Open

On behalf of President Bush and Secretary Mineta, I want to thank you for allowing me the opportunity to join you all today.

It’s a real pleasure for a big Texan boy like me to have a chance to visit one of the most progressive states in the nation when it comes to transportation.

In many ways, y’all really know how to do it right.

However, before we jump into the transportation arena, I’d like to take a moment and briefly mention a couple of the priorities that President Bush and his leadership team are working so hard to make reality for the benefit of the American people.

I want to talk about three things today:
-Administration plans for reviving the American economy; -Major transportation priorities of Secretary Mineta, who after all, was your first choice of speaker; and -Issues facing the railroad industry.

Tax Cut Without question, this President is committed to putting the pieces in place that strengthen America’s economy – not just for the short but the long haul as well.

While it’s accurate to say that we’re experiencing our second consecutive year of growth, the American economy is not growing strongly or rapidly enough.

President Bush has proposed a bold plan that will boost the economy by providing tax relief for every American who pays federal income tax. And after all, President Ronald Reagan once said that a taxpayer was someone who works for the federal government but doesn’t have to take the civil service examination.

Under the President’s plan, 92 million Americans would receive, on average, a tax cut of $1,083 this year. That’s real money to help pay the bills and push the economy forward.

It’s tax relief that Congressional Republicans and Democrats alike passed in 2001 and promised for future years.

In a speech to the Nation on April 15, Tax Day for millions of procrastinators, President Bush called on Congress to again cut taxes by at least $550 billion — not over the next several years but now.

President Bush’s plan is built on policies that: -Encourage consumer spending, -Promote investment, and -Help unemployed citizens.

How is he going to do all of this? Well, let’s start with consumer spending.

The President has said on more than one occasion that economic and job growth will come when all of you - the American consumer - buy more goods and services from American businesses.

And the best and fairest way to make sure that happens is to grant Americans immediate tax relief thereby allowing all of you the choice as to how to spend or save more of your hard-earned money.

Secondly, the President wants to promote investment. This is where the elimination of the double taxation on dividends comes in. The House and Senate are currently debating this topic, but I don’t know what the debate is all about. Hopefully, it’s about when to pass this tax cut.

We want to put more money in the hands of American investors, especially seniors who rely on this income for their daily lives.

Here in California, almost 4 million people – of which 24 percent are seniors – will take home more money in their dividend checks – 28 percent more for most Americans, should the President’s proposal be enacted.

In fact, the Council of Economic Advisors estimates that President Bush’s proposed dividend tax cut will inject an additional $20 billion into the economy the very first year it is passed. That $20 billion would produce more than 400,000 new jobs by 2004.

Finally, we come to the third part of the plan to reshape the economy and to help Americans during this recovery period, and that is to help those who are unemployed get back on their feet.

President Bush already signed into law an extension of the unemployment benefits to help those particularly hard hit during this downturn.

The next step is to create new Personal Re-employment Accounts. These accounts would provide unemployed workers up to $3,000 to use for job training and costs related to finding a new job.

I can assure you that the President will not be satisfied until every American who wants a job can find one; until every business has a chance to grow; and until we turn our economic recovery into lasting prosperity that reaches every corner of America.

I’m sure it’s obvious that I’m a true believer in this – not just ‘cause the President is my boss – but that if enacted, tax relief will touch each and every one of us in a positive way.

Secretary’s Transportation Issues

I’m equally excited about the outlook for transportation, considering our plans for:
-the President’s proposed transportation budget; -federal Surface Transportation reauthorization.

President’s 2004 Transportation Budget Proposal

For FY04, the President has proposed increases in overall discretionary spending by 4 percent – which is about as much as the average family’s income is expected to grow.

DOT’s budget represents a 6 percent increase over last year, signaling the priority this Administration places on our national transportation system.

As the President works to strengthen the economy and meet our security needs at home and overseas, Secretary Mineta’s leadership at the Department of Transportation will continue to focus on ensuring the highest levels of safety, mobility and economic growth throughout our nation’s surface, rail, maritime and aviation systems.

From the Secretary on down, we’re working hard to develop a SAFER, SIMPLER and SMARTER national transportation system for all Americans.
-SAFER, because we are placing our greatest emphasis on saving lives and reducing accidents;

-SIMPLER, as we consolidate and streamline programs and improve project delivery;

-SMARTER, because we are focusing on improving system performance and enhancing program accountability.

The President’s proposed transportation budget identifies a total of $14 billion, or 27 percent of the budget, for our highest priority, the safety of all Americans.

From an economic perspective, you might find it of interest to note that for every $1 billion invested in transportation, nearly 47,500 jobs are created, along with more than $1.3 billion in wages, and more than $6 billion in goods and services.

This budget request and these guiding principles provide the foundation for a new reauthorization cycle in both surface and aviation programs that will guide the course of these important programs for the next several years.

Surface Transportation Reauthorization

Speaking of reauthorization – a topic that I’m sure is near and dear to most of you assembled here today – I’m pleased to report that the Administration soon plans to unveil the details of our proposed legislation. First and foremost, this Administration will propose surface transportation reauthorization legislation that ensures the highest possible funding for investment in our country’s transportation infrastructure, constrained only by the resources available.

