDIE BERNICE JOHNSON, Texas
DUNCAN HUNTER, California ELIJAH E. CUMMINGS, Maryland
ERIC A. ``RICK'' CRAWFORD, Arkansas RICK LARSEN, Washington
LOU BARLETTA, Pennsylvania MICHAEL E. CAPUANO, Massachusetts
BLAKE FARENTHOLD, Texas GRACE F. NAPOLITANO, California
BOB GIBBS, Ohio DANIEL LIPINSKI, Illinois
DANIEL WEBSTER, Florida STEVE COHEN, Tennessee
JEFF DENHAM, California ALBIO SIRES, New Jersey
THOMAS MASSIE, Kentucky JOHN GARAMENDI, California
MARK MEADOWS, North Carolina HENRY C. ``HANK'' JOHNSON, Jr.,
SCOTT PERRY, Pennsylvania Georgia
RODNEY DAVIS, Illinois ANDRE CARSON, Indiana
MARK SANFORD, South Carolina RICHARD M. NOLAN, Minnesota
ROB WOODALL, Georgia DINA TITUS, Nevada
TODD ROKITA, Indiana SEAN PATRICK MALONEY, New York
JOHN KATKO, New York ELIZABETH H. ESTY, Connecticut,
BRIAN BABIN, Texas Vice Ranking Member
GARRET GRAVES, Louisiana LOIS FRANKEL, Florida
BARBARA COMSTOCK, Virginia CHERI BUSTOS, Illinois
DAVID ROUZER, North Carolina JARED HUFFMAN, California
MIKE BOST, Illinois JULIA BROWNLEY, California
RANDY K. WEBER, Sr., Texas FREDERICA S. WILSON, Florida
DOUG LaMALFA, California DONALD M. PAYNE, Jr., New Jersey
BRUCE WESTERMAN, Arkansas ALAN S. LOWENTHAL, California
LLOYD SMUCKER, Pennsylvania BRENDA L. LAWRENCE, Michigan
PAUL MITCHELL, Michigan MARK DeSAULNIER, California
JOHN J. FASO, New York
A. DREW FERGUSON IV, Georgia
BRIAN J. MAST, Florida
JASON LEWIS, Minnesota
(ii)
Subcommittee on Railroads, Pipelines, and Hazardous Materials
JEFF DENHAM, California, Chairman
JOHN J. DUNCAN, Jr., Tennessee MICHAEL E. CAPUANO, Massachusetts
SAM GRAVES, Missouri DONALD M. PAYNE, Jr., New Jersey
LOU BARLETTA, Pennsylvania JERROLD NADLER, New York
BLAKE FARENTHOLD, Texas ELIJAH E. CUMMINGS, Maryland
DANIEL WEBSTER, Florida STEVE COHEN, Tennessee
MARK MEADOWS, North Carolina ALBIO SIRES, New Jersey
SCOTT PERRY, Pennsylvania JOHN GARAMENDI, California
MARK SANFORD, South Carolina ANDRE CARSON, Indiana
TODD ROKITA, Indiana RICHARD M. NOLAN, Minnesota
JOHN KATKO, New York ELIZABETH H. ESTY, Connecticut
BRIAN BABIN, Texas CHERI BUSTOS, Illinois
RANDY K. WEBER, Sr., Texas FREDERICA S. WILSON, Florida
BRUCE WESTERMAN, Arkansas MARK DeSAULNIER, California
LLOYD SMUCKER, Pennsylvania DANIEL LIPINSKI, Illinois
PAUL MITCHELL, Michigan PETER A. DeFAZIO, Oregon (Ex
JOHN J. FASO, New York, Vice Chair Officio)
JASON LEWIS, Minnesota
BILL SHUSTER, Pennsylvania (Ex
Officio)
(iii)
CONTENTS
Page
Summary of Subject Matter........................................ vi
WITNESSES
Edward R. Hamberger, President and Chief Executive Officer,
Association of American Railroads:
Testimony.................................................... 3
Prepared statement........................................... 40
Responses to questions for the record from:
Majority-side subcommittee............................... 55
Minority-side subcommittee............................... 61
Supplementary information to responses to questions for
the record............................................. 63
Charles ``Wick'' Moorman, Cochief Executive Officer, Amtrak:
Testimony.................................................... 3
Prepared statement........................................... 82
Responses to questions for the record from:
Majority-side subcommittee............................... 87
Minority-side subcommittee............................... 88
Linda Bauer Darr, President, American Short Line and Regional
Railroad Association:
Testimony.................................................... 3
Prepared statement........................................... 90
Responses to questions for the record from the minority-side
subcommittee............................................... 95
Thomas DeJoseph, Senior Advisor of Industry Relations, Loram
Maintenance of Way, on behalf of the Railway Supply Institute:
Testimony.................................................... 3
Prepared statement........................................... 97
Responses to questions for the record from the minority-side
subcommittee............................................... 105
Larry I. Willis, President, Transportation Trades Department,
AFL-CIO:
Testimony.................................................... 3
Prepared statement........................................... 108
Responses to questions for the record from the minority-side
subcommittee............................................... 118
SUBMISSIONS FOR THE RECORD
Letter of October 18, 2017, from James Pollard, Chief Executive
Officer, OptaSense, to Hon. Jeff Denham, Chairman, and Hon.
Michael E. Capuano, Ranking Member, Subcommittee on Railroads,
Pipelines, and Hazardous Materials of the Committee on
Transportation and Infrastructure.............................. 120
Testimony of Ray B. Chambers, President, Association of
Independent Passenger Rail Operators........................... 122
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: RAIL STAKEHOLDERS'
PERSPECTIVES
----------
WEDNESDAY, OCTOBER 4, 2017
House of Representatives,
Subcommittee on Railroads, Pipelines, and Hazardous
Materials,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:03 a.m. in
room 2167, Rayburn House Office Building, Hon. Jeff Denham
(Chairman of the subcommittee) presiding.
Mr. Denham. Mr. Capuano is already complaining that we are
a couple minutes behind, so I thought we had better get things
rolling here.
Good morning and welcome to the Subcommittee on Railroads,
Pipelines, and Hazardous Materials. Our hearing today is
``Building a 21st-Century Infrastructure for America: Rail
Stakeholders' Perspectives.''
So, first of all, the committee will come to order. I would
like to welcome all of you here. We are seeking your input as
we put together our overall infrastructure package. Our goal is
to rebuild, expand, and improve our current rail system, and
make sure that it is a system that is competing or expanding as
other areas of infrastructure are moving forward, as well.
And in the process we want to do it very, very quickly. We
want to make sure that we are unleashing capital so that we can
actually do the big improvements quick, so that we are not
talking about 10- or 20-year projects, we are expediting them
to 2-year projects.
We also want to build on our past successes. This
subcommittee has had a number of successes in regulatory
reform. We want to build upon that and make sure we are able to
not only deliver these projects quickly, but also have the
resources to do so, which is making sure that some of our
current programs actually work and work well.
One of those would be the RRIF loans, the Railroad
Rehabilitation and Improvement Financing. We want to make sure
that those loans are--or that capital is able to get out there
into the market, and we are able to improve a number of our
different rail systems.
We are very proud of our rail system. This is a freight
rail system that started in 1828. It is the best in the world.
We--our imports, exports--we are competitive because we are
able to move goods across the entire country. But we can do
better.
We have also seen a big increase in passenger rail, and we
want to make sure we continue to do the investments to make
sure that passenger rail is on dedicated track, passenger rail
is continuing to be more and more competitive, and we are
continuing to put new technologies in place to create greater
efficiencies so that more people are excited about riding on
passenger rail.
So, this is an opportunity for us to hear from you. We want
to learn not only best practices, but, more importantly, we
want to hear from you the regulatory changes that will help to
expedite projects, as well as the funding scenarios behind
those. This is your opportunity to give us the information,
both in this hearing as well as after the hearing, as we do
followup to make sure that we are included into the overall
infrastructure package that we will be seeing in the next month
or so.
So, with that, welcome. We look forward to your testimony.
I now turn it over to Mr. Capuano for as much time as he may
consume.
Mr. Capuano. I agree with everything the chairman just
said. Thanks for coming.
[Laughter.]
Mr. Denham. All right. Well, let me start with our panel.
Mr. DeFazio? Yes, sir.
Mr. DeFazio. Thank you. Since Mr. Capuano went on for so
long, I will keep my remarks brief.
[Laughter.]
Mr. DeFazio. You know, I think this is our third hearing in
this subcommittee, and we have also held hearings in other
subcommittees on infrastructure initiatives, the trillion
dollars that the President promised during the campaign, and
yet we have seen nothing concrete--not to make a bad pun--from
this administration or the White House.
I started a clock, which is based on estimates of the Texas
Transportation Institute, of the costs of congestion in
America. And that clock, since the inauguration, has run up
$110 billion of wasted time for individuals and businesses
because of congestion. Yet we don't have a proposal.
The most substantive thing we have heard was from the
President's chief economic advisor, Gary Cohn, who talked about
so-called asset recycling. That is, bribing States to sell
their assets to private interests who would then presumably
toll them. And there are a lot of problems with that proposal.
We also saw that they started talking about, well, we are
going to put up $200 billion, source unknown, of Federal money.
And the other $800 billion will come from the private sector
and the States. Well, the problem is 24 States, including mine,
have already acted to increase gas taxes or wholesale rack
taxes and license fees and all sorts of other things, but they
don't have a willing Federal partner to help deal with their
huge infrastructure needs.
If we do want to incent States, it should also have a look-
back provision to say, well, for States within the last number
of years--2 years or so--you know, should also get the same
sort of matching payments that Mr. Cohn was talking about. It
wouldn't--because there are quite a number of States that
haven't raised their user fees or gas taxes in more than two
decades. We don't want to reward that sort of behavior, while
penalizing those who actually felt a little pain and went out
and did something about it.
Obviously, rail definitely needs more focus. It is way more
efficient than trucking. You know, I used to say it was the
most efficient in moving freight until a gentleman who owns a
large towboat company in my district, Dale Sause, reminded me
that barges are more efficient. But it is a great way to be
moving freight and facilitating our economy. And it is also a
good way to move people, also very efficient.
And so, you know, I was sad to see that the President
basically proposed to kill Amtrak yet again. We have been
through that debate. Congress has acted longer term on a
minimal bill to keep Amtrak on life support, and we shouldn't
back away from that.
So with that, Mr. Chairman, I thank you for convening this
hearing and look forward to hearing from the witnesses.
Mr. Denham. Thank you, Mr. DeFazio. Now I would like to
welcome our panel of witnesses.
First, Mr. Ed Hamberger, president and chief executive
officer of the Association of American Railroads; Mr. Wick
Moorman, cochief executive officer of Amtrak; Ms. Linda Darr,
president of the American Short Line and Regional Railroad
Association; Tom DeJoseph, senior advisor of industry relations
for Loram Maintenance of Way; and Mr. Larry Willis, president,
Transportation Trades Department, AFL-CIO.
I ask unanimous consent that our witnesses' full statements
be included in the record. Without objection, so ordered. Since
your written testimony has been made part of the record today,
the committee requests that you limit your summary to 5
minutes.
Mr. Hamberger, you may proceed.
TESTIMONY OF EDWARD R. HAMBERGER, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, ASSOCIATION OF AMERICAN RAILROADS; CHARLES ``WICK''
MOORMAN, COCHIEF EXECUTIVE OFFICER, AMTRAK; LINDA BAUER DARR,
PRESIDENT, AMERICAN SHORT LINE AND REGIONAL RAILROAD
ASSOCIATION; THOMAS DEJOSEPH, SENIOR ADVISOR OF INDUSTRY
RELATIONS, LORAM MAINTENANCE OF WAY, ON BEHALF OF THE RAILWAY
SUPPLY INSTITUTE; AND LARRY I. WILLIS, PRESIDENT,
TRANSPORTATION TRADES DEPARTMENT, AFL-CIO
Mr. Hamberger. Thank you, Mr. Chairman, Ranking Member
Capuano, Ranking Member DeFazio. On behalf of the members of
the AAR, thank you for the opportunity to discuss railroad
infrastructure with you today.
If I might, Mr. Chairman, I would ask your indulgence to
make two personal comments that might extend my comment beyond
the 5 minutes. This is the first opportunity I have had to
appear before the committee since Mr. Duncan has announced his
retirement, and I just wanted to thank him on the record for
his many terms of leadership on transportation writ large, but
certainly for his support of the rail industry in this country.
So thank you, Mr. Duncan.
[Applause.]
Mr. Hamberger. Secondly, this is the first opportunity I
have had to appear with Mr. Willis since he has achieved his
new position at the Transportation Trades Department. This
hearing was scheduled 2 weeks ago, and was postponed because of
two devastating hurricanes. And I just wanted to say thank you
to Mr. Willis and his members for the work they did under
impossible conditions to get ready for those hurricanes.
