[Senate Hearing 112-822]
[From the U.S. Government Publishing Office]
S. Hrg. 112-822
NATIONAL LEADERS' CALL TO ACTION ON TRANSPORTATION
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HEARING
BEFORE THE
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
FEBRUARY 16, 2011
__________
Printed for the use of the Committee on Environment and Public Works
Available via the World Wide Web: http://www.fdsys.gpo.gov
__________
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COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana JAMES M. INHOFE, Oklahoma
THOMAS R. CARPER, Delaware DAVID VITTER, Louisiana
FRANK R. LAUTENBERG, New Jersey JOHN BARRASSO, Wyoming
BENJAMIN L. CARDIN, Maryland JEFF SESSIONS, Alabama
BERNARD SANDERS, Vermont MIKE CRAPO, Idaho
SHELDON WHITEHOUSE, Rhode Island LAMAR ALEXANDER, Tennessee
TOM UDALL, New Mexico MIKE JOHANNS, Nebraska
JEFF MERKLEY, Oregon JOHN BOOZMAN, Arizona
KIRSTEN GILLIBRAND, New York
Bettina Poirier, Majority Staff Director and Chief Counsel
Ruth Van Mark, Minority Staff Director
C O N T E N T S
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Page
FEBRUARY 16, 2011
OPENING STATEMENTS
Boxer, Hon. Barbara, U.S. Senator from the State of California... 1
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma... 3
Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland 5
Johanns, Hon. Mike, U.S. Senator from the State of Nebraska...... 7
Sanders, Hon. Bernard, U.S. Senator from the State of Vermont.... 8
Lautenberg, Hon. Frank R., U.S. Senator from the State of New
Jersey......................................................... 10
Carper, Hon. Thomas, R., U.S. Senator from the State of Delaware. 11
Udall, Hon. Tom, U.S. Senator from the State of New Mexico....... 13
Baucus, Hon. Max, U.S. Senator from the State of Montana,
prepared statement............................................. 54
WITNESSES
Trumka, Richard, president, American Federation of Labor and
Congress of Industrial Oreganizations (AFL-CIO)................ 14
Prepared statement........................................... 18
Responses to additional questions from:
Senator Inhofe........................................... 21
Senator Lautenberg....................................... 21
Senator Carper........................................... 22
Senator Sessions......................................... 23
Donahue, Thomas J., president and CEO, The U.S. Chamber of
Commerce....................................................... 24
Prepared statement........................................... 27
U.S. Chamber of Commerce:
Policy Declaration, Transportation Infrastructure-General 33
Recommendation to Congress Regarding SAFETEA-LU
Reauthorization........................................ 34
NATIONAL LEADERS' CALL TO ACTION ON TRANSPORTATION
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WEDNESDAY, FEBRUARY 16, 2011
U.S. Senate,
Committee on Environment and Public Works,
Washington, DC.
The committee met, pursuant to notice, at 10 a.m. in room
406, Dirksen Senate Office Building, Hon. Barbara Boxer
(chairman of the committee) presiding.
Present: Senators Boxer, Inhofe, Baucus, Carper,
Lautenberg, Cardin, Sanders, Udall and Johanns.
STATEMENT OF HON. BARBARA BOXER, U.S. SENATOR FROM THE STATE OF
CALIFORNIA
Senator Boxer. Good morning, everybody, and welcome.
I am pleased to have with us today two national leaders who
represent business and workers across our great country to
discuss the needs for investments in transportation and, more
specifically, the need to enact a Surface Transportation Bill
this year.
In his State of the Union address on January 26, President
Obama called for the rebuilding of America. The two witnesses
who will testify here today, Tom Donahue, President of the U.S.
Chamber of Commerce, and Richard Trumka, President of the AFL-
CIO, were clearly listening. Following the speech, they issued
a rare joint statement supporting the plan to create jobs and
accelerate the economy, the economic recovery, through
investment in our Nation's crumbling infrastructure.
As Mr. Trumka and Mr. Donahue stated, building a modern
transportation system will help our Nation compete in the
global economy.
[Remarks off microphone.]
Senator Boxer. The U.S. Chamber of Commerce and the AFL-CIO
do not always agree. So, Mr. Donahue and Mr. Trumka's
willingness to stand together or, in this case, sit together,
in support of a strong Surface Transportation Bill, is a
powerful signal. I want to thank both of them, from the bottom
of my heart, for this.
Just like they have set aside their differences on this
issue, I believe we in Congress, Democrats and Republicans,
must roll up our sleeves and get to work on a bipartisan bill.
With that goal in mind, I have reached across the aisle in the
Senate and House of Representatives to find common ground.
Senator Inhofe and I always work together on infrastructure
issues and now is no exception. Through their staffs and
through our conversations, we are working together to develop a
Surface Transportation Bill that can gain bipartisan support
and provide much needed investment and jobs.
