Streams

First Steps for Obama's DOT, Seen Through a Bush Administration Lens

Monday, August 30, 2010 - 11:26 AM

President George W. Bush speaks with US Secretary of Transportation Mary Peters in the Oval Office of the White House on September 27, 2007.(JIM WATSON/AFP/Getty Images)

President George W. Bush speaks with US Secretary of Transportation Mary Peters in the Oval Office of the White House on September 27, 2007. The meeting was after a summer of long delays and flight cancellations at airports. (JIM WATSON/AFP/Getty Images)

(Transportation Nation)  Mary Peters and Ray LaHood, oddly enough, were both born in places called Peoria. (Peters's birthplace, a suburb of Phoenix, was named for Lahood’s hometown in Illinois.) Until recently, it might have seemed that this was all that the Secretary of Transportation and his predecessor had in common. LaHood, a Republican Congressman, was appointed with little experience in transportation policy, but has been given billions to spend. Peters had worked for twenty years at the Arizona DOT and was the head of the Federal Highway Administration before Bush nominated her to replace Norman Mineta as Secretary of Transportation in 2006.

Many of the hard issues now facing the Obama Administration—such as crumbling infrastructure, declining gas tax revenues, and disparate opinions on spending priorities—were first recognized during Peters's tenure. The solutions put forth by the Bush Administration were bold and controversial, and Peters took the lead in encouraging highway privatization and more permissive tolling policies. She stood firm with President Bush (and against many influential Congressional Democrats) in refusing to advocate a gas tax increase.

The Obama Administration's focus on "livability" and high-speed rail have been in contrast with the past, and yet lately LaHood has been sounding more like Peters, speaking kindly of tolling and private investment. Transportation Nation's Matt Dellinger interviewed Peters last week.  She talked about the persistent problems with our transportation policy, her reaction to the Obama Administration’s first steps, and what her own future holds after January, when federal law will allow her to lobby the White House and Congress.

DELLINGER: When you were with the Bush Administration, you told me that you felt like the canary in the coal mine as far as the gap in federal transportation funding, the weaknesses of the gas tax, and the need for innovative thinking. What were the first signals that we were headed for trouble? And have things gotten any better or worse since you left?

MARY PETERS: I would say in terms of the status of the federal Highway Trust Fund, from the perspective of the revenue that it's collecting, versus what was expected to be collected, it has gotten worse—due to the recession in part, but also due to the fact that we have more fuel efficient cars and we have more alternative and renewable fuels. And then of course Americans are driving less, especially during the recession and, in the summer of ‘08, the very high fuel prices.  American driving is picking up a little bit, especially through the summer months this year, but by-and-large we're not gaining vehicle miles traveled at the rate that we had in the past and I believe won't in the future. So if anything, yes, it has gotten worse. Now, the reason that I caveat that a little bit is because Congress has elected to put some fairly significant amounts of money into the Highway Trust Fund. Between the summer of ‘08 and February of this year they've put $34.5 billion dollars of General Fund monies into the Highway Trust Fund to maintain its solvency. Absent that, we would be in real, real trouble.

DELLINGER: Generally speaking, President Bush was against using general funds to boost the Highway Trust Fund.

MARY PETERS: He really was. Of course, he did sign off in the fall of ‘08 on the first infusion of money that had to go from the general fund into the Highway Trust Fund, but generally speaking, he felt that the trust fund ought to do what trust funds do: collect revenues from defined resources and operate within the constraints of those revenues. But again, because this came on very suddenly through the summer of 2008 and because the trust fund appeared that it would not remain solvent through September of ‘08, we went to Congress—in fact, just the week before Lehman Brothers failed—and got the first infusion of cash.

DELLINGER: Because of this funding problem that you saw coming, you and the Bush Administration took a position that was pro-toll and pro-public-private-partnership. The Democrats in Congress at the time gave you a lot of pushback. Perhaps they saw this policy as being one that was just ideologically opposed to the gas tax and thought you were doing gymnastics to avoid raising taxes. But now Secretary Ray LaHood and the Obama Administration are saying some very nice things about tolling and public-private partnerships.  Do you feel at all surprised by that?  Or relieved?  Or vindicated?