And then, in the rebuilding that they did, the response
that they did, the cooperation that management had, and the
working relationship with labor got us up and running again
within 7 to 10 days following both of those hurricanes, many
times waiting, unfortunately, for our customers themselves to
be able to get up and running. And it is all due to the
dedication, the courage, and hard work of our employees, and I
just wanted that to be on the record, as well.
Freight railroads operating in the United States are the
best in the world, and provide tremendous benefits. They are
safe and getting safer. In 2016 the train accident rate was the
lowest ever. And they are efficient. A single train can carry
the freight of several hundred trucks. And, on average,
railroads are four times more fuel efficient than trucks.
This means moving freight by rail helps our environment,
cuts highway gridlock, and reduces the high cost of highway
construction and maintenance. And, as you know, the demand for
freight movement will only grow. DOT studies predict a 41-
percent growth in freight demand by the year 2040.
I respectfully suggest that it is in our Nation's best
interest that the benefits of freight rail continue to accrue.
And that cannot happen unless the amount and quality of
railroad infrastructure is up to the task. Railroads know this,
which is why they have been spending more in recent years on
their infrastructure and equipment than ever before: $135
billion, to be precise, from 2012 to 2016, or $74 million a
day.
America's freight railroads are privately owned and
operated almost exclusively on infrastructure that they own,
build, maintain, and pay for themselves. When railroads invest
in their networks, it means taxpayers don't have to.
As an aside, I would note that a reduction in the corporate
tax would enable railroads to invest even more in their
infrastructure, and would, just as importantly, allow our
customers to compete on world markets.
Thanks to their massive investments, freight rail
infrastructure today is in its best overall condition ever. The
challenge for railroads and policymakers is to ensure this
continues. And you have a crucial role to play in this regard.
First, you should resist calls to once again give
Government regulators control over crucial areas of rail
operations. Economic re-regulation, in whatever form, would
mean rail spending on infrastructure would shrink, the
industry's physical plant would deteriorate, and rail service
would become slower and less reliable, outcomes that are in no
one's best interest. The 2015 STB [Surface Transportation
Board] authorization bill you passed struck the right balance.
Second, promote more public-private partnerships under
which Governments pay only for the public benefits of a
project, and railroads pay for the benefits they receive. As a
result of these partnerships, the universe of projects that can
be undertaken to the benefit of all parties is significantly
expanded. It is the so-called win-win for everyone involved. Of
course I would be remiss not to point out that the Chicago
CREATE [Chicago Region Environmental and Transportation
Efficiency] program with which you are all familiar is our
industry's premier poster child for public-private
partnerships.
Grade crossings are also an important element of rail
infrastructure that often involves a public-private cooperative
approach through the Federal section 130 program. Section 130
provides Federal funds to States for installing new grade
crossing warning devices and other purposes. The 2015 FAST Act
[Fixing America's Surface Transportation Act] included
dedicated funding for this vital program, and we urge you to
continue to support it.
Yet another variant of public-private partnerships, in my
view, is the 45G short line tax credit, which is one of the
more successful provisions in the tax code, and which I am sure
you will hear more about in just a few minutes from my
colleague, Ms. Darr.
Third, continue efforts to reform outdated and unnecessary
regulations. Railroads often face long permitting delays from
Federal agencies, unnecessarily adding to the time and expense
of getting infrastructure projects from the drawing board to
completion. We applaud the recent efforts by Congress and the
administration to address the permitting process, but more can
and should be done. I want to emphasize, however, that this is
not to adversely affect the quality of the reviews, but merely
to make sure they get done in a timely way.
Fourth, policymakers should address modal inequities. As I
mentioned earlier, freight railroads operate overwhelmingly on
infrastructure they own, build, maintain, and pay for
themselves. By contrast, most other modes operate on
infrastructure that is publicly funded. Unfortunately, public
policies relating to the funding of other modes have become
misaligned.
Regarding highways specifically, the traditional user-pay
model has been eroded as Highway Trust Fund revenues have not
kept up with highway investment needs, and so have had to be
supplemented with $143 billion of general taxpayer dollars
either already paid or scheduled to be paid by 2020 under
current law.
We applaud this committee for being in the forefront in
reaffirming the user pays policy, and suggest one method to do
so would be by moving forward on a weight distance tax for
trucks, a policy that is already in place in the State of
Oregon.
Finally, fund Amtrak so that its infrastructure can be
improved to a state of good repair. Commuter railroads too need
Federal support, specifically to cover the costs of
implementing federally mandated Positive Train Control on their
systems.
Thank you for your attention, and thank you, Mr. Chairman,
for your allowing me to extend my time.
Mr. Denham. Thank you, Mr. Hamberger.
Mr. Moorman, you are recognized for 5 minutes.
Mr. Moorman. Thank you, Mr. Chairman. Good morning to all
the members of the committee. It is my pleasure to be here
today on behalf of Amtrak's employees, our board of directors,
and my cochief executive officer and Amtrak's president,
Richard Anderson, who is looking forward to working with you.
I think, as all of you know, Richard and I have both joined
Amtrak to help position the company for the future, and I can
tell you that, as a lifelong railroader who started out as a
track engineer, I have a long-term interest in rail
infrastructure.
At Amtrak, as all of you know, we are focused on
transforming the company by three basic things: first,
strengthening our safety culture; second, improving our
operational effectiveness and efficiency; and third, enhancing
our customers' experience by improving our product for
reliability and its delivery. All of those elements depend upon
a sound, modern, reliable infrastructure to meet the growing
demand for rail passenger transportation in this country and
the 21st century.
Amtrak has been in business for 46 years now, and we have
been the Nation's sole intercity passenger rail operator. We
are a proven industry leader, not only in the U.S. but around
the world, for the delivery of rail passenger services, both in
our own right and in partnership with our many diverse
stakeholders.
Over the past decade, we have achieved a succession of
record years in ridership and revenue growth, driven primarily
through our State services and the Northeast Corridor. All of
these are important steps, but the major challenge that
threatens our ability to continue to improve and grow is
investment.
Passenger rail, as you know, is a vital part of our
Nation's infrastructure, but capital funding is not keeping
pace with the risks that face us from the standpoint of our
infrastructure and fleet, both to maintain a state of good
repair and to answer the demand for additional growth and
capacity. And you need look no further for an example than the
Northeast Corridor, where we have an extensive array of 100-
plus-year-old assets that now handle 2,200 trains a day, double
the number from when Amtrak took over operations of the
corridor in 1976.
We are here today to endorse the development of a
comprehensive infrastructure plan which features significant
rail investments to support what I think is a generational
investment in our Nation's transportation infrastructure that
is needed to keep the economy growing, our Nation competitive,
and the quality of life in this country improving. We need the
additional resources to carry that out.
So, what are our primary capital needs for the upcoming
century and the upcoming years? Broadly speaking, we think that
there are four crucial elements of any infrastructure package
that we need to move forward aggressively, and we can move
forward aggressively if funding is available.
First and foremost, rebuild and expand the Northeast
Corridor. All of you, I think, are familiar with the Gateway
Program, which includes a number of projects to replace
critical assets, such as the Hudson River Tunnels, which were
flooded by Hurricane Sandy, and which have a clock running. At
some point they will not be able to be maintained reliably,
thereby shutting off effective rail transportation for the
200,000 commuters that move into and out of Manhattan from New
Jersey every day.
Second, we need to expand and improve on our State-
supported corridors. That is the business that is growing, that
is where we see the opportunity. These are short-distance,
auto-competitive routes that carry almost half of our ridership
and generate more than half a billion dollars in revenues. We
have 21 partners in 19 States. We all want to grow ridership
and ticket revenue, but we can't do that without strong
financial participation from the Federal Government.
Third, our long-distance services, they connect important
city pairs and serve communities large and small across the
Nation. We are in the process of relooking at our entire long-
distance network to make sure it is effectively doing what it
is supposed to do for the most number of citizens that we can.
But a key issue to that, and to that service's viability,
is on-time performance over the freight railroads. And we need
your help to make sure that those railroads have the dollars to
invest in capacity, because quite often we run into capacity
constraints, as well as helping us to work with the host to
make sure that on-time performance of Amtrak trains is a
priority for them.
And then, finally, equipment replacement. We have a lot of
aging equipment. We are engaging in self-help to fix that
equipment, but it is old. We have new Acela sets, we have new
locomotives, but we are going to need help over the next 10
years in replacing some of this equipment.
If we can get all of this investment I have highlighted, we
will continue to improve and modernize the passenger rail
network. We have a new ready-to-build campaign with videos of
our major infrastructure needs. We have shown, with this
summer's work in New York, that we are capable of doing these
projects.
There is a great opportunity, a historic opportunity out
there, to invest in our passenger rail infrastructure, and all
of us at Amtrak look forward to working with you to accomplish
that.
Mr. Denham. Thank you, Mr. Moorman.
Ms. Darr, you may proceed.
Ms. Darr. Thank you, Chairman Denham, Ranking Member
Capuano, and Ranking Member DeFazio, and all the other members
of the committee. I am with the Short Line Railroad
Association. We do a great job of serving our customers and
arriving on time, so I will make it my goal to finish my
testimony before the red light comes on.
My name is Linda Darr, and I am president of the American
Short Line and Regional Railroad Association. We are the
national trade organization representing the Nation's 600 class
II and class III railroads, operating just under 50,000 miles
of track, and that is nearly one-third of the national rail
network.
Short lines operate in 49 States and handle in origin or
destination one out of every four railcars moving on the
national rail network. Short lines share four defining
characteristics. They are small businesses with combined annual
revenues that equal less than the annual revenues of any one of
the four largest class I railroads. The average short line
employs 30 people or less. For large areas of the country, and
particularly for small-town and rural America, short line
service is the only connection to the national railroad
network.
Because their task was to bring back to life
undermaintained class I branch lines that were headed for
abandonment, they invest, on average, from 25 to 33 percent of
annual revenues in rehabilitating their infrastructure. This
makes short line railroading one of the most capital-intensive
industries in the country. Without infrastructure upgrades,
short line customers face competitive disadvantages associated
with the short line's inability to handle the modern, heavier
weight freight cars increasingly utilized by our class I
connections.
To help short lines sustain heavy capital investment,
Congress enacted the short line rehabilitation tax credit in
2004, and has renewed it five times since. The credit expired
at the end of 2016. This credit, known as 45G, has been a major
factor in maximizing our infrastructure investment. And we
believe making the credit permanent is the most important thing
Congress can do to improve the infrastructure in the areas of
the country that we serve.
I know the tax legislation is not the purview of the
committee, and I appreciate that there are other grant and loan
programs that deal with infrastructure improvements. We support
full funding for competitive programs such as TIGER and INFRA.
INFRA has a 10-percent set-aside for small projects like ours,
and TIGER provides support to several short lines each year.
But we have 600 short lines that need help.
We are hopeful that DOT will soon make funds available for
the CRISI [Consolidated Rail Infrastructure and Safety
Improvements] program, which has a rural set-aside that will
benefit short line railroads, as well. All of these programs
are tools in the effort to rebuild all kinds of infrastructure,
and some short lines will benefit from that.
But the 45G credit is the most economical and effective way
to maximize investment in our portion of the national rail
system. And if it is not extended, we fear the growth of our
industry will be stymied. As the committee that is the most
knowledgeable when it comes to railroad infrastructure matters,
I urge you to take that message to your colleagues whenever and
however the subject of infrastructure is addressed in this
Congress.
We know and appreciate that your subcommittee has led on
this effort: 28 of your 34 members are cosponsors of H.R. 721,
the stand-alone bill that would make the credit permanent,
including the chairmen and ranking members of both this
subcommittee and the full T&I committee. Today the legislation
has 247 cosponsors, the third most cosponsored House bill in
this session of Congress. And thank you to every Member in the
Chamber today, because all of you have cosponsored that bill.
In the Senate we are the number-one tax bill when it comes to
cosponsors: 55 total to date.
My written testimony details the reasons that 45G has been
so successful, and provides data that quantifies that success.
The data shows that the credit has allowed short lines to spend
more than they would have to maintain high levels of investment
in the worst of recessionary times, and leverage significant
amounts of private investment by our customers. This must be
continued if we are to preserve rail access in rural and small-
town America. We estimate the total need to upgrade our track
and bridges to $10 billion to enable us to handle the modern
286,000-pound railcars across our system. It costs roughly
$500,000 to $1 million to rehabilitate a track mile, and north
of $10 million per bridge, of which there are thousands.
I appreciate the opportunity to appear before you today,
and I am happy to answer any questions.