I have also had discussions with Representative John Mica,
Chairman of the Transportation and Infrastructure Committee,
who is my counterpart in the House. Next Wednesday, Mr. Mica's
committee and ours will hold a joint Senate/House hearing in
Los Angeles on transportation needs and our proposals to get
the economy back on track through infrastructure investment.
I was very pleased that Chairman Mica suggested holding the
hearing in Los Angeles because Los Angeles has been a leader in
figuring out a way to leverage funds and leveraging is crucial
in these tough times when we are looking to stretch our dollars
as far as we can.
Los Angeles' 30/10 Initiative, which is a model for the
Nation, will improve the local economy by creating hundreds of
thousands of jobs now and by reducing carbon pollution
emissions and other emissions and easing traffic congestion.
The 30/10 Initiative would speed up delivery of the transit
projects funded by a local sales tax measure passed by the
people of Los Angeles. The idea was to come to the Federal
Government and ask us to front load those moneys knowing that
there is a stream of revenue behind it. It is virtually no risk
to the Federal Government and this could happen in any part of
our great Nation.
So, Senator Inhofe and I have been looking at changes to
part of an existing transportation law call TIFIA,
Transportation Infrastructure Finance and Innovation Act, so
that we can figure out a way that this type of leveraging could
become more common and we can stretch those Federal dollars.
TIFIA helps communities leverage their transportation
resources by providing loans and loan guarantees. According to
the Federal Highway Administration, every dollar made available
through TIFIA can mobilize $30, $30 in transportation
investment. I am proud to report that there is a growing
bipartisan support here. I think we will hear from our friends
at the witness table about this because everybody knows we need
to cooperate and we need to stretch our dollars.
The need for a Surface Transportation Bill is real. Our
Nation's transportation systems used to be the best in the
world but our investments have not kept up. We are falling
behind. The rest of the world is building infrastructure
systems to move people and goods. We need to do that here.
There is a huge backlog, according to the American Society
of Civil Engineers. In their 2009 report card, our Nation's
infrastructure received a D based on 15 categories. We know the
hardship in the construction industry. We know our friends in
business and labor are struggling and suffering. We have heard
them over and over.
The construction industry, just in the last month, lost
32,000 jobs, 130,000 the past year, and today there are nearly
2 million unemployed construction workers. We have a little
presentation, we are not quite ready, but when we show this to
you, I think it will take your breath away.
Raymond Poupore, Executive Vice President of the National
Construction Alliance, pointed out at our last hearing, we
could fill nearly 20 stadiums the size of Cowboy Stadium where
the Super Bowl was played with unemployed construction workers
for a total, again, of two million people. This created such a
powerful image in my mind, and in my Ranking Member's mind,
that we wanted to share it with you.
So, I would ask the staff to stand up now, each of them
holding two photos. So, if you look at all of this, it is
breathtaking. Two million people. Two million construction
workers. I think it is worth taking a look at this, at those
people. Each one of those people represents a family. I think
this image was really worth showing and I want to thank my
Republican friends for going along with this because I think it
is an image worth noting. Thank you very much.
There is a story of pain and unemployment in the
construction sector in large part due to the housing crunch. We
are still not out of that housing crunch. We can begin to
address the serious problem by making the kind of
transportation investments we need. Putting America back to
work, providing new business opportunities, helps everyone.
As Mr. Trumka and Mr. Donahue pointed out, we have a common
goal, investing in our country. We invest in a lot of other
countries. It is time we invest in America. We have an
opportunity to move forward on a robust Surface Transportation
Bill for the 21st Century. I look forward to hearing from my
colleagues today as well as our distinguished witnesses.
I close with this. 2010 was a tough election. I am looking
at two of you who were deeply involved in my race. On different
sides.
[Laughter.]
Senator Boxer. Different sides. Robust, tough. But for
everything there is a season. Election season comes soon
enough. Now we have an obligation to set all that aside and
work together for our people, for jobs, for business, for our
Nation.
So, thank you all, and I am pleased to call on the Ranking
Member.
STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM THE STATE
OF OKLAHOMA
Senator Inhofe. Thank you, Madam Chairman, and I am going
to go ahead again and repeat what I said at the last hearing
that we had. Much to the chagrin of my staff, I am not going to
use their statement. I am going to submit that for the record.
I want to also tell my friends here on both sides of the
aisle that I will have to leave for 15 minutes to introduce a
bill on the floor at 10:35 and then I will be right back.
I hope, first of all, to have you two giants here is very,
very significant. When you stop and you think about all of the
segments that you represent, and we have this one thing in
common. You know, in this Committee, this is Environment and
Public Works, and on the environment issues I do not get along
with these guys over here. Barbara and I are on opposite ends.
