Remarks by Senator Mark Warner (D-VA)

REMARKS BY SENATOR MARK WARNER (D-VA)

SUBJECT: INFRASTRUCTURE STRATEGIES FOR THE NATION

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SEN. WARNER: (Applause.) Thank you, Mary (sp), for those very generous comments.

Good morning, everyone. It's -- great opportunity for me to be here at this very important conference. I know my good friend Secretary Locke and Secretary LaHood had to leave.

I want to commend, though, the art -- and I'm learning this as I move from being governor to senator -- the art of putting together conferences in Washington. You had two Cabinet secretaries, you've got a new senator and you've got a governor speaking at lunch. So you had, I guess, two keynote speakers, one plenary speaker and one luncheon speaker. So everybody's got the appropriate designation for their presentations this morning. I guess I'm your plenary speaker, which means I'm going to go 10 or 15 minutes and then, as time and interest allow, be happy to take a couple of your questions.

As Mary (sp) indicated, I have had a(n) interest in competitiveness long before my career in the public sector. It is something that -- having spent 20 years in the telecom and IT business and then in the venture business, looking at how America stays competitive has been something that has been about my livelihood and all about everything I've focused on.

As governor -- and again, Mary (sp) was kind enough to point out some of the challenges we took on with our department of transportation -- we did improve our department's performance. We weren't quite as successful on making sure we had adequate funding for that department. As anybody who still travels in the greater Washington area knows, we still have enormous transportation challenges. But this question of how we keep our -- Virginia competitive, America competitive, is something that I want to take some time to focus on in this new challenge I've got as a United States senator.

It is a little bit of a transition, I will also acknowledge, moving from governor to senator. One of the -- one of the things -- Secretary Locke was going through some of his stellar record as governor of Washington.

I've had some transition getting used to, as well. You know, Virginia is the last state in the country with a one-term governor. That was kind of a down side of that job. The up side, though, was the way you were introduced in Virginia as governor: You were always introduced as "His Excellency, the Governor of the Commonwealth." (Laughter.) And by tradition, at least, south of the Occoquan area, whenever you come into the room, everybody stands up.

To think, going from that position to being the junior senator from Virginia with -- ranked number 91 in terms of stature at this point. And I recall the first couple of weeks -- I have moved up now into my permanent office, but the first eight or nine weeks when I transitioned to my new job and was located in the basement of Dirksen, four windowless offices in the basement of that Senate Office Building, and some friends from Richmond came down. And they'd been used to visiting me in the third-floor governor's suite in Mr. Jefferson's capital. And they saw me in these new offices and they said, "Gosh, Warner, who'd you make mad already?" (Laughter.)

But this subject today, supply chain management specifically and competitiveness overall, is again something I hope in this new challenge to take on. And I do want to come to supply chain management in some of my later comments, but I want to frame this a little bit in terms of what I would hope -- and I think the administration is starting to move in this direction, and I'd love to become more of an advocate and ally of this -- of we need in this country, I believe, to have a clearly articulated national competitiveness strategy. I think it's kind of crazy that in 2009, even with all of the kind of economic tsunami that we're confronting, that we don't have as a nation a clearly articulated "Here's our game plan, here's our national business plan to compete and win in a global economy."

Now, I think if we had that -- well, that's all right; I don't mind a little applause on that line -- you know, if we had that, some of the debates that the Congress has to take on I think might be simpler, because we could argue about how we get there, but at least we could agree upon what the components of that national competitiveness plan would look like.

And I believe, really, it could pretty much boil down to eight points. And I promise you I won't go through all eight in detail, but I at least want to -- at least I want to go through them briefly. First of all -- and every elected official, regardless of party or where they stand on the ideological spectrum, advocate this, but we don't always put enough "oomph" behind it -- we've got to realize that if America's going to stay competitive we've got to have the most educated, most innovative and most entrepreneurial workforce in the world. That clearly means education, from pre-school through graduate school, has to be one of those components of a national competitiveness plan.

Second, we've got to elevate research and development. Creation of intellectual capital and innovation throughout the 20th century was America's leading asset, in terms of building an economy that was the envy of the rest of the world.