Mr. Denham. Thank you, Ms. Darr.
Mr. DeJoseph, you are recognized for 5 minutes.
Mr. DeJoseph. Thank you, Mr. Chairman and distinguished
members of the subcommittee. My name is Tom DeJoseph, and I am
senior advisor of industry relations at Loram Maintenance of
Way, and honorary chairman of the Railway Supply Institute. I
am from Danbury, Connecticut, and I traveled down here
yesterday on Amtrak.
RSI is an international trade association representing more
than 260 companies involved in the manufacture of products and
services in the freight car, tank car, locomotive, maintenance
of way, communications and signaling, and passenger rail
industries. Our members represent more than 756 rail supply
locations in 44 States and 281 congressional districts.
Collectively, railroad suppliers contribute over $28 billion
annually to the U.S. economy.
Our members seek dedicated investment and infrastructure,
sensible tax reform, and balanced economic regulation, as well
as increased support and promotion of domestic manufacturing
and American innovation. We are encouraged by the interest
shown by the administration and the Congress to bring America's
transportation systems into the 21st century, and with the
administration's effort to scrutinize existing and proposed
regulations to ensure that they do not unduly burden industry
and economic growth. FRA's CFR part 243 is a particularly
onerous regulation.
Investing in rail will bolster industry competitiveness,
promote job creation, improve our Nation's mobility, and have a
profound, long-term effect, economic impact on the railway
supply industry. To ensure that the rail sector can continue to
provide good employment opportunities to American workers,
public and private investment could relieve major bottlenecks
and choke points that will increase track, tunnel, bridge, and
station capacity across the passenger and freight rail system.
It is high time for the Federal Government to provide
predictable, dedicated, and meaningful funding for capital
investment in our intercity passenger rail system, along with
investment, to improve the efficient movement of freight
through private-public partnerships.
Furthermore, continued investment in rail safety, such as
providing funds to the section 130 highway rail crossing safety
program, and Operation Lifesaver is a proven way to save lives
and should be supported.
As suppliers, we are in a unique position to focus on both
passenger and freight rail, and believe that there are several
areas of new investment that would vastly improve the
efficiency and productivity of our rail systems. The FAST Act
authorized several rail programs, as well as important changes
to certain loan programs, and we commend you for that. RSI
urges that these programs be funded at a level commensurate
with the need, and urge that they receive the same priority as
other FAST Act-funded modes.
I should also note that RSI supports the 45G tax credit
that expands freight rail capacity and helps short lines remain
competitive.
The Buy America program was designed to promote U.S.
manufacturing and encourage new industry to help the domestic
economy and create jobs for Americans. U.S. DOT should apply
Buy America provisions strictly, consistently, and enforce the
statute accordingly. Our suggestion is not to change the law,
but to make sure that current laws are being enforced.
I would also like to point out that there has been an
increase in State-owned foreign involvement in U.S. passenger
and freight rail market. It has the potential to change the
entire dynamic of the multimillion-dollar business. Current
American rail supply manufacturers are concerned that more
State-owned enterprise involvement could lead to cut-throat
pricing, resource dumping, and a reduction in American jobs.
Allowing a foreign, State-backed entity to increase direct
investment in our Nation's critical infrastructure without
appropriate review creates significant economic and national
security concerns.
It is important that Congress and the administration
continue to enact and promulgate fair and balanced regulations
that recognize the benefits of moving freight by rail, and not
punish rail by enacting poorly thought-out public policy.
Finally, I would like to address two regulations which RSI
was intimately involved with through its Committee on Tank
Cars: HM-251, the Enhanced Tank Car Standards and Operational
Controls for High-Hazard Flammable Trains. The RSI Committee on
Tank Cars comprises six companies that build virtually all tank
cars operating in North America and that own and provide for
lease of almost 70 percent of railroad tank cars. The DOT-111
tank cars have essentially been removed from crude oil service,
and members of the committee are committed to meeting the FAST
Act deadlines.
Secondly, prevailing wages required on Government-funded
projects can increase labor costs by up to three times for the
contractors that do this kind of work. That money ultimately
gets billed back to the taxpayer.
Thank you again for this opportunity to testify on behalf
of Railway Supply Institute. We look forward to working with
the subcommittee to help establish more balance in the Nation's
transportation system, and address the critical needs of the
freight and passenger railroad industry and its suppliers.
Mr. Denham. Thank you, Mr. DeJoseph.
Mr. Willis, you are recognized for 5 minutes.
Mr. Willis. Thank you, Chairman Denham and Ranking Member
Capuano, for inviting me to testify this morning. I also want
to thank Ed Hamberger for those kind words about our front-line
rail workers responding to the hurricanes and other
emergencies. And I should note that our other unions are also
likewise involved in various ways.
By way of quick background, TTD consists of 32 unions in
all modes and areas of transportation. For purposes of today's
hearing, that includes workers on the freight rail side,
Amtrak, and commuter rail.
TTD believes that significant investments in freight and
passenger rail must be included as part of any broad
infrastructure bill considered by this committee. In 2015, as
part of the FAST Act, Congress wisely chose to fund Amtrak and
create and expand important freight transportation programs. As
important and necessary as those investments were, they
represent only the tip of the iceberg of what is needed to
reverse decades of neglect inflicted on our transportation
network.
With strong support from the public, a promise from our
President, and bipartisan interest in Congress, the time to end
the lost generation of infrastructure investment, we believe,
is now. Failing to act to date has idled millions of good jobs,
stifled economic expansion, and worsened wage inequality.
Voters wonder why the richest country in the world no
longer places a premium on high-quality, modern transportation
infrastructure, and too many working families have been left
behind. When made strategically and paired with the right
policies, the investments that we are discussing today can grow
our middle class.
These investments are linked with good jobs and economic
growth because workers in rail specifically and transportation
more broadly benefit from collective bargaining and generally
high union density. We know that workers who belong to a union
earn higher wages, enjoy better benefits, are safer on the job
than their non-union counterparts. As this committee considers
transportation and rail investments, it would be a mistake--and
one that we would vigorously oppose--to weaken the application
of longstanding labor protections or to undermine collective
bargaining.
Strong and enforceable Buy America rules must also be
included in any infrastructure package to maximize job creation
in manufacturing, and to create a sustainable market for U.S.
companies. It would make little sense to invest the kind of
dollars that we are talking about to remake our infrastructure
only to ship good manufacturing jobs overseas.
For freight rail we would urge the committee to expand on
the funding programs in the FAST Act, and to leverage the
significant private financing the industry already provides, as
Ed has outlined. The investment that rail carriers make in
their networks and in their workers is premised on a balanced
economic regulatory framework that we join the industry in
supporting.
We agree with and support the immediate and long-term needs
of Amtrak, as outlined by Wick Moorman, including funding for
Amtrak's long-distance routes. And as part of its commitment to
Amtrak and passenger rail more broadly, Congress must ensure
funding to complete the Gateway Program. Failing to fund this
critical project will cost thousands of construction and
transportation jobs, and will cripple our Nation's busiest rail
corridor.
The same is true in California, where high-speed rail is
currently under construction. This project has the potential to
transform the economy and mobility in California. Already the
project has created 1,400 good-paying construction jobs and
generated nearly $4 billion in economic activity, and could
pave the way for high-speed rail in other parts of the country.
Finally, any investment package must not be used as a
vehicle to attack critical safety or labor regulations in the
name of fast-tracking infrastructure projects. We agree with
the desire and the need to complete projects in a timely
fashion, and support reasonable permitting and environmental
reforms. But we do not believe that some of the safety and
labor rules that have been talked about interfere in project
delivery. We are also opposed to any effort to undermine the
authority of the Federal Railroad Administration to issue
needed safety rules to protect our members and the public.
The most pressing challenge to enacting a broader
infrastructure program is how to fund it. In addition to the
needed investments for passenger and freight rail I discussed
earlier, we believe that the Highway Trust Fund must be put on
stable financial footing to meet our surface transportation
needs. We were pleased earlier this year when 253 Members of
the House from both parties took this same position and called
on Congress to fix this problem as part of any rewrite of the
U.S. tax code.
And while there have been many ideas offered to shore up
the trust fund--and we can support different approaches--we
continue to believe that the best approach, the most efficient
and straightforward, is to raise the gas tax and index it for
inflation. This is a user fee that has not been raised since
1993, and has simply not kept up with construction costs or the
needs of our surface transportation system.
Thank you again for allowing me to testify, and I look
forward to your questions.
Mr. Denham. Thank you, Mr. Willis.
Let me start with each of our panel members. What are some
of the biggest rail infrastructure projects that you foresee on
the horizon? And what are some of the ways that a Government
can assist in their completion?
Mr. Hamberger?
Mr. Hamberger. Clearly, one of the ways, one of the biggest
ones--and Mr. Lipinski is gone--is a joint public-private
partnership. In Chicago we will be submitting an application
for the INFRA grant on November 2nd. It is a partnership of
Cook County, the city of Chicago, Amtrak, Metra, and the
freight railroads to begin a rebuilding of what is called the
75th Street CIP running through Chicago.
Secondly, you passed in the FAST Act requirements to
improve the permitting of rail projects, and I would just draw
your attention to the Virginia Avenue tunnel, which you can see
from this building, which started out as a $140 million
project. Seven years later it was finally opened on December
24th of 2016, cost $210 million. And not one penny of Federal
dollars involved, but it took 6\1/2\, 7 years to get it built.
So that is the kind of delay and waste that is out there,
and so we appreciate what you did in the FAST Act, and we are
working with the administration. The Vice President just had an
event earlier this week talking about cutting redtape, and we
are certainly supportive of that, as well.
Mr. Denham. Thank you, Mr. Hamberger. And we will follow up
after this hearing to hear about some of those specific ways
that we can get rid of some of this redtape and expedite these
projects.
Mr. Moorman, Amtrak?
Mr. Moorman. Let me first say, in terms of redtape, there
have been, actually, in Amtrak's perspective, a few effective
things done. We completed the environmental impact statement
for the Hudson River Tunnels in about 2 years. The original
estimate was 4 years. So there has been some streamlining done,
but there is always more that can be done.
From the Amtrak perspective, there are a lot of capital
requirements. But clearly, the most pressing is the Gateway
projects. The Hudson River Tunnels, the Portal North Bridge,
eventually a series of projects that leads to the expansion of
Penn Station, these are assets that were open for business in
1910. They are a little past their sell-by date.
But in addition to those Gateway projects, we have other
significant projects on the corridor: The B&P Tunnel south of
Baltimore, which was opened, I believe, in 1874; the
Susquehanna River Bridge, a series of bridges. And in terms of
the Federal Government's involvement, particularly in Gateway,
it is clearly recognized by all concerned that the States have
to play a major role in funding that, as well. But we can't do
it without Federal involvement.
There is possibly a place for some user fees. I, as you
know, come from the private world and believe in private
capital. But there needs to be a formula derived at which
includes both State and Federal funding to get that done
because, unlike a lot of assets which are suitable for public-
private partnership, we just can't toll in the same way that
the highways can.
Mr. Denham. Thank you.
Ms. Darr?
Ms. Darr. I would say, Mr. Chairman, that the projects
aren't large and specific. Our projects are truly many. There
are thousands in the queue across the country for our short
line railroads, railroads that are waiting for 45G to be
extended. It has been proven that 45G has spurred investment.
As a matter of fact, $4 billion has been invested since the tax
credit was enacted in 2004.
Our challenge is to rehab abandoned track, so that is
usually what we are going to be spending that money on. And our
goal is to become able to handle 286,000-pound railcars across
the network, to be better partners with our class I railroads,
and to be able to work more closely with the shippers and help
to meet their needs in taking freight off of the highway and
putting it on the rails.
Mr. Denham. Thank you. And my time is about to expire, so I
will pass it on to Mr. Capuano.
Mr. Capuano. Pass it on to Mr. Sires.
Mr. Denham. Mr. Sires, you are recognized for 5 minutes.
Mr. Sires. Thank you very much, Chairman, and thank you to
our panel for being here today.
You know, I come to these meetings, and every time I come
all the panelists agree that we have to do something about
infrastructure, especially in the rail. I have been working on
rail for a long time. From light rail to passenger rail to
freight rail, it has always been my opinion that that is the
way to go, in terms of alleviating traffic, especially in the
region I represent.
I understand that the private sector has a role. I
understand that the State has a role. But I think that the
Federal Government certainly has to have a bigger role, because
without the support of the Federal Government, I don't think
these projects can be done.
You know, I travel the Northeast Corridor every week. It is
the busiest passenger line in the country. And yet it is in
need of so much infrastructure. And it is frustrating to me to
come here and listen every week, or every month, when we have
one of these hearings, and people tell me the same thing, and
we don't seem to do anything.