I am still ranked, by the national journalists, as the most
conservative member of the U.S. Senate and yet, and Barbara is
on the other end of that, and yet we are together on this. This
is very significant. There is not a person up here who does not
look at the priorities of infrastructure in America and
recognize the dire straits we are in.
Now, if you look at what is going to happen in the next 30
years, we are going to have doubling truck traffic, increasing
car traffic by 30 percent. I though the President did a
disservice when he came out and he said yes, we need $556
billion for infrastructure. Well, there are two problems with
that. It is easy to say that, and I agree we could spend that
much. We could do it. This bill that we have, the robust bill
that we had in 2005, was a huge success. But, that just not
much more than maintained what we had already. This is what we
ought to be doing.
I think that, the other thing I did not like about his
statement was he wants to change this from the Highway Trust
Fund to Transportation Trust Fund. Well, you know what that
means. That means, I have been around long enough, I was on
this Committee in the House for 8 years before coming here in
1994. We used to have surpluses. Do you remember that? We
always had surpluses in the Trust Fund.
Then all of these hitchhikers came along. They wanted to
get their deal. You know, I do not care if it is bike trails or
high speed rail or everything else, instead of just maintaining
and building highways, bridges and construction. So, I would be
opposed to that.
I think what we need to understand is we would not be here
today if we had 2 years ago, tomorrow is the second year
anniversary of the Stimulus Bill, $800 billion that was
supposed to stimulate. Do you know how much of that went to
roads, highways and construction? Three percent.
Now, Barbara and I joined hands. We had an amendment to
increase that to pay for everything where it was spade ready in
America, and then come up and use that for a 6-year bill, we
would not be here today. Good things would be happening.
So, I think it is a very difficult thing to come up with
the funding because we are talking about huge amounts. When you
stop and think about all the money that has been spent, right
now we are looking at a budget that came out from the President
that $8.7 trillion in new spending, $1.6 trillion in new taxes,
all this, the deficit that he is proposing now is more than the
1996 budget to run the entire country for a whole year. That is
just the deficit.
So, the money is out there. It has not been directed in the
right places. So, we are going to look at all possibilities,
areas where you two can use your resources and your influence
to try to help us come up with a way to have a robust bill.
So we are all together on this and we will get started.
[The prepared statement of Senator Inhofe follows:]
Statement of Hon. James M. Inhofe, U.S. Senator from the
State of Oklahoma
This is the first transportation hearing we've held since Senator
Vitter became ranking member of the Transportation and Infrastructure
subcommittee. I'd like to welcome him in this role and I look forward
to working with him on the highway bill.
Today's hearing highlights how important transportation
infrastructure is to our economy. We have one of the leading voices
from the business community sitting next to one of most high profile
labor leaders and remarkably they are both saying the same thing:
without robust and strategic investments in our roads and bridges, the
U.S. economy will not achieve the growth necessary to get us out of our
current economic crisis and we will have trouble competing with other
countries.
Without the investments and vision needed to build the interstate
system, our country would not be the economic power it has been for the
last 50 years. Much of our interstate is at the end of its useful life
and needs to be rebuilt. On top of this, truck traffic will double over
the next 30 years and car traffic will increase by 70 percent over the
next 45 years. To accommodate this demand and begin to address our
current levels of congestion, hundreds of billions of dollars are
needed to build new roads and expand existing roads.
I'd like to end with some comments on the President's budget
proposal for the highway bill, which was released on Monday. I was
hoping for some positive leadership by the Administration after only
paying lip service to our crumbling roads and bridges. Sadly, the
President failed to step up and show any leadership. He failed to
specify how he would pay for his mammoth $556 billion proposal. Instead
he punts, saying his higher trust fund revenue is ``a placeholder and
do not assume an increase in gas taxes or any specific proposal to
offset surface transportation spending. Rather, they are intended to
initiate a discussion about how the Administration and Congress could
work together on a bipartisan basis to pass a surface transportation
reauthorization. . . ''
This puts us back in the hole former House Democrats dug last
Congress: proposing a huge bill with no way to pay for it. This is flat
out irresponsible. If he were serious about getting a bill done, he
would have either cut spending or said how he is going to pay for it. I
can only call this a setback. It gives false hope to transportation
advocates and leaves Congress in the same box as before the budget was
released. This comes almost exactly 2 years after the failed, so-called
stimulus bill, which was sold as having primarily an infrastructure
focus, but ended up with only 3 percent of the total going to roads and
bridges. Here we go again.
On top of all this, the President proposes destroying the Highway
Trust Fund. He wants to open it up to pay for a number of things
currently not eligible for funding, including Amtrak, high speed rail,
and a greater share of transit (which currently receives 20 percent of
its funding from the general fund). The whole point of a trust fund is
that users pay for the services they are getting. Not a single penny is
paid into the trust fund by users of transit or Amtrak, nor does any
high speed rail proposal include user fees deposited into the trust
fund.
