Thank you, chairwoman brown. I now recognize mr. Gardner, you may proceed. Mr. Gardner thank you, chairman lipinsk lipinski, the Ranking Member, and thank you for the opportunity to testify today Service Transportation boards key role in enabling amtrak to effectively serve the nation. Strongly support the s. T. B. Needs ieve the board updated authority for Passenger Rail so we can achieve the ontime evels and erformance your constituents deserve. Ongress took amtrak on for the job. Common carrier obligations for assengers and the associated operating losses for passenger service, the freights agreed to whereverrak to operate and whenever it wanted over their lives. Trains with trak dispatching preference over freight and to empower what is the s. T. B. To ensure amtraks access to the rail network. 50 years since the Freight Railroads agreed eagerly to this bargain and yet many of our host railroads fall short in ulfilling some of these key obligation obligations. Mr. Gardner, if youll suspend. On. Need to have your video we need to see you in order for to testify. Mr. Gardner absolutely. Is that better . Mr. Lipinski we see you now. Mr. Gardner congress had to amend the law. 1973, the freights had begun delaying amtrak trains so enshrinedhat congress this promise of amtrak preference into federal law and delays had gotten so bad that congress created a new rocess to set amtrak on time performance and provided the s. T. B. With the authority to o. T. P. Gate poor but for several reasons, these fforts havent remedied the problems. For amtrak and your constituents, thats meant millions of delayed passengers as we rs of impediment try to add trains or start new routes to keep up with changing demand. And clear in the is standards rule, many hosts see supporting our operation not as to the public n but as competition for the use of their infrastructure. Wasnt created to relieve host railroads to support passenger trains. To help them reduce financial losses and ensure that passenger trains can country. Ve the we need this committees help to restore your original deal with the freights. You can provide us, as you have in the moving forward act, a way to enforce of existing rights preference. You can make real amtrak start newy ability to routes and add Additional Trains without arbitrary barriers. An office of Passenger Rail within the s. T. B. And require them to use their pursuit tive powers to ignificant instances of 4 o. T. P. And grant amtrak access to hosts capital and investment requirements. To be clear, amtrak strongly suppo railroads. R freight we want the whole rail network to grow and succeed and we have rail host partners who deliver very good service to am a track. Freights seem to essentially view us and our illions of passengers as an imposition to be minimized instead of a valuable Public Service to be supported. We and the why s. T. B. Must have clear and appropriate authority to support our mission. To say that just this week, f. R. A. And amtrak took an important step in this the publication of the metrics and standards rule. Will empower the s. T. B. To investigate poor performance and help enforce amtraks preference rights which could make a huge difference in train performance. Our c. E. O. Bill flynn recently testified, were hopeful with covid relief we can and your support, quickly restore service and recover from this pandemic. Of ing in motion a new era growth and a chance for amtrak to play a significant role in reduce Carbon Emissions across the country. A rarely heralded fact is that has the Largest Rail Network in the world. It yet, we use so little of for intercity Passenger Rail service. Fundamental reason for this is quick, ility to gain reasonable access to the network and receive Reliable Service law. We are owed under this has effectively blocked our rowth and left much of our nation underserved. Cities like los angeles and nashville atlanta to could clearly benefit from amtrak service. Existing rail lines already connect them. Amtrak trains be serving these and many other similar corridors nationwide . With your help, we can answer his question with a yes by gaining rights and probably s. T. B. Enforcement coupled with of ngterm dedicated source funding for botham track and inner city and Passenger Rail. We can provide the type of rail service er that nearly other developed nation now takes for granted. Want to thank you, particularly, chairman lipinski, for your long standing support leadership or your role throughout many issues affecting amtrak and for your committee. We have always appreciated your support. Thank you very much for it. Answering any to of the questions from the committee. Much. Very r. Lipinski thank you, mr. Gardner. Jefferys jefferies, you may proceed. Jefferie, s thank you mr. Jefferies thank you for me. Ng railroads are diligently on the hand, delivering essential goods across the u. S. While the railroad value to the american tolic has many sides, i want highlight three specific areas. First, railroads have taken extensive steps to protect their employees from coronavirus from the coronavirus throughout required ic with p. P. E. Use, strict social distancing policies, and procedures. Aning our industry is fortunate to employees who does this and deserve rve their their gratitude. And its safe for customers around the economy. As a result of sustained investment and nimble operations, Railroad Service thiss have remained strong year, a reality that has been highlighted by federal officials prominent customers alike. And broad Safety Measures are encouraging. With the overall employee injury 2019 own 12 so far from while the train accident rate is 11 . Third, railroads are playing a key role in help support the nations economic recovery. Businesses and Consumer Behavior has seen dramatic as the his year, such boom in ecommerce or the ramp up in auto manufacturing or even uptick in grain shipments, railroads have flexed operations to meet these challenges. Rail, to passenger Freight Railroads continue to work closely with amtrak and ther passenger partners, adjusting to meet changing needs in the face of unprecedented challenges. Service e passenger operations have been suspended in recent months, freight work ads stand ready to with their partners to restore. Ooking ahead, the expansion of Passenger Rail must recognize amtraks unique position and not rail e growth of commuter with any perception of access rights. Oluntary agreements with privately owned freight rails have proven extremely successful. Ontime performance, the federal railroad final rule ons recommends that schedules must be updated. Engagedlroads have been and remain committed to working towards scheduled modernization with amtrak. Agreed upon schedules are in place and true causes of delay are accurately identified by data, o. T. P. Metrics can be a meaningful tool. Matterndependent subject expert that adjudicates disputes hosts, amtrak and its the Surface Transportation Board does have a productive role to play in this process. More broadly, the s. T. B. Has een active on