Will talk panelists about today. Everyone agrees America Needs to improve the efficiency of the infrastructure investments. President trump has talked about reason the cost of highly buildings so we would get more and better highways. Think that is possible. Privatization and publicprivate partnership. For example, three decades since Margaret Thatcher in britain, which has launched a global revolution in airport management. Half of europe passes airports are private. Donald trump called u. S. Airports owned by the government third world. What is donald trump going to do about that . We will see. I hope they look at International Reform trends and adopt some of these reform styles here in the United States for infrastructure. Our panel survey will discuss with trump may do and can do with infrastructure reform. In my own writing on of theructure, on all speakers today, i would encourage you to go to the website of the Institution Representative here today to learn more about infrastructure. Speakers anduce then get it going. Is a researchker fellow at the American Public policy institute. For many years, ron was at the Heritage Foundation and was the go to guy on infrastructure. When i write about transportation issues, i always go back to look and see what ron said to make sure i am on the right track. In the reagan administration, ron was the associate director from 1987 to 1989. Ron has a phd from indiana university. Our next speaker will be marked, a senior fellow at the competitive enterprise institute. Mark writes about infrastructure investment, privatization, and innovations such as Automated Vehicles and Unmanned Aircrafts. Marks writings on aircraft control are crucial to the current debate about air Traffic Control reform, which i think will be a big topic of discussion this year. Mark received an undergraduate degree in economic philosophy. Third speaker is assistant director of transportation policy at reason foundation. Hill, hey on capitol handled capital issues for west moreland. He earned a masters degree in. Ity and Regional Planning our cleanup speaker this morning expert ontos own urban growth come planning, and issues, a book and studies on those topics over the years. Local transportation choices. See on light rails i the speakers will talk for 10 minutes. Ron thank you for inviting me to be here today. It is an interesting time to talk about of the structure. Hillary clinton announced she was in favor of half a chilean dollar Infrastructure Spending proposal that she believed would create great jobs and get the American Economy on the move again. From isater, candidate in favor of a trillion dollar infrastructure plan. Since that date, there has not been much detail provided on that. It also gives us a chance to do recommending. You have a 1nce trillion infrastructure plan, would you set off in america and globally a huge money scramble. The money scramble has already started. The National Governors association provided a white house with over 400 Shovel Ready Projects that are ready to go totaling about 120 billion. Senator schumer has come out with the oppositions plan also for a trillion dollars, which you would expect. Is largely oriented toward his particular constituency. Trump, mores donald and more of these things are coming through as everyone believes there will be a huge amount of money on the table and they want to get it. An important thing that trump has let us know and the few details he has is that it will be incentivized by 137 billion of tax credits to encourage the private sector to get more involved in infrastructure, providing the management and presumably the operation of these things. This raises an important issue in infrastructure in america. Really have two kinds of infrastructure. Private infrastructure when i say infrastructure, we are typically talking about longlived assets to provide this society and people with the flow of useful services. The private infrastructure, we have housing and retail, shopping centers, hotels, notforprofit hospitals, refinery, airlines, and so on. Infrastructure, we have roads, transit, air Traffic Control, and so on. There is a difference between first and second and it is not just ownership. The items listed in the first are not cited as a problem and if anything, you tend to overproduce that kind of infrastructure. Many policies in america are designed to curb food production. It is difficult without getting ifroval because otherwise, anything, housing production, as they tend to create cycles. These are where we have deficiencies, where we have conditions,errible potholes, technically obsolete. Water systems that dont work. And this is where a lot of people talk about the infrastructure crisis. Is it a crisis of socialism since all of the things that are all the things that lend themselves to easy solutions year after year are in fact publicly owned. Not to be pursued received as a problem. Capitalism versus socialism. We need to make that distinction very clear. Since there will be a huge money how will we make decisions about these projects. That the threat is public in the house may likely this year than earmarks. They simply put the issue off until later this year. I think it will be a freeforall because Congress Wants to be part of the action as well. My suggestion is you start to look at mechanisms already toated and implemented rationalize Infrastructure Projects because many more proposals then you will ever have money to do. An example of that is one just implement it in virginia. It has now been operating for two years, to create a performancebased system for selecting Infrastructure Projects. Roads,udes transit and but Something Like this can easily be done for wastewater treatments and airports and so on. It is the idea of coming up with an objective costbenefit standard to rank projects by their particular value. In 2014, virginia and acted how actually, which was implemented in 2016 for the first time. Mitigation is one of six factors considered in any project. Congestion mitigation must predominate in urbanized areas and the facts are weighted by region. Smartogram is now called scale. Accessibility, environmental quality, Economic Development and land use coordination. Since all parts of the state are problems, theheir state has been divided up into four