The current problem with the Highway Trust Fund is that we have
gotten away from the user pays, user benefits concept and are providing
a free lunch to too many unrelated activities. The Highway Trust Fund
needs to focus its spending, not broaden it. I can't blame the
President on this; he has been very clear about where his priorities
lie. He is less interested in rebuilding our roads and bridges than in
building street cars and bullet trains.
I think this budget proposal will make it harder for Congress to
get a bill done. But as we are discussing today, it is imperative that
we get a good bill done soon. So I am going to treat this budget as yet
another obstacle we have to overcome to enact a responsible, budget
neutral bill this year.
Senator Boxer. Thank you, Senator.
I am just going to say, in order of arrival, Cardin,
Sanders, Lautenberg, Carper and Udall and, of course, my
friend, Senator Johanns. But you will go right after Senator
Cardin.
STATEMENT OF HON. BENJAMIN L. CARDIN, U.S. SENATOR FROM THE
STATE OF MARYLAND
Senator Cardin. Madam Chair, thank you very much for this
meeting. To Tom Donahue and to Rich Trumka, it is wonderful to
have you all here. It is nice to have you here together on an
issue that I think we all do agree on, and that is investment
in our transportation infrastructure will be good for our
economy, will create jobs for our community, will make America
more competitive, will help deal with our future innovation by
allowing businesses to grow, et cetera, et cetera. We are in
agreement on that. It is good to see both of you at the table
together for this issue.
A $1 billion investment in transportation infrastructure
will create 30,000 jobs. But the interesting point is it will
create even more jobs in public transportation. So, I just want
to differ, if I might, from the Ranking Republican Member as to
the name of the fund. I think it is very important that we have
a coordinated transportation system in this country. Quite
frankly, I am disturbed that the projections, according to our
friend, would increase 30 percent as far as car traffic in this
country is concerned. I hope it is not 50 percent. I would like
to see it at 20 percent.
Senator Inhofe.
[Remarks off microphone.]
Senator Cardin. I would like to see an increase in public
transportation because I think that is going to be good for our
country, it will help us with our energy policies, it will
create more jobs. It is interesting. The American Public
Transportation Association tells us there is a three to one
ratio. For every $1 we invest in public transportation, we will
create $3 in private sector sales by businesses that locate
near public transportation sectors.
So, I think it is good for our country to invest in public
transportation and I just want to stress that as we start
today's hearings. It helps local economies. Values near metro
stops are substantially higher because businesses want to
locate near metro stops because it is convenient for their
employees in order to be able to get to work.
Commercial values are all higher near metro stops. In my
own area, in this area, you go to Arlington and Alexandria, VA,
Bethesda and Silver Spring, MD, you go to areas in Prince
Georges County, you will find that there are considerably
higher values in the lease space that is within walking
distance of our metro sites than otherwise.
Maryland's highest transportation priorities, and our
Governor will be here tomorrow to talk to our delegation, are
three public transportation projects. So, I want to make sure,
as we focus on what we are doing on the reauthorization of our
Surface Transportation Act, that we work very closely with the
Banking Committee, as it relates to the public transportation
issues, because I think it will make it easier for those who
use our roads, make it easier for the commuters that have to
use their cars, if there are less cars on the road.
Of course, or energy policies will be of greater advantage
if we use less energy in transportation, and we do that through
public transportation.
So, I just urge my colleagues, there is a good reason why,
Rich, you will find that a lot of your unions are strongly
supportive of the public transportation part of this, and for
good reason. Because they know there are jobs, they also know
it will help our economy and will help our community.
Quite frankly, we all live in the second most congested
area in the country. Those of you who have to commute into the
Nation's Capital, you know what I am talking about. Our metro
system here is overloaded, it needs to be modernized, its
ridership increases dramatically every year, and we may need to
pay attention to it.
So, I would just hope that as we reauthorize Surface
Transportation Programs that we are mindful that we need to
increase, not decrease, our commitment to public
transportation.
Senator Boxer. Thanks, Senator.
Senator Johanns.
STATEMENT OF HON. MIKE JOHANNS, U.S. SENATOR FROM THE STATE OF
NEBRASKA
Senator Johanns. Madam Chair, thank you. Let me say to the
witnesses, I appreciate the show of unity, if you will, and I
appreciate you being here.
When I was Mayor, in another life, and when I was Governor,
in another life, the one thing I could always get business and
labor to agree on was investment in infrastructure. In some
respects, it was kind of a no-brainer. It was a job creator and
it was an economic development engine and we could all come
together on that. Your presence illustrates that is the case
here, too.
Let me offer a perspective, if I might, based upon those
past experiences. Each bidding season, if you will, when I was
at the city or when I was Governor, we would anxiously await
the results of the bidding process. What we wanted to achieve
year after year after year was a strong, competitive bidding
process because it kept prices for construction down.