fronts, freight rail, many of which you heard from our prior witness, regardless of the specifics of proposal, its critical that the board proceed in a manner that is datadriven grounded and sound economic principles. Regulatory environment that promotes investment instead of at stake. Ises is dissuade is at stake. Freight railroads stand ready to solutions. S from helping drive economic fostering infrastructure investment, or addressing environmental concerns, railroads will play a central role. Public policy set forth by congress and federal regulators plays an Important Role in the of robust rail operations throughout the country. Reexamines ittee surface transportation eauthorization next congress, divisive policy measures should be cast aside and the laser ocus should be infrastructure a Infrastructure Network that all stakeholders can support. Thank you. Im happy to answer any questions you may have. R. Lipinski thank you, mr. Jefferies. Otoole. Mr. Otoole good morning, mr. Chairman and members of the committee. I appreciate the picture behind which im sure chairman of zio knows is the shaft lake. Ht passing the i rode that when i was a boy. Nd i passed that very same lake. Now, last year, the average africanamerican traveled more by automobile. Es 2,000 miles by air. Miles. More than 100 and bicycle 26 miles. Carries the trak average american just 19 miles. Few people rode amtrak a lot more than 19 miles and most didnt ride it at all. Contrast, almost everyone realize on the railroads for deliveries of freight. Role of thering the federal government in general, the Surface Transportation Board, in particular, and amtrak, we should remember that one third of by train n miles go but only one 10th of 1 rides amtrak. I love passenger trains. As a see amtraks creation mistake based on erroneous assumptions about the value of the just trains and problems faced by the private railroads. Railroads main problem was money not from assenger trains but overregulation by the federal and state governments. Regulation or not, passenger trains are unable to compete gainst airlines and automobiles. 1958 interstate commerce concluded report there was no way to make passenger trains profitable. Advocates believe passenger train losses were the naer and imaginary. And they had a huge surplus in capacity and would welcome any its of train that covered basic operating cost. Haswell, nthony founder of the National Association of railroad passengers, made it clear in a hearing that he believed passenger trains could be profitable and he to ifically objected government subsidies to passenger train operations. Taking passenger trains off the railroad hands and save them from bankruptcy. 50 years and more than 50 billion in operating subsidies later tpwheerks that amtrak isnt and never will be profitable. Anthony haswell is sometimes called the father of amtrak and hes called amtrak a legendary boon doingle and admitted hes personally embarrassed by the organization he helped create. His prediction of operating subsidies to passenger trains or eliminate any incentive to reduce expenses or increase revenues is proven correct. When amtrak was created, average rail fairs nor passenger mile were two fairs of average airfares. Thanks to airline deregulation, since then inflation adjusted airfares have fallen by 60 even as amtrak fairs for thousands of miles have doubled. Average amtrak fairs exceeded airfares by 1990 despite huge operating subsidies or perhaps as well predicted because those subsidies encouraged inefficiencies. Today counting all subtsdies to both amtrak antiairlines, amtrak spends more than four times as much as the airlines moving someone a passenger mile. The airlines have made themselves so efficient they have tracked well over 100 times necessaryic travel as amtrak. The creation of amtrak didnt particularly help railroads such as the milwaukee road which went out of business after amtrak took over. Instead, railroad revived only when congress pad an act in 1980. One of the effects of deregulation was that railroads shed the surplus capacity they once had that would have been available to passenger trains. Today thanks to more efficient operations, railroads rail routes that once all only a handful of trains per day supports 60, 70, or 80 more Freight Trains day. This leaves little room for amtrak. Displacing a money making Freight Train with a money losing passenger train is especially unfair considering so few people use the passenger trains while so many rely on freight. Passenger trains are pretty, but they are an obsolete form of transportation. Giving passenger trains over freight will hurt more people than it helps. I believe the federal government should end its support of amtrak and allow passenger trains to operate unhindered where they are viable and to disappear where they are not. Thank you very much. Chair lipinski thank you, mr. Otoole. R. Skew tellas skew constitute last. Mr. Skoutelas members of the committee, Ranking Member graves, chair lipinski, thank you for opportunity to testify today. President and c. E. O. Of the American PublicTransportation Association known as apta. I want to thank you, chairman lipinski, and express this deep attitude you have done for Passenger Rail during their time in congress. I do not remember a previous time when Commuter Rail issues have been at the forefront of the agenda than during your tenure. We thank you. Commuter rail is critical to our economy. Creating and supporting more than 200,000 jobs. Prior to covid19, the pandemic, 32 agencies operating as Commuter Railroads safely carried more than 500 million passenger trips a year and ridership had grown over 9 over the last decade. Commuter railroads success in advantages their reach is dependent in part on the Surface Transportation Board and its ability to adjudicate service disputes that come before it. Commuter rail connects people to jobs and opportunity. Each and every day. For Passenger Railroads including Commuter Rail, speed rail as well, access to freight rail road rights of ways is expanding or initiate new service. Commuter railroads are often at a disadvantage when utilizing freight rights of way as they have no priority for such access. As the Committee Considers the surface transportation bill in the 117th congress, apta would like to work with you and our Rail Partners to explore the best opportunities to ensure equitable access for all Passenger Rail on freight rail lines. That said, we are grateful for the inclusion of provisions in h. R. 2, the invest in america act, to enhance the Mediation Authority to ensure that Commuter Rail operators have a fair and equitable process for norbleting Passenger Rail access on freight rail lines. In addition, as part of the fair and equitable process, we believe the s. T. A. Bus ensure any unused capacity on freight rail lines is defined. That the Railroad Owner is fairly compensated for available capacity and a process established to enhance capacity on Freight Railroad lines where there is insufficient capacity. To theand, apta recommends