We can achieve this by building on the legacy of earlier surface transportation legislation.

Guaranteed funding each year is one of the biggest success stories from ISTEA and TEA-21. These guarantees should be retained and refined in the new surface transportation legislation.

Our proposal calls for increased funding flexibility for State and local authorities so that they can address specific areas of concern. This will help deliver needed transportation improvements promptly and relieve congestion.

We also should continue to encourage innovative financing tools so that states and municipalities can leverage the power of federal funding. To do this we will need to encourage more private sector investment in infrastructure projects.

In just a few moments, I’ll speak to an innovative financing tool which some of you in this room might wish to take advantage of.

A portion of our proposal also will help make the grant process more efficient and help relieve congestion. This means continuing a strong emphasis on public transportation and looking for ways to streamline, consolidate and simplify processes for getting grants to build and improve transit facilities.

If I may, this may be a good opportunity to say a couple of words about the transportation team that Secretary Mineta has assembled.

You should know that my modal colleagues are first and foremost safety advocates.

Everything we do speaks to our dedication and our stewardship of taxpayer monies to save lives through an array of Safety Programs.

We’re Pioneers in Transportation - leaders pursuing "best practices" that benefit the taxpayers and the nation.

We’re Architects of the Future, visionary in our view of what is possible in transportation.

And, finally, we’re Defenders of the Homeland, continuing to play a major role in preserving, protecting and defending our nation, our way of life, and our citizens.

A part of this includes our efforts to ensure the security of our critical transportation infrastructure and working with other agencies to support the President's national security objectives.

In short, the President has assembled a tremendous team that is actively committed to realizing the benefits of a world-class transportation system for the betterment of the American people and our nation as a whole.

Rail-Specific Topics

Now, let me turn to some rail-specific topics, which I hope may interest many of you. I love working with people in the railroad industry. I am the envy of millions of young boys who love watching and playing with Thomas the Tank Engine--I’m a big kid who gets to ride trains and work around them and I get paid for it!

Safety

Last year, I was asked to appear before several Congressional panels where I had the chance to tell the great story about the safety accomplishments of America’s rail industry.

And what a story it is. To appreciate where we are, one really needs to step back and look at safety with the big picture in mind. Just consider the fact that:

-Accidents have declined nearly 70 percent since the late 70’s;

-Over the last three years, we’ve had the lowest number of rail-related deaths and employee fatalities on record;

-Despite more than 2 million movements of hazmat cars, last year marked the lowest number of train accidents involving a release in five years; and,

-Despite 6 passenger deaths that occurred in 2002, intercity and commuter trains moved more than 2.3 billion passengers in the previous five years with only 2 fatalities resulting from a derailment.

Pretty impressive if you ask me, though my rail colleagues and I won’t be satisfied until we reach the ultimate zero figure.

Congestion

While safety of the rail system has improved, all of us in this room know that the demand on the publicly funded highway system continues to grow resulting in growing urban and suburban congestion.

During the same time, freight traffic has grown as well, further straining America’s highway system.

Truck traffic on major interstates far exceeds the loads anticipated when those roads where built, and those truck volumes are growing rapidly.

Heavy truck traffic and an aging highway system means that more and more highway funds must go into rehabilitation rather than new roads.

In this context, the Association of American State and Highway Transportation Officials, or AASHTO, recently released its “Freight Bottom Line Report.”

The document points out that in order to accommodate significant increases in freight volumes, some of this traffic should eventually shift to the railroads, where much of it used to move.

But, railroad capacity is limited, particularly in specific corridors where both freight and passenger trains coexist.

Clearly, further investment and expansion will be directly tied to expected returns on investment.

My point here? If the economy continues to grow, freight must be able to continue to move.

Obviously, your attendance here today is a recognition by each of you about the value rail can and should play in helping to address the nation’s growing problem of congestion and highway expense. While freight continues to be a major focus for us at the Department, the challenge continues to be how do we encourage states and localities to give freight and freight-related projects greater attention and dollars – much of which I know are minimal at best?

Public private partnerships

Obviously, increasing rail capacity and shifting more traffic to railroads will require greater partnerships among all stakeholders.

The public sector may be expected to contribute to projects based upon the public benefits, the railroads on their private benefits.

There are plenty of examples of this approach. An ideal one is right here in California with the Alameda Corridor.

This visionary project involved the purchase and construction of a shared rail line serving the ports of Los Angeles and Long Beach with transcontinental rail system connections east of LA, creating a high capacity trainway in southeast Los Angeles County.

Specifically the corridor, which was completed last year, resulted in the consolidation of four separate freight train routes owned and operated the Union Pacific or Burlington Northern Santa Fe Railroads, into a single 20-mile rail cargo freight rail expressway.

The economic effects of this project are numerous not the least of which is a significant decrease in transit times for rail cars moving into and out of the ports.

From a safety perspective, the project resulted in the elimination of numerous rail-highway grade crossings, thereby significantly enhancing safety for the motoring public and also contributing to more fluid movement of trains.

