involves facilitating the involvement of outside sources of
capital. But there are questions as to whether companies
can step up to the table today. Whether it is debt financing
or equity funding, funds are hard to come by. The credit
window has closed to a great extent. People are in a holding
pattern until they see things improving.
Q
AI do.
Do you see that happening any time soon?
Q
Do you see any improvement in freight activity and
demand?
AThe question is will there be money to
improve major freight corridors connecting, say, ports of entry with distribution
centers. The stimulus package does not
come up with a lot of money. In his initial
stimulus proposal, President Obama proposed somewhere around $300 billion in
transport and infrastructure. The final bill
allocated some $58 billion.
Maybe right now, with the economy
down, it’s not a big deal. But in two or three
years when the economy comes roaring
back and we are not ready with the facilities
to match the increased flow of goods, it will
have an impact.
Q
Is the money allocated for infrastructure in the
final stimulus plan enough to meet President
Obama’s twin goals of job creation and infrastructure
improvements?
AWhat the president submitted to Congress was a pretty healthy package. But what came out of Congress
was much lower. I don’t see it generating the 3. 6 million
jobs the administration is striving toward.
Q
The Highway Trust Fund is up for reauthorization
later this year in an environment where the motor
fuel tax, the traditional mechanism for paying for infrastructure improvements, is bringing in less cash due to the
economic downturn and the proliferation of more fuel-effi-cient vehicles. The major trucking groups advocate an
increase in the federal fuel tax, which has remained at 18. 4
cents per gallon since 1993. Others are promoting alternate
approaches like a tax based on the number of miles that a
vehicle travels. Where do you come down?
AI don’t believe the gasoline tax is a sustainable source
of revenue for highway and transit construction as we
have relied on it the past.
QWhy?
AEven with vehicle miles traveled going up, the total
flow of funds into the highway trust fund is coming
down. And, as you noted, this is due to significantly
increased fuel efficiency of today’s vehicles. I have said that,
by the end of President Obama’s second term, the majority
of the cars will not be powered by gasoline. You have
increasing ethanol use—right now, it may represent 10 to
12 percent of each gallon. But let’s say it gets up to 60 percent. So look at the total picture. You will
have more electric cars—you can’t apply a
gas tax to them. You will have greater use of
ethanol, which means less gasoline consumed per gallon, so there is less to tax. Then
you move into fuel cells powered by hydrogen—you can’t apply a gas tax to that. We
have to move away from the gas tax.
Q
What funding alternative would you
support?
AI think the “Vehicle Miles Traveled”
program ought to be seriously considered. Even if you go to a VMT, you still have
some form of tax. But the beauty of the VMT approach is
that all you look at is how many miles you travel on the
highway. It captures activity regardless of energy source.
Q
You ran DOT on 9/11, and in the years to follow you
presided, along with the Department of Homeland
Security, over the biggest ramp-up of transport security in
the nation’s history. Nearly eight years after the fact, are you
comfortable saying that security has improved since 9/11?
AMy answer is a definite yes, though it would be hard to
imagine, say, getting to a point where we can screen 100
percent of all ocean containers without compromising the
speed and reliability of an intercontinental supply chain. If we
can get to 85 percent screening, that would go a long way.
Q
But in screening air freight moving in the bellies of
passenger planes, we are at 100 percent physical
screening, albeit mandated by law?
AI did not support that approach at the time it was
being debated. To me, the idea of physically screening
everything would be too costly and time consuming. The