that the s. T. B. Hold a capacity summit to discuss how best to allow for the efficient allocations and use of capacity on freight rail lines for Passenger Rail operations. Last, we note that the stb is operating without a full complement of Board Members and hopeful the senate will approve the pending nominations to the s. T. B. Without delay. Let me turn to safety for a moment. For Commuter Rail operators and the entire public industry, safety a core value. As a nonnegotiable principle and promise to our riders. We are on track to meet the december 2020 deadline to installing the train control. We have devoted tremendous time pane resources to ensure the safety of riders through this implementation and grateful for the support of this committee in getting us to the finish line. Another issue id like to touch upon is Commuter RailLiability Insurance. Agencies are facing rapidly escalating costs to procure necessary Liability Insurance for their operations. With the number of insurers dramatically decreasing over the past several years. Despite Commuter Railroads exceptional safety record, a recent survey about this commuter agencies, reveal theres been a 60 increase in premium costs for the last three years, which is impacting agency operating budgets. There are a number instances where federal law provides backstop to cover losses above liability limits or allows for federal intervention in a constrained insurance marketplace. Apta plans to propose a federal Liability Insurance framework for Commuter Rail in advance of the next surface transportation authorization for this committee to consider. I also want to take this opportunity to discuss Public Transportations continuing need for additional covid19 emergency relief. The 25 billion in cares act funding provide a critical life line to the industry, and enable our industries to serve first responders, hospital workers, and Grocery Store clerks every day. According to the federal Transit Administration, Public Transit agencies have obligated 94 of cares act funds, 23. 4 billion of the 25 billion appropriated. Apta estimates that the additional need for emergency funds is now at least 32 billion. With that additional emergency funding, many Commuter Rail agencies and transit agencies will need to consider cutting services, routes, and furloughing workers. Federal support is critical to ensure that operating agencies, including our Commuter Rail operators, can reposition themselves to survive and move forward to serve their communities. Time is of the essence in securing this additional emergency funding. To theand apta strongly supports h. R. 925 the heroes act which provides 23 billion of emergency transit funding. We stand ready to work with this committee and congress to ensure covid19 emergency funding for Public Transportation is passed before the end of the year. Lastly, apta is grateful for the robust funding for Public Transportation and Passenger Rail in the invest in america act. And focus on investing Commuter Rail for the consolidated Rail Infrastructure and safety program. Apta encourages the committee to continue this robust funding as it considers the surface transportation authorization bill in the 117th congress. On behalf of apta, thank you for giving me the opportunity to testify and share our thoughts on the Surface Transportation Board. I look forward to answering any of your questions. Chair lipinski thank you. At this time before we begin questions, id like to ask unanimous consent to enter into the record statements from the Rail Passengers Association and the states for Passenger Rail coalition. Without objection, so ordered. Those will be entered into the record. We are now going to move on to member question. Each member will be recognized for five minutes. And im going to begin by recognizing the chairman of the full committee, mr. Defazio, for five minutes. Mr. Defazio thank you, mr. Chairman. I have to be at another modal briefing in five minutes. Regarding the 737 max. I appreciate the opportunity to go first. Ill just ask one question in the interest of time. Mr. Gardner, its been presented that essentially its freight or passenger, a zero sum game. Recently conversing with you i found out something i didnt know, that you have a history doing dispatch. Would you please give your perspective. Is there a way to both have an efficient rail system for passengers and not impinge upon he freight industry . Mr. Gardner, could you unmute and answer if you are still there. Mr. Gardner thank you, hairman defazio. Can you hear me . Mr. Defazio yep. Defazio, chairman can you hear me . Mr. Defazio off and on. Mr. Gardner ok. Thank you. Yes, absolutely. I can find mr. Defazio dont know what kind of wifi or connectivity you have down there. Mr. Gardner can you hear me well . Mr. Defazio on and off. Try again. The house has approved zoom now, havent they . Mr. Gardner mr. Defazio, thank you for the question. We can absolutely make passenger and Freight Trains work together. Mr. Defazio i guess well take that as an answer to be expanded upon at some future time when you have thank you. Thank you, mr. Chairman. I got to go to this other riefing. Chair lipinski the chair will now recognize the Ranking Member for five minutes. Ranking member crawford. Mr. Crawford we see what a rousing success these hybrid hearings are with regard to their technical efficiency and all those other things. Im going to go to mr. Gardner again and see if we can possibly work around this technology glitch. Despite amtraks huge losses and potentially slow climb back to normal operations, it was reported last month that they were circulating a map showing plans to expand at a reported cost of at least 25 billion. Can you please explain these plans, including the Funding Sources and whether amtrak assessed rider demand and the need for these two routes . The question is for mr. Gardner. Again, no i can hear you better if you were sitting here in the committee room. Ell do what we can. Im going im afraid in the interest of actually leading a record, im going to ask you to submit your answers for the ecord. Again, if you would, please, suspend, im going to ask you to submit your comments for the record because we cant hear a word youre saying. And again, a stellar example of the efficiency of these hybrid proceedings. Let me go to mr. Otoole. Mr. Otoole, amtrak suffered record losses this year as a result of the covid19 pandemic. What are your recommendations nor how amtrak should rebuild or restructure to be profitable nd attract riders . And again mr. Otoole i have unmuted now. I think the covid19 pandemic has given us an opportunity to sit back and reevaluate our transportation choices. We know from this pandemic and from past natural disasters and recessions and terrorist attacks that the most resilient form of transportation we have is Motor Vehicles and highways. And yet our government policy in many states and to some degree the federal level, is to deemphasize highways and emphasize mass transportation, particularly rail transit, and urban bus transit. And