I quickly realized that the only way to achieve that was to
have a sufficient and predictable flow of funding into those
programs because the construction industry could not tolerate
up and down and up and down. It is a high capital investment
industry. You do not go out and buy the equipment that they
need to build the bridges and roads without investing a
substantial amount of money.
When all of those charts were raised, or those pictures
were raised of the football stadium and all of the people, what
that tells me is not only have a lot of people lost their jobs,
but a lot of construction companies have gone out of business.
Now, at the end of the day, some will survive. That is the
nature of a free market system. But at the end of the day if we
do not address the issue before us the competitive nature of
this system is going to be decreased because you will just have
fewer people in the business, bidding the projects and keeping
that bidding aggressive and prices low.
So, in some respects, folks, what this is about is pay me
now or pay me later. We have to build roads. We have to build
bridges. We cannot allow, as a Nation, for our bridges to fall
into the river as one did fairly recently. It is not an
acceptable result.
If we do not somehow figure out how to deal with this and
how to provide a sufficient amount of funding, I know what will
happen. We all know what will happen. We will pay a higher cost
for that same construction in years ahead because the
competitive nature will decrease as companies go out of
business.
So, my hope is that we can find a solution to this. As
passionately as some feel about, and this will be my last
point, as passionately as some feel about public
transportation, I feel equally as passionately about investment
across our great country.
When I was Governor, I liked to say that my plan for the
State of Nebraska was a 93 county Economic Development Plan. In
other words, no county gets left behind. But, you cannot create
jobs without investment in roads and bridges. I can give you
example after example where, if Government led the way and put
down the infrastructure, the investment would follow. Business
would build and construction would occur and the after effect
of that government investment would be significant and it would
generate revenues. Like I said, I could take you on a car ride
through Lincoln, NE or Omaha or Scottsbluff and where we made
investment, additional investment was bound to follow.
So, I hope we get this right because I fear that not only
are we losing those jobs, but we are losing those companies and
that is going to have an impact on the cost of construction in
the future.
Madam Chair, thank you.
Senator Boxer. Senator, thank you so much for those
remarks.
Senator Sanders.
STATEMENT OF HON. BERNARD SANDERS, U.S. SENATOR FROM THE STATE
OF VERMONT
Senator Sanders. Thank you, Madam Chair. This is an
interesting day, as I said to Jim Inhofe. There it is. I
actually agree with much of what he said and, Mr. Johanns, I
certainly agree with much of what you said. It is interesting
to have people from organized labor and the Chamber of Commerce
with us today, the leadership there.
I speak also as a former mayor. I think I want to reiterate
one of the points that Mr. Johanns made. My experience, and I
am sure yours was, that if you do not take care of your rotting
infrastructure, your crumbling infrastructure, this year, it
does not get better next year. Right? It gets worse and it
becomes more expensive.
So, I think that in the midst of a severe recession where
our construction industry is in very bad shape, we saw the
amount of unemployment that is there, if there ever was a time
to start rebuilding our crumbling infrastructure, now is the
time. So, this is, what we are talking about today is jobs. We
are talking about something in terms of increasing the wealth
of the Nation. It has to be done. Let us do it now.
We are talking about roads. In my State of Vermont, the
ARRA stimulus package did not put as much money as I wanted. We
put more money into roads and bridges than at any time in the
history of our State and we are seeing the difference. But
clearly we need a lot more.
In States like Vermont where you have 20 below 0 weather,
that temperature beats up your roads very badly. So, we have to
be mindful not only of different States with different needs,
but rural areas as well. Let us not forget about the problems
in rural America.
Also, this is an issue of international competition. Madam
Chair, let me just read you this. Today, the United States
invests just 2.4 percent of GDP on infrastructure. Europe
invests twice as much. More troubling, China invests almost
four times our rate, roughly 9 percent of their GDP annually,
on rail alone. I know this is something that Frank Lautenberg
has been very interested in. The Chinese invested $186 billion
from 2006 through 2009. According to the New York Times, within
2 years that country will open 42 new high speed rail lines
that will have trains that can reach speeds of more than 210
miles per hour.
In the United States today, do you know what we have? We
have situations where trains go from location A to location B
in a slower time than they did 50 years ago. We are moving
backward, and the Chinese are building dozens of high speed
rails.
But it is not only trains and it is not only roads and it
is not only bridges. It is tunnels, it is water as well. I
know, outside of the jurisdiction of this bill.
Let me tell you a story and I do not think it is unique to
Vermont. I met with a mayor in one of our largest cities a
couple of months ago. He had this piece of pipe, a kind of old,
decrepit looking piece of pipe. He said, you know, the guy who
laid this water line for us, after he did this, he designed it,
he went off to the war. I knew what the punch line was, and I
said, well, what war was that? He said it was the Civil War.
Senator Boxer. What?