I think it's time to return science to its properly respected role. I think it's time we make sure that we bump up our R&D efforts. It may not pay off as much short-term. But longer-term that has always, particularly in a post-World War II environment, been America's value-add.

Third and here I think, I know, some folks have challenged the president, with the economic challenges we've got, his willingness to take on health care. But I think he's dead-on, because unless America can drive down our health care costs, we will not be able to be competitive.

(Phone rings.) I'm sorry, I apologize about that. As the former co-founder of Nextel, I'm the only politician alive also who says it's okay to leave your cellphones on, even when I'm speaking. (Laughter.)

You thought it was annoying. To me, it sounded like money: ch- ching, ch-ching. (Laughter.) And now that I'm on a federal salary -- that was not a setup line, let me assure you. But cellphones have gone off when I've spoken before. But health care -- driving down our health care cost has to be part of a national competitiveness strategy.

We cannot continue to afford to pay 3 to $5,000 more per employee, for our health care costs, than any of our other competitors around the world. And driving down those health care costs has to be a piece of that strategy.

Fourth area that I think has to be part of a national competitiveness strategy, and again something where I think there is a growing consensus, we've got to change our energy mix. And I don't care what motivates you, whether it is legitimate national security concerns, about our addiction on foreign oil, whether it is legitimate concerns about climate change.

Or, and I say this as -- it's somewhat hard, as a telecom and IT guy, to acknowledge this. But I for one believe there will be more jobs and more wealth created in the energy sector, over the next 25 years, than any other sector. And right now America does not have the kind of national competitiveness strategy, around energy, that we need to take on.

Fifth and obviously a subject of many of the sponsoring groups, trade, any who retreat from the notion that America must not or cannot compete and win, in a global economy, I just don't think has it right.

I think if there is one point that has come out of the economic challenges, and I also serve on the Banking Committee right now. And as we wrestle with how we get financial re-regulation right, one thing is again more evident, from this economic crisis we're confronting now, than ever before.

There is no such thing as an American-only economy or an American-only financial structure. And we are inexorably tied together, in a global economy. And America has to compete and win. And part of that competing and winning means being an active partner in trade.

That doesn't mean we don't have trading rules and that we ought to ensure that the rest of the world follow those rules. But the notion that we can retreat, behind some kind of protectionist approach, makes no sense to me.

An area that oftentimes is not focused on, when we think about competitiveness, and oftentimes is not as -- is not very sexy, but again -- (inaudible) -- was kind enough to mention it was something that we focused a lot on when I was governor of Virginia. And that really is government accountability.

How do we bring more effectiveness to our government spend patterns? This is stuff that never is going to get much attention. I can tell you, from the press standpoint, you know, people's eyes start rolling over.

You just heard about putting spending policies and accountability policies in practice, but as we ask the American people to make investments, we also have to put on top of that an equal commitment to making sure those investments are well managed and spent out appropriately.

One of the things that I would -- I looked forward to working with the administration strongly on, and I strongly hope that the administration will really step up their efforts when -- the president has announced the creation of a chief performance officer, a chief technology officer and a chief information officer, the CPO, CTO and CIO, all very, very critical positions -- I might also add, all positions from either Virginia or the greater Washington area, in terms of the individuals named: Jeff Zients at CPO, Aneesh Chopra at CTO and Vivek Kundra at CIO.

But my hope is that these positions are truly empowered, because, while the administration has gone -- has taken a first step in line- by-line -- in trying to look at those programs that can be eliminated -- and I will say the $17 billion is a first small step; I think it needs to grow exponentially in terms of cutting back on government spending -- but if we're really going to find a way to bring efficiencies to government -- and this was a lesson that I learned as governor -- a lot of the efficiencies we're going to find are not going to be in programmatic elimination but are going to be across the government, across all the silos in three different areas: in procurement, technology and HR. And the only way we're going to -- really be able to drive some of that spend curve down is going to be empowering the CPO, CTO and CIO.

And finally, one of the -- actually number seven in terms of what our national competitive strategy ought to include -- it does require a renewed commitment to building our human capital. That means valuing people who choose to work in government. It does mean valuing and ensuring that we've got an economy that allows you to compete, whether you live in Northern Virginia or whether you live in rural south-side Virginia.