the problem is that these forms of transportation are not resilient against natural disasters. They are not resilient against recessions. They are not resilient against terrorist attacks. They are not resilient against pandemics. And because of this, we are essentially digging our own hole here when we emphasize these kinds of transportation instead of emphasizing Motor Vehicles and highways. Personally i dont like to drive. I prefer to bicycle or take a train. But the fact is, most americans have made their choice, 85 to 95 of our travel is by automobile. Almost all the rest is by airlines. And amtrak and urban transit are insignificant quantities and they are not resilient. We need to be resilient and that means emphasizing kinds of transportation that are resilient. Mr. Crawford im going to attempt to get a question on the record. I dont have any faith that it will be answered due to technical difficulties, im going to attempt it again to mr. Gardner. While youre hear i want to follow up on an r. F. I. Congressman gibbs, perry, smucker, and i sent you. Thank you for the response regarding my concerns about operating the biden charter train despite the cutsbacks due to the pandemic. Im concerned you did not answer my question about the total cost to amtrak of providing this service which is very important given amtraks extremely limited resources and historic demands for taxpayer money right now. Im hopeful at some point you can tell me the total cost, which you havent provided yet, to amtrak and whether amtrak actually even broke even. I wont expect that amtrak will have made money on that. Im concerned that amtrak is asking for record amounts of taxpayer founding funding while cutting jobs and services but not being transparent to the americans whether the services to the Biden Campaign cost amtrak money. I have 55 seconds remaining. It concerns me that i had to followup with you to get a straightforward answer at this hearing that you didnt provide me that information when i and three of my colleagues on this committee asked you in writing. If you expect taxpayers to give you record amounts of money to bail you out of the pandemic, we should expect full transparency about amtraks costs and spending. Also if you can make a profit on an specially ordered charter train, you should be able to make a profit on your normal routes and services. I would point out its been brought to my attention there are two privately run Metro Services in japan that somehow manage to make a profit. So the statement that all public metro rail is subsidized around the world is not accurate. Ill leave those comments for you and expect those answers in writing. Thank you. Yield back. Chair lipinski i now will recognize myself for five minutes. Want to start with a quickly, not an s. T. B. Question. M. T. A. In new york announced what cuts theyll have to make if there is not more funding in the covid relief bill for Public Transit. I want to ask ms. Brown, chairwoman brown, what would be the consequences for metro if there is no further covid elief for metro . Ms. Brown thank you, chairman, for your question. The current ridership passengers is currently between 8 to 15 depending on which of the 11 lines you are riding on. Due to prepandemic ridership. We saw an increase in the numbers prior to the latest spike in positivity, and we continue online and have put ut Additional Transit Services in march for social distancing. Our employees remain the core success of the union pacific, operating for the 11 lines. A testament to our dedicated employees is the fact that we have not asked any of our Schedule Service due to the pandemic. I hope that answers your question. Chair lipinski did you have blans for what you would have to do if you do not receive any further funding . Have a plan do that we are currently exploring on what it would cost if we do have to expand our service and we can get back with you in writing with those answers. Chair lipinski thank you very much. Mr. Chairman, may i make a comment on that to address your question as well. This is paul skoutelas. Chair lipinski do it quickly. Mr. Skoutelas thank you. We have conducted at apta a survey of our membership across the board. All Commuter Rail agencies, bus agencies, multimodal. And determined about 60 days ago that about half of all of the agencies were proposing to reduce services, cut back their routes, and lay off employees. If not Additional Resources were made available to them. The business side, its also true that the Businesses Supporting the industry are very much hurt by this and impacted with a third of them, in fact, likely to go out of business all together unless there is some intervention to provide some additional resource. Thank you for my ability to answer that. Chair lipinski thank you. Im going to go quickly. I need to get mr. Jefferies a minute and then mr. Skoutelas a minute. Mr. Jefferies, i assume you dont agree with mr. Skoutelas about giving Commuter Rail any more leverage in terms of expanded service. On freight rail lines. Ill give you a minute and mr. Skoutelas a minute to respond. Mr. Jefferies keep it quick. Thank you for the question. As i mentioned in my opening statement, amtrak is wholly unique in the access rights it has with regard to freight rail lines. And commuters do not have those rights inherently. Made s they have been through voluntary agreements between privately owneds ares are and Commuter Railroads. We believe that strikes the right balance. We believe the dramatic growth we have seen in Commuter Rail throughout the country since formation of amtrak, i think one to well over 30 has demonstrated that. And certainly there are challenges that come along. But we found that when new services approached in a proper manner where both sides get together, have skin in the game, identify clear articulated goals from day one and appropriate resources are made available, that often agreements are put in place and successful outcomes emerge. Very quick answer. Thats our position. Thanks. Chair lipinski mr. Skoutelas. Mr. Skoutelas i would say first of all we want a healthy rail system. Supporting the great railroads. We also want to be able to support the needs of our communities and the people who rely on these services. We cant be a one dimensional society. Everyone does not want to own and operate an automobile. Thats a recipe for disaster. We need a Multimodal Network that looks to the rights of people to their ability to move around with social equity, addressing the climate issues, Environmental Issues that we have. I believe that we must look for winwin solutions. Sure, there are divergent interests on all sides. We need to get together to find how we can balance those needs and provide for the public. Chair lipinski thank you. Ms. Quick question for begeman and vice chair oberman. We now have three members of what does it mean to not have a full complement of five members on the board. Ow does that hurt . Ms. Begeman the board is certainly still able to conduct business. We do not have a quorum requirement