Senator Sanders. The Civil War. This was Rutland, VT, the
second largest city in the State of Vermont. That is not unique
in America. We are losing enormous amounts of fresh water in
this country because of leaks in water lines. We have
wastewater plants all over America that need work, tunnels that
need work, and meanwhile you showed us a picture of millions of
workers ready to go to work. When they go to work rebuilding
America, they get a paycheck. They spend that paycheck. It has
a stimulus impact on our country.
So, what I am excited about today is that I think there is
a broad understanding from all across the political spectrum
that now is the moment to rebuild our crumbling infrastructure,
to pay attention not just to urban needs, as important as they
are, but to rural needs, to do it all across the
infrastructural spectrum. I am excited by the fact that we have
Mr. Donahue and Mr. Trumka here, that we have people with very,
very different political philosophies united about this.
So, Madam Chairman, let us go forward on this. We have an
opportunity to do a whole lot for America.
[The prepared statement of Senator Sanders follows:]
Statement of Hon. Bernie Sanders, U.S. Senator from the State of
Vermont
Madame Chairwoman, thank you for calling this important hearing
today. I look forward to working with you and the other members of this
committee as we craft a new surface transportation bill.
The issue at hand is not just transportation's role in supporting
the economy, but rather, it is about getting our national priorities
straight. It is no secret that the United States is facing the worst
economic crisis since the Great Depression. Millions of people have
lost their jobs as a result of Wall Street greed. We have a record-
breaking deficit. The middle class is disappearing, and the gap between
the very rich and everybody else is growing wider.
In my view, it is high time that we create millions of jobs
rebuilding our deteriorating infrastructure. Let me briefly explain.
Our transportation infrastructure needs are well-documented, and
they are growing more dire with each passing year. In 2009, the
American Society of Civil Engineers graded America's roads, public
transit and aviation with a ``D'' and said $2.2 trillion must be
invested over the next 5 years simply to get to a ``passable''
condition. And as our constituents know, our nation's infrastructure
needs go well beyond just the transportation sector. Our water systems,
wastewater plants and schools all need an enormous amount of work, and
our energy and broadband networks all need upgrading.
In my State of Vermont, we are debating--and I kid you not--how to
finance the replacement of Civil War-era railroad infrastructure with
higher-speed rail. Thirty-five percent of Vermont's 2,700 bridges are
either ``structurally deficient or functionally obsolete,'' and more
than half of those have structural deficiencies.
Throughout our history, America has led the way on transportation
innovations: a network of canals, a transcontinental railroad,
Interstate highway systems, and a robust network of regional airports
have kept Americans connected and the economy humming. These advances
have been the envy of the world. Sadly, that is no longer the case and
I fear we are losing ground.
Today, the United States invests just 2.4 percent of GDP on
infrastructure. Europe invests twice that amount. More troubling, China
invests almost four times our rate--roughly 9 percent of their GDP
annually.
On rail alone, the Chinese invested $186 billion from 2006 through
2009. According to The New York Times, within 2 years that country will
open 42 new high-speed rail lines that will have trains that can reach
speeds of more than 210 miles per hour. By 2020, China plans to add
26,000 additional miles of tracks for freight and travel, 230,000 miles
of new or improved roads, and 97 new airports.
In addition to the issue of long-term economic competitiveness,
investing in transportation infrastructure remains one of the best ways
to stimulate the economy in the short term. For every $1 billion in
Federal funds invested in infrastructure, more than 30,000 jobs are
created or sustained, and those jobs have a significant impact on local
economies.
Last October, the Department of the Treasury and the Council of
Economic Advisers issued a report concluding that well-designed
infrastructure investments raise economic growth and productivity, and
have significant ``spillover effects'' on economic development, energy
efficiency, public health and manufacturing.
The study also found that infrastructure spending
disproportionately benefits the middle class. On one hand, the majority
of jobs created are in the construction sector, which--with an
unemployment rate of more than 22 percent--has been particularly hard
hit during the recession. On the other hand, the infrastructure
improvements themselves also primarily benefit middle class families.
Let's put Americans to work rebuilding our country from the bottom-
up, in jobs that cannot be out-sourced or off-shored. Let's begin the
task of reinvesting in America.
Senator Boxer. Well said. Thank you.
Senator Lautenberg.
STATEMENT OF HON. FRANK R. LAUTENBERG, U.S. SENATOR FROM THE
STATE OF NEW JERSEY
Senator Lautenberg. Thanks, Madam Chairman.
This is such an important review that we are taking here
today. President Obama pointed out when he addressed the U.S.
Chamber of Commerce last week that Richard Trumka and Tom
Donahue rarely agree. But they do agree on the need to build a
21st Century infrastructure system and I, we all here, share
this conviction.