MARY PETERS: I do feel that they are recognizing the futility of continuing to just use gas taxes or fuel taxes to support the system and recognizing that we have to do something else. They also have been very emphatic, both President Obama as well as Secretary LaHood, about the administration not being willing to support a fuel tax increase. They do caveat that a little bit—“in this economy” or “at this time” is what they're saying—but I think even leaders such as Dick Gephardt, a very senior former democratic official in congress, have said that there's just no opportunity to increase fuel taxes today. So that reality, I think, is what has made people more receptive to attracting and using private investment to help supplement our public fund for transportation.

DELLINGER: So it didn't surprise you that the Democratic administration would embrace these?  As you see them, are these bipartisan policies?

MARY PETERS: Generally speaking yes, they are. We in the Bush Administration really liked more of a market based approach to transportation, and charging for transportation, and welcoming private investment. Early on, that just fell a little bit on deaf ears, especially after the Democrats took the majority in Congress in ’06.  I think it's a philosophical difference. I'm not saying, “they're wrong and I'm right” or anything like this, but I'm saying early on I think that Chairman Oberstar and people like him really believed that it was an inherently governmental responsibility to raise taxes or do what was necessary to provide sufficient funding for surface transportation. I think they have evolved since that time to the reality that there just is not an appetite to increase fuel taxes in the country, certainly not right now, nor is it a sustainable approach, and that we really have to look at other ways to bring revenue in to support our infrastructure needs in the United States. I think it's an evolution of their thinking that has happened over time, and I think a welcome evolution.

DELLINGER: If you could go back to 1956 and try to talk to Congress back then when they were devising a way to pay for the Interstate Highway System, do you think you would have advocated for tolls, or privatization?

MARY PETERS: It's very interesting -- early on there were proposals. The Clay Commission, which made recommendations for the Interstate Highway System legislation, and President Eisenhower himself initially both wanted a toll system as opposed to a tax system, but the technology at the time— Even if I were there at the time, I might have gotten in to see President Eisenhower and some members of the Clay Commission and said “You know, we really need to use tolling and free market principals to do this,” but with the technology where it was then, it would have just been pretty limiting in terms of what we could have done. All the toll booths and toll collection facilities that would have had to have been built, as well as manual toll collections. That's a distinct difference between 1956 and today when technology enables open-road tolling and no one even has to stop in order to be charged for using a road.

DELLINGER: You're working in the intelligent transportation system sector now. Does any of that technology have anything to do with toll collection, or is it all enforcement?

MARY PETERS: It certainly can be used for enforcement. And it can be used for active traffic management, real time traffic management*. But the technology absolutely enables us to use open-road tolling today and it is part of the overall intelligent transportation system that is going to give us safer systems. Where we have vehicle-to-vehicle communication, it will help us prevent collisions. If someone is about to run a red light, you can get a warning in your car so you don't drive into that intersection. All of these things intelligent transportation systems are enabling, and one of those that I think will be extremely helpful is the ability to eventually move to a vehicle miles traveled type of taxing system or payment system as opposed to fuel taxes.

*Peters told us that she currently serves on the board of directors for Aldis, a company working this technology, based in Tennessee.

DELLINGER: The vehicle miles traveled tax could of course be a public mechanism, as the gas tax is. But does your vision for it leave room for public-private partnerships?

MARY PETERS: Most definitely. Very definitely.

DELLINGER: How would those two things work together?