in the statute. Years ago it comes to one serving member business to go on. I will say that there also has not been litigation to determine that someone else wanted to have a different thought process on that. At the moment we dont have a quorum requirement. With three, two, one, business has continued. I will say that my colleagues and i have worked very effectively together. Appreciate their cooperation to try to be a productive board. Some of us, and i think congress, are highly disappointed there still isnt a full complement of five members. If that were to happen, the sunshine act would no longer be preventing a majority from speaking to one another and perhaps deciding certain outcomes. At the moment sunshine act prohibits members from speaking directly in a nonpublic format because you could have an outcome oriented decision. So that is not currently allowed. Im hopeful one day there will be five. Im not sure that it will happen on my watch. Chair lipinski mr. Oberman, very quickly. Im way over time. Mr. Oberman justdished just like to add and echo what chairman begeman said about the productivity we have had with three members. I also underscore the ability to interchange with individual Board Members under the sunshine act. I have heard much value the contribution that each additional person makes, each person brings additional insight, additional intelligence, and experience i think all of us as the board and industry will benefit from it, full complement. I hope well get there. Thank you. Chair lipinski thank you. My time has expired. I recognize for five minutes mr. Perry. Mr. Perry thank you, mr. Chairman. Its been a privilege to serve with you. My question will be for mr. Otoole. Im going to provide some context so if you can get unmuted while i do that well be ready to go. Your testimony supported by amtraks audited Financial Reports directly contradicts what many see as a carefully manicured narrative spun by amtraks leadership that the railroad was nearly profitable, i put that in quotes, in 2019 and would have been profitable in 2020 but for the pandemic. Now in september, newly appointed amtrak c. E. O. And president William Flynn testified before this very subcommittee projecting what many say is a false narrative that profitability was within amtraks grasp prior to the pandemic. When i confronted him with the concerns similar to those you raised about amtraks unusual accounting practices, excluding depreciation from expenses, and including state subsidies as revenues, he dismissed the concerns. According to mr. Flynn, excluding depreciation from the total is merely a result of the decision to report on adjusted operating income basis rather than on a gap basis. And county state subsidies as passenger revenues is an acceptable practice because it is a payment for Services Provided by amtrak. However, it is due to the exclusion of depreciation that reporting on adjusted operating income basis is particularly misguided for Capital Intensive Industries such as railroads. This concern is amplified by the fact that much of amtraks fleet is near or beyond its useful life and as you highlighted that depreciation is the second largest operating cost reported in amtraks annual financial statement. Moreover, amtrak is still providing the services to the states without, without payment of these subsidies. Instead requesting 500 million in federal money to make up for the lost, and i quote, revenue. Which i think is hardly in line with the payment for Services Arrangement described by mr. Flynn. With that, can you expand on the impact of these accounting tricks on the publics perception of amtraks profitability and financial viability. And if there is, what if anything can be done to force amtrak to be more transparent with the American People that pay for nearly half of every amtrak cost with their federal and state tax dollars . Mr. Otoole yes, thank you. Its a surprise to me that amtrak so many people believe that amtraks northeast corridor actually makes a profit. Or that it even makes an operating profit. The way that amtrak claims that it makes an operating profit is that it doesnt allocate depreciation to the various trains in its system. As a result, most of the appreciation would follow in the northeast corridor. Because thats where amtrak owns the most infrastructure that it owns. So by failing to have appreciation, they are exaggerating the profitability of the northeast corridor. If when i sit down and take a look at all the trains in the system, state supported trains, Long Distance trains, the northeast corridor trains, and i try to allocate depreciation and i find all the trains lose about the same amount of money per passenger mile. Im not the only one. The rail Religions Association is also critical of amtrak accounting and believes that that accounting is biased towards the northeast corridor for one reason or another. I think the biggest effect of amtrak accounting tricks, as we both call them, is it makes the northeast corridor appear more valuable than it really is. But in fact amtrak only carries about 6 of intercity passenger travel in that corridor. The vast majority of intercity passenger travel is carried on highways in that corridor and in every other corridor in the united states. Mr. Perry thank you, sir. E followup, this is for the apta represent, paul. If you can be prepared. Public transit agencies receive 25 billion in cares act funding, approximately 10 billion more than the annual revenue for all transit federal agencies combined. In addition tole 12. 8 billion allocated for f. Y. 20. Despite this massive amount of spending, you claim Public Transit agencies need an additional 32 billion in federal spending otherwise they will begin cutting routes and furloughing employees. If this request is met, the combined spending between the requested amount f. Y. 20f. Y. 21 in cares will exceed 82 billion over two fiscal years. That amount vastly exceeds the fiveyear total under the fast act. 61. 1 billion. This alleged this cannot this alleged need cannot be explained by the impact of the pandemic as far as i can tell. Nor can covid explain the 8 drop in nationwide ridership om 2014 to 2019 and the 106 million in state of good repair backlog that predated the pandemic. These demands are transparent attempt to force the taxpayer to bail out the transit sector from a crisis quite honestly of their own making. Do you believe, this is a question, do you believe it creates a moral hazard to reward decades of financial irresponsibility and mismanagement with over 80 billion in taxpayer subsidies . How can you reassure my constituents, my bosses, that transit agencies can be good stewards of taxpayer money moving forward when they have failed to do so in the past . Mr. Skoutelas thank you for that question. Let me begin by sharing with you. First of all with regards to ridership nationally, just leading up to the pandemic the two quarters preceding National Ridership on transit had been up. And that was in contrast to the decline that you recognized. I will say as