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Rolling Along

Transportation Secretary Mary Peters Has Big Plans, but Bigger Obstacles

Congestion, says Secretary of Transportation Mary Peters, is like the parable of the boiled frog: Put a frog in boiling water, and it will jump out. But place a frog in cold water and gradually raise the temperature to boiling, and the frog will never notice.

Congestion has caught up with Americans in the same way, Peters says, reaching a situation many have now realized is intolerable. The problem, notes Peters, the former head of the Arizona Department of Transportation and the Bush administration’s Federal Highway administrator from 2001 to 2005, is an archaic 1950s-era funding structure she hopes to change.

Peters was confirmed as the nation’s 15th Transportation secretary in September.

Last week, she sat down with Roll Call Executive Editor Morton M. Kondracke to discuss the state of the U.S. transportation system and ways to make it better.

ROLL CALL EXECUTIVE EDITOR MORTON M. KONDRACKE: Your predecessor, Secretary Norm Mineta, a year ago proposed a national strategy to reduce congestion. What has been done, and why has it taken so long?

TRANSPORTATION SECRETARY MARY PETERS: Well let me try to answer the last question first. Why did it take so long? The symptom of the system performance breaking down has been occurring over time. Are you familiar with what is called the parable of the boiled frog?

ROLL CALL: Yes, of course.

PETERS: OK, well, I think it was a little like that. People have just acclimated. We don’t realize this used to be rush hour — an hour or two in the morning and an hour or two in the evening. Now it’s lasting longer. And I think just now people are beginning to wake up and say, “This is intolerable.” It’s having a price on our economy and our businesses. It’s affecting our quality of life.

And really, it just took too long to recognize that. And what are we doing about it? Well, we’re parlaying a fund of money that we’ve had for the first time ever, it’s actually some discretionary money, about $1.2 billion, because Congress passed a discretionary measure and then earmarked those discretionary funds. We have already received applications for “Corridors of the Future” and we will by August select several of those as finalists with major trade and tourism corridors that are really having a negative effect [and] go in and fix those.

And then the urban partnerships. We’ve received almost 27 applications for urban partnerships, shortlisted that to nine, including this very controversial project in New York City. What I want to be able to do … is take those, really try some innovative things in the finalists areas where we’re making some selections and then learn what we can to replicate those things in other areas.

The base problem in my opinion is that funding programs and funding structures that support transportation, whether it be aviation or surface transportation or a mix, are from a bygone era. They served us well then, but they’re not serving us well today. So the problematic structures in the funding are going into the areas that are not areas that should be our priority.

ROLL CALL: So what is the funding problem?

PETERS: The funding problem is that the base programs were put in place with the Interstate [system], for example, during the mid-1950s, when then-President Dwight Eisenhower and Congress created the spending mechanisms to support the interstate highway system.

There were a few programs for that specific purpose. By the 1970s and into the early 1980s, even when President Ronald Reagan was president, he said, “You know, we’ve completed the interstate now, let’s hand these programs back to the states because we’re not using it to build them any longer.”

Well, instead, Congress and the president signed subsequent authorizations that changed the focus of that funding from building the interstate system, which really serves a unique national service, [to] today what I think is a unique public works program to support whoever is in a position of power. The [Congressional] committees — what are their priorities, what do they want to do — and then sending this funding out in 48 different ways now today instead of these very specific core programs. Today, only about 60 percent of the funding that goes out under the highway trust fund supports core programs. The rest of it goes to safe routes for schools, supporting programs in Alaska, you name it.

ROLL CALL: Core programs are?

PETERS: Interstate highway maintenance, national highway maintenance, other core programs are the surface transportation program. This money out there goes to funds — in a lot of different ways. So instead of having it with core programs, it goes out to 45 specialty programs that were in place in 2005.

When I started at Arizona DOT there were only a handful of these speciality highway programs. For example, no disrespect intended for [House Transportation and Infrastructure] Chairman [James] Oberstar [D-Minn.] … we now have a safe route for schools program.