MARY PETERS: It's very similar to what we're seeing today in some cases where roads are being built with public-private partnerships. In some cases they're using static tolling, a standard per mile fee that you would pay for using that facility, but more and more we're seeing, especially on what we call managed lane projects, where those lanes are private-public partnerships. They're built by the private sector and operated in most cases by the private sector and those who use the roadway are charged different fees based on how much traffic demand there is at any given time. Probably the oldest example of that is State Route 91 roughly going from Riverside into Orange County, California. That road, they changed the fee every 8 minutes based on what traffic has been. It's a little bit of a lagging system because they based it on what traffic had been days before as opposed to real-time, but in Texas, The Katy Freeway and others are operating on real-time traffic information, so if too much traffic is using the facility, the price goes up and more vehicles choose not to go on the facility because of the higher price. That keeps the freeway free-flowing and allows it to move. In the case of State Route 91, they can move almost 50% more vehicles in the same lane configuration per hour that the adjoining so-called “free” or general purpose lanes can move because they keep the traffic moving. So very definitely an opportunity for the private sector to be involved in building and operating these roadway systems, even with the VMT type of tax.

DELLINGER: And, in theory, if the information was feeding back more immediately to the driver, in advance, you wouldn't have to actually drive to the entrance of that lane to figure out what it would cost?

MARY PETERS: Exactly. You get that information right in your car with the systems that we have in the vehicles today. The Vehicle-Infrastructure Integration, or VII as it's called in the intelligent transportation system world, creates the ability for the roadway to communicate with the driver, and the vehicle to give them information so that they can know approaching—or maybe even before they leave their home, right as they're backing out of their driveway—what's the fee for using the managed lanes today and is it worth it to me to use those lanes. If so, I'll go on them, if not, I'm going to go on the general purpose lanes. That motorist will also be able to get information about how congested the general purpose lanes are, they'll know if there are accidents or something else that has happened out there that is going to impinge their ability to drive on that facility. All of that information will become more readily available in the vehicle and in vehicle communication systems as well as at home by just logging onto a site before you even leave. And then I mentioned these collision avoidance systems that I think just holds such tremendous promise for helping us further make improvements on the number of people who lose their lives in highway crashes every year. I'll very specifically call them “crashes,” not “accidents,” because in most every case they are preventable. Again, if the driver had the right information or if we knew for example that ice was forming -- black ice was forming -- because of temperature sensors in the pavement, we could keep people driving into situations that cause crashes today.

DELLINGER: How many years are we from a system that looks like this and what do we do in the meantime? We have a transportation bill that's overdue and underfunded, and obviously it's a little early for a lot of these ideas to really make a difference.

MARY PETERS: Some people think it's as long as 20 years away from a viable VMT tax system. I'm more inclined to think we're within a decade of fully implementing these systems. This recent issue that we've had with the Highway Trust Fund solvency and declining purchasing power of fuel tax is because, of course, fuel taxes are not based on the cost of gasoline but a static fee per mile and they haven't been increased since 1993 on the federal level. So you're losing purchasing power, people are driving less, vehicles are more fuel efficient, they're going to be more fuel efficient in the future. All those factors I think are going to cause this transition to occur sooner rather than later, and again, I would put it about a decade out and the way we transition into that is actually what we're seeing happen today. We're seeing these managed lanes get put in place and operating with great success in many, many areas around the country and I think we're going to see more of that, more of those types of lanes, especially in heavily congested areas. I believe we're going to see public-private partnerships fund bridges that there just simply isn't enough money to fund today, but bridges that need to be built and need to be replaced or need to be improved upon like the Tappan Zee Bridge and the Boston area. So I think we'll see more and more of those types of projects come online. Eventually,  we'll go to a fuel vehicle miles traveled system but that probably is at the end of that decade but the technology, interestingly, the technology exists today to enable that but what we don't have answered is how do you employ it on a very broad basis. What happens to state and local governments and how is revenue sharing occurring and what's the backroom operations look like because we don't want to have a bunch of different providers doing that with systems that don't talk to each other so all of those things I think are going to have to be answered and the real big issues frankly is privacy. With GPS locaters telling us where a vehicle is at any given time so that we can charge the appropriate rate for using that facility at that time, that means there is information that tells you very specifically where that person's vehicle was and there are folks who are concerned about that and I think that we can answer those privacy questions and we can answer them very easily by determining how that data can be used but those are things that we have to get through in the ensuing years if we're going to fully implement a VMT system.