One of the great challenges we've got in this global economy is -- and part of the promise of a global economy was that you can build it anywhere. Well, we've shown you can build it in India and China. We've not shown you can build it as way -- as well in rural America. And some of the things that the administration has moved forward on -- broadband technology, I think, again, is a step in the right direction.

Now, all seven of these items -- human capital, accountability, trade, energy, health care, education, innovation -- I'd be happy to come back and give my whole pitch on any one of those, but today's subject is obviously infrastructure and, more specifically, supply- chain management.

I want to take my remaining couple of moments and talk again mostly about infrastructure. And this is an area -- and again, I think we've got enormous challenges in -- ahead of us.

I think we all know, from an infrastructure standing -- spending standpoint, you know, we're spending about 50 percent less as percentage of our GDP on infrastructure today than we were 30 years ago in the '70s.

And in many ways, we are basically eating the seed corn of investments made in the '60s, '70s and early '80s in terms of our infrastructure. And what is strangely absent from most of the political debate is how do we put in place the kind of resources we need to build up this infrastructure, because no matter how creative we get with supply chain management, unless we've got a standing infrastructure that can support that supply chain management, we're not going to get the job done.

And unfortunately, most of our funding mechanisms for infrastructure are truly 21st -- 20th century models that are not going to fund a 21st century infrastructure format.

But recognizing that funding is the kind of giant elephant in the room, let me talk about a couple of things that I think -- where we can make progress.

One is -- and Secretary LaHood and I have spoken some -- spent some time talking about that -- and that is trying to think beyond the stovepipe approach that we currently have in infrastructure funding. If there was ever an area that's ripe for major reorganization, it's DOT. If there was ever an area that is ripe -- and again, I think Secretary LaHood would concur with most of this -- that we have to think beyond our silo approach, it's infrastructure. I had my staff recently count. There were currently 108 different federal transportation programs and funding cycles. That makes no sense.

I have to tell you, as a governor, I often couldn't understand why we didn't have more of a national transportation program and more of a national transportation policy. Now, as a 125-day freshly minted United States senator, I have more understanding why we don't have a national transportation program, because oftentimes not only are we stovepiped at the DOT federal level but we are very stovepiped in terms of congressional oversight, both -- more so on the Senate side than on the House side, so that it really makes it challenging to figure out a true national transportation policy, because the congressional jurisdiction, in terms of oversight, in terms of funding, chops everything up between road, rail, ports, airports, so that the ability to put that kind of macro approach that you need from a supply chain standpoint is dramatically, I think, underappreciated.

Second, beyond this kind of reorganization effort, we've got to be much more aggressive about new approaches in terms of funding. And one of the ones that I think needs to be in the mix is public-private. We in Virginia have been as aggressive as any in some of the public- private transportation initiatives. Our Dulles Toll Road extension is a prime example of that.

And I am a big believer -- and I have talked with Secretary LaHood about seeing if we can expand public-private transportation funding options as we look at ways to get the infrastructure that we need.

Now, I might quickly add, though, that while I am a supporter of public-private, I do not believe that it is a single magic bullet or silver bullet. Too often, I see private-sector proposals that are under the guise of public-private, but basically end up being, okay, public side take all the risk, private side take all the profits. That's, to my mind, not a true public-private initiative.

I recall in the waning days of my administration there were proposals that were coming in to look at privatizing part of the Dulles Toll Road. And, you know, they came in with these wonderful, big price tags, "We're going to give you a billion dollars of free money!" the private-sector guys came in. You know, and I love some of my colleagues in the legislature who thought, "Oh, my gosh, this is a free billion dollars! Manna from heaven." When in reality, the business plan behind that billion dollars, you would have flunked out of business school 101 if you would have accepted that deal, because it was a bad deal for the taxpayer.

And too often, because sometimes I think we've not had enough sophisticated financial modeling on the public-sector side, we've seen private-sector players come in with what looks like good up-front sticker prices, but which are really, truly not good long-term value for the taxpayer. So public-private ought to be part of the mix, but there needs to be a real analysis to make sure that there is private capital at risk as well, that there is truly a sharing of obligations in the front end and sharing of the up-sides in the back end.

