FOR IMMEDIATE RELEASE: CONTACT: CHRISTI HARLAN
Tuesday, April 25, 2000 202-224-0894

GRAMM'S OPENING STATEMENT AT HEARING
ON DELAYS IN FUNDING MASS TRANSIT

Sen. Phil Gramm, chairman of the Senate Committee on Banking, Housing and Urban Affairs, made the following statement today at the opening of a full committee hearing on the ability of the U.S. Labor Department to delay or change mass transit projects that have been approved and funded by Congress:

"What we want to do today is begin the process of asserting this committee's jurisdiction over mass transit. This is the committee that has jurisdiction over banking, housing and urban affairs; an important part of that jurisdiction is mass transit. For many years, this committee has been relatively inactive in this area. That is going to change, as of today.

"We have asked the General Accounting Office to do a major study. We're going to hold a series of hearings that will intensify next year in an effort to see that mass transit is serving taxpayers and the people who use mass transit.

"It is not the goal of mass transit in America to serve the people who work for mass transit, any more than it is the goal of government to serve the people who work for government. The goal of mass transit is to serve the taxpayers who pay for it and to serve the public who uses it.

"Today we're going to look at one small part of our mass transit process, and that is the part that deals with the provision of a 1964 law granting labor protections. We're going to look at three particular cases.

"One is a case in Dallas, an award-winning mass transit authority which probably has a better record of controlling costs and providing services than any other mass transit authority in America. It sought a grant, received approval for a grant, and in the process found itself torn between a mandate from the Labor Department that would not allow competitive bidding in order to get the money and a law of the state of Texas that made it illegal for the Dallas transit system to spend the money without engaging in competitive bidding. The federal government was fostering an objective of trying to prevent competition and drive up costs, whereas state law was aimed at serving the general public, promoting competition and controlling costs.

"We're also going to look at a problem in Nevada, where a transit authority sought funds to study the feasibility of providing services. Remarkably, the Labor Department sought in that case to require that an analysis be made as to whether even studying the feasibility of service would call into play the rights of union members and, in fact, sought to impose on the Las Vegas transit system the requirement that they limit competitive bidding and purchase only from a union contractor.

"Finally, we're going to look at a much publicized case in Boston, where initially the Federal Transit Administration urged the local transit authority to engage in competitive bidding on maintenance and cleaning of trains. Competitive bidding occurred; four bidders bid, and three of them had bids between $175 million and $200 million. The incumbent contract holder, Amtrak, bid $291 million.

"Despite every effort of the transit authority to implement competitive bidding, these efforts have been held up, and we've had a reversal from the Federal Transit Administration. Apparently the mass transit authority in Boston now is on the verge of junking competitive bidding, paying $116 million more than competitive bidding would have produced and staying with the incumbent contractor.

"Obviously, I'm confused. I thought we were trying to serve the public here. I thought we were trying to make it more efficient for people to get to work and go about their daily business. Obviously, I'm surprised that these things are happening.

"We're not going to fix the problem in one day. I'm not going to point any accusatory fingers at anybody – today. But we are going to begin to look at this in detail – this and the entire area of mass transit. It seems to me that this whole area is due for major legislative reform. We're starting that process today."

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