Mary Peters speaks after President George W. Bush nominated her as the next US Transportation Secretary on September 5, 2006.  Bush chose Peters, a former federal highway administrator, to replace Transportation Secretary Norman Mineta. (Photo: MANDEL NGAN/AFP/Getty Images)

Mary Peters speaks after President George W. Bush nominated her as the next US Transportation Secretary on September 5, 2006. Bush chose Peters, a former federal highway administrator, to replace Transportation Secretary Norman Mineta. (Photo: MANDEL NGAN/AFP/Getty Images)

DELLINGER: You talked about getting the technology, getting everyone on the same page technologically using the same systems, there's a feeling that there has been a lack of federal leadership on transportation goals, even as far as what we build or don't build and how we charge for it.  Under the Bush Administration -- under your Department of Transportation -- some ideas were floated that would have allowed states to, for instance, perhaps buy back their interstates and then toll them and sort of breaking down the rules that we have, the preciousness we have about our interstate system and not tolling it, and you seem to want to create a lab for the different states to try out different solutions.  Is that still a good idea or are we ready now to move towards a more national goal?

MARY PETERS: I think we do need to have the states be these laboratories of innovation for a few more years yet to make this idea fully develop and really get beyond the stigma of tolling interstate highways, because I've had members of Congress tell me that the Interstate Highway System was sacred, it should never be changed or never be tolled, that's not what the President or the people had in mind back in the 1950's when the interstate system was authorized. And again, with the exception of what I told you about the Clay Commission and President Eisenhower, certainly it was intended to be a tax-based system, but things have changed and that tax, that fuel tax that was back then pretty good proxy for use of the system is no longer true so it is time for us to get into the 21st century and really think about what can we do today to ensure that we have the necessary infrastructure but to pay for it and operate it in a way that's significantly more efficient than the system that we designed back in the 1950's.

DELLINGER: And yet a national transportation vision is required in order to accomplish something like high speed rail. How do you feel about the priority that's been put on high speed rail?

MARY PETERS: Let me talk about a national policy first because I think you raise a very, very important issue there and I truly did feel that there needed to be a national policy discussion on transportation and what our nation's transportation system needed to look like to facilitate interstate trucking and a variety other ways that freight and people move around the country and we did need to have national goals.  We did need to have standards to which we wanted the Interstate Highway System maintained to.  I guess my belief was all of that did not have to be implemented by the federal government through the Federal Highway Administration or a federal aid program, but we could give the states more autonomy and more ability to be innovators on their own without placing such heavy restrictions on them at the federal level, but all of that begged that we would agree on a national transportation policy. And we need that. We desperately need that.

In my opinion the biggest failing of the federal government in terms of our nation's transportation system -- having that important policy discussion and setting that policy direction on a national basis.  Then the states can choose to implement in ways that best benefit them and that are the most accepting to people within those various states and local governments, but we tried to do that, in fact, with the proposal that we put on the table for reauthorization shortly before we left office at the end of 2008, the “Refocus, Reform, and Renew the National Approach to Highway and Transit Systems in America” with a pretty heavy policy bent in it. It was kind of dead on arrival when it hit the Hill but nonetheless we tried to get some of those ideas out there even very late in the Bush administration.

DELLINGER: I think that the current administration and the current Secretary of Transportation would say that they to have a fairly coherent vision for America and that it involves high speed rail.  It involves these livability principals of rebalancing the modes to try to allow more biking and more transit -- more walkability.