I look at the budget, 28 percent of the budget has been cut
for the Northeast Corridor. I mean this is the busiest line,
passenger line, in the country.
I want to talk about the Portal Bridge. We have a guy with
a sledgehammer that, every time the bridge closes and opens, we
have to have a guy out there to sledge the track back in line.
And obviously, you know, the tunnels. I predict that if one of
those tunnels goes because it was damaged by Sandy, the country
is going to suffer, the economy of the country is going to
suffer. It is not just my district, it is the entire country.
And those are States that send money to the Federal
Government. We are not takers. New York, New Jersey, we send a
lot of money to the Federal Government. We are not one of these
States that says, hey, give me money. So we have to somehow
find a formula to really work this issue out. I am sorry I am a
little frustrated because I have been on this committee and I
hear it all the time, and everybody agrees: We need
infrastructure work.
You know, our country is--we are the greatest country in
the world, and we have the lousiest rail in the world. And I
travel to some of these countries and they have beautiful stuff
and it works. But does anyone here believe that the private
sector is the sole answer to this? If you do, please tell me
because I don't believe it.
Mr. Hamberger? I know you pour a lot of money into your
business to fixing up the rails, but----
Mr. Hamberger. You are talking about a much broader topic
than just the investment in freight rail. What you are talking
about clearly goes beyond what the private sector at this point
is prepared to do. Certainly our members invest to respond to
the marketplace and provide freight capacity where the market
says it is needed. But obviously--I think Mr. Moorman's needs
go far beyond what the private sector can do, and I think that
you are talking about investment that is needed beyond what the
freight rails can put into our system.
Mr. Sires. Mr. Moorman?
Mr. Moorman. Well, I couldn't agree with you more. You
know, the simple fact is that the Northeast accounts for about
20 percent of the Nation's GDP. And the Northeast Corridor is
the vital link in this part of the country, particularly for
business.
If you look at the Acela ridership, 60-plus percent of the
ridership is business, the highest percentage of business
ridership on any rail corridor in the world. So it is
absolutely essential for the economic vitality of the region.
And if we don't invest in these critical, huge infrastructure
projects--and it will take Federal investment--at some point
the system runs out.
With what we are doing today, we can do a lot of work on
state of good repair, we can improve the way we spend money, we
can become much better project executors. We are already, I
think, a long way down that path. But I agree completely it is
going to take a lot of Federal investment, and the States and
the Federal Government need to figure out the formula and get
the work started.
I will give you a great example. The environmental impact
statement for the Hudson River Tunnels will be done first
quarter of 2018. We have been working on that process, but once
we get that statement we are waiting for money. It is just that
simple.
Mr. Sires. You know, we had a meeting with the President.
It was very hopeful. And yet I look at these budgets, and they
slashed the budgets. So I mean it is like one thing is said,
and then there is another action that really just destroyed
what he said.
Thank you, Mr. Chairman.
Mr. Denham. Thank you, Mr. Sires.
Mr. Duncan, you are recognized for 5 minutes.
Mr. Duncan. Well, Mr. Chairman, thank you very much.
And first of all, Mr. Hamberger, thank you for your kind
comments about my work on this committee. After the 1994
elections, we had 10 openings on the Ways and Means Committee.
Speaker Gingrich offered me one of those openings, but I was
going to get to chair the Aviation Subcommittee at that point
and I decided--and I think surprised many people--but I chose
to stay on this committee, and I have never regretted that. But
you have been a very effective leader for the railroad industry
during most of the time that I have been here, so I have great
respect for you, as well.
Let me ask you this, though. I chaired a panel, a special
panel in the last Congress on public-private partnerships. And
one of our many hearings was held on Wall Street, where we had
several of the top leaders of some of the big Wall Street firms
tell us that there was a lot of money out there that companies
wanted to invest in public-private infrastructure projects. Yet
I noticed a few days ago that President Trump expressed some
great skepticism about public-private partnerships.
Did you see that? And have you or will you tell your story?
You sounded very favorable towards public-private partnerships
in your testimony. So have you expressed that, or will you
express that to the people at the White House?
Mr. Hamberger. Yes. Yes, indeed. That was part of--and I
should have mentioned it specifically, Mr. Sires, of--
obviously, that is evidence of the fact that we believe that
there needs to be a role for Government. I mentioned in my
testimony this morning public-private partnerships, it was part
of our material that we gave to the transition team.
I have to admit, somewhat surprised by reading that because
I know that Secretary Chao, Gary Cohn, and the folks who work
for him have been talking both publicly and privately about the
need to encourage private-sector investment in infrastructure.
And I think that that was, at least some of the early plans I
saw, one of the ways that they were going to get to the
trillion dollars was by encouraging private-sector investment.
But I think--to go back to Mr. Sires's point--it will take
both the private sector and the public sector stepping up.
Mr. Duncan. Also, on another topic, you mentioned that the
industry is one of the safest in the country, and is becoming
safer. You know that some of us had some doubts about whether
the Positive Train Control was really worth the amount of money
that was going to be spent on it, but we crossed that bridge a
long time ago.
Would you tell us where we stand on that? Now, how much
have your members spent on that so far? And how close to
completion is all that?
Mr. Hamberger. Well, I appreciate that question. We have
spent, as of last year, the end of last year, a little over $7
billion. It will be another $1 billion this year. By the time
it is fully implemented, it will be around $10 billion.
And you are right, we have crossed that bridge, we are
moving forward aggressively. We will meet the deadlines in the
FAST Act. That is to say we will be 100 percent installed by
the end of 2018, and at least 51 percent operational. That
then, under the law, allows for a potential additional 2 years
of testing and validation to make sure it works. If you are
going to rely on a safety system, you want it to be working.
In 2015, when Congress saw fit to extend the deadline, we
were at about a 70-percent success rate. That is to say, put in
the negative, the system wasn't working 30 percent of the time.
And, you know, you don't want to get on an airplane when the
air traffic control system is not working 30 percent of the
time. I am pleased to say we are now at a success rate up in
the high eighties, but that is still not there. We are
continuing to run into technical problems.
Someone said to me the other day if there is a solar flare
and it interferes with the communication, how do you deal with
that? And so we are dealing with all sorts of challenges as we
try to install PTC on a 60,000-mile network, but we will have
it installed, we will meet at least 51 percent operational. And
I am confident we will meet the 2020 deadline, as well.
Mr. Duncan. My time has run out by I do want to tell Mr.
Moorman that I am bringing one of my grandsons up to go to the
Navy-Air Force football game Saturday, and then I, just before
I came here, bought two tickets for me and him on Amtrak to go
to Philadelphia to see the Eagles game on Sunday.
But I do want to say that I am very pleased that you
mentioned that we had allowed an expedited environmental
process for the Hudson Tunnel Project because I have sat here
for all these years, and we used to just hear that every
infrastructure project of every type took three times as long
and cost three times as much because of all the environmental
rules and regulations and redtape. And finally we are making, I
think, a little bit of progress on that. But I think you did
save some time and money, as well, because of that expedited
process.
Mr. Moorman. That is correct. And I think it is a very
positive thing for the future. And I will just take 2 seconds
also to congratulate you on your retirement and thank you for
your friendship and support of our industry, and certainly----
Mr. Duncan. Well, thank you.
Mr. Moorman [continuing]. In both the companies that I have
had the good fortune to be with.
Mr. Duncan. Thank you very much.
Mr. Moorman. Thank you.
Mr. Denham. Thank you, Mr. Duncan.
Mrs. Bustos, you are recognized for 5 minutes.
Mrs. Bustos. Thank you, Mr. Chairman, and also our ranking
member. And thanks to all of you for being here with us today.
About 2\1/2\ years ago we had a train derailment in my
congressional district in a town called Galena, Illinois, which
is in the far northwest corner of the State of Illinois. And
these were tank cars that had left North Dakota filled with the
Bakken crude. When they hit the Galena area there was a
derailment that happened to have been right along a slew that
led to the Mississippi River, so potentially a terrible
situation. The BNSF Railway handled it very well. Our first
responders handled it well. And everything is back in a good
place again.
But it is a reminder that folks in my area are curious
about. In the highway bill there were the requirements that the
tankers carrying flammable liquids, especially something like
crude oil, that those be upgraded, and especially those that
are the oldest. I think there is a deadline, the fast-
approaching deadline of January 1st, for the oldest and maybe
the more dangerous tank cars.
So I think this question would be for Mr. Hamberger or Ms.
Darr and Mr. DeJoseph about what is happening in the industry
as far as upgrading those. And maybe give us a progress report
on that and what you see ahead, as far as meeting those
deadlines that are coming up.
Mr. Hamberger. Let me jump in, I guess. Thank you for that
question. This is a good news story. The DOT-111, as the old
tank car was referred to--in 2013 there were 21,340 of those
tank cars moving crude oil. In the first quarter and second
quarter of this year there are exactly 156. So more than a 99-
percent decline in the DOT-111s moving crude oil. And so, given
that, I am quite certain that we will meet the January 1, 2018,
statutory deadline to have those tank cars out of service
moving crude oil.
Ms. Darr. I should probably defer in large part to Ed and
to my colleague, Mr. DeJoseph, on the freight rail side and on
the supplier side. But I will say, from the short line
perspective, that we have been very pleased with progress that
has been made over the last 3 years with the establishment of
our Short Line Safety Institute that is specifically focused on
raising up the safety culture of our industry with a particular
focus on those railroads that do move hazmat.
And we recently received a $500,000 grant from FMCSA to
create a hazmat training academy. We are very excited about
using that to make sure that everyone in our industry is, you
know, at a level of knowledge and compliance that they need to
be to operate safely when they move hazmat on the network.
Mrs. Bustos. Thank you.
Mr. DeJoseph, is there anything that you wanted to add to
that?
Mr. DeJoseph. I would go along with Mr. Hamberger,
basically saying that the DOT-111 cars have essentially been
removed from crude oil service. There are 16,000 new DOT-117s,
and--I can't quite read this note--6,000 retrofitted to meet
the new standard. So we will meet the FAST requirements from
the supply industry.
Mrs. Bustos. OK. All right, thank you.
Shifting gears to Amtrak for a second, Mr. Moorman, you had
mentioned that there is an opportunity for expanding passenger
rail service in your opening comments. With the help of a
Federal grant, the Illinois Department of Transportation is
working on upgrades that are necessary to return passenger rail
for a Chicago-to-Moline route. Moline is in my congressional
district, so something that our people back home are anxiously
waiting for.
So in the FAST Act, Congress created the restoration and
enhancement grant program to help initiate, restore, and
enhance passenger rail service. Can you talk a little bit about
how the program can ensure that investments that go into
infrastructure upgrades for passenger rail translate into
successful service for a route like I just mentioned?
Mr. Moorman. Well, I think it is an essential part of
restoring routes like that, and something, obviously, that we
are very interested in, because we believe that the real growth
opportunity for passenger rail are corridors like that to
Moline. That is where you have a lot of ridership that wants to
go into a congested area, and passenger rail just makes all the
sense in the world.
So it is incumbent upon Amtrak to work with the State
authorities to make sure that the service is well thought-out,
that we have the right equipment, and that our projections are
such that the State has confidence that the service can be
provided on the economic terms. But given the assistance that
you have talked about--and I think there is even more that can
be done--I would tell you that I think State-supported
corridors like that are really where passenger rail needs to go
in the future.
Mrs. Bustos. That is good to hear.
All right, Mr. Chairman, my time has expired and I yield
back.
Mr. Denham. Thank you, Mrs. Bustos.
Mr. Faso, you are recognized for 5 minutes.
Mr. Faso. Thank you, Mr. Chairman. I appreciate the panel
being here today.
Mr. Moorman, I am wondering if you could update the
committee on the work that Amtrak performed in Penn Station
this past summer and what other improvements you are
contemplating in that regard. As you know, I live on the Empire
State Corridor, and the service in and out of Penn Station is
vitally important to people in upstate New York, as well as
people in the general metropolitan area.
Mr. Moorman. Thank you for the question. As you know, it
was billed by those in the media and some politicians as,
prospectively, the summer of hell. I am happy to say that,
thanks to our execution and really great work by a lot of the
folks that Mr. Willis represents down there, it turned out to
be no more than the summer of mild inconvenience.
And it really set the stage, I think, for us to do at
Amtrak--and particularly in the Penn Station area--a lot of
work that needs to be done, and to do it in a thoughtful way,
working with our partners, but in a way, quite frankly, that
will at times impact the service into the station. Not in the
same way that this summer did, but we will need to take tracks
out of service for a longer period of time.
We have a schedule which actually goes through next summer.