Our country is going to be stuck in a morass of congestion,
foul air, further dependence on foreign oil and it is stifling
our economic growth and our job creation. After all, companies
cannot succeed when their employees are stuck in traffic or
when delivery delays prevent them from putting their products
into the hands of the customer. We dare not make that mistake.
If the United States does not invest in its transportation
infrastructure, we will all be left behind.
As we hear, and have just heard, other countries are
building for the future, strengthening their economic
competitiveness in the process. When we hear and look at what
is happening in China and Europe, they are leading the global
race for high speed rail. Today, it takes just 2 hours to
travel 250 miles between Paris and the French city of Lyon. By
comparison, Amtrak's Acela takes 5 hours to go between
Philadelphia and Boston, roughly the same distance.
The success of high speed rail abroad reminds us that we do
need a well balanced approach to transportation in our country,
to create jobs, to get our economy back on track, keep America
competitive. We cannot rely solely on cars and trucks and
planes. We have to invest in rail as well.
That is why I am working with Amtrak now to build a new
gateway tunnel under the Hudson River which will expand high
speed rail in the Northeast Corridor while improving rail
service in my home State of New Jersey. It is an exciting
project for our future. It shows that Amtrak is serious about
its mission to provide world class intercity travel options to
the public.
It was pleasant to see Vice President Biden outline the
Administration's bold planning for a high speed rail just last
week. The Administration's plan will make trains a faster, more
reliable alternative to other transportation modes and build
upon the High Speed Rail Grant Program that I helped author a
little more than 2 years ago.
I know that some of our elected officials on Capital Hill
and across the country will tell you our country cannot afford
these investments right now. I do not think there was ever a
time that major investments were at a good time, when it was
not the right time. If we look at the George Washington Bridge
and the tunnels that were built in my area over the years, they
were not done when there was a huge cash-flow. They were done
when things were tight, 1935 for the George Washington Bridge
and similarly for the others.
But critics want to blindly cut public investment simply
for the sake of cutting. It is a reckless approach. It will do
irreparable harm to our country. Take it from me. When I was
building a business, our business, I learned first hand that if
you want to be successful tomorrow you have to lay the
foundation down now, or today. The same principle applies here.
If we want to leave our children and grandchildren a better
country, we better make these smart investments on their behalf
and do it now.
So, I am sorry that Senator Inhofe is not here because when
he talked about if we look ahead 30 years, I just want to look
ahead.
[Laughter.]
Senator Lautenberg. Nobody got that, huh?
Senator Boxer. I did.
[Laughter.]
Senator Lautenberg. Thirty years from now, I will be middle
aged.
[Laughter.]
Senator Lautenberg. So, I look forward to hearing from
today's witnesses and working with my colleagues to strengthen
America's transportation infrastructure system. Tom and
Richard, I am glad to see the two of you sitting side by side
with no handcuffs on. So, let us continue on.
Senator Boxer. Thank you.
Senator Carper.
STATEMENT OF HON. THOMAS R. CARPER, U.S. SENATOR FROM THE STATE
OF DELAWARE
Senator Carper. Thanks, thanks very, very much. I join my
colleagues in welcoming both of you, together.
I am sure you both watched the President deliver the State
of the Union Address. You have seen a lot of those before. As
in the past, the Democrats sat there and the Republicans sat
here and as you know, this time, a lot of us sat together
across the aisle.
Instead of just Democrats standing up on a Democratic
President's speech to applaud, and there were Republicans
standing up for Republican's speech to applaud, we stood
together. We stood up, frankly, a lot less and I found the
things we actually stood up to applaud for were, for the most
part, worth applauding.
I think it is not unimportant that that night we stood
together during the speech, a good speech, but also that we
find plenty of opportunities to stand together on important
issue to our country going forward. God knows that the decaying
infrastructure, the decaying transportation infrastructure, is
something that we need to stand together on. It sounds like we
are.
We are delighted that your voices are being raised loud and
clear to support that and to encourage us and our colleagues.
So, we simply think that what you are doing, your presence
here, is just great.
I would urge you to take your message beyond the walls of
this hearing room. I urge you both to talk to business leaders
and to labor leaders and to impress upon them the importance of
investing in transportation and why those investments need to
be paid for. I always like to say if something is worth having,
it is worth paying for. That is why we end up with AAA credit
ratings in Delaware and we need to follow, and in Nebraska I
suspect as well, and we just need to do that more around here.
I am one of the few people who is actually on record for
supporting a modest, gradual increase in the Gas Tax. George
Voinovich, the only person I could find to join me on that was
George Voinovich. He was leaving and so he was willing to join
me in that. But we proposed a penny a month increase in the gas
tax over a period of 25 months and to use most of that for
infrastructure, use some of that for debt reduction.