MARY PETERS: I think all of those goals are good, but they're attributes of a system that you want to have. You want a system that's livable, that's sustainable, that meets the fabric of the communities that it serves and not kind of this national one-size-fits-all and so I do think that those are good and they're laudable goals.  It's how they're implemented that will be very important to us.  What does the administration mean by “livability” and “sustainability” and is that the definable so that state and local government officials really understand what they're looking for and are able to implement that?  I really have some concern about bifurcating further transportation dollars, especially surface transportation dollars right now that there aren't enough of anyway, there aren't even enough of to support the core programs, never mind all the other things that we've added on over time, so I think during this transition period and specifically while we don't have a new surface transportation authorization, we need to go back and do the need to do things to maintain our interstates and our core national highway system and stop doing some of the nice-to-do things that, at a time when there was more money, perhaps it was okay to restore historic covered bridges or do some of those things.  But today, we just don’t have that luxury in much the same way that American families and governments on a state and local level are tightening their belts and really asking themselves what is it that we need to do to maintain and preserve this system right now, vs. what is nice to do.

DELLINGER: And high-speed rail would fall into the “nice to do” category?

MARY PETERS: Yes.  I think high-speed rail absolutely can be part of the transportation solution but I don't believe that if I want to travel from New York City to Los Angeles, that high-speed rail and building a high-speed rail between those two cities may not be the best most cost effective approach to my transportation. If I’m traveling however in the Northeast Corridor and I want to go from Washington, DC to New York City, I think rail is a great option. Our airspace is overcrowded in that area, our highways are certainly overcrowded in that area and, from a time standpoint, it makes sense to have those kind of high-speed rail links between city pairs were there's a significant amount of demand, generally under about 500 miles apart, somewhere around that line. I think high-speed rail can absolutely make sense in some of those circumstances but I'm just not sure that we're going to see it as some put it as a corollary to the Interstate Highway System and then eventually we're going to have an interstate high-speed rail system.

DELLINGER: Is the objection to using gas tax dollars for transit just a matter of how much money there is, or is there also a philosophical problem?

MARY PETERS: I'm not necessarily going to go there with transit. There are people, like the Reason Foundation who are advocating that, at this time, we just go back to the core highway programs and fund those with the gas tax revenues that we are able to collect on the current system and that transit, which is now 50% funded by the General Fund, should move over and become 100% funded by the General Fund.

I'm not necessarily going there. I think the core highway and transit programs I would probably leave alone and leave the flexibility that state and local governments have to flex that money one way or the other right now today because that helps meet their needs. Eventually, we may make a transition to something else where there's more of a distinct highway and a distinct transit program, but I don't think we're there now.  I wouldn't want to take that flexibility away from local or state officials that want to move that money into transit or into highways depending on what their needs are locally. I am talking about a lot of peripheral programs and they're not bad programs at all. We've seen a lot of great things come out of transportation enhancement or the Historic Covered Bridge Program or some of those other things.  But if you look at what started out in Eisenhower's era as a single program to build an Interstate Highway System -- that has now grown to 108 different programs, each with their own requirements, each with their own little pot of money that's associated with it.  It really is, I think, unnecessarily tying our hands today at this time of fewer revenues.

DELLINGER: Would you like to see more private involvement in transit and rail?

MARY PETERS: I would and I think there is absolutely opportunity to do that. One of the real advantages that we see in the highway program in attracting private investment is the ability to leverage federal funds or state funds and buy more transportation solutions or people by leveraging those federal dollars with private dollars and I think the opportunity exists to do that in transit and rail as well. If you're strictly looking at fare box recovery, then it won't pencil out.  But if you're looking at transit-oriented corridors, if you're looking at investment that will occur because of the transit lines very much like we've seen along the Orange Line in Arlington, Virginia and some of those areas, then I think there is a real opportunity to bring the private sector to the table and to help fund some of those projects.  That is why we started what we called the Penta-P program when I was secretary is to try to find opportunities to use public private partnerships in transit as well.

DELLINGER: You mentioned Eisenhower wanting tolls earlier. In my own research, I discovered that Franklin Roosevelt, who first put together the commission that dreamt of a national road system, wanted to look into the idea of what he called “excess taking,” where the government would actually take a half-mile or a full mile with the right-of-way and then use the increased value in the land to fund the infrastructure itself.