different regions. In category a, which includes three metropolitan areas in the one ofhampton roads, virginia passes suburbs and fredericksburg, part of Northern Virginia at this point, congestion mitigation counts for 45 percent for a particular project. Projection must dominate. Other factors are relatively minor in comparison. Cities, get to smaller other factors take over. When you get to categories see nd, congestion counts for virtually nothing. They do not have a congestion problem. The reason for this is to hold all regions harmless in terms of the money they get from the state. We Start Talking about congestion mitigation to rural officials, wed will ship all the money to more everybodythis allows to tailor the state money to the particular needs of their community. In each factor, we have several sub factors. Access to jobs, the most , and multiple. Hoices, the transit industry Economic Development we have support for Economic Development, travel time reliability which also relates to congestion mitigation. Forth ourojects put new projects or substantially revitalized projects that will cover the next six years. It includes transit. Local governments submit their itsfic projects, then if court according to the scale. The commonwealth transportation board, essentially a political board, either accept them or makes changes as appropriate. We have done this in virginia for 2016 and 2017. Of the 8. 5 billion worth of only 2. 7submitted, billion are actually approved for 2017. They have been announced so far. Those were the losers. Is asmart scale process position. Everyone is happy. The elected officials who voted for it are pleased. It seems to be working. See of the things i can make sense in terms of keeping or getting rid of. What is important, in closing, is the quantitative measures are only as valuable as what goes into them. What goals you set for yourself. In the case of virginia, congestion mitigation is a very serious problem in the two major metropolitan areas of the country. Example has a different political philosophy and we just came up with their set of proposals. Not only are they proposals for guidelines but active in legislation. It means the government cannot change anything or violates the law. As you can imagine with a liberal legislature in maryland, the scale factors are largely prolocking. Almost impossible under the standard for maryland blt to approve any highway projects. This is a real problem. It is enacted in the law. He sent it back and came back with a veto and majority. If you are not careful, it can really backfire on you. Looking forward to any questions later on. Thanks. Mark hi, everybody. Thank you ron, and thank you, chris, for moderating. To, we had the issue of trying to find 1 trillion worth of Infrastructure Projects in the next 10 years, and this is coming from both parties. What i want to talk about today is getting the most bang for the buck and trying to shift some of the project risks away from taxpayers. You have heard speaker ryan and thatr mcconnell both say 1 trillion will not be 1 trillion worth of federal spending. The areas i will talk about most bang for the your buck out of infrastructure investment, finance reform and regulatory reform. With respect to financing, an important distinction between finance and funding, financing entitiesthe government with a private sector partner enter the credit markets and use Debt Financing to construct ,hese Infrastructure Projects coming right out of the treasury. These can and do shift costs away from the general taxpayer. One problem for increasing private sector involvement in to sector, they are able access Municipal Bonds while the private sector generally does not enjoy such a tax advantage. The ideal solution here is to ,evel finance eliminate the tax the secondbest solution here is to expand publicprivate partnerships. We already have a thing called private activity bonds in the 2000 five hwy bill reauthorization. What paths to do is allow the private sector to borrow in a way similar to the Public Sector. Of 15a lifetime cap billion, and as of january 23 of the year, a quarter to the federal highway administration, 10. 8 6 billion has already been allocated. Andthe Administration Congress to greatly increase financing, the cap is going to need to be raised substantially. There is a solution of lifting the cap while expanding asset eligibility and the types of projects eligible to receive passage, now basically limited to transportation projects. We already have an example and the Current Administration can look at the past administration which had a proposal 2016 which would have been qualified and that would have expanded eligible projects into airports, water and wastewater systems, and eliminated the expiration date. If the goal is increasing private Sector Investment infrastructure in the near term, a new bond framework should be created to level the financing between the public and fight and private sectors. This would be Public Financing anorm, but, we have authorization bill. One thing we would like to see is modernizing the facility charge, a local airport user charge, and it helps to reduce the federal taxpayer burden. At a maximum and that has been unchanged since 2000. Inflation has eroded about half of the buying power. Many airports are approaching the debt limits. If we were to modernize the psc to eliminate the cap and allow the airports to raise passenger facility charge, those revenues can be used to back on. Allowing the airports to reaccess credit markets soon to be shut out of it. Large airports have said for give they are willing to up their federal Improvement Program grants and exchange. Fortunately, last week, we saw , thelation introduced thomas, amber, and republican member of the committee, and they will also report shall he did reduce funding. Reform,n to regulatory i will go brought on what we should do to move in a general positive direction. Get specific at the end. Many know the executive border,igned by president clinton whenever possible, to specify performance objectives rather than the behavior or manner or compliance. This performancebased approach to regulation has been encouraged for many years now. Despite attempts to move away from the more descriptive safety regulations at d. O. T. , the best he d. O. T. Have