Now, I’m all for kids having a safe route to school, I want them to have a safe route to school, in fact, I spoke to a bus drivers association meeting this morning. But chubby children aren’t chubby because they’re not walking to school, they’re chubby because they’re sitting around watching TV and eating too much crap and all this. So, the specific purpose that may be laudable but should people paying gas taxes fund a program like this?

ROLL CALL: So this is a walking program?

PETERS: Right.

ROLL CALL: Which the Highway Trust Fund is paying for?

PETERS: Correct, correct. And then there’s many, many other funds today, a ferry-boat program, a historic covered-bridge program, all of which beg the question, are we dealing with core transportation issues anymore, and I would argue that we’re not, Mr. Kondracke.

So the issue is that we have to decide again whether there is a compelling national interest in funding transportation, and if there is, fund those things — direct funding directly to those items — and turn back the rest of it to the state, or quit collecting those taxes, but do something different than what we’re doing today.

ROLL CALL: Do we have any prospects, for example, that traveling out of Washington, D.C., south on [Interstate 95] will not take five hours to get to Woodbridge, Va?

PETERS: Yes, yes, yes we do in fact. The 95 corridor is one of the corridors we’re considering. The exciting thing about the Corridors of the Future and the urban partnership is that they’re not just looking at it in the single jurisdictional issues or the single silos.

By single jurisdictional, I mean, not just the state or the county or the local government or the federal government, but all of them together in the more promising projects. And not just looking at highways or transit or freight rail but looking at the combination of those things, and saying how can we work together cross-jurisdictionally, cross-modally to come up with solutions, and frankly, that’s what I find so exciting about this.

ROLL CALL: Give me a vision of what the new world would look like if you’re successful in adjusting it.

PETERS: We would say, what is the transportation demand, what is the need that we need to meet, and what is the best, most efficient way to meet that, to serve the needs of the public, the businesses. We could say, the thing to do here is to double-track the railroad, because if we did that we can have a viable commuter rail program and we can handle more freight, so we’re taking more trucks off the road, therefore the highways would be more efficient.

So let’s put the money there, lets build that, instead of well, we only have this color of money, let’s build this, and we have to carve it up in all these many ways. That’s my vision for the future.

And the same thing is true for aviation as well. You know, we would say, where can we best meet the need. For example, if you’ve been to JFK, if you’ve been to LaGuardia, if you’ve been to Newark, if you’ve been to Philadelphia, it’s a bloody mess.

And people are really, really unhappy, and it’s the tip of the iceberg. So if we were to say, well, these airports are really really crowded, what if we said that 40 percent of the demand for the New York City airports — and I’m making this up — came from Washington, D.C. Could improving high-speed rail between those two locations help relieve some of that air transportation?

Because if we build another airport — and that’s being talked about now — we are decades away, decades away from any kind of relief from that. We can improve the air traffic control system and we’re going to do that. But we have to say what’s the best solution, and let’s put the money where the best solution is.

ROLL CALL: Let me stop you there. I thought this administration was against upgrading Amtrak?

PETERS: A very good question. I don’t believe and I don’t think anyone in the administration believes that we should keep funding a failed business model. And in some cases we believe that Amtrak is supporting a failed business model.

For example, there are long-distance routes that are losing enormous sums of money, money that the public is subsidizing today. And the ridership just isn’t there. But then there are corridors that are very, very successful. In the Northeast corridor, in the Northwest corridor, some of the routes out of Chicago, those are very, very successful.

ROLL CALL: So what is the prospect of getting high speed rail along the Eastern seaboard? Say, from Washington and New York and Boston?

PETERS: I think it’s good. And it’s part of what we’re looking at.

ROLL CALL: And on what timetable?

PETERS: Well, probably too long because we have to build additional tracks. Freight is already overwhelming, we’re going to have to double-track in different areas.

ROLL CALL: Well, could you ever envision the United States having something like the high-speed trains that exist in France and China, I mean, the Maglev train out of Shanghai travels 220 miles per hour. There’s nothing like that in the United States, and that’s a third-world country. How come we don’t have that?