MARY PETERS: Exactly. Something that many times today is referred to “tax increment financing” is a tool that we don't have here in Arizona.  I wish we did, but we don't.  In many cases, it is taking Roosevelt's idea to do that.

President George W. Bush watches as Transport Secretary Mary Peters arrives on her motorcycle with the leadership of "Rolling Thunder" on May 27, 2007 at the South Portico of the White House.  Rolling Thunder is a non-profit organization that publicizes the POW-MIA issue and helps US veterans.  (Photo: MANDEL NGAN/AFP/Getty Images)

President George W. Bush watches as Transport Secretary Mary Peters arrives on her motorcycle with the leadership of "Rolling Thunder" on May 27, 2007 at the South Portico of the White House. Rolling Thunder is a non-profit organization that publicizes the POW-MIA issue and helps US veterans. (Photo: MANDEL NGAN/AFP/Getty Images)

DELLINGER: One thing that the Obama Administration is putting a lot of its weight behind is coordination between the Department of Transportation and Housing and Urban Development. Is that something you longed for under the Bush Administration? Do you think it's a good idea?

MARY PETERS: We did actually look at something like that.  The (Federal) Transit Administration in President Bush's first term worked very closely with HUD and with other agencies to basically say “there are packets of transportation dollars that exist in some of these programs, wouldn't it better to coordinate all of this?”  So let's say as we're looking at a bus service for a neighborhood.  If we know that there are residents in that neighborhood that are causing buses to come in, paratranist vehicles -- something like that to take people to medical appointments and things -- isn't there a way that we can coordinate and maximize the use of those dollars in those systems so that we're not operating independent of one another. Like the Dial-a-Ride system.  If someone has a medical appointment and wants a Dial-a-Ride vehicle to come and take them to that appointment, they have to reserve that in advance and do some things.  Well, gee, what if the neighborhood bus could just swing by that person's house and give them that ride if they were going somewhere during the time that that bus was going to come to the neighborhood and they wouldn't have to call the day ahead to make that appointment?  They'd just know that they could get on that bus.  So we certainly did some of that in the Bush Administration. I think the Obama Administration has taken it a step further and I applaud finding transportation solutions.  Especially for those who are lower income, or elderly, or ill and don't have other transportation options.  But I just want to fit within the overall fabric and national goals that we have set.

DELLINGER: There was some criticism of the Bush Administration's policies as it pertained to new starts (federal capital investments for transit systems). The rules now are a long way from where they were when you were Secretary of Transportation.  Were Bush policies, as critics charge, unfriendly to people of lower income, and even minorities?

MARY PETERS: The Environmental Justice Programs existed to deal with those issues.  But I think it's an unfair criticism of the Bush Administration. I don't have the numbers in front of me, but we authorized more new starts during the Bush Administration than had the prior administration. So, for people to say that we were unfriendly and not willing to authorize projects for new starts was simply not true. The other factor is cost effectiveness.  In the past, to qualify for a full funding grant agreement in the new starts program, you had to demonstrate “cost effectiveness” of a transit project.  There were things that we would have improved and did work on toward improving what constitutes cost effectiveness.  But to move completely away and not use cost effectiveness and only use factors like sustainability, livability, things like that, really is not serving American people well in terms of the use of their tax dollars.

Don't we want our tax dollars to go to the meritorious projects?  Don't we want our tax dollars to be used where they can provide the greatest amount of transportation demand for the money?  The most bang for the buck, if you will?  So, I think it's important to have cost effectiveness be part of the process of evaluating and determining which of many, many projects that are out there trying to get not enough money, which ones do get funding. And I fear that by using more subjective instead of objective criteria that it's going to lend itself to more Congressional influence, in terms of “I want this project for my district (even if it isn't the most meritorious project).  I'm in a position to make sure that this project gets funded in my district” and less of funding the most meritorious projects.

DELLINGER: I note that you are almost two years out of the DOT and once you are you'll be able to do a wider range of activities in Washington, is that right?

MARY PETERS: That's correct.

DELLINGER: Do you plan to?