at best been uneven in their approach. That is the Safety Administration which regulates auto safety in the United States. Their crash standards are generally performancebased. They are not telling you how to design your airbags. Y set a forced fresh hold threshold and automakers can decide how to meet the standards with whatever technology they want. Script safety certification rules that have been on the books for many years, we did see in recent months small aircraft certification reform that moved in this performancebased direction. Unfortunately, when we see things like Emergent Technology especially Unmanned Aircraft systems, you are seeing the faa continue to churn out very onerous rules that restrict also is of operations and the only way around those is to request and receive a waiver or that is a very difficult process. The federal Railroad Administration has some rules. Late 2006, carrnative Passenger Rail crashworthiness standards that would have adapted a performancebased approach and allowed the introduction of new technologies that could have improved lives of the design of american cars. Proposal,loping that in 2016, they also proposed a rule that would that would require a crew. That cuts against the mandate , positivea technology, communications and Automation Technologies that one of the business benefits that were cited in the past is reducing crew sizes. The same way we are moving toward self driving cars, in the future there is no reason we shouldnt be able to move toward self driving terrains. And is clearly clinical that is the thing, the rules that dont allow the uptake, driving up costs and disadvantaging consumers. I think congress should require in legislation a copperheads of regulatory review of the agencys safety regulations and develop performancebased remaininges to prescriptive rules and also require all new rules be outcome based. Paid tocare needs to be some of these emerging technologies that they not be subject to regulations at this time. Driving cars are not but they soon will be. There is a risk of adopting nontechnology neutral prescriptive standards that could really cause us to forgo the many benefits that knowledge is promise us for the future. , the name specific rules national highway traffic and Safety Administration via all communications proposed rule which would specify a specific technology and at warning drivers of hazards. The problem with the rule is it does not allow alternative compliance with alternative technologies. Rise ofes the automation, where you can actually have a computer directly avoid these collisions rather than just providing a whether that is tactile feedback in the Steering Wheel or something to the driver. It makes no sense and should also be withdrawn. Be the example would transportation boards proposed reciprocal switching change. They basically had railroads which were largely deregulated for aboutly 1980s, 30 years, you had a standard that required a showing of any competitive conduct on the part of the railroads in order for the Surface Transportation Board to force railroads to interchange each others traffic. There has been no evidence of any conduct in the part of the railroads. The solution to this was to eliminate the conduct requirement and allow it to arbitrarily propose these switching arrangements. It is another example of patience is going in the wrong simultaneously being able to go in a more sensible economic performancebased direction. Trump, in his joint session to congress address, said, you know, he did tell private financing, which i thought was good, there were no specifics, but at least he was talking about it, one thing that did trouble me is one of the two principles he said would guide his infrastructure plan are by america provisions. All this will do is needlessly drive up the cost of Infrastructure Projects. We have seen this play out before with the stimulus under president obama. You saw between 2009 and 2011, steel and iron provisions. Increase by 5. 7 billion, i believe. It is pure waste. The money could have been used for other projects. It is the exact opposite direction we want to be going. Under federal Credit Assistance such such as private activity bonds, the private sector partner would be required to put abide by these provisions unless they receive a waiver. The call to strengthen that cuts against the president s call for more private Sector Investments. I think the approach needs to be congress, if we want to see private Sector Investment takeoff. I will conclude and i look forward to any questions. Hello and thanks very much for sending. The assistant director of transportation policy and i want to thank chris and randall for inviting me to speak. This the first two presentations focused on ideas we should be doing and things that would be good to move us forward. This is a proposal that will be introduced in congress. Andas introduced last year is probably our best chance to do Something Big over the next four years in my opinion. It is a little complicated, air Traffic Control is different than surface transportations. If there are any questions, we can hopefully answer them at the end. Provide at to presentation outline here of wire think this is a chance for a meaningful reform, what is wrong with the current air Traffic Control system, we have had some folks who are neutral that it is wonderful and we do not need to do anything to it. That is not true. What this would actually solve we then examples of problems have now and how those problems would actually be solved. When i see a chance for meaningful reform, there are a lot of great things we can do for infrastructure, some of which i wish the trumpet ministration would propose. Unlocking a more federal barriers to tribe private surface improvements and investments, there are quite a few investments and solutions we could have if we would just make it easier for the private sector. And peoplesometimes are like, the problem is we do not have enough opportunities. We have laws preventing the opportunities from being taken advantage of. Try to financing to build airports, that is a little different but it goes to the comment about new york airports and how some of them are decrepit and could be better. What a way reconstruction is a whole other issue that i think would be