We are working with New Jersey Transit, Long Island Rail Road,
and now Metro-North, because, as you know, to accommodate the
work this past summer we took about half of the--all of the
peak trains into Grand Central. And as we look at work to be
done at particular parts of Penn, we are going to be starting
conversations with Metro-North to do that again at times.
So I think it was a great project for us. I think it
established that we can do that kind of work. And it set the
stage for us to do a lot more important work up there.
Mr. Willis. Let me just add quickly. You know, there were
some proposals that we needed to sell off or privatize Penn
Station because Amtrak and its workforce couldn't handle that.
You know, I think, as Wick said, that turned out not to be the
case. I think our members worked very directly and closely with
Amtrak and their management team to get that project done.
And you know, again, there was a live debate leading up to
the FAST Act of whether the solution for Amtrak was to
privatize the carrier or defund it. Those debates were
considered and rejected. And we hope that as an infrastructure
package is considered by this committee, that we don't need to
relitigate those type of issues. And I think Amtrak has built
up some trust in this area that they can handle this kind of
work and really be the type of carrier that we need, if given
the funding and support.
So I think it was successful up there in Penn Station and
can be a real model and a template for other projects, going
forward.
Mr. Faso. Thank you. And, Mr. Willis, I agree with what you
are saying about the way the workforce responded. It was truly
excellent. And I congratulate you and Mr. Moorman for that
effort. And Mr. Moorman knows I have some particular interest,
as well, on that Empire State Corridor, so I know----
Mr. Moorman. I know that well.
Mr. Faso. He is paying close attention to that.
Mr. DeJoseph, I know often we have testimony that is
somewhat sanitized in a way to ameliorate or smooth over some
difficult issues. But one in particular caught my eye when I
read your testimony. You spoke about these sticky issues of the
Buy America provisions. And I am wondering if you could perhaps
elaborate a little more in terms of the stickiness, so that we
can fully understand what you are getting at when you mention
that.
Mr. DeJoseph. Without getting too far indepth, there is
definitely concern from a lot of our members about foreign
involvement. The Buy America provisions must be adhered to and
strictly enforced. We are very concerned about foreign
investment in the United States, where we have companies that
are bidding on new production projects at upwards of 30 percent
of anyone else that has been in business in the United States
since the 1980s.
So I think that we, our membership, wants to ensure that
all of the Buy America provisions are strictly enforced. There
are continuing questions about raw materials that are being
brought in that would constitute in some areas dumping.
Mr. Faso. Thank you. Mr. DeJoseph, my time has expired, but
perhaps you could provide greater detail to the committee in
writing on this issue expressing your concerns in that regard.
Mr. DeJoseph. Yes, we will.
[Mr. DeJoseph elaborates on Buy America provisions on pages
105-106 in response to a post-hearing question for the record.]
Mr. Faso. Mr. Chairman, I yield back.
Mr. Denham. Thank you, Mr. Faso.
Mr. Lipinski, you are recognized for 5 minutes.
Mr. Lipinski. Thank you, Mr. Chairman.
Mr. Hamberger mentioned a couple of times already CREATE,
the rail modernization program in the Chicago region which--we
talk about--the Gateway has been brought up also, but I think
it is very important that people understand how important
CREATE is for freight traffic for the entire country, in
addition to Amtrak and commuter rail.
We have moved along well, although more slowly than we
would like in getting CREATE projects done. I can't pass up the
opportunity again to talk about grade separations. Those are
lagging far behind, and those are very important. I would like
to see more funding, Federal funding, and railroad funding on
grade separations.
But right now the big project that we are looking at is
75th Street. And I was very happy to hear you say earlier, Mr.
Hamberger--when I had stepped out, unfortunately--that the
railroads are in for the application for an INFRA grant. Is
this going to be similar to the application--do you believe it
would be similar to what was put in at the end of last year?
Mr. Hamberger. Yes, sir. Each of the partners has
reaffirmed their commitment exactly in the same proportion as
last year.
Mr. Lipinski. That is great to hear. I think this fits very
well in exactly what the administration is talking about when
it comes to infrastructure in general, the private capital
going in, also the State, Cook County, city of Chicago, I think
Metra and Amtrak also on board. So this is exactly the type of
project that should be funded if the administration follows
through on what they have said they would like to see. So very
happy that the railroads are on board on this.
Mr. Hamberger. Yes, sir. And it actually refers back to the
question Mr. Duncan asked about the involvement of the private
sector, and one of the main metrics that the DOT has announced
in analyzing the INFRA grants is what is the private sector
involvement. So I think that that indicates at least that the
Department--that they are committed to the public-private
partners approach.
Mr. Lipinski. Very good. The other question I wanted to ask
Ms. Darr, I want to talk about the RRIF loan program, which,
unfortunately, has been undersubscribed. And part of that is a
result of the confusing loan repayment policies, the issue of
the credit risk premium that the RRIF loan recipients are
required to pay.
You know, DOT has not repaid nearly $76 million in CRPs
that they have collected to date. I want to know what would the
impact be if those CRPs were paid back, in terms of
infrastructure that would be able to be financed with that.
Ms. Darr. Thank you for your question, and I think that
that would be an excellent outcome, is if we could get DOT to
pay back the credit risk premium. And going forward, I think
that also needs to be considered.
The RRIF program really stands out to our industry as a
massive wasted opportunity at this point. Maybe two or three
loans have been processed per year, and only a few of those
have gone to the short lines. There is a number of reasons for
that. One of them is the credit risk premium. But additionally,
it is just truly too complex and costly for our small
businesses. There is a high cost to the transaction for
financial advisors and legal advisors that runs in the
neighborhood of up to $500,000.
You know, we believe the solution is to fund the credit
risk premium to help cover application costs and to do whatever
you can to speed up the process, because we can't wait the year
or more that it takes for those loans to be improved to get
started on some of these projects. Again, that is why 45G is
more of an immediate solution for us.
Mr. Lipinski. I think this, again, fits in with what the
administration has been talking about, and I am hopeful that
they take a look at the RRIF program and the credit risk
premium, and that we can get the RRIF program really working,
because I think it can be highly valuable, and is very
important for short line railroads.
So that--I would yield back.
Mr. Denham. Thank you, Mr. Lipinski.
Mr. Weber, you are recognized for 5 minutes.
Mr. Weber. Thank you, Mr. Chairman. A little bit of a
different question for the panel, if you will.
Have you all been watching the discussion about tax reform?
Mr. Hamberger. Yes, sir.
Mr. Weber. Just one out of five? That is not very
encouraging.
[Laughter.]
Mr. Weber. OK, I see some nodding heads.
Did you all take a position on the BAT tax? I will start
with you, Mr. Hamberger.
Mr. Hamberger. We did not take a formal position. Some of
our members did oppose the BAT tax, and we are founding members
of an organization called RATE. It is a great acronym:
Reforming America's Taxes Equitably, I believe it stands for.
And we are a very high effective tax rate industry, right
around 33 percent, so we are very open to getting that rate
down. And if that means interest deductions aren't deductible,
or if that means that accelerated depreciation goes away, if we
can get it down to what the Big 6 are talking about, in the 20-
percent range, we think that that would not only spur
investment by us, but would really make our customers more
competitive.
Mr. Weber. So you are against the 15-percent range.
Mr. Hamberger. We would love to see 15 percent, but I see
20 percent on the table, so we are good at 20 percent.
Mr. Weber. Mr. Moorman?
Mr. Moorman. Well, I have certainly been following it from
a personal standpoint, but Amtrak is not a taxpayer.
Mr. Weber. That is right.
Mr. Moorman. Yes. And we are striving to get it to that
point, where we can, but right now it is not a corporate issue
for us.
Mr. Weber. OK. And Ms. Darr?
Ms. Darr. We are, of course, supportive of comprehensive
tax reform, and we are hopeful that the Chamber will be able to
get that done. 45G, as you know, is our main focus when it
comes to a tax program. That is certainly our priority. And
when it comes to lowering the corporate tax rate, again, we are
supportive. But our businesses are not profitable enough that
we believe it would have the same impact as 45G would.
Mr. Weber. So do you have a white paper? Can you get my
staff a background on 45G for me, please?
Ms. Darr. I would be thrilled to do that.
Mr. Weber. OK.
Ms. Darr. Thank you.
Mr. Weber. Mr. DeJoseph?
Mr. DeJoseph. The Railway Supply Institute did not take a
position on the tax program. I can speak from my own company's
point of view that we would support 20 percent, 15 percent----
Mr. Weber. Nothing on BAT, you didn't engage in the BAT
conversation?
Mr. DeJoseph. That is correct.
Mr. Weber. OK. And Mr. Willis, I take it that would be the
same for you all?
Mr. Willis. We have not taken a position. I think some of
our unions are going to play in that space and the broader AFL-
CIO definitely will. But we have not been engaged in that.
Mr. Weber. OK. I am going to ask you kind of a broader
question. I will start with you, Mr. Hamberger, again. What is
the worst thing Congress could do to you all in this coming
session?
[Laughter.]
Mr. Hamberger. I know I shouldn't say this, but it does
remind me of a Will Rogers line. But I won't say it.
Mr. Weber. We will talk offline.
[Laughter.]
Mr. Weber. We will think about that.
Mr. Moorman, I will jump over----
Mr. Hamberger. For us the biggest issue continues to be the
economic regulation of the industry. In 2015 you passed the STB
reauthorization which continued the balanced economic
regulatory system that is there.
The worst thing you could do, because everything we do is
private sector, where you have to earn capital to reinvest it,
so if you did anything that would in any way change that
balance to send a signal to the railroads to disinvest, that
would be the worst thing you could do.
Mr. Weber. Mr. Moorman?
Mr. Moorman. I only say this because I was in the freight
industry for a long, long time. I thought Ed was struggling
because he was going to say that Congress would make the
freight railroads run Amtrak trains on time.
[Laughter.]
Mr. Weber. We are talking about in realms of possibility.
[Laughter.]
Mr. Moorman. Not fund the capital that we need to keep the
rail infrastructure, and particularly the Northeast Corridor,
moving ahead. That is absolutely critical, I think, not only
for Amtrak but for the country.
Mr. Weber. I think Mr. Sires had that conversation.
Ms. Darr?
Ms. Darr. You probably can guess what my answer is going to
be. But if 45G was not extended, that would be an enormous
problem for our industry. So we urge you to support 45G.
Mr. Weber. Mr. DeJoseph?
Mr. DeJoseph. I would think any attempt to do any form of
re-regulation would be the worst thing that Congress could do
at this time.
Mr. Weber. Especially without your input.
Mr. DeJoseph. Correct.
Mr. Weber. Mr. Willis?
Mr. Willis. Well, I will limit my comments to what is in
front of this committee, because there is a lot of things that
could happen to labor and the unions that I represent.
But, you know, I think devolving the Federal role back to
the States would be a real mistake. We have got real funding
challenges. The States need to be partners. But to devolve it
back to the States and--as a way that--you know, we just can't
figure out how to fund it. Or over-reliance on private
financing. There is a role for private financing, but to turn
it over to those two entities, we think, would be a real step
backward from positive moves made in the FAST Act.
Mr. Weber. Well, and the Constitution says something about
interstate commerce. I am not sure, but I think that is what
you are getting to.
But thank you, Mr. Chairman, I yield back.
Mr. Denham. Thank you, Mr. Weber.
Mr. Garamendi, you are recognized for 5 minutes.
Mr. Garamendi. Thank you, Mr. Chairman. The corporate tax
issue is one that we need to be very, very careful about. I
appreciate the gentleman raising the issue.
The evidence over the last 15 years indicates that those
companies that have successfully reduced their corporate tax
rate into the 1-digit and maybe the 10-percent rate have done
so--the result of having done so is to lay off thousands or
tens of thousands of American workers, and to use that reduced
tax rate, or the revenue from the reduced tax rate, to buy back
stock and corporate pay, corporate executive pay.
So we need to be very, very careful as we approach this.
Clearly, a lower tax rate for corporations could be, properly
structured, a significant economic boon. But presently, if you
take a look, AT&T, for example, GE, and a couple of other major
corporations--including Apple--that have very, very low tax
rates are not creating jobs in America. So just a heads up on
that.
Also, the Buy America provisions, all of you talked about
that, extremely important. If you want to build jobs in
America, make it in America. The President talks about it. Good
for him. Good for us, if we actually cause it to happen. So be
careful. All of you gentlemen discussed this.
Also there is a horrible disconnect and a very, very
serious problem and a disconnect between the rhetoric--in this
case, infrastructure, building infrastructure, funding
infrastructure--and what is actually happening in Congress.
This week we will pass a budget--well, some of us will vote
for a budget, and it will pass--that has the potential of
significantly reducing by $2.5 trillion, maybe as much as $5
trillion, revenue for the Federal Government. If we are going
to build infrastructure, these very extraordinary revenue
reductions that are embedded in the budget that will pass the
House this week will not happen. There will be no money for
infrastructure investment.