well, you have to really look at the finances of how transit organizations function. You mentioned the fair box revenue, which is a significant portion of their revenue. However, every Transit Agency also depends on local support. Of some kind. State or local support for funding their operations. In many cases its 50 or higher. And so what the pandemic has done is not only take away the fair box return from ridership as we saw ridership decline as high as 90 on rail systems and 70 overall for bus systems, but also took away the notion that we would continue to see increases in sales taxes, payroll taxes, property taxes, and the like which are some of the means of which support Public Transit agencies. And they vary by financial structure across the country. Just depends on the local sir circumstances. The need for those circumstances, so the need is not just the fair box revenue, but the loss of other Revenue Sources for agencies as well. Mr. Perry i yield the balance. Chair lipinski thank you. The chair will now recognizes mr. Payne for five minutes. Mr. Payne thank you, chairman la binpin i ask. Let me just say that lipinski. Let me just say it has been a real honor and privilege to work with you and your leadership on this committee will sorely be missed. We will try to continue on in the manner in which you have led us so ably in the past. Let me ask mr. Skoutelas, the northeast core core rail network is critically important to passenger freight transportation. In 2019 amtrak recorded approximately 12. 5 million passenger trips, most on record. The bureau of Economic Analysis estimates that the states Rail Networks produce 20 of the u. S. G. D. P. Can you share with the committee the National Importance of the northeast Corridor Network to our Passenger Rail system . Mr. Skoutelas representative, you are directing that to me as apta . Mr. Payne yes. Mr. Skoutelas certainly its a critical piece of our transportation network, both in terms of mobility, giving people the options to travel in that corridor. As you cited the Economic Impact that it has both in that region and really across the country. Whats not often recognized is the business aspects of those services. Certainly the people who ride them every day are a top concern, but the benefits derived from many businesses across the country who are not located in the corridor derive benefits from the Economic Impact of having that generation of new business and income. Its critically important. It is part of an integrated network of services, urban transit, as well as the inner city transit. Its something that we are strong advocates for and believe that our people and our communities need today. They need Mobility Options and mobility is a basic freedom that people need to conduct their lives. Mr. Payne thank you. Followup with respect to postcovid, ridership across the country has been at historic lows because of the pandemic. When the pandemic is over, we could see a massive uptick in rail ridership with minimal lead time. Now is the time to really make the necessary investments now in the Rail Infrastructure to prepare for expected levels of demand. What investments have been needed in our rail network to meet this demand . And what standing whats standing in the way of these investments . Mr. Skoutelas i would well tell you that by the d. O. T. s, u. S. D. O. T. s own accounting there is over 100 billion of state of good repair needs to modendize our urban transit systems. Thats not been addressed. And we would be looking in the next authorization that that be addressed in large measure because we need to provide modernized services for people. That takes investment in few facilities, enrolling stock, and expansion of service. There is no question in my mind that Rail Services will come back as the economy opens back up again. Should not be a surprise tony of us that while we have seen the economic downturn and shelter in place orders, that chokes off economic activity. Urban transit, inner city rail, and the like are dependent on moving people and its a function of economic ack activity. We need to make these i. N. S. Vestments now to prepare for the time soon when the economy will be back open and running. Mr. Payne thank you, sir. Mr. Gardner, its no secret that im a strong proponent of the Gateway Program along the northeast corridor ranging from the port of north bridge placement to build agnew tunnel under the hudson river. Building a new tunnel under the hudson river. Which would bring upgrades to ensure passenger lines will not be impacted. How will amtraks nationwide rail operations benefit the full completion of the gateway project . Mr. Gardner thank you, congressman payne, great question. People generally know our Gateway Program as an Improvement Program between new wark, new jersey, and new yorks pen station penn station. As you point out it has vast impact across our whole network. Roughly 17 million of the 32 million passengers amtrak had precovid ride somewhere on the northeast corridor. And two out of every three trips begin or end at penn station. All the routes to the southeast, of course, begin at penn station for Long Distance trains and head through this area. Our f mobility through north river tunnels would have catastrophic impacts. You dont need to wonder about this. We saw it after sandy and we see it when we do have infrastructure problems that rent you are our current crossing there is a massive impact across our entire northeast corridor because new york really is the epicenter of the rail system for passengers. New york penn stations the largest and busiest facility in north america. And 450,000 riders a day. They all rely on 1910 Era Infrastructure to deliver essentially service. We through the Gateway Program with our partnerships with the two states, with the department of transportation, aim to upgrade this infrastructure, make it reliable, to put in the state of good repair, and begin an Expansion Program so rail can continue to grow as the transportation in the corridor. Mr. Payne people dont understand f that bridge fails, traffic stops between boston and washington, d. C. Its crucial in that tunnel as well. Its very vital that people understand what project means to the northeast corridor visavis and also the country. Thank you. I yield back. Chair lipinski the chair now recognize mr. Davis for five minutes. Mr. Davis thank you, chairman lipinski. Dan, its been great to be on your subcommittee. Its been great to serve with you in this great institution. Youre somebody who just gets things done. And this committee and all of us on both sides of the aisle are going to miss you. Im going to miss you here because you are one of my good friends. And to know that youre not going to be a voice being i can go to on rail issues on a regular basis is difficult. I know i can still pick up the phone and give you a ring. I appreciate you and i want to make sure that i got a chance to say that at this hearing. Countless friends, mr. Oberman, mr. Jefferies, also, but you have made a difference, too. Look what happened