PETERS: Well, that particular train doesn’t run profitably either, and I think it makes a very good demonstration of Maglev technology, but is it doing the job of providing for minimum traffic demand? Probably not.

That said, I’ve been on it a couple of times, I absolutely understand what it is. Yes, that could be successful, but it has to be the right situation for it to be successful. We shouldn’t be building Maglev trains just to be building Maglev trains. We should be building them to meet transportation demand, and it will be something that will help us ease traffic across the various modes.

ROLL CALL: But Democrats in Congress say that they want to upgrade Amtrak. So if that’s the case, how close are you to an agreement on some new high speed rail initiatives?

PETERS: We’re not right now. And in fact, many of the people in Congress — and I think with good intentions — think that we have to have a national rail transportation system and that we need to continue to have these various routes that are going to various areas in the United States today, but again, in our opinion are not necessarily cost-effective.

ROLL CALL: Which routes?

PETERS: The long-distance routes. Sunset Limited, for example — and I say that because that runs through Arizona — great, I love trains, I’m nostalgic — but frankly, the ridership is not there. And it’s more expensive in many cases than not flying.

So if we’re not going to have the ridership that meets the demand, then let’s not do this. Commuting between city pairs makes a lot of sense, I think, especially in the right corridors. Some of these long-distance routes that perpetually lose money are not places we should be investing.

ROLL CALL: So the Lautenberg-Lott proposal on Passenger Rail Investment and Improvement Act, you’re for it or against it?

PETERS: We’re for working with them. It’s not where we’d like it to be, but we think it’s a good start. … I mean, if you look at what came out of the Senate Appropriations Committee in the Senate yesterday versus what we had proposed with Amtrak, we’re clearly not on the same path today. But I think we have to be.

ROLL CALL: You are an advocate of public-private partnerships. Chairman Oberstar says that public-private partnerships won’t protect the public interest, the integrity of the national system, and is not sustainable. First, what are the kind of public-private partnerships that you’re proposing, and what do you say to what he says?

PETERS: What we’re proposing in this administration is to give state and local governments the opportunity, where they see it as a business model for private-sector investments, to complement public-sector investments and create a partnership where transportation infrastructure can be built and operated more efficiently than it is being done today. We don’t have enough money to build transportation infrastructure, and I’ll talk about the gas tax later, but what public-private partnerships are supposed to do is give [governors] an opportunity to take what today are inactive capital assets and bring in private-sector investments to build corridors that wouldn’t otherwise be built for decades into the future and be able to build those now today.

So I think public-private partnerships are a good way to increase efficiency and bring sorely needed capital to the table to meet transportation demand. Now, Chairman Oberstar and [Transportation and Infrastructure Subcommittee on Highways and Transit] Chairman [Peter] DeFazio [D-Ore.] believe that they don’t protect public interest. I have a lot more confidence in these state and local officials than that. I believe that they can and have negotiated agreements that are in the public interest. As long as they spend money within federal requirements, I don’t believe that we should interfere in a decision that they have made.

ROLL CALL: Is the issue one of privatization that Democrats just oppose on principle? Or toll roads, which a lot of people think are unpopular?

PETERS: I think it’s a philosophic difference between Chairman Oberstar and Chairman DeFazio and this administration and certainly my belief. They believe that providing transportation infrastructure is an inherently governmental responsibility and should not be privatized or contracted out to anyone other than government. I don’t. I believe that providing transportation infrastructure is important in the public interest.

But there are a variety of ways we can do that, and if we can bring private-sector investments to the table to help complement the dwindling revenues that we have today, I’m all for it as long as we protect the public interest, as long as that asset is going to serve the public the way the needs of the public need to be served today, and I trust governors, I trust county supervisors, I trust state leaders, to make those decisions.

ROLL CALL: Do public-private partnerships inevitably involve tolls, and are tolls not regressive?

PETERS: Well, is the gas tax regressive? I would argue that the gas tax is regressive. So does it involve tolls? Probably? Does it have to? You could for example create a situation where the private sector can come in and build a road today that you couldn’t build until tomorrow and then pay them back with interest with the public revenues that you would subsequently collect over time, similar with what many states do with bonding today.