So let's be very, very careful here as we talk about tax
reform, as we talk about budgets, and all of the witnesses
today--and this is not the first panel that has been in this
room saying we need more money. There is a serious, serious
disconnect between our political statements of building
infrastructure and the reality of what the tax reform and the
budget that will pass the House this week will do to funding
availability.
Secondly, it has been suggested that we increase the excise
tax on fuel. Good idea. However, in today's press, General
Motors, within the next decade, will be out of the internal
combustion engine business. So tell me how that works. We need
to move beyond the excise tax on fuel, as we raise revenue fees
from the motoring public, whether that is commercial or private
automobile. We simply cannot rely upon the excise tax on fuel
as a funding source for the highway programs.
Also note that about 30 percent, 25 percent of the total
highway funding is general fund, which is scheduled to be
reduced in the tax reform programs.
So my point here--and this is not to, I guess, sort of
preaching, hopefully to the sinners, or not to the choir--but
the reality is that there is a very serious disconnect between
what we talk about doing in this infrastructure committee and
what we are doing in the tax committees. They simply do not
work together.
My final point is Buy America is extremely important. Make
it in American is extremely important, the testimony we have
received today about ways in which foreign, State-owned
companies can dramatically alter the ability of American
companies and American workers. Also, the issue of waivers and
inconsistencies, all of which you have talked about in one way
or another.
I am particularly interested, Mr. Moorman, in your point,
which you say in your testimony about the Buy America. I am not
sure that you like it or dislike it, but I will tell you you
must have it. The Siemens operation in Sacramento is a
marvelous example of where some $700 million was spent on
Amtrak locomotives, all 100 percent American made. I assume
that is continuing to be your position.
Mr. Moorman. Absolutely.
Mr. Garamendi. Perfect.
Mr. Moorman. We certainly support Buy American. And in
addition to the Siemens locomotives, we have a commitment for
over $2 billion for new Acela train sets, all of which will be
built by Alstom in upstate New York, so----
Mr. Garamendi. Which raises the question of the Siemens-
Alstom merger and what effect that might have on American
employees.
Mr. Chairman, I am 30 seconds over time. Please forgive me.
Thank you.
Mr. Hamberger. Mr. Chairman, could I answer one of Mr.
Garamendi's questions? That is how----
Mr. Denham. Mr. Hamberger, you are recognized for a brief
response.
Mr. Hamberger. Thank you, sir. How to fund the Highway
Trust Fund, given the technology that is coming down the road.
I mentioned in my opening statement--I don't think you were
in the room--we recommend a weight-distance tax which is
already in existence in your neighbor to the north, in Oregon,
which I think is fair, because it is based upon what is the
damage that a particular vehicle does to the infrastructure,
and measured by the vehicle miles traveled. So that would be
one way to get----
Mr. Garamendi. But the chairman and I do not travel in the
right-hand lane of Interstate 5 in California for the very
reason of destruction of the road bed. By passenger cars? I
doubt it.
[Laughter.]
Mr. Denham. Thank you, Mr. Garamendi.
Mr. Sanford, you are recognized for 5 minutes.
Mr. Sanford. I thank the gentleman. Let me follow up just--
I guess with a little bit more in the way of questioning to
you, Mr. Moorman.
The operating losses within Amtrak have been perennial, so
I think you are, if I am not mistaken, down to, it looks like,
227, which is a record low. I guess last year it was 305. But
there has been a longstanding run of operating losses on that
front. If you were to pick the three biggest efficiencies,
money savers, what would they be, in terms of correcting that
sort of perennial problem we have going right now?
Mr. Moorman. Let me first say that the way that I and my
co-CEO view Amtrak is we are a company, we are a corporation.
We are effectively a Government contractor. And over the past
40-some years----
Mr. Sanford. But in fairness, if you were a business, if--
you would be out of business on that basis. I mean you are
subsidized by Federal Government, et cetera.
Mr. Moorman. And what I was going to say is we effectively
are a Government contractor, and we carry out the wishes of the
U.S. Government in terms of passenger rail transportation. And
the Government's position over the past 46 years is that it
provides an essential service. And someone needs to do it, and
that is Amtrak.
But it is inherently--and I have said this many times
before in many forums--passenger rail around the world is not a
particularly good business model. So our job is to execute the
intentions of the Government----
Mr. Sanford. Understood. But back to what would your
efficiencies be. If you were to look for three of them, what
would they be?
Mr. Moorman. So, therefore, the first thing that we need to
look at is our route structure, our fare structure, how do we
better manage yield, how do we put services in places where
people want to use them, and how to buy them, and that is----
Mr. Sanford. I got it, but again----
Mr. Moorman. But----
Mr. Sanford. I only got a couple minutes, I want to get
specifically----
Mr. Moorman. OK, all right.
Mr. Sanford. So what would you do? I mean those are
generalities, I understand that.
Mr. Moorman. Well----
Mr. Sanford. What would you do?
Mr. Moorman. Well----
Mr. Sanford. If you raise fare structure you are probably
going to lose more money and lose ridership, right? So that is
probably off the table.
Mr. Moorman. We are not sure. But let me answer that and
say we are not sure of that, because Amtrak has not really done
the kind of job and look at fare structure, looking at revenue
management, looking at yield management. We actually believe we
can do a lot there which will raise our revenues without
impacting our ridership. So that is number one.
Number two, we are scrubbing everything internally in
Amtrak, in terms of looking at our organization, our headcount,
our procurement policies----
Mr. Sanford. Is that----
Mr. Moorman. And all of those are----
Mr. Sanford. But----
Mr. Moorman. All of those are----
Mr. Sanford. Yes, but why--I mean you all lose big money,
for instance, on meal services, as I have seen. If that is the
case, how is that being scrubbed, yet you, I mean, consistently
lose----
Mr. Moorman. Well, all I can answer for is what we are
doing now.
The third thing that we are doing, we are bringing in
outside help to look at how we offer meals. What is the whole
concept? What is it that we can do, given that the Congress has
mandated reduce the losses on meal service, but at the same
time it has mandated you don't--we can't do anything about
labor costs? So that puts us in a position where we have to be
very creative.
Mr. Sanford. What would----
Mr. Moorman. At this point----
Mr. Sanford. If you had the choice, what would you do on
labor cost?
Mr. Moorman. What would we do on labor cost? We would
probably try to figure out ways to deliver meals more
efficiently to more people on the train using the same or less
labor that we do today.
But that--all of the--you are asking great questions. And
all I can tell you is that, since my--in my short time at
Amtrak--and what we are doing is try to answer exactly what
those are--but they--but it is like every business. It comes
back to how----
Mr. Sanford. Again, I am down to 58 seconds.
Mr. Moorman [continuing]. And lower costs.
Mr. Sanford. So if--again, specific measurable and
achievable, I guess, is the mark of a real goal.
Mr. Moorman. Yes.
Mr. Sanford. So what we have talked about is sort of
generally--these are directions I would go. Are there three
specific things or two specific things that you would do to get
your numbers out of the red?
Mr. Moorman. We are in the process right now of completely
reviewing procurement. We think we can drive several tens of
millions of dollars out of our procurement costs. That is
number one.
We are looking at our entire organizational structure to
see where we can probably eliminate over some period of time
some layers of management. That is one. That will save us
millions of dollars.
And I will go back to we think there are substantial things
we can do to increase revenues without impacting ridership----
Mr. Sanford. Last question in the last 9 seconds I have.
What is your least profitable route?
Mr. Moorman. It would be one of the long-distance routes
between Chicago and the west coast. And the--again, the
profitability there is primarily because of losses because of
allocated costs----
Mr. Sanford. Got you.
Mr. Moorman [continuing]. Rather than direct costs.
Mr. Sanford. Thank you, sir.
Mr. Denham. Thank you, Mr. Sanford.
Mr. Carson, you are recognized for 5 minutes.
Mr. Carson. Thank you, Chairman.
Mr. Moorman, I am very proud that the largest passenger
railcar repair and maintenance facility is in our congressional
district in Beech Grove, Indiana. That is the Amtrak facility.
But I am also proud of one of Indiana's engine manufacturers,
which is Cummins.
I am curious. What is Amtrak doing to reduce emissions and
increase efficiency for their locomotives at this time?
Mr. Moorman. So we have an aging--obviously, on the
Northeast Corridor, we run electric locomotives. We have an
aging diesel locomotive fleet, quite frankly. And a lot of work
is done on that fleet at Beech Grove.
Mr. Carson. Yes.
Mr. Moorman. And I will be there next week. New diesel
locomotives are $6 million a copy. So, to replace our fleet
would be about $1 billion.
We are right now looking at how to rebuild them. Those
rebuilds would include reducing emissions, while giving us more
life on the diesel fleet. And I think we are about to put a
very good program together that will accomplish both of those
things.
Mr. Carson. Are there any obstacles to increasing the use
of cleaner technologies?
Mr. Moorman. The biggest obstacle I think I will go back to
is just a financial obstacle. If you look at the freight
railroads, which--the new locomotive standards from the FRA are
the tier 4 standards. We don't have the capital to get to tier
4 locomotives, as I said. But I think there are ways--and we
are aggressively pursuing them--to do exactly what you said,
and extend the life of our assets.
And I will say, by the way, that we are also looking always
across the country on how we can be more efficient and emit
less, in terms of carbon and pollutants.
Mr. Carson. Yes, sir. Thank you.
Mr. Hamberger, do you have any thoughts from the freight
side?
Mr. Hamberger. Well, I would actually just like to turn it
over to Mr. DeJoseph in a minute, because we were very
concerned, several years ago, whether or not the supply side
would be able to meet the EPA tier 4. And if they did, would
there be a fuel penalty?
But I am pleased to say that his members stepped up and we
now have several manufacturers who meet the standard. But----
Mr. DeJoseph. As far as I know, all of our locomotive
manufacturers are now in the position that they will be
producing tier 4 locomotives, going forward. I am not talking
about the rebuilt side, I am talking about new locomotives.
Mr. Carson. Thank you all. I yield back.
Mr. Denham. Thank you, Mr. Carson.
Mr. Smucker, you are recognized for 5 minutes.
Mr. Smucker. Thank you, Mr. Chairman. I would like to thank
the panel for being here, as well, and I certainly support
continued investment at the Federal Government level in our
rail infrastructure for both freight and passenger.
Today I would like to just--first a comment and then a
question in regards to passenger. And this is a comment for Mr.
Moorman and Mr. Willis. I would just like to congratulate you,
as well, for the work that is done at Penn Station.
So I live along sort of the Keystone Corridor, which goes
in and out of Penn Station, of course, multiple times a day,
and have family--a daughter of mine is in the New York area.
She spends time going back and forth, and I will occasionally
do that, as well. And we went through the station several times
during the course of a major project, expecting more delays
than what we encountered, and so I think that project was
coordinated very well, and I would like to thank you for that
work well done.
One of the opportunities I think we have in passenger is
increasing the speeds. Lancaster, Pennsylvania, is the second
busiest station in Pennsylvania behind 30th Street Station in
Philadelphia. People use it on a regular basis to go to
Harrisburg to work or to Philadelphia and, of course, all the
way to New York. You know, and people are making decisions
about whether to get in a car or to get in the train. If we can
increase the speeds, I think we will continue to see ridership,
which is already growing.
I will occasionally ride the train from either Aberdeen or
another station into DC here, and I have taken the Acela and I
have taken the other train, as well. And it seems to me that,
you know, the Acela provides additional benefit.
But we haven't nearly reached the speeds that high-speed
trains have experienced in other countries. And I believe that
is because--I think, Mr. Moorman, you briefly mention it in, or
one of you maybe briefly mentioned the opportunities that we
have here. Is there an infrastructure--it is tracks, other
things? Why isn't it that we cannot--what would it take, maybe
is a better way to put the question, what would it take to
increase the speeds on lines like the Acela?
Mr. Moorman. At the end of the day, train speeds are
determined by geometry. And the essential issue for both the
corridor itself and parts of the Keystone line is that they
were built when 80 miles per hour was an aspirational speed.
And so there is a lot of curvature that just restricts train
speed.
What the Japanese and then the Europeans figured out a long
time ago was hills don't matter, you can put enough horsepower
to go up and down as fast as you want. You slow down for
curves.
So if you look at the corridor, the two things are the
geometry in a lot of places doesn't permit higher speeds, and
then we mix a lot of slow commuter trains with the high-speed
trains.
If you go to Japan or Europe or anywhere else and you
experience those great trains, they are segregated from the
commuters and they are new builds that are dead straight. So
what stands in the way of the U.S. in terms of high speed is
just you need that kind of infrastructure.