One area that I would love to see more of as an example of kind of a different approach on public-private, in an area, again, that I've shared with Secretary LaHood and we tried somewhat in Virginia -- and I think it, again, ties into this notion of how we think more broadly about supply chain management: Too often, we sometimes think in a 21st-century way supply chain management is a lot about moving -- moving goods. Well, I actually believe in the 21st century supply chain management is about moving goods, but it's also about moving ideas. And an area that we tried to advance, and found the reality of it was harder than the campaign slogan, was saying -- we tried in Virginia to say whenever we are going to build a new road, let's go ahead at the same time that we build that new road, that we go ahead and put in dark fiber and lay a broadband conduit in place, even if we're not ready to light that fiber up at this point. Because why go back in after the fact and put in the broadband at a subsequent time?

A great idea, and one that I think can be -- while we've seen a great enhancement of the laying of fiber around the country, unfortunately in America we're still 15th in the world in broadband deployment, which, Lord knows, is not very good. But the idea and the notion of trying to make sure that as we -- whatever additional transportation infrastructure we think about building out, that we include not only moving goods, but we actually think about moving information and lay behind -- lay along that highway construction the broadband capabilities. Great idea, but we really are going to need federal assistance on that to make it -- get it right, in terms of clearing out the massive right-of-way challenges we've got.

But one example of how we could potentially better fund some of our transportation infrastructure, if we actually partnered, for example, with folks on the telecom side, to basically pool resources to build out additional infrastructure. So public-private has to be a piece of going forward.

Third area we need to look at in terms of infrastructure is really taking a fresh look at accountability and performance metrics. One of the things I -- one of the opportunities I had before I took on this new job was to work with a bipartisan policy commission on a transportation initiative with folks like former Congressman Sherry Boehlert and Congressman Sabo and Slade Gorton, former Senator Slade Gorton, where we were looking at, as we look at the new highway bill, how do we really put in place 21st-century metrics.

I think, as you often on the supply chain management side think, you've got to have some of the same frustrations that I do, when we've oftentimes looked at building out our infrastructure, and generally look at 20th-century metrics like vehicle miles traveled, or VMT, as one of the sole judges of how we evaluate transportation projects -- clearly, not a 21st-century way. We've got to think about it. Much more, we need to think in terms of safety, in terms of energy usage, in terms of mobility.

The challenge is these new 21st-century concepts are great, but how do we take them down from kind of the broad definition. And obviously, a piece of this as well, in my mind, should be the flow of goods, in terms of a national supply chain network. But how will we translate these new terms into specific metrics by which policies and funding streams can actually be allocated is a challenge that we will be confronting in the Congress in terms of the new road bill.

I would say that one of the things that Secretary LaHood mentioned that is a great opportunity is, while he has put out -- and I give him great -- great credit for spending out a lot of the so- called stimulus funds in a fairly quick way -- one of the most innovative pieces of the stimulus program, I believe, was the billion- and-a-half dollars in the multi-modal funding, the kind of jumpball projects that he mentioned that he's hoping to get hundreds of proposals on.

I would add on the front end that we do need to do more education of members of Congress about the need for multi-modal. I will recall in some of the Recovery and Reinvestment Act negotiations sitting with some of my Senate colleagues, and they were all talking about, "Gosh, we need to get more infrastructure spend into the stimulus bill"; at the same time, they were taking out some of the multi-modal funding, because they didn't understand that was actually infrastructure spending.

We've got to elevate this multi-modal -- the multi-modal advocacy so that, again, members understand its importance, and I think this billion-and-a-half dollars that the secretary has laid out. MORE How we evaluate those projects could be -- could be, in effect, a beta test for some of these new concepts, in terms of how we will fund transportation projects of the future using some of these concepts like mobility, like safety, like energy usage -- truly some of the 21st-century modes that could be then, obviously, put into greater usage as we look at the more comprehensive highway bill coming up later this year or next.

So I look forward to working with the administration. I look forward to -- I'm not going to be able to spend the whole day here, but hearing -- I'll have staff here most of the day -- hearing from you on specific suggestions on how we get this supply chain management right. I commend my colleagues, Secretary Locke and Secretary LaHood, for their collaboration between Commerce and Transportation in trying to get it right.