interesting. A good idea. And Traffic Control reform, what im saying is i think air Traffic Control reform would be the most significant of the challenges at this time. We have support by political leaders. I think there is also support on the senate. Support frome is people talking there. Think tanks on the right in terms of cato, heritage, reason, even in the middle and in some wees on the left or whatever consider brookings. Support from trade groups, airlines for america. The airlines obviously are very important when we talk about air Traffic Control. So having them on board is important. Places, i unexpected thought it would be a slamdunk. Politically, it is more challenging. Are byson those groups and large the Current Situation basically leaves a leave them open to government shutdowns. That means they do not get paid and there is uncertainty. Though they are a part of the , not fans of any corporatization, but the uncertainty has gotten so bad for them with the Current System that they are like, please get me something else, even if they have to give up union protections. What is the problem . There are really three main problems here. One is the faa is a Government Agency designed around the cautionary principle. A Government Agency decided to be precautionary, that a shocking. Including what we need to upgrade the aviation system. Be Traffic Management should using richer information. It uses a single locust of control now. The cousin of the various Technology Upgrades and commute Computer Software and a last 50 years, it can get to a robust system. It automates the separation of aircraft control, meaning plants can find together safely or capacity runways, meaning we have to build another runway, a very difficult process. Landing protocols improving the amount this is a big one. Some of the rural airports are concerned because they are losing service now because they are expensive to maintain. There are solutions we can implement. The faa is not proving open to those solutions right now and it is more for political reasons. The second problem is the faa has trouble attracting top talent. Government salaries are wouldlly lower than they be in the private sector, especially in a technologically congregated environment such as this. A notable brain drain in the past 50 years in particular. Working foroblem is the government does not give you a chance to be creative or innovate. You basically have to do the same thing for your career. That is not feel attractive real attractive to the more educated and sophisticated folks coming to the market now. Problem is the micro man bent micromanagement of the faa. Most politicians unless they are on the Transportation Committee dont really have a great grasp of aviation because it is complicated. Even if they do, they are not often looking out for taxpayers best interest. They are looking out for their own. Something i know will shock you. Oversight interference from at least eight different sources now. Both Transportation Committees and funding committees, the inspector general, omb, and the executive and maybe i should have put dvl on there as well. It is hard to operate if rational system when these folks are all weighing in. Some have weighed in to say how bad the Current System is, understandable, but if you are always going from negative two negative, it is hard to make positive changes. Result, the faa was focuses on pleasing political folks and not the passengers and that is who they should be focused on. Does corporatization actually solve the problem . It separates the air Traffic Organization from the rest of the agency. Spinning off of that small part of the faa. It brings it into guidance with recommendations, worldwide aviation group. Every developed or first world country in the world has some form of separating the atl from safety regulator except for the u. S. Say that again. Every first world developed country, here in europe, and canada, wherever, separates these agencies because they recognize it does not belong. We are the only one that has not done this. Some have separated them in different ways. They are sometimes a different type of nonprofit but they are all separated. The majority has a privatized , item and the best example is not to say that we will copy at the but if you look overall system and how it has lowered costs, it seems like a good system for the u. S. And we. Re a large Geographic Area how would it solve the problem in terms of funding . Questionhis is a big and because there previously was not a revenue title, or something that could not be identified and something that is a Sticking Point for some issues, it would shift funding from aircraft it air Traffic Control to chargers charges paid by aviation customers. What happens now is user taxes go into an Aviation Trust Fund and must be appropriated. Thatroblem with this is the appropriators necessarily want to provide the full funding. Backsometimes will hold the funding because they decide they know best, which is very interesting. If there is a government shutdown, no funding. L thing of ago, senators getting a home from districts and they magically did certain things for aviation but in theory, there is not funding if you have a government shutdown. Charges paid by aviation customers, it would be more of a user pay, use or system, something we at reason and nato and cato often support. You pay for what you use. There is a direct link for how much an airline or general aviation or whatever, how much that particular operator is paying and how much they get in return, not what we see right now. Governance, another issue that is important. What corporatization does is for aviation stakeholders. There has been a lot of controversy and people think the board is made up of only airlines. That could not he further from the truth. The board is made up of airports, of employees, the public, or there may be some changes. We are still seeing if airports have a technical spot or not, but it is not only airlines. It is all members of the public. The board is the one actually ofting the policies knowledgeable aviation folks. It is not some politician or a special Interest Group for draw the longs to straw. I want to briefly summarize how corporatization solves the print the three problems identified before. Agencya government designed