Mr. Smucker. So have we reached our speed capacity on the
Acela trains that we have now?
Mr. Moorman. The new trains will be able to go slightly
faster, and we are looking at some--maybe possible improvements
that might improve some modest speeds. But once you get beyond
that, every minute of savings is some hundreds of millions of
dollars of investment.
Mr. Smucker. Thank you.
Mr. Willis, any comments on that?
Mr. Willis. Yes. You know, I think Wick is clearly right,
that it is--you know, it is the track on the corridor and the--
you know, the new train sets that are being built up in Alstom
are great, but they are not going to be able to go as fast as
they otherwise could unless we make real improvements.
Just to circle back on a conversation that occurred earlier
about, you know, Amtrak losing money, you know, look--Amtrak is
a public service. We subsidize other forms of transportation in
this country, whether it is roads--our local bus, you know,
outside doesn't ``make money,'' but it is there to provide a
valuable travel service, just as Amtrak. And if we are going to
have conversations about figuring out how to speed up trains as
you want to do, we have to sort of get over that.
I thought we sort of came over that hump as part of the
FAST Act and had a debate of whether or not Amtrak needed to be
privatized or what have you. But, you know, holding Amtrak
accountable for not making money I think is a little unfair
when, again, other forms of transportation get subsidized at
both the Federal and State level.
Mr. Smucker. Yes. All right, thank you.
Dr. Babin [presiding]. I would like to call on the
gentleman from Arkansas, Mr. Westerman.
Mr. Westerman. Thank you, Mr. Chairman, and thank you----
Dr. Babin. I am sorry, Mr. Cohen. I apologize.
Mr. Cohen. Thank you. We can see Arkansas from our patios.
[Laughter.]
Mr. Cohen. Thank you, sir.
Mr. Moorman, you probably are aware of the development in
Memphis--where we can, in fact, see Arkansas--at the Central
Station. And I think some of the people on your staff came to
meet with me--I know they did, and they were very responsive.
This is a redevelopment of the train station into a
marvelous downtown hotel by the people that started Holiday
Inn, the Kemmons Wilson family, a residential area, and it will
make the station for the customers much, much nicer, and a nice
attraction.
There is still a need of a lease that your real estate
people are working on. Do you know who that might be that would
be working on a lease with them?
Mr. Moorman. I know in general who works on leases, and I
will be talking with them shortly after this hearing.
Mr. Cohen. Thank you. I appreciate that very much. You
know, your co-CEO, Mr. Anderson, in this room testified to his
love for Memphis, to the people he loved, to the Rendezvous, to
the river. Because of his love, I hope he will understand that
we would not only like to get that station improved, but
possibly get a second line from Chicago. I think there is talk
of a second train to come to Memphis, I guess out of Carbondale
or somewhere in southern Illinois.
Do you know, since Delta left Memphis, a lot more people
have been using the train, so that is a good thing. Do you know
anything about that second line to Memphis?
Mr. Moorman. Let me first echo my love for Memphis, as well
as Mr. Anderson's, and particularly for the Rendezvous.
Mr. Cohen. John Vergos will appreciate the advertisement.
Mr. Moorman. But, you know, I am not aware of any effort
right now that we have internally--we may have done some
preliminary looking, but there are no eminent plans to add a
second service. And that would be an issue for us to do right
now because of limitations around the equipment we have, and
other, you know, things like that.
Having said that, that is another thing I will go back and
see if--to what extent any planning has progressed.
Mr. Cohen. Thank you. I was a State senator. It has been,
like, 25, 30 years they have been talking about a second train,
and--I guess it would be a day train, and it would just come to
Memphis and then go back. And there are a lot of folks who, I
think, use that train, and especially poor people who can't
afford the airlines and----
Mr. Moorman. We will certainly take a look at it.
Mr. Cohen. Thank you, sir. I appreciate it.
Mr. Hamberger, you are aware that there were adjustments
made in the appropriations process to the President's budget,
and they made deep cuts to the state of good repair grants--I
think cut $150 million--and the Consolidated Rail
Infrastructure and Safety Improvement Grants by close to $200
million, and the elimination of restoration and enhancement
grants.
What can you do or do you think you can do to influence the
administration and/or Congress to put those monies back to the
levels they were at?
Mr. Hamberger. Well, all I can do, I guess, is what I did
today, is call for the appropriate money for Amtrak that needs
to be in the state of good repair. I think it should be
appropriated at the authorized levels.
Mr. Cohen. I am sorry I missed your earlier testimony, but
thank you for that.
I am a big fan of Amtrak, Mr. Moorman, from when I was--I
guess it is a nostalgic thing, but it is also--it is a nice way
to travel. And I did the Panama Limited and the City of New
Orleans, and all that stuff, and I have done all the trains,
and used a lot of--coming down from New York to Washington.
Do you by chance know if Mr. Trump has ever been on an
Amtrak train?
[Laughter.]
Mr. Moorman. No, sir. I don't know.
Mr. Cohen. A lot of people from New York have, and it is a
good thing, and we need to let him know that we need to help
Amtrak.
And I am kind of concerned about your labor cost on the
food. When I have been on the train there has only been one
person there putting the sandwich in the microwave. How much
more labor cost is there?
Mr. Moorman. The labor cost is more around the full dining
car service, which we don't have on the Memphis train right
now, or the Acelas, where we just have one food car.
Mr. Cohen. Yes.
Mr. Moorman. There are things we can do to enhance our----
Mr. Cohen. So it is on the trains, the longer distance
trains.
Mr. Moorman. The long-distance trains. But we have work to
do there. And I will reiterate what I said. There is a lot of
opportunity at Amtrak to improve our service and at the same
time reduce our operating losses, and that is our goal.
I think we have a good team. We have a lot of work
underway. And my goal and Richard's goal is to run this like a
highly efficient company doing exactly what you, our
shareholders, ask us to do.
Mr. Cohen. Well, don't eliminate any hubs, and don't make
the seats a lot smaller.
[Laughter.]
Mr. Moorman. Yes, sir.
Mr. Cohen. Thank you, I yield back.
Dr. Babin. Thank you very much. And I would like to call on
the gentleman from Arkansas, Mr. Westerman.
Mr. Westerman. Are you sure this time?
Dr. Babin. I am positive.
[Laughter.]
Mr. Westerman. Thank you, Mr. Chairman. And I remind the
gentleman from Memphis he is in good company. Even though Moses
didn't get to go into the Promised Land, he got to go up and
look in, and he never got to cross the river. But you are
invited to cross the river and come on over some day.
Mr. Cohen. DeAngelo Williams came on over to our side.
Mr. Westerman. Right.
[Laughter.]
Mr. Westerman. Moving right along, and I appreciate the
witnesses being here today, and I appreciate your written
testimony. I had a markup in another committee so I wasn't here
to hear your verbal testimony.
But in my district we have about 18 short line railroads. I
believe that is the largest number in the country. We also have
a couple of class I railroads and we got a lot of folks that do
supplies and materials for railroads. So it is very important
to my district, as it is to much of the rest of the country.
So, Ms. Darr and Mr. Hamberger, I wanted to ask you all.
What, other than Federal funding for discretionary grants, what
types of policies would help implement the first mile and last
mile improvements to our rail system?
Ms. Darr. Well, first, Congressman, I want to congratulate
you for winning the award for having the most short line
railroads in your district of any Member of Congress. So you
are uniquely positioned, so congratulations on that, and thank
you for your support.
We talked a little bit about this earlier, but generally,
when I think of what is needed from my short line small
business perspective is mindfulness to the fact that the
average short line has fewer than 30 employees. So when we are
talking about regulations, when we are talking about grant
programs, when we are talking about anything that might support
their operations, we need to keep in mind that we have folks
running these railroads that have to wear many, many hats.
And so, you know, the less complicated, the better, whether
it is the training rule issue that we are debating right now
with the Department of Transportation, or whether it is all the
bureaucracy that goes behind the RRIF program, these things are
costly, expensive, and overly complicated. So the extent to
which we can simplify all of that, the better it would be for
our members.
Mr. Hamberger. Two areas I would focus on, one
complementary to what Linda just said, and that is regulatory
reform and having environmental reviews done concurrently and
not seriatim, for example, so that you can get a project off
the drawing board and into the ground in a couple of years,
rather than 7, 8, 9, or 10.
And secondly, addressing what we have called modal
inequities, where--as I know you know, we are privately owned,
maintained. We invest $74 million a day into our network. And
we compete with our also best customers, the trucking industry.
And intermodal is now the largest single revenue source for the
freight railroads, but it is also the biggest competitor.
And as my testimony points out, I believe it is $143
billion of general revenue will have gone into the trust fund
by 2020. And that puts us at a competitive disadvantage. And
so, we would like to see--and I guess I tried to make the point
with Mr. Garamendi--some way to have that trust fund funded by
the user pay policy, and our suggestion would be a weight-
distance tax, which would take into account the vehicle miles
traveled and the weight of the particular vehicle going over
the infrastructure.
Mr. Westerman. Thank you.
And, Mr. DeJoseph, I have got rail tie producers, I have
got aggregate producers, and rail producers all in Arkansas, a
lot of that in my district. I actually had the opportunity,
back when I was doing engineering work, to design a borate
pretreatment system for rail ties, so I understand that a
little bit, and I know there was a shortage of rail ties, and I
think there is still a shortage.
But we are about out of time, but do you feel like we have
got the supplies and the materials and the labor that we can
update and build new rail systems?
Mr. DeJoseph. The rail tie folks are not part of our
organization. I think the rail supply industry is ready and
able to take on any challenge, any build that is out there for
us.
I do think that, from the contracting side, I think we have
to look at--if there is Government funding involved, I think we
have to look at this requirement to pay prevailing wage, which
automatically increases the cost of the project. And I
obviously think that we have to continue to look at the
requirements, as Linda noted, about CFR part 243, which is the
additional requirements on contractors for the Federal
Government for training.
Mr. Westerman. Time, Mr. Chairman.
Dr. Babin. Yes, sir. Thank you. And now I would like to
call on a gentleman from Massachusetts, Mr. Capuano.
Mr. Capuano. Thank you, Mr. Chairman. And I want to
apologize to my colleagues. I usually let all my colleagues go
before me, but I didn't realize there were going to be so many
colleagues who wanted to speak today.
First of all, thank you all for coming. And, as I expected,
it is a pretty bipartisan hearing. We are all pretty much in
agreement that rail is important and we would like to be able
to do something about it. But there are a few things I would
like to comment on.
First of all, I didn't know we were going to talk about
taxes today. But for those of you who want tax cuts, it is
awfully difficult for me to hear the very same people who want
tax cuts simultaneously ask me to have more Federal spending on
their issues. It is virtually impossible. None of you could do
that with your private businesses, cut your revenues and
increase your spending.
What makes you think the Federal Government can do that?
Unless, of course, you want to tell us what to cut, which, of
course, gets you into a whole new quagmire that if you have a
brain in your head you don't want to get involved in, because
that is a no-win situation.
So, I am not going to ask about taxes, but since it came
up, it is critically important to me. Everybody that comes in
and asks me for things from the Federal Government, every one
of you has to be willing to pay your fair share in taxes.
That being said, I also want to comment on the DOT-111s and
the PTC. When we did the DOT-111 legislation and the PTC
legislation, I will tell you I had numerous people coming to me
and saying we can't get it done, it can't be done, it is going
to take 100 years. And to sit here today and listen to the fact
that we are pretty much done with the DOT-111s and we are on
track for the PTC is great. It goes to prove that when any
industry gets pushed to do something, you know how to do it.
And when you work with Congress to come up with a reasonable
timeframe within which to accomplish it, it can work. I want to
say thank you and congratulations for doing that. They are both
important to America, they are both important to safety.
Ms. Darr, I really appreciate your answer, when asked by
the chairman about prioritizing certain projects, that you have
a lot of smaller projects. I think that is the answer I
expected to hear, I am glad to hear it.
But I also want to warn you--because I agree that we don't
want to forget the short lines--if you don't find ways to
prioritize some projects, if not within the national scope, at
least within the State scope, you run the risk of being
forgotten. Because I will guarantee you if and when we ever get
to an infrastructure bill, people will be tripping over
themselves with project-ready things. We all love to be at
ribbon cuttings, we all want to make announcements. If you are
not ready with specific projects, I fear you would be left
behind, and I think that would be a mistake and a tragedy.
So I just would ask you to go back to your members and try
to find some way to prioritize. I know there is no one big one,
but at least here are the three in this State, and here are the
three in that State, and work with the State members.