I think supply chain management is obviously part of that national competitiveness strategy. And I would again urge everyone in this room that, as we're here talking about supply chain management, you also continue to think about these other components of a national competitiveness strategy.

Out of this economic downturn I hope there will be this chance to kind of -- for our country as a whole to recalibrate, to kind of buckle up for a new round of competition. I for one think that if we have that national competitiveness strategy articulated and laid out, it will mean that America -- it'll show again that America can compete and win in this global economy. And I hope to be partners in making sure we turn that plan into reality.

So I thank you for the opportunity to be here. And I know -- I think I'm supposed to now take a couple of questions. Thank you all very much. (Applause.)

Questions, comments, suggestions -- criticisms. Hey, I'm only a junior senator. You can fire away. Don't be shy.

Yes, sir.

Q Senator, with all the spending bills that have already been passed this year, you're now talking about a -- (off mike).

SEN. WARNER: Great question. I -- I don't think the highway bill -- it seems to me, with everything that's in front of us right now, we are still -- I'm spending a lot of my time with financial re- regulation. That's going to happen this year, one way or the other. We're going to -- you know, health care obviously is the 800-pound gorilla, quickly followed by whatever we're going to do on energy.

A lot of the -- of the specific committees' time is more focused right now on the energy issue than on the highway issue. I'm not sure we're going to see the full highway bill put out this year. I'm not on the committee, so this is speculation more than prediction.

I also think that it's -- with all of the other spending that's gone on, the notion of how we confront a(n) infrastructure program at both the state level and the federal level that is almost flatlining is a -- is an enormous challenge.

And as we look at our traditional, for example, highway, and I know Secretary LaHood has made quite clear, and I understand -- I understand the administration's position that, you know, there's not an appetite to look at increasing transportation spending.

But we've got to also acknowledge that our current transportation spending sources, based upon a gas tax, is going to be a declining source of revenue. I mean, you know, we all acknowledge that we desperately need more funding for transportation. At the same time, we have the policy goal of dramatically driving down fuel consumption.

You know, that at some point is going to be a policy collision course that we're going to have to confront. So I hope that is a vague enough answer that I didn't put into an exact prediction of when that bill is going to come out.

Yes, sir.

Q (Off mike.)

You talked about public-private partnerships and being able to smell a bad deal, when you were governor. Recently the port of Norfolk or the Port of Virginia received an unsolicited proposal, I think, to privatize, let some logistics companies run the port down there, instead of the state.

I'm wondering how you feel about that or if you've had a chance to look at that deal.

SEN. WARNER: One, I have not had a chance to look at the specifics of the deal. Two, as someone who knows our ports, we're blessed with a extraordinarily successful port, in the port of Hampton Roads, and one that's becoming more and more prosperous. You know, I think, we're going to have to take a good, hard look. And I'd like to reserve comments before I look at the specifics of the deal.

On all of these though I view myself as an advocate but an ecumenical advocate in that, you know, I'm willing to have all comers. But we've really got to put it through a thorough financial analysis. And I've not seen the specifics of the proposal.

Yes, please.

Q Good morning, Senator. Thank you for being here.

I'm curious about your thoughts on trade policy. In light of or in the context of national competitiveness, a lot of, I would say, increased tenor in terms of protectionism around the world.

I'm curious where you see trade policy going over the next several years.

SEN. WARNER: Well, I hope we will guard against those overly protectionist voices that are heard, not only from the Congress. But also people rightfully are concerned, because oftentimes where the disproportionate -- the biggest losers, I would argue, in trade policy, in this country, are not the major metropolitan areas. But they're disproportionately rural and smaller communities that have depended oftentimes upon a, you know, single manufacturing facility.

I think about some of my -- southern part of my state that were textile and furniture -- it's the industries that have been extraordinarily hard hit.

I think we have not done a good job, as a country, trying to kind of even out the benefits of globalization around the country. And part of that is because, one, we've not made, I think, adequate infrastructure improvements to make sure that those communities are linked. Two, I think the failure to have broadband connectivity in rural communities has been a real -- has been a real disadvantage to those areas. Third, the failure to try to kind of beef up our educational capabilities in rural communities.