around a principal solution is to have air Traffic Control, which requires technology and innovation and outsideking to be moved into a separate entity. The faa has trouble with attracting top talent. The corporation can have a different pay structure and less rigid restrictions, it can have more of a creative culture, something that will be very important if there is a lot of demand for top talent around the world now. Politicians run the faa, i love to be blunt with that one because that is how it works. The corporation will have an independent board of users, folks who understand aviation, actually understand the problems, and are knowledgeable to fix them. So support is growing. Not everyone is on board yet. I want to mention why some are perfect a post. The National BusinessAviation Association is strongly opposed. Is interesting. Some of their users are classified as commercial and some are classified as noncommercial. In this particular instance, commercial users would pay more, although the noncommercial would not the reason there is that classification is very stupid but it would take me 10 minutes so i will not do that. They are heavy users of the airspace. 12 overall of the aviation, 20 of the users in new york city during the times, obviously a major market, one that is heavily congested right now. Our approach is that users should pay regardless of the , saying wecraft should be exempt, and we are saying everyone should pay. A user pay unit user benefit system. My friends at delta airlines, i have a flight tomorrow, they were previously strongly opposed. In recent statements, they have become more neutral. Very interesting. They quit the Airlines Group over this issue and it looks like they now are trying to make peace with the group. They were previously opposed because they were concerned they were losing out. They can easily influence politicians and they like the idea. Under the new ceo, things are different and we will see how that goes. Isrent leadership, there opposition. They have labeled it privatization. Some union issues fair is the domain unions actually supported, we think other unions are jealous of these unions. I do not even want to think about Union Politics but Something Like that is going on. There appears to be a rest between the current leadership and democrats. I would say a lot of them support this. As exhaustive in their administration as did the folks in the reagan administration. The nontransportation unions, as i mentioned. Generally, we will see, house ways and means, appropriators do not like using money losing money, things might be getting a little better now but the public statements certainly have not been great. And general aviation. Is a lot of misinformation. They are not affected. It would be ideal if they were but politically that would make it even more challenging. It is really not worth it at this time. Linking it is incorrect although some folks try to do that. An additional challenge is the scoring of the proposal. Scores the bill as new spending even though if the revenue spent revenue were correct, we dont know if it would be. If you are a republican, you will not vote for something looking like increase in spending. We are seeing what we can do on that. Thank you very much. [applause] i was supposed to talk about transit but i will start out with one of my favorite subjects, autonomous or self jiving cars. When i first started talking about this here eight years ago, a lot of people thought it was science fiction. Sende was nice enough to one of those cars to cato headquarters to take the blonde rides. Affirming lee, last august, the ceo of ford anonymous vehicles, having as fordscant impact as moving Assembly Line did over 100 years ago. That is why today, we are levelcing a high volume four, fully Autonomous Vehicle in commercial operation in 2021 in the right hailing or ridesharing service. Ford will be massproducing vehicles with full autonomy in five years. That means there will be no Steering Wheel, there will not be a gas pedal or a brake pedal. Of course, a driver will not be required. I imagine that will totally revolutionize everything about transportation and it will make a big difference for transit, a big difference for what we do about roads. Of special infrastructure the, meaning they will drive themselves sometimes and you can take over other times, or fully autonomous . Infrastructure will they need . It turns out they will not need any new infrastructure at all. They just need to have the existing infrastructure. Smartole idea of highways, which the Obama Administration wanted to fund, is already obsolete. Will be inelligence the cars themselves. They will not need any electronic infrastructure to help to guide them around. I have a projection of how long it will be before we start seeing the cars, and it might be a little optimistic, but a somewhat marc said, i think we will be able to buy a car that will drive itself under most circumstances in about three or four years. After, you will be able to buy a kit for 5,000 maybe and convert a car into a self driving car. A fulltime self driving car sharing. By 2025, i think you will be able to buy cars like that. By 2030 or so, roughly half the cars on the road will be. We will talk about close highways to human driven cars because human drivers are so dangerous. What kind of infrastructure do we need . We will maintain the infrastructure we have got. We might need to have consistent signage for things like detours. Self driving if a car will understand. Turn left, turn right, which is what you would say. Those are minor things. For self driving cars, we are going to use existing infrastructure. What about transit . A huge impact on transit. Wanting to spend 3 billion building the purple line, my argument is that will be totally obsolete long before the line has worn out. Lets look at the cost of driving. Americans now spend about one join dollars a year on automobiles and 2. 7 trillion miles a year, . 40 per mile. Since we have an average of one or two thirds per person on the car, 20 passengers per mile. Are hovering around . 