with create in chicago. I see the benefits that have in my district downstate what you have done over your time here in this institution. Youre going to leave a legacy, success, when it comes to transportation. You are also going to be leaving a lot of friendships that will never go away because you are such a good friend. I thank you for that, sir. I do want to say thanks to the witnesses. I appreciate the opportunity to talk about issues that affect my district, especially with amtrak. I wanted to go to mr. Gardner with the time i have left. In regards to the Illini Service in central illinois. I spoke with your c. E. O. Just a few months ago, and i want to know what has been done to le it fix the issues causing delay that is are just unfathomable and impacting my constituents ability to use your service, what we do, what can we learn from you as to how that is being addressed right now, sir . Mr. Gardner thank you very much for the question, congressman. As you referenced we have a unique condition on that line with the national which we have had issues of shouldnting, shuntsing of the circuits for grade crossing protection. We have doing cooperative work to try and identify rectify this issue. Its combli kated set of circumstances to try and figure out. In the immediate period, we have addressed the issue by having additional fleet that allow u. S. To operate through this section. And current performance with Canadian National has actually become quite good. We think they have made dispatching improvements and we are at roughly 80 ontime performance of the current route as a result of the improvements c. N. Has made. We continue to work with them on looking at technological solutions. We have new technology thats coming. A little dwadedelade by covid. And being able to get both some equipment and expertise from overseas relative to some technology we are looking at. We are all working cooperatively with Good Relationship there. And our seeing in the immediate period better permanent formance. We still aim better performance. We still aim to adjust the schedules and better performance as we see today on caurnt schedule we believe there is more to achieve. With the new metrics and standards rule and being able to redistribute the schedule time for customer o. T. P. , we can get further better performance. We again tin to work with c. N. And trying out new technology here shortly. We are dealing with the immediate issue by having mr. Davis i appreciate that. As i said my previous questions u, mr. Flynn, we are ridership is down, to address these issues. Do you know if the Illinois Department of transportation has been able to place any orders on the technology that could be helpful in addressing this short shouldnt issue on that route since it doesnt seem to affect any other illinois routes . Mr. Gardner we as i understand it, amtrak and c. N. Are look at this. We are out to procure some additional equipment here to test this technology and environment. As you say it is a unique circumstance to this one area. So we have worked together and f. R. A. Has been part of our conversations to understand what is driving this condition, but we are going to test this new technology and hopeful well find a good solution. Other than the length we have today. Now is the exact time we want to solve this. As we recover from the pandemic and envision serving more passengers, we can do so reliably to your district. And with better performance over that route. Mr. Davis until we see some solutions im going to continue to ask you to address this issue. Probablely with a little more impatience each and every time. I certainly hope we can continue to work together. I appreciate the information. And also being here today to answer all questions. With that, chairman lipinski, probably for the first time ever, im actually yielding back some time. Chair lipinski well, looks like you are yielding back time. You started late. The clock started late. Thank you for your kind words. Good luck with everything moving forward. I will the chair will now recognize mr. Malinowski for five minutes. Mr. Malinowski thank you so much, mr. Chairman. Thank you for your continuing service. It has been such a pleasure for me to work with you and learn from you in the last couple of years. I have a couple of questions. I first want to respond to a point that was made just a little while back. A question that somehow there is a moral hazard by the federal government subsidizing or investing in our nations Passenger Rail, and Rail Infrastructure. Tees a very strange comment to make. Recognizing that in fact, taxpayers subsidize every form of transportation in the united states. Including all of us who drive cars on our nations highways, which after all are not built or maintained by the private sector. And we do it because not just as a Public Service but because we recognize the transit of all kinds is critical to keeping our economy moving. I wish that didnt have to be said, but here we are. I have a couple of questions for mr. Gardner. Building on some of the points that my colleague, mr. Payne, ade. September we had a hearing, mr. Flynn, in exchange with me he told me he was hopeful that the portal north bridge, a key part of this northeast corridor, work that we have to do, would the construction on the north bridge could begin as soon as early 2021. I wanted to just ask if you have any updates for us on that. Any more definitive estimates of when we will see work actually beginning on that critical bridge . Mr. Gardner thank you, congressman malinowski. We are making Good Progress on the portal north bridge program. As you know the critical next step is to achieve a full Funding Grant agreement between the federal Transit Administration and the new jersey strit. So i know that new Jersey Transit is working very hard with f. T. A. To accomplish that. With the goal of completing that certainly this year. The end of this year. We have a role in that arrangement by just cementing our agreements with new Jersey Transit on their execution of the program. Thats going well. If we are able to complete that work, then new Jersey Transit will begin the process early next year going out to market and looking at ways to start full construction next year. Thats the critical last piece of the puzzle. Amtraks received additional funding from the f. R. A. , amtrak has its dollars in place. And this last piece of federal Transit Administration, crirks, t. Program is really the final remaining element. We can begin on this project which we have been planning for and hoping to develop for well over a decade. Le mr. Malinowski good to hear. There is the hudson river tunnel. And i trust you agree its promising that on january we will be swearingin a guy whose nickname is amtrak joe to be president of the united states. There have been a number of blockages to proceeding with this next critical stage of the gateway project, and i wonder if you could talk a little bit about some of the procedural levers that a new administration could pull to allow this project to go forward, specifically what are some of the early steps a new administration committed to completing this project could take, should take to let it get started . Mr. Gardner thank you. There are really three core steps that immediately need to be taken to advance the program. First, like the other witnesses here today, amtrak is in dire need of Additional Support financially to get through the covid pandemic. And we have requested 2. 