Funding for the project was the result of a Congressionally mandated loan that is being partially repaid by a user fee on the railroads using the corridor – a toll road concept of sorts.

There are other fine examples of innovative partnerships taking place across the country.

Clearly, as more and more folks begin to realize rail’s economic and societal benefits, railroads will need to be prepared like never before to partner with the public sector.

Challenges and Opportunities

No doubt there are challenges, but I also see many opportunities.

Know that at the Department, we are committed to developing a means for bringing to bear the resources and abilities of freight railroads.

Specifically:

Section 130: We are discussing a number of options to improve the effectiveness of the program, and are encouraging states to take advantage of flexible funding programs to leverage crossing dollars with other safety funds.

Tax advantaged investments: A variety of innovative funding techniques are being considered. We hope to design them in ways that will be “user friendly” to public/private projects involving railroads.

International and Intermodal Connectors: We are considering changes in the Borders and Corridors program that will improve the effectiveness of intermodal projects.

Multi state corridors: Transportation problems that cross state lines is a growing problem. We are considering ways of encouraging states and other stakeholders, including railroads, to develop programs that bridge jurisdictional boundaries and eliminate bottlenecks that thwart more effective intermodal transportation.

Examples of this include the I-81 study and I-95 Coalition projects. Both Eastern U.S. projects involve multiple states, federal agencies and railroads to examine the total capacity needs of all modes along the corridors, identify chokepoints and bottlenecks, and estimate and prioritize investments to improve throughput.

In the case of the I-81 study, the FRA has helped fund this effort with the states of Tennessee, Virginia, North Carolina and Georgia, and Norfolk Southern.

In the I-95 study, we are working with states between Virginia and New Jersey to identify projects that benefit the societal benefits from rail infrastructure investments, including regional economic development and environmental issues.

RRIF

For many of you in this room today, rail financing can present some challenges. So for you we have RRIF, better known as the Railroad Rehabilitation & Improvement Finance program, which provides eligible borrowers direct loans or loan guarantees to develop or rehabilitate rail equipment and infrastructure.

To date, we’ve identified nearly $600 million worth of potentially federally financed improvement projects ranging from track rehabilitation, line acquisition and equipment purchases.

If you haven’t done so already, I strongly encourage you learn more about RRIF program, and where possible, consider it as a viable option for financing capital improvements on your properties.

Intercity Passenger Rail Finally, I guess most of you won’t let me leave the State without providing an update on Amtrak. The most important thing for this group to know is that all of the Administration’s actions to date with respect to Amtrak have been geared toward keeping Amtrak in business, recognizing the strong relationships that exist between Amtrak and many of you in this room. Without question, the political situation has never been better for a fundamental reassessment of the manner in which we deliver passenger rail services in the country.

As most of you know, last summer, Secretary Mineta unveiled the Administration’s principles for reform of intercity passenger rail as follows: -A system driven by sound economics; -The requirement that Amtrak transition to a pure operating company; -The introduction of carefully managed competition; -The establishment a long-term partnership between states and the Federal government; -The creation of an effective public partnership to manage the capital assets of the Northeast Corridor. All of the principles are based on a core belief that passenger rail is an important part of the nation’s transportation system.

A flexible and redundant national transportation system -- not to mention the added value of relieving congestion on our nation’s already congested highways –makes rail essential.

Luckily, we have a great example of the future of passenger rail here in California. The state has invested millions in new rolling stock and freight rail capacity improvements.

Customers have responded to better equipment, higher frequencies and a network of connecting service by making California routes some of Amtrak’s busiest services.

Metrolink, the commuter rail authority here in Southern California offers another example of creative cooperation with freight carriers and clever contracting for services.

We’re trying to bring some of these successes to the rest of the country, but we all must admit that funding alone won’t solve Amtrak’s problems.

Congress followed the Administration’s lead and recently passed legislation as part of the 2003 Appropriations Act incorporating much of what we’ve been calling for in terms of Amtrak reform.

To that end, the Department of Transportation recently approved Amtrak's business plan for the remainder of fiscal year 2003 and executed a new grant agreement that candidly many didn’t think we could accomplish in the timeframe established by Congress.

While pleased with this latest Congressional action, we must recognize it for what it is – a first step in redefining intercity passenger rail in America. The Administration strongly maintains that significant reform is necessary for Amtrak and intercity passenger rail to remain a viable means of transportation.

Simply put, we believe we have a fiduciary responsibility to the American people.

As is the case when a bank requires a loan applicant to provide a business plan outlining how loaned funds will be spent thereby safeguarding the principal.........the Administration fully believes it has an obligation to the American taxpayer to do the same with respect to Amtrak’s appropriation.

CONCLUSION

Once again, thank you for allowing me the opportunity to spend some time with you today. Most of all, thank you for paying attention.

I’m extremely confident about the future – the future of both our economy, under the President’s leadership……and the nation’s transportation system, under the leadership of Secretary Mineta, one of California’s greatest sons.

I’d certainly be happy to take any questions you might have at this time.