I'd point out two things -- and recall, when I was governor, being the first governor, actually -- a lot of senators and governors were going to China, and nobody was going to India -- went to India and brought back a major firm to -- that's a growing firm, now, in Danville, Virginia. And it's amazing how folks in Danville's views on trade changed when they actually saw the benefits of having a(n) Indian-based company come to those communities.

Too often, for example, what I would argue to the -- our colleagues in India was to say, you know, don't just look at Northern Virginia or northern New Jersey or northern California; look at these rural communities. And we need to do a better job of proving out the benefits of trade to those rural communities.

One of the things that also -- that I looked at -- tried to advance for the stimulus bill -- I was, perhaps, too early and a new- enough senator that I didn't get it put in place -- I'd love for us -- and I may have legislation that I'll be putting forward later on this -- to look at trying to put forward some policies or some financial support for insourcing.

You know, one of the things, again, we didn't -- in Virginia, there were a number of our mid-tech-level jobs that were subject to going outsourced. We've pushed very hard, put in broadband capabilities to our rural communities, and convinced Northrop Grumman and CGI-AMS to move 700 -- north of call-center but perhaps short of full software-design jobs to Lebanon, Virginia, in southwest Virginia, in the old coal-mining country. You know -- has done more for those communities than any government program, just the ability to show the -- bringing these kind of quality jobs that otherwise might have ended up in India with some incentives.

One of the things I'd, again, had advocated, perhaps during the incentive program -- states right now spend a lot of dollars on economic development efforts. Too often those economic developments are, you know, Virginia stealing from New York and Maryland stealing from California.

I thought there could be, perhaps, some federal dollars that could supplement state dollars that could be used to try to actually attract jobs coming back from India or coming back from other countries into more rural locations -- you know, a multi-thousand- dollar stipend on top of already-existing state and local economical development efforts.

You've already got an infrastructure in place to find -- seek out those jobs. You could juice up these job -- juice up those state and local efforts. It could be, again, restricted to going after jobs that might be abroad, relocating here in this country.

Other countries like Korea have done that very effectively. Canada, actually -- the province of Quebec has got a $15,000 stipend payment for bringing jobs into Quebec from outside the country.

Again, I think this fits within the context of a pro-trade policy, but one that also says we're going to do more to help and -- help out those parts of our country that have been, candidly, seriously disadvantaged by trade, because I believe, so far, just simply the worthy -- but, you know Trade Adjustment Act and some of the retraining efforts alone aren't enough if you do the retraining but you then also don't have a follow-up effort to try to actually bring jobs to the area after you've got a workforce retrained.

Long answer, but very important question.

Yes, sir.

Q Okay. My name is Nguyen (sp) and I'm one of the -- (off mike) -- specialized in construction for the bridges and then repairing the bridges. And then when I was doing in the business, I would like to see that -- where can I find the American products? Most of the -- in the construction industry, nails, equipment, tubes -- not much of this was made in USA anymore. And we are fixing the bridges; we are building the road. And then -- I would like to know that -- why American products are not competitive to have and use it in the construction industry?

My contracts, my business mostly come from the government contract. So whenever the money come in, these monies are from the taxpayer money. I (will ?) spend this money when I was building these bridges. So I would like to see that -- how are we going to put in the American products competitive in the construction industries?

SEN. WARNER: Very good question. I mean, I -- probably there's some answers in this room that would be better answers than I could give you. I do believe that where American in the manufacturing sector -- and I think it's terribly important that we have a strong manufacturing sector in this country -- I do think where we're going to have our most value add (sic) is at the high end of manufacturing -- you know, the value-add products.

I'm not sure, as I've -- you know, and I've said this to my friends in Southside, Virginia -- you know, it's going to be hard to bring back some of the textile jobs, where -- you know, where low end -- or more mass production with cheap labor -- it's going to be hard for us to compete against those.

I think high-end manufacturing. I think more -- you know, you look at countries like Germany and Italy that still have high-end manufacturing. I think we can compete. And in the construction industry, you know, I look at the Caterpillars of the world. That's again on the higher end. I'd love to see more in terms of the actual products as well.