9 billion in additional funding to be able to fully restore our service. Recall employees who are furloughed, and keep our program going. Thats important because if we dont do that, we dont have the capital dollars at amtrak that would be necessary to undertake some of the elements of the Gateway Program. Thats essential. Number two, we need the record of decision to be finalized fored hudson tunnel for the hudson tunnel. The department has been reviewing that for several years now and that record decision timized has to be issued. With that we can begin a whole series of activities to advance the program right away. Next, we need support from administration recommending that the hudson Tunnel Program be funded through the budget process through the c. I. T. Program. Start to build the Financial Capacity to undertake the project. Those were all important early steps. And we are ready to go at amtrak. Even in these very difficult times, just to put that in context, we have 13,000 passengers yesterday on the amtrak system instead of the normal 100,000 we would have in a day. So very challenging times, but we are continuing to keep our capacity to advance essential project like gateway so that when we come out of this pandemic we are there to serve america. Mr. Malinowski thank you so much. I yield back. Chair lipinski the chair will now recognize mr. Babin for ive minutes. Mr. Babins thank you, mr. Chairman. I appreciate it. Good morning to youall. Thank you for participating in this hearing today. You may all know texas high speed rail project is fairly controversial. Costs have tripled, even though construction has not started. There is opposition from local officials and landowners. And the company in charge of the project, Texas Central, has reneged on their original promise that the project would be privately financed. Most recently House Democrats included an earmark for the company in their partisan infrastructure package, h. R. 2, that would alter the credit risk premium and make it easier for the Texas High Speed Railway to get federal rrif loans, leaving the taxpayers across the country on the hook if the project fails. To that Texas Central claims that they are unable to pay for the risk premium up front for this project, and have requested legislators to change federal law in order to help them qualify for a loan that they otherwise would not be able to receive under the standard rules. To be frank, i believe these decisions should be made at the state and local level. But i do have a few questions on the subject. Chairwoman begeman, it is my understanding that Texas Central must file and the board must approve a full application in order for the company to have the authority to construct. Is that correct . Ms. Begeman thats correct, sir. Mr. Babin thank you. Again, to you again, chairwoman, what role does the financial visibility play into the boards decision to grant or to deny a full application to the board for construction and operational permits . Ms. Begeman i would say it will have an Important Role. I dont want to prejudge an outcome, so im going to give you more of a historical viewpoint. A few years ago the board considered a case from a an entity that actually wanted to develop a very large Freight Network in the chicago area. As you can imagine it had quite a bit of a tension and dare i say controversy from many communities and leaders. Of course also a lot of proponents. One of the things that the board asked the applicant to do, or the advocate to do was to disclose what their finance availability was in order to complete the project. And we learned roughly that they had 113. And that was really all the board needed to say, no. Mr. Babin thank you very much. Mr. Otoole, does it worry you that Texas Centrals project costs continue to skyrocket, lacks the necessary land to build the train, and some transportation experts like the Reason Foundation have noted that the companys ridership projects are inflated. Mr. Otoole even if we accept the ridership projections of the Texas Central, at their current estimated construction costs, they would have to charge every single rider 255 per one way trip to just cover construction costs. Amortized over 30 years. In addition they would have to charge enough to cover operating costs. The tickets would start at 300. Compare that with the cost of driving in the corridor which would be faster. Certainly its southwest and american and other airlines are charging about 100 a ticket. There is no way the Texas Central can be competitive. And the whole problem with high speed rail is that it requires ge amount of expensive to build and expensive to maintain infrastructure that the airlines dont need. Basically the airlines infrastructure is the air. So they dont need a lot of infrastructure. So they can be extremely competitive. The whole idea that airlines are only competitive above 500 or above 600 mile distances is belied by the fact that there are 35 tore 45 flights a day between dallas and houston. There are 35 a day between porl and seattle, which is only 160 miles apart. There are a lot of places where there are a lot of flights that are much shorter than 600 miles. And most of the people on those flights are just going from point a to point b. They are not using it to connect. Mr. Babin thank you very much a few seconds left. Back to chairwoman begeman. What steps will be take green by the board to address the serious concerns raised by local landowners and officials are adequately addressed. Ms. Begeman we have a process where anyone is allowed to participate in our proceedings, particularly situation involving a proposed high speed rail project. A freight project. Communities, congresspeople, senators, anyone can submit their views to the board. Thee will be posted. The board will consider them. Well read all our filings. And well certainly take everyones views into account and try to make the most appropriate decision based on the law and the facts. Mr. Babin thank you very much. Thank both of you. I yield back, mr. Chairman. All right. Ski the chair now recognizes ms. Ohnson for five minutes. S ms. Johnson there right now . The chair will recognize mr. Well be leaving this hearing at this point for live house coverage. You can continue watching on our website cspan. Org. House about to gavel in for legislative work, including debate and votes on the National Defense authorization act which sets programs and policy. Also a bill seeking to prevent russia from joining. G7 group. Votes will take place later this afternoon after 5 00 p. M. Eastern. To live coverage of the u. S. House here on cspan