"Thank you, Kathy and good morning everyone. Secretary Peters: It's always a pleasure to welcome you to New York. Thanks for joining us.

"I hope everyone had a smooth trip here today. If you ran into some traffic - well, just keep in mind that there are about two million other people trying to get into Manhattan's Central Business District today, most during what, for some mysterious reason, we call 'rush hour.' It's hard to see why we use that term. We should call it the 'slow hour' - or some days, the 'no hour.'

"Today people who travel to jobs in Manhattan from the other four boroughs endure the nation's longest commutes. Their co-workers from the suburbs don't do much better. Our Administration is working to relieve congestion by reducing on-street parking placards, discussing enhanced ferry service with the City Council, and through other measures. But we need to do even more, or congestion will only get far worse.

"Well, we've got a great opportunity to do something about that. We can begin reducing the traffic congestion that saps $13 billion a year from our regional economy, that heavily pollutes the air that our children breathe, and that dumps tons of climate-altering greenhouse gases into our atmosphere every day.

"Crain's readers, of all people, appreciate that to alter behavior, nothing makes more sense than dollars and cents. And we're proposing a capitalistic incentive to commuters to leave their cars at home, and travel more quickly and less expensively by enhanced mass transit.

"I'm speaking, of course, about congestion pricing for driving into the busiest parts of Manhattan during the busiest hours of the work week. If the City Council and State Legislature don't act on the recommendations of the independent Traffic Congestion Mitigation Commission by the deadline, we'll forfeit $354 million in Federal funds, a revenue stream dedicated to immediate transit improvements - a point that Secretary Peters will return to in her remarks. Refusing those funds is basically saying that there will be next to no MTA capital projects in our immediate future.

"Congestion pricing has been a success in London, Stockholm, and Singapore. The city of Milan, Italy also recently enacted congestion pricing. I believe strongly that congestion pricing is right for us, too. And last week the Quinnipiac Poll found that, by a 59%-38% majority, New Yorkers support a congestion pricing plan that funds mass transit improvements - as our plan does.

"Now, congestion pricing is a new idea, and so naturally people have had questions about it. At first, I had some reservations myself. But they were overcome as my questions about congestion pricing were answered.

"In the same fashion, the Commission addressed a number of reasonable concerns expressed about the original congestion pricing plan. They modified the pricing zone's boundaries and eliminated charges for driving within the zone. They addressed privacy concerns by scaling back the plan's projected use of cameras. They created a mechanism for reviewing the plan's environmental impact before it is instituted, and for monitoring that impact over time.

"The result is a plan substantially different, and substantially better, than the one unveiled nearly a year ago. That process of modifying and strengthening the plan has continued to the point that today there remain only four significant issues about congestion pricing. Let me briefly describe how each can be addressed.

"First, New Yorkers want to know with certainty that the revenues raised by congestion pricing will go to transit and only to transit. The MTA'S new five-year capital plan spells it all out. It's by far the most ambitious and farsighted MTA capital plan in recent memory. If the Legislature approves the plan, the projected $500 million a year in congestion pricing revenues - which would bond out to at least $4.5 billion - would be dedicated exclusively to it.

"We must face the facts: Even with that funding in place, and even with the hope that the Federal government will provide another $8 billion, there's still a gap of more than $9 billion in the capital plan. And why will we get any Federal funds if we walk away from $354 million? State Comptroller Tom DiNapoli warned last week that, with debt service already pressing hard on the MTA's operating budget, more borrowing by the MTA isn't a feasible option for filling this gap - unless there's a steep increase in fares. If we want to avoid such a fare increase, we need the congestion pricing revenues embedded in the MTA capital plan.

"Second, New Yorkers have raised misgivings that the neighborhoods bordering the congestion pricing zone might be turned into free 'park and ride' lots by commuters who are trying to dodge congestion pricing fees. We're not going to let that happen. That's why we've proposed as part of our congestion pricing plan a system for creating residential parking zones that would protect neighborhood residents and local businesses - if and only if communities want them.

"Third, some worry that congestion pricing would penalize low-income New Yorkers who regularly commute to Manhattan by car. Even given the fact that the average car commuter has a substantially higher income than most subway commuters, there are certainly ways to address this concern, too.

"We could, for example, create a refund for such commuters that offsets what they'd pay in congestion pricing fees that are over and above the comparable cost of commuting by subway. And we're currently exploring such ideas with members of the Legislature. But the fact remains: Congestion pricing charges the approximately 5% who drive and pay $3.30 per gallon for fuel and $30-$50 per day for parking - and uses the money to build mass transit for the 95% who can't afford the luxury of their own polluting autos.

"Fourth, objections have been raised that congestion pricing unfairly exempts New Jersey drivers. Well, the fact is that no one drives in to Manhattan from New Jersey for free. The Port Authority charges a toll at all its bridges and tunnels. They recently raised it to $8 during peak periods, in anticipation of congestion pricing. So in a very real sense, there's already a congestion pricing fee for New Jersey drivers. And although it's only been in effect a few weeks, initial estimates suggest that it is reducing Manhattan-bound traffic during peak hours.

"New York and New Jersey share the revenues from these tolls 50-50. Nevertheless, concerns remain about where and how those revenues are spent and how much Port Authority commuters should pay in auto tolls. Bearing in mind the federal Constitutional issues that have to be dealt with, we can and will find ways to address these concerns.

"In short, congestion pricing can be made to work for everyone. That makes it the single most effective way to both relieve congestion and raise the mass transit revenues we need.

"Before turning the floor over to Secretary Peters, let me make one final point. Last December, I was in Shanghai and I saw with my own eyes the tremendous progress that that city is making in upgrading its transit system. As Lee Sander pointed out in his 'State of the MTA' earlier this month, during the coming year, the MTA will use four tunnel-boring machines to expand its subway and commuter rail network.

"That certainly sounds impressive. But then consider that 90 of those machines are at work on rail and other projects in Shanghai. Cities that are our competitors in the global economy are making the investments that will ensure their future. So must we.

"When times get tough, it's 'business as usual' for government to let both basic infrastructure maintenance and long-term infrastructure investments go by the boards. The result: Future generations get stuck with the massive bills that inevitably come due.

"Our children deserve far better from us than an inheritance of excuses bequeathed by business as usual. This isn't just a test of our policies; it's a test of our character. Let's meet that test."