MARY PETERS: I will, in certain cases. I started my own business and am actively working on a number of projects right now.  So it hasn't been a problem or I would say it hasn't inhibited my ability to serve clients today by not being able to approach the Executive Branch.  Where it would be helpful I think is in areas like the Transportation Infrastructure Finance and Innovation Act (TIFIA), funding.  TIFIA is one of the smartest things that the Administration could do today, because there are a lot of projects out there that can be made to work financially with a TIFIA loan and there just isn't enough money in TIFIA to do it right now. So, were I able to approach Secretary LaHood or members of Congress, (I’d say) one of the best things you could do to help today would be to put some of this funding that you're talking about -- whether it be stimulus or TIGER grants,-- put some of that money into the TIFIA program.

DELLINGER: TIFIA would widen the range of plausible projects for a profit-driven company to get involved with.  Is that right?

MARY PETERS: Exactly.  Private activity bonds help us to an extent but there just wasn't enough. You go through $15 billion of private activity bonds pretty quickly.  So expanding that might be a good idea.  That's something that I would want to approach the Administration and Congress on.  The other (item I would approach the administration on) is the Special Experimental Program 15. It's something that I put in place when I was Highway Administrator, because frankly, when they were trying to build the Katy Freeway in Texas, the laws and the regulations that were on the books at that time really had never envisioned a project like the Katy Freeway, a managed lane project.  So it was a very convoluted way to get to an approval for a project like that. I wanted to have a process that would allow us to try new things like that and I wanted for the highway to have the authority to authorize local areas to be able to move forward with projects like that without being seen as outside the law.

DELLINGER: This streamlines the environmental approval process.

MARY PETERS: It does but it does other things as well. And it doesn't shortchange.  Streamline, yes.  Shortchange the environmental process, no.  If you have to go in under the Interstate Reconstruction Act, you have to demonstrate that there are no other funds available to build that facility.  That was one of the things that we ran into with the Katy Freeway.

DELLINGER: Pennsylvania had that problem.

MARY PETERS: Exactly.  Or where the money is going to be used. And so, I think that Federal Highway and US DOT have become a little risk-adverse in using SEP 15, fearing that if they get too far out ahead of Congress, that Congress might take that ability away from them.  I understand where they're coming from, but the very reason that that process was put in place was to try this new out-of-the-box thinking.  If it doesn't work, okay, we won't do that anymore.  But let's give local governments the opportunity to be innovative and to try to new things and give us a process where we can feel comfortable that we can approve their doing it and not have to worry about (them saying), “well gee, there's this regulation that says you can't toll on an interstate unless the money is only used on the interstate.”  What if they wanted to do, for example, a system-wide hot lane network?  How would that work?  Could we approve that?  That's the type of things that I wanted SEP 15 to enable and again.  I just see the agency getting a little risk-adverse in terms of using that today.

DELLINGER: Last question (it's the $450 billion dollar question).  When do you think we'll see a new transportation bill on the floor of Congress?

MARY PETERS: I am not optimistic.  By that, I mean it may well be after the 2012 presidential election. There are two windows in which it could occur. One would be a lame duck session, depending on what happens with the midterms and whether or not the Democrats continue to hold the majority in the House of Representatives.  There's some desire to try to move a bill during that lame duck session.  I would not put any money on the odds of that happening, but there are people who are talking about doing that. The next window would be after the new Congress is seated, assuming that the Democrats would retain leadership in the House. The bill that Chairman Oberstar put out last year would have to be reintroduced in a new Congress.  If the economy has stabilized substantially between now and early next year, then that might present an opportunity. I think if it doesn't happen somewhere in the first three to four months of 2011, or during a lame duck session, it's not going to happen until after the 2012 Presidential election.

DELLINGER: If Republicans take the house it will look quite different.

MARY PETERS: It would be a very different bill.  (Potential Republican Chairman) John Mica has gone on record of saying that he would put out a very different bill than Chairman Oberstar has put out.

DELLINGER: We'll have to wait and see.

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