25 per passenger mile. They are trying to compete with the automobile. If you dont have a car and ford out there or for or General Motors and lift have self driving cars out there and you can call it up on your smart phone and they might be charging to use0 a vehicle mile their self driving car, you look out the window and it is snowing or it is raining or it is 90 degrees in 90 humidity, do you really want to walk to a transit station when you can put push a button, and take you where you want to go . Two of you, it is cheaper than taking transit. One of you might be more expensive than taking transit. You can imagine with those kinds of alternatives available, light rail trains and buses will be running a lot emptier than they are today. When you add in subsidies, the picture changes even more. Year, 2015, 70 3 billion on highways. A lot more than usual. Billion, that is only 2. 6 cents per passenger mile. That is for cars. When you add in trucks and buses and things like that, the cost is lower. Subsidies to transit, just operations and maintenance set . 41 per passenger mile. Decisionmakers will look at declining transit ridership and saying why are we spending all of the money subsidizing transit when we could just put people in self driving cars and maybe give vouchers to people who do not have high incomes, low income vouchers and they can use it for self driving cars. The implications of self driving cars for building new infrastructure . If you have a really congested area, you might need new infrastructure. Will reduce cars the need for building new infrastructure and congestion. Congestion. Duce most congestion is caused by slow human reflexes and computers have faster reflexes. You will fit more cars on the road. Where you do need to build a new infrastructure, i think you of user build it out fees and not rely on general funds at all. That might mean a publicprivate partnership. There is a certain kind usually riskfor roads, the demand partnership where a private partner puts up the money, collects the user fees, and pays back the cost of building the infrastructure out of the user fees. The public takes no risk at all. All of the risk is taken by the private partner. Infrastructure operated privately tends to be better maintained than infrastructure operated publicly. Infrastructure is operated publicly but tends to be better maintained than ever structure operated publicly but operated out of tax dollars. Our highways are operated out of user fees, tolls and gas taxes, and local rules tend to be operated out of general funds. You have all heard about bridges falling down and things like that. That arer of bridges structurally deficient are declining by more than 50 in the last 25 years, almost 140,000 55,000 today. Almost all of the decline has been state bridges, and most of the bridges are a disproportionate share of the bridges the remaining structurally deficient are look bridges. If we could get the local roads on a user fee basis, they will be better managed. Similarly with rail transit, huge infrastructure problems and a huge infrastructure backlog and agencies are starting to turn to publicprivate partnerships to build transit such as this Commuter Rail line built in denver that opened up last year. Oft is a different Kind Partnership than a demand Risk Partnership used for role for roads. Partner are as the money, spends it, and the public partner pays the private partner back. Not matter whether anybody rise the train or not or fares are collected. Public partners are obligated in this case to pay 5 million a month to keep the train running. It is as if the public partner barbie borrow the money, but the Public Agency did not want to exceed the debt limit and let the private partner brother money and it does not show up on the agencys books. There are two problems with this kind of system. If you are not worrying about going user fees, your costs way up because you do not care and someone else is paying for it. The first built in america was in 1980 and todays dollars after adjusting for inflation, it cost 15 million a mile. Million, some are spectacularly more expensive. Seattle just completed one. Los angeles just decided to build one that will cost 980 million per mile. It will not be able to carry anymore people than the line built in 1980 that only costs 15 million a mile. Because we are not worrying about earning a profit and we are just spending wildly and building all kinds of infrastructure we will not be able to afford to maintain, that is the second problem. You will not be able to maintain it at user fees and so you get situations like this. The washington metro system we all know is falling apart. It is not just washington metro. It is the chicago transit authority. In boston. In philadelphia. Serioushave infrastructure problems because they are relying on tax dollars and the federal department though these lines, just built department built these lines, so they are falling apart. Putting up more tax dollars to maintain rail systems that are losing tremendous amounts of money, it is time to think about replacing them with buses. This is a busway that moves more than 250 buses per hour. A larger bust and we use in the United States, it can hold 200 passengers. Could move more people in an hour than the washington subway system. We can use buses anywhere there are rails in the United States, with the exception of new york city. Far less expensively. The bus line goes 41 miles an hour and the rail lines, it is the only one that did not have a huge cost overrun. It goes it goes on the same lane individual cars go on. The bus is always on time, it never gets caught. Buses get rendered obsolete. You dont even need to spend a lot of money on these. The only difference would be between the high occupancy lane. They dont spend a lot of money building it. Infrastructure can be cheap, infrastructure can be effective, and it can be flexible. Rely on buses and increasingly rely on things like self driving cars, rather than spending a lot of money on rails and other obsolete technologies. Thank you very much. Listening to all these speakers, the diversity of topics is amazing. Together isem all the federal government has a theseower all over different technologies. Urban transitke are purely City Operations owned locally by cities and states. Because the federal government , bus, light rail and highways, the federal government aid has a lot of power in determining what local governments to and all the regulations are related to safety