Let me give you another kind of one-off example. It doesn't directly answer your question. And again, I'd love to hear comments from this group on how we could answer Nguyen's (sp) question on more construction materials itself. But as we think about building those roads, we also ought to think about, you know, how we make sure that some of cars that are driving on those roads might actually be American-built as well.

One idea that I had was rather than simply, you know, government writing checks to our domestic auto industry -- and I for one hope that we'll continue to have a domestic auto industry -- I've argued, why couldn't we aggregate the demand of state, local and federal vehicle fleet purchases, go to our Fortune 100 companies around America and say, you know, one of the things we could show you could do to support our country -- and again, I don't think this contradicts my comments about trade -- would be to say, if we would aggregate together our vehicle fleet purchases, I think you could put together basically about a 5-million-unit-a-year fleet vehicle purchase in aggregate.

We could go to domestic, and for that matter, international automakers alike, and say, we'll give you a three-year, 15-million- unit guaranteed purchase order; you build us a car; pick your number, 60, 70, 80 miles per gallon; and let's see if we can encourage those cars to actually be built here in this country -- actually have a demand-driven incentive to our auto industry, rather than simply the approach we've had right now, which is simply, let's write taxpayer checks to basically shore up what may be a -- a 20th-century business model.

I think that could be one way. And you could have it not only competitive with American companies, but also some of the international companies who are American based, to drive some of that next-generation capacity here in this country. But one indirect example that's back to your question.

Yes, ma'am?

Q Kate Naseef. I'm a reporter with BNA. My question is about the president's $5 billion he put in the budget for a national infrastructure bank. Could you speak to how that's shaping up in the Senate, and when we can expect to see a proposal?

SEN. WARNER: I'm very interested in the national infrastructure bank. I need to kind of -- and I know actually Governor Rendell, who -- coming at lunch -- he's been a big advocate of that. Candidly, I need to kind of get down to the next level of detail before I comment on it. And I don't know the exact status of its position in the Senate at this point.

But, you know, kind of at the 10,000-foot level, I think it's a great idea. I need to, again, look at the details before I weigh in more heavily.

Please.

Q Good morning, Senator. First of all, for those of you in the audience, please approach one if the microphones. I've been asked to say that.

I'm Ron Lewis. I'm with Coca Cola Enterprises. You mentioned earlier that you think that the gas tax is probably not a solution for us to build the infrastructure that we need to. I was wondering what your point of view was on offering the opportunity to build infrastructure to some other foreign governments or sovereign funds. How do you feel about that, as far as patriotism goes in North America, and the U.S. specifically? Are you willing to look at other countries funding that infrastructure building?

SEN. WARNER: We already have some of that taking place, I believe, around the country. I believe, you know, it's more of the Spanish and the Australian firms who've been very active on some of this infrastructure build-out.

And I believe in some of the tolling situations, around the country, you've got those firms as partners or participants.

So I don't think you can take kind of this blanket notion that there's not lessons we can learn, from better examples around the world, because there are countries around the world who, I think, are further down the line in terms of more creative ways to fund their infrastructure. And again I would argue we're doing some of that. Very shortly we'll be adding -- I think we've gone to bid and very shortly are -- I think we may have already started some of the clearing and construction.

Those of you who ride the Beltway; we're going to be adding additional lanes, HOT lanes, HOT lanes on the Beltway, which are a public-private approach that will add additional capacity and the allow basically, you know, the consumers to make the choice, whether they want to drive in this lane.

If they drive in that lane, they're going to have to pay a fee. It's not a silver bullet but one more solution set, when our current, existing funding formulas just don't pay the bills, just don't as most of the people in this room -- barely even, in a state like Virginia, barely even get us to the point where we can do maintenance, let alone new construction adds.

Yes, ma'am.

Q Senator Warner, my question actually revolves around that. I'm from the Baltimore area. And actually we have a similar setup happening, outside of Baltimore, coming down south on 95.

What is your view though on moving away from the idea of highways? Reading one of your brochures -- a lot of loss to companies, billions of dollars for a tie-up in traffic -- I know, I experience it.