It could involve shadow tolls, where there may be tolls charged but the government pays them out of existing sources of revenue. So there are variety of ways that you can do it, but the most common way is to toll and then have the developer repay with the tolls that are collected over a period of time. And it’s more acceptable where there’s been a toll. The public has the hardest time with it and I can understand their concern. Where there has been an otherwise “free” road and they begin to toll it, people get pretty cranky about that.

ROLL CALL: Our total outlay for a gallon of gasoline is $3.40 or $4, but still a lot less than it is in Europe. So why couldn’t we phase into a European level of gasoline tax that would reduce usage of gasoline and we could build infrastructure with. What’s wrong with that?

PETERS: We could, but I don’t think we should. Here’s why, another reason I believe why the gas tax hasn’t been increased over the past 14 years. And I was reading an interview you did with [Alaska Rep.] Don Young [R] a couple of years back, and I think at the time gasoline was something like $1.40 a gallon, and now, at worst-case today, we’re seeing maybe $3.47 a gallon. It’s not going to go down any time soon.

And regardless of what we’re willing to pay, Americans don’t have the stomach for that. But the other reason I think that the gas tax hasn’t been increased is because people don’t like transportation infrastructure, they only like it when it benefits them in their daily commute or their business model.

But when you pay the 18.4 cents, and they collect it by state, and they give it to Washington, and those dollars are federalized and bring with it a whole host of requirements that you wouldn’t have if it was a nonfederalized dollar, why would I in Arizona want to pay more federal gas tax and send it back to Washington and not even get back what my state pays in when I’m the fastest-growing state in the nation right now?

ROLL CALL: Would you like to detach the federal gas tax from the federal government and rebate it to the states?

PETERS: Part of it, perhaps most of it, but certainly part of it. I don’t think Congress is quite ready to do that yet.

ROLL CALL: But you had a Republican Congress. Did you get anywhere with it?

PETERS: We signed that bill, and no we did not. There is a national interest in a couple of things. One is maintaining our national highway system. That’s a standard that is the same across the United States. I think that’s important for our system. But now how are trucks regulated from state to state? That’s not something that should be done with a patchwork of regulation.

ROLL CALL: Isn’t the problem that lots of states think the federal [Corporate Average Fuel Economy] standards are just too low? [Sen.] John Kerry [D-Mass.] said that computers now run 1,000 [times] faster than they did in 1981, but cars and trucks get no further on a gallon of gasoline than they did 25 years ago.

PETERS: I think cars today are more fuel-efficient than they were 25 years ago, but certainly Americans haven’t asked for it today. We are going to increase fuel-economy standards whether they do it through legislation or regulation. It has to be done.

ROLL CALL: Why has it taken this administration so long to do it?

PETERS: Well, we asked Congress back in 2002 for permission to revise the way we calculate fuel-economy standards and it wasn’t acted on. It was acted on last year for light trucks. And we had asked for that same privilege to be calculated the same way for automobiles and Congress hasn’t acted on that.

We haven’t acted on it today because we don’t believe picking an arbitrary number is the best way to do it. We think we should do it in a way it was done with the light trucks, by looking at the different classes of vehicles and looking at what’s more appropriate based on the footprint of that vehicle, and as importantly, considering safety.

Europeans have more fuel-efficient cars than we have, but I don’t believe they’re as safe as the cars that we have here in the United States today. They don’t necessarily have the fatality rates that we have, but they don’t have the long sections of open highways that we have either.

ROLL CALL: Bottom line here, sounds like there are a lot of philosophical differences between this administration and the Democratic Congress. Is anything going to get done?

PETERS: What could get done and what should get done is reform of aviation programs. We must move from today’s ground-base radar system. When the Beatles came to America, the plane that brought them here used the same technology that planes use today. Right now, our airspace is very, very crowded — about as crowded as it can be with the current system and still operate planes safely. We need to change the way we’re managing our airspace.

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