Before I get to the one question I do have, I will tell you
that I didn't expect to get into one, but Mr. DeJoseph, in the
heavy rail there is no, you know, hot line. In light rail there
is a live line there. And once in a while people step on it and
they die. And when you talk about prevailing wage, for me--that
is a live line--the prevailing wage to me is the way that we
ensure that monies that are spent by the Government actually
get to working people. And without the prevailing wage, the
disparities we are seeing today in income across this country
would be greater.
So I will guarantee you--though I agree with everything
else, pretty much, that has been said, if you push prevailing
wage changes, you will lose--I won't speak for every Democrat,
but darn close to every Democrat and a whole bunch of
Republicans. Because, as far as I am concerned, that is a
direct attack on the middle class.
Now, I understand that reasonable people can disagree, and
that is fine. But I would rather take an item like that that is
a hot button issue and put it aside on a bigger issue where we
can all find very common ground that we can work on. So, for
me, that is--I wasn't going to do this, but when I heard the
words ``prevailing wage,'' I have been burning up here for
about one-half hour, waiting to talk about it.
And I love and respect you and what you do, and I am with
you on everything else, but that one, that is the best way I
can think of that would divide us, not just down the middle. My
side will win. And the problem is if you push it you risk
bringing down everything else for that, and I don't think we
want to do that.
Mr. Hamberger--and it is not just you, but you are the one
who mentioned it, about streamlining regulations.
Mr. Hamberger. Yes, sir.
Mr. Capuano. We are all trying to streamline regulations.
Everybody wants that. But, you know, we will disagree exactly
what streamlining is, and what the lack of regulations are.
That is always a fine line. But to me, part of the problem is a
lot of it is EPA and other agencies that are involved. It is
not just streamlining regulations. You have to have somebody in
place on the other side of the table to actually make those
decisions.
In your experience, have some of the cuts that we have made
in the Government agencies reduced the personnel on the other
side of the table, or made their jobs harder so that they
cannot get to all the regulations that they are supposed to
get? Have we cut it too much? Or is it just no regulation is
good regulation?
Mr. Hamberger. It is not no regulation is a good
regulation. In fact, I want to just emphasize that what we are
talking about is not doing away with reviews, not doing away
with making sure that it is done properly, but trying to
streamline it.
I am not really in a position to answer your question
because it is our members who deal directly with the agencies.
But let me take that question for the record and get back to
you.
Mr. Capuano. Fair enough. Thank you.
Thank you.
Dr. Babin. Yes, sir, thank you. I now call on myself for a
couple of questions.
Mr. Hamberger?
Mr. Hamberger. Sir?
Dr. Babin. How are you doing?
Mr. Hamberger. Doing fine, sir.
Dr. Babin. What are some of the steps the industry is
taking to meet the projected increased demand for freight
shipments over the next 20 years?
Mr. Hamberger. Well, the biggest, of course, is the
continued investment that we have been doing over the past--as
my testimony indicates, it is about $74 million a day. I think
we have averaged $26 billion, $27 billion a year of private-
sector investment, and that is money that is targeted at where
the marketplace tells us freight is going to move.
And sometimes the marketplace can be fickle. It wasn't too
long ago that I was hauled before Congress wanting to know why
we weren't investing more building a fourth line into the
Powder River Basin. Well, we started to do that, and that line,
of course, is what one might call a stranded asset these days.
But we nonetheless made that investment. We are making
investments now to try to respond to the growth of intermodal.
We are making sure that we have capacity to move grain for
export. So it really is the investment and, of course, the
hiring and training of employees to be able to operate on the
infrastructure, once we have it.
Dr. Babin. Absolutely. Thank you very much.
I would like to ask you, Ms. Darr, what is the impact of
burdensome and duplicative regulations on short line
infrastructure investments and also the creation of American
jobs?
Ms. Darr. I would say--and I think I said in my testimony,
as well--that our short lines have been overwhelmed in the last
8 years or so by an enormous amount of regulation, a lot of
which we don't think is based in sound science or backed up by
data.
A big example of that is the CFR part 243 training rule.
And I came before this committee a few months ago and shared
with you a telephone-book-sized document that was just 1
piece--and it would have 25--we would have to replicate it 25
times to show what the requirement would be for a short line to
comply with the training rules.
So we have about 26 crafts in the industry. Each one of
them would require a detailed training program, training
manual. It would have to be approved by the FRA. And I added
that up: 15,600 separate plans would have to be approved--
because we have 600 railroads--by the Federal Railroad
Administration. It just doesn't make sense.
So what we have done is spent a lot of money suing the U.S.
Department of Transportation, money that we didn't have, and
this was the first time we have done this in 105 years. Our
railroaders have spent a ton of time working together, trying
to address this rule. And ultimately, we hope that the rule
will be turned over and that it will go away. But that was a
lot of lost time that we could have spent doing things that are
a lot more productive for our industry.
Dr. Babin. All right. Thank you very much.
And then, lastly, for Mr. DeJoseph and Mr. Willis, do you
face any issues with conflicting safety regulations from
different agencies? And, if so, what are some of the concerns,
and what are possible solutions to that?
Mr. DeJoseph. I would echo Linda's statement about CFR part
243, for example, which is adding significant additional costs
to contracting companies that have to do work. We are talking
about in the neighborhood--at least with our own company--of
over $5,000 per employee to conform to the CFR part 243
regulations.
Dr. Babin. Mr. Willis?
Mr. Willis. You know, I don't think we have any issues with
conflicting regulations, as you asked. I think, you know, FRA
regulates in its space, and Federal transit regulates in their
space.
I just think, generally, we have talked a lot about how
safe this industry is, and I think that is accurate. And there
is a lot of reasons for it. It is front-line workers, it is
responsible and good companies that are here at the table. But
it is also the role of Federal regulators, and I don't think we
can discount the fact that Federal railroad has been very
successful in going out there and making sure this industry is
as safe as possible.
Not to get into the weeds on each of these regulations,
but, you know, a lot of these rules are very important, and we
can't just throw these things out without understanding there
is an impact there.
Dr. Babin. OK, thank you very much----
Mr. Hamberger. Mr. Chairman, could I give you one
conflict----
Dr. Babin. You sure can.
Mr. Hamberger [continuing]. In the environmental arena? We
have 3 seconds left, sorry.
But under FRA regulations we, of course, have to have
appropriate and proper drainage along our right-of-way so that
the rail maintains its integrity and the ballast maintains its
integrity. And then, as that drainage occurs into the ditches
alongside our track, along comes EPA to say that that is a
navigable water and you may have to get a permit from the Corps
of Engineers to go out and do some maintenance work.
So, hopefully, that is one of the ways that EPA could
interpret it, and that is just an example of where you do have
a conflict.
Dr. Babin. Absolutely. I appreciate you adding that. OK.
Well, the next questioner would be the gentleman from Maryland,
Mr. Cummings.
Mr. Cummings. Thank you very much, Mr. Chairman.
Mr. Moorman, Amtrak is a vital component of our Nation's
transportation network, and it is past time for us to make
investments needed to modernize Amtrak's infrastructure. You
stated in your testimony that Amtrak is working to make the
best use of its stations.
And, as you know, I am from Baltimore. You noted that at
Chicago's Union Station, Amtrak had--and I quote--``recently
selected a master developer to oversee the commercial
development of the station's parking garage, concourses, air
rights, and more than 14 acres of adjacent land.'' Amtrak has
also been in the process of trying to identify a master
development for Baltimore's Penn Station.
I consider it as very personal, something I have been
working on for many years, trying to make sure that the
development of Penn Station and that area around Penn Station,
which is, by the way, a 5-minute drive from my house, takes
place. Penn Station is an asset and has tremendous potential,
and has been untapped for too many years. The station is
obviously a key gateway into and out of Baltimore, serving
approximately 3 million rail passengers annually.
Right now, however, Penn Station is simply the place where
folks come to catch a train. It isn't a destination in itself,
and it certainly isn't able to support broader redevelopment in
our community. Now, I must say that there are many developers
who are coming to Baltimore. They see it as a place to be. And
Penn Station so happens to be in a prime location.
So, for many years--more than a decade, in fact--we have
been working on this project. And I appreciate the modest
improvements that Amtrak has made in the station's basic
facilities like the bathrooms, but much of the building still
sits empty, and it provides almost none of the amenities that
folks can access at Washington's Union Station, or even
Philadelphia Station.
And to show you how serious I take this, it is not unusual
for me to visit Penn Station once or twice a week, just to make
sure the bathrooms are clean, to make sure that they are
functioning properly, because I want people to feel welcome
when they come to my city. But I also want it to be a place of
destination, I want it to be a lively place where young people
can have activities and office buildings, and things of that
nature can be developed.
So that is why I was very pleased to join Amtrak officials
last August to announce that Amtrak was ready to receive
qualifications from bidders that wanted to partner with Amtrak
to revitalize Penn Station.
So I just have two questions. Now, more than 1 year later,
I want to hear from you what is going on with this process. How
close are we to announcing the selection of a master developer
and to learning about the developer's proposals for
transforming Penn Station?
I also appreciate that there are limits on what you will be
able to say here in this public setting. But will you commit to
calling me as soon as the developer is selected and briefing me
on the plan for revitalizing this very important station?
Mr. Moorman. Thank you for the great question, Mr.
Cummings. The answer is certainly. To the second part of your
question is we will call you as soon as we have a name and the
plan in place. We don't have it yet, we have been through a
couple of iterations on it. It is a fairly complex plan to
develop, with not only the station itself, but, as you know, a
couple of adjacent pieces of property that Amtrak controls.
We have had the RFPs out, we are looking at them and
reviewing them right now. I would hope that, over the next 60
to 90 days, we will have the answer for you. But there are
issues in how to do it best so that it not only accomplishes,
you know, making it a better train station, which is obviously
something we are very interested in, but making it a better
area for the community, which is clearly what you need.
So, we are in the mid-flight on it. It is one of, as you
mentioned, several major stations where we are doing the same
thing--Chicago being one, but certainly we are looking at
Philadelphia Penn, Washington Union Station. New York Penn is
its own world. And we are aggressively trying to pursue all of
them.
Mr. Cummings. Thank you very much.
Thank you, Mr. Chairman.
Mr. Denham [presiding]. Thank you, Mr. Cummings.
As we conclude today's hearing, Mr. Moorman, I would like
to follow up with just one last question, which you can provide
greater detail in the future, as we move forward.
But since our last hearing in June have you publicly
released your 5-year plan now?
Mr. Moorman. Yes, sir. Yes. The 5-year plan, along with the
business line plans, have all been issued.
Mr. Denham. And can you give us the profits that you are
projecting for the newly formed Northeast Corridor account
structure?
Mr. Moorman. The cash generation on the corridor under the
FAST structure, which is the new structure that we are
reporting in, I don't have the number right in front of me.
Order of magnitude is about $400 million, which, obviously, is
a significant part of Amtrak's finances. But, as I often say,
it, itself, doesn't sustain the capital requirements for the
corridor.
Mr. Denham. And which projects are detailed out in the 5-
year plan that are going to be utilizing the revenues generated
from that corridor?
Mr. Moorman. The basic projects that are detailed are,
obviously, the Gateway project, starting with Portal North and
the Hudson Tunnels. In addition, I mentioned earlier the B&P
Tunnel, the Susquehanna River Bridge. Those are the major
capital projects.
But in addition we talk about just all of the work needed
for the state of good repair, the track work, the work on the
catenary, and things like that.
The other thing that we have released, but I think--because
much of the work was done before I arrived--is the 5-year
business plans. That is where we are going back and really
scrubbing to try to develop better strategies for today, in
terms of what Amtrak can and should be, not only in the
corridor, but in the long-distance network.
Mr. Denham. Thank you. Looking forward to seeing greater
detail on the 5-year plan.
Mr. Hamberger, final thoughts?
Mr. Hamberger. Mr. Chairman, I was remiss in answering your
first question. We have submitted to Deputy Secretary Rosen,
the designated regulatory reform officer at the Department of
Transportation, a list of those regulations which we would like
to see revisited at the Department. So I ask unanimous consent
to submit that for the record.
Mr. Denham. Without objection, so ordered.
Thank you.
[The information from the Association of American Railroads
submitted to Deputy Secretary Rosen is included in response to
a post-hearing question for the record and is on pages 63-71.]
Mr. Denham. Are there any further questions from members of
the subcommittee?
Seeing none, I would like to thank each of our witnesses
for their testimony today. Your contribution to today's hearing
has been very helpful. I ask unanimous consent that the record
of today's hearing remain open until such time as our witnesses
have provided answers to the questions submitted to them in
writing, and unanimous consent that the record remain open for
15 days for additional comments and information submitted by
Members or witnesses included in the record of today's hearing.
Without objection, so ordered.
If no other Members have anything to add, the subcommittee
stands adjourned.
[Whereupon, at 12:10 p.m., the subcommittee was adjourned.]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
[all]