Being 30 miles out, I spend a minimum of two hours on the road a day. Investing in the public transportation systems -- which could transport large numbers of people, be a little bit more convenient -- having lived in Europe, I know that that is feasible, and it works.

Why, or what do you think, about the U.S. investing more in that, especially in metropolitan areas?

SEN. WARNER: I think we should do more of it. I mean, it's -- you know, the challenge is, I know, folks oftentimes are critical of, say, for example, an Amtrak or critical of some of our public transportation systems, that they don't break even.

There's not public transportation system or no passenger rail system in the world that breaks even on a cash flow basis. You know, for us to deny that there's massive subsidies that we put into our road network is just again a failure to, you know, understand the economics behind it. So I do think the notion of increased transit systems, the development and movement towards high-speed rail, all very exciting.

And, you know -- and one of the things -- and I know that -- I've been told this'll be the last question, so let me just take one comment on the recovery and reinvestment act, or what I guess most of us call the stimulus plan.

You know, it's -- you know, I kind of look at it as, you know, it was three buckets. You know, part of it was the tax-break bucket, so you lose about $350, 360 billion. That's started to hit people's pocketbooks.

Another third of it was basically to go to states to shore up where they would have otherwise had to make cuts. And again, we've not seen many of the -- you know, that's basically been loss avoidance rather than new jobs added, since it meant, in a state like mine, in Virginia, where we've filled in some of our transportation hole and supplemented Medicaid dollars, helped our teachers.

But the really exciting part of the stimulus area is -- we haven't really seen the dollars hit yet. And, you know, one of the things that I'm excited about is for -- you know, for 10 or 15 years in this country we've talked about the need for broadband, the need for health-care IT, the idea of doing energy conservation more broadly, the notion of trying to make some investments in high-speed rail.

And in all of those areas, there's now multiple billions of dollars. Not enough, you know, to really solve the problem; I mean, I think there were about $9 billion in high-speed rail. You know, that's probably not going to fully fund any single high-speed rail corridor, you know, start to finish. But it's going to at least move us down the path on our -- and I think the challenge we're going to have -- those of us, again, who think that, whether it's broadband, high-speed rail, health-care IT, comparative-effectiveness research and medical -- these are all areas that I would argue will -- if we do right -- will feed into that national-competitiveness strategy.

We've got to make sure that we balance -- and the administration, I think, is trying desperately to balance -- the need to get these dollars out quickly with, also, the need to have them spent efficiently so we can measure and get some metrics.

And I, for one, hope that, whether it's the high-speed rail or some of the other dollars that go into the mass-transit initiatives, that we get a couple beta sites out there that can be examples of 21st-century getting it right so that we can then build the public support to build that out. Because asphalt alone, in terms of a highway-transportation system, is not going to get us there.

And I can -- I can assure you -- it is going to take, though, some strange bedfellows. I still recall and bear the scars back from -- for those of you who lived around here in 2002, when I was governor and tried to argue to the people of Northern Virginia we ought to maybe find a different way to fund our infrastructure and actually add on a bit of a sales tax that would be directed into our infrastructure and got beat by a combination of those folks who basically -- you know, the no-tax crowd at any cost, but it was combined with the no- tax crowd with actually part of the environmental community.

And the irony was that we had more money in that initiative for mass transit than anything prior or anything since that would have actually put a dedicated source of funding for mass transit in Northern Virginia that could have given us the kind of long-term revenue source that we could bond against to get ourselves out of our cars into other transit options.

So we are going to need to find some broader alliances. Just making this the case as the business case, we've got to really engage the frustrated commuters. We've got to engage our friends in the environmental community that more infrastructure per se is not bad; that sitting in the car creates as much -- idling in traffic creates as much greenhouse gases as actually -- more than driving efficiently, or getting people into buses and trains. So that's part of the case we've got to make.

Again, I've gone on too long, but I thank you for your attention. I'm anxious to get your specific suggestions on -- I know I've not spent as much time on supply chain management, but as you've got specific suggestions on how we can do supply chain management better as we move to these infrastructure issues, please let me and my office know. As I mentioned, I've moved up from the basement of Dirksen now to the fourth floor of Russell. Please come by and see me any time.

Thank you all very much. (Applause.)

END.

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