and economic returns are very powerful. Im going to open up with one question to the panelist and then open it up to all you folks to raise any question on these topics. All the power the federal onernment has is centered one person and the new administration, that is the new secretary of transportation. She oversees the highway program, the transit program, and the aviation program. What do we know about her priorities and how much power is she going to have to push reform in this administration . Which direction is she going to go . She has delayed the last which would eventually be part of a highspeed rail program. Be seen if it gets rejected. But i think she is off to a great start there. Dont think we have key wesonnel in place, nor do have any ironclad policies out there. I have been encouraged by her stated openness to increase private sector involvements and also looking at the regulatory state of transportation. Right now i am cautiously optimistic. Im rather optimistic as well. She was actually deputy secretary of transportation in the george bush administration. Shes a supporter of Public Private partnership. She is also very interested in air Traffic Control reform. Looks like she will be taking a trip to canada to see how the system works. She has been in the aansportation area from business perspective and understands the problems inherent in government control. She has gotten some folks involved in the p three world. It is the investing world donald trump has named. So far so good. We can go to the audience for questions if you want to wait until a microphone gets to you. Here in the red jacket. My name is from the new york times. Could you expand the possibility of expanding the tolling system to finance highway projects. Highway tolling . Are you talking about the legal or technical possibility . The technical possibilities are infinite. Oregon was the first state to have a gas tax. Now oregon is the first state to be extensively testing a mileagebased user fee system. A little gps, i plugged it into my car. The gps transmits to a private company. The private Company Tells the state how much i owe them. Dont feel like my privacy is being invaded. That system can be used on congested roads. Local governments get their share of the money, so i drive on a local road rather than a state highway. I see this is very positive and i look forward to seeing it adopted. I think it will be transitioned cars have tonew can usesystem and they the existing gas tax system for years. Speak to some of the specific legal barriers, we have prohibition on states tolling their own interstate segments. Barriersl said, these would need to be eliminated before we see any significant expansion of tolling. In particular if you want to see more private investment in Public Private toll roads, absolutely finance reform would be key to that as well. It is up to congress. I kept thinking about how you could tell the story so that the general public could understand it. Is unbelievably complicated, but i think we have to start educating our public so they get behind these ideas and dont just assume it is right wing therefore we dont like it. Most people dont understand it. You to put it into individual charts. Just a suggestion. Its a very good suggestion. I have a question about any advice you have to get transportation to accept new technology. You talk about redoing bridges and roads. Materials out there now that we are not using. One person invented something to fill potholes in minnesota. It was so effective the road crumbles around it. Also bridges, we know using concrete, they catch on fire. They burned, they melt, they collapse. How do we get the government to look at these new technologies so that if we are going to rebuild infrastructure we are going to do it smart . Withthink we need to start procurement reform and acquiring competitive hitting. Problems, while there are many at the federal and state level, really go down to the local level where you have municipal engineers doing the same thing for 20 years, having relationships with , and you seeliers this across transportation but victorious in the water and wastewater sectors. Andink over procurement Competitive Bidding can start there and see what happens. Private ownership would be helpful because the procurement process problem is low bidder wins. There is an incentive to use less expensive materials, a lot of the materials are more expensive. Nobody cares about that in the bidding process. The contractor is obligated to finish a product up to a certain standard. You are a private owner you have a great deal of incentive over the last 30 years if there isnt a submission payback. That hasa system now no internal incentives to adopt technology. In the Public Sector there is no way to capture that. This is one of the widely discussed advantages. Is operating the capital beltway. They will operate for the long term so they have an incentive to use materials and procedures that minimize longterm cost. Maybe back down over here . Im with the American Public transportation association. Thanks for the invitation to be here. Comments on private sector participation, that is indeed a good thing. Sector, thevate denver project is accustomed to the purple line here. Even beyond that. My question is really a straight question. Is there an appreciation not all projects may be private sector . Many will be but some are not going to quite work under that model. Be fort going to everything. I would accept that point of view. I wonder if the panel views it that way or not . Im for diversity, im for federalism. Because so much federal money and topdown authority is involved here, we are not giving them a chance to go their own diverse ways. Bestt know what the solution for all the different cities you mentioned are. I would like state and local governments to be making decisions that i think mandates create. Trains, i ride amtrak a lot. Im taking amtrak from oregon. I once was open to that idea that the more i looked at urban transit the more i realized once he opened the door to saying we not going to worry about it, we are not going to worry about covering our cost, fares were going to cover 100 of operating cost and 80 of capital cost, then it was another capital cost and than 50 of the annual operating cost. And more expensive, more and more bloated. There has to be a line. The line is it has to be able to cover its own cost. Maybe we ought to have another session and you and i can debate that. Discussion and to be perhaps a tad controversial, if there are truly areas of need that cant be served in the private market, maybe we would be open to looking at that and some sort of public funding. The challenges right now a lot of rail projects are being billed for choice writers. Transitnal view is the dependent writers dont have transportation any other way. If we are providing some sort of federal government funding, that should be our priority. In syria think you raise a good point. But i think we need some reforms as to how we are doing it. Maybe down front here . I live in china part of the year. I have taken the chinese highspeed trains and the japan highspeed train. This country seems to be a natural for highspeed trains. Why arent we emphasizing that . Problem of going from miami to washington and shanghai to beijing in five hours . Is a political problem or a money problem . Dam of the problem is we have these new inventions called airplanes, the go faster than highspeed trains, they are cheaper than highspeed trains, they dont require a lot of precisely maintained infrastructure. They are cheaper to maintain. California in 1995, an economist estimated it would cost and at that cost he says highspeed train would cost more to move a passenger from los angeles to San Francisco by train than by car or by plane. It would be far cheaper by plane, a little cheaper by car. Todays projected cost is 100 billion. There is no way that is going to be competitive with flying. Airport to from an near where you live to where you want to go. Highspeed trains are going downtown to downtown. Only 8 of americans will ever work downtown anymore. To bes not going convenient for 92 of americans. A natural trains are solution from tokyo to osaka. The rest of the world, france, spain, hundreds of billions or tens of billions in debt because of them. They are not providing satisfactory transportation. There have been numerous stories about a lot of the chinese infrastructure project. Essayl has an excellent on exactly those issues. Maybe down the middle here . Thank you very much. Dangerous. Tremely a lot of data to process. Are the the costs included . It is a loaded question. Numbers where the and thomas costs environmentally will be so the Environmental Impact . We do have a lot of numbers on that and what we know is 85 of all of our travel is by car rail. Ybe 1 by intercity if we could double that rail,ail uses maybe 20 less energy 20 less pollution than cars may be. Rail,hope we could double reducing pollution emissions by a fraction of a percent. Effective to go for 85 and get more people to drive preassist and electric cars. Get a smalle to percentage of people to change their. Inknow that works because 1970 you couldnt see across town because air pollution was so thick in the United States. Maybe not as bad as beijing was today. We made cars cleaner and try to get people out of the cars on transit. The average american road transit 50 times a year, still half 1 trillion and today the average american rights at 40 times per year. On the other hand making cars cleaner worked. 10 y have less than 10 of solution being emitted by cars. That means each cars emitting less pollution. Maybe two more questions. It is always good to see you, especially because you have great visuals to support the ideas and initiatives. I wanted to ask you what is your observation of bc . What is your observation of what could be done better in the showcase, which recently hosted the inauguration . There were some problems right in front of union station. As you cross over the crosswalks you can see there is an in theus negligence restoration of the asphalt. The federal areas could use some work. What are your thoughts about showcasing a Nations Capital . This is definitely a local issue and the federal government has distorted the system to make the locals behave rationally. For example the car costs 100 billion. It is such a failure they want to expand. Portland has built more miles of streetcar line than anybody else, they want to build 140 miles. Those 5000 miles of streets are in desperate need of repair. The cost of 140 Miles Per Hour would be more than paving every single one of those 5000 miles of street. I wouldnt be surprised if the street card, the grandiose plans they written up are more than the cost of paving every single street in washington dc. The metro system is an embarrassment. ,hen i came to washington entering into 2001 a space odyssey going to the station. Today its like entering into blade runner. Its because they settled on a technology that was too a technology we cant afford to maintain. We have to think about different technologies we can afford rather than what we thought were 2001 technologies but were in fact 1901 technologies. Last question down in front here. There hasnt been much bicycling. Bout has there been any thought of those in infrastructure . I bicycle more than i drive in the summer anyway. I think bicycles can be compatible but it is clear a lot of people dont feel comfortable cycling. Think there are very cheap making doing that, like a major arterial and finding a street that isnt major at all and turn it into a bicycle boulevard. Means minimize the number of stop signs and stoplights. Put a few little barriers in to keep cars from using it as a through street. Thats a very cheap solution for bicycles. You dont have to spend millions of dollars per mile on special bike lanes. Moneyyou do have to spend , i think a tax on bicycle tires would be a good thing. They wear out according to how much cash you tax the tires. And then at least bicyclists would be able to say they are paying at least a share of the cost of the roads. Let me start by saying im generally skeptical about the federal role in transportation, but we are going to have a federal rule. Think the projects ought to be nationally significant. I dont think there is a way to make that argument for pedestrian and bicycle infrastructure. Do have no problem with cities put in bicycle and pedestrian infrastructure. Thanks, everyone for coming. Lunch will be upstairs. Thank you. And coverage with president