God bless Erskine Bowles and Alan Simpson because when they
proposed to the Deficit Commission, they actually said we will
take part of the Voinovich-Carper idea and that is to go maybe
15 cents, but not all at once, to do it over maybe 3 or 3\1/2\
years, maybe a penny or so a quarter, and to use that money in
their proposal just for infrastructure, just for transportation
infrastructure. Think about a 15 cents increase in about 3\1/2\
years. I have seen 3\1/2\ months where we have seen gas prices
go up or down by 15 cents. I have seen 3\1/2\ weeks, we all
have, where they have gone up by that much.
So, I would ask for you, just in the spirit of things worth
having are worth paying for, to keep that in mind in helping us
to find a way that we can make this acceptable to the folks in
our country.
But we ought to take action and I think the time is now and
to do what is in the best interests of our country. Again, the
voice of the Chamber and the AFL-CIO are just incredibly
important to this debate.
I will close with this. I like, to my colleagues who have
heard me quote Albert Einstein, I am probably the only person
around here who quotes Albert Einstein, but one of the things
he used to say is in adversity lies opportunity. In adversity
lies opportunity. I think I have made a life of living off of
that, in adversity lies opportunity.
If you look around this country today, at our decaying
infrastructure, that is adversity. If you look around our
country today and see high levels of unemployment in the
construction industry, that is adversity. But if we can somehow
summon the will to actually pay for what needs to be done, we
can address that adversity and turn it into great opportunity
for a lot of people in those industries building our
transportation systems and also for our country.
Thank you.
[The prepared statement of Senator Carper follows:]
Statement of Hon. Thomas R. Carper, U.S. Senator from the
State of Delaware
Madam Chairman, I'd like to welcome Mr. Donohue and Mr. Trumka and
thank them for testifying before our committee.
I hope that everyone in this room recognizes the important
statement that Mr. Donohue and Mr. Trumka are making today. These
business and labor leaders agree that a stronger transportation system
is in our Nation's best interest.
I applaud Mr. Donohue and Mr. Trumka for speaking with a united
voice on transportation.
However, I ask you to take your message beyond the Environment and
Public Works Committee. I urge you to talk with business and labor
leaders around the country about the importance of investing in
transportation and why those investments need to be paid for.
I am on the record in support of a gas tax increase to pay for
those investments.
As the financial condition of the Highway Trust Fund worsens and
our highways, bridges, and rail systems continue to deteriorate, action
must be taken on transportation funding.
We must do what is in the best interest of this country.
The membership of the Chamber of Commerce and AFL-CIO are critical
to this debate.
I hope that today's united voice will continue as a sustained
effort in support of transportation.
I look forward to your testimony.
Senator Boxer. Thank you, Senator. Senator Udall, and then
we are going to move to our panel.
STATEMENT OF HON. TOM UDALL, U.S. SENATOR FROM THE STATE OF NEW
MEXICO
Senator Udall. Finally, finally. That is good. We are going
to make it in under 45 minutes today.
Being the last in line, everything has been said but not
everyone has said it. So I will not repeat all of the fine
comments that have been said earlier, but just to make two
points.
I think that the theme here from Johanns and Sanders and
all of them, Carper, is how do we find a way to get a constant
flow of resources into the infrastructure? The President has
come up with his idea of a National Infrastructure Bank. That
worries me a little bit because I do not know the rural areas
are protected. But I think the theme we are hearing, over and
over again, is how do we protect our infrastructure over the
long term and have a flow of resources. I think you two can
really help us with that.
With that, Chairman Boxer, I am going to put my opening
statement into the record so we can get directly to the two
witnesses.
Thank you very much.
[The prepared statement of Senator Udall follows:]
Statement of Hon. Tom Udall, U.S. Senator from the State of New Mexico
Thank you, Chairwoman Boxer. Thanks for putting a priority on
addressing our transportation system's needs.
As we are all aware, our Nation's transportation infrastructure is
struggling. Many would say that it is even failing. Our transportation
needs are growing far faster than our transportation investments. This
is not sustainable. It hurts our economy when employees are late for
work due to road congestion, or when goods can't get to markets because
of poor road conditions.
The quality of our surface transportation system directly impacts
the quality of our economy--from our major cities to our small rural
towns. So as we consider this reauthorization, we must ensure that it
does two things. First, that it maintains our Nation's major highways,
like interstates 10, 25 and 40, through New Mexico. And second, that it
maintains smaller roads like those that lead from the New Mexico
dairies to the interstates, to ensure their products make it safely to
market. At the same time we must address the safety of all of these
roads and highways. That means employing best practices to help
eliminate collisions and reduce injury when they can't be eliminated.
Equally important, we must recognize the toll of our transportation
system on our environment. It accounts for nearly one-third of all U.S.
greenhouse gas emissions. Much can be done to reduce emissions through
the development of cleaner and more efficient vehicles. But we can also
look within the transportation system for improvements. Simple changes
can be made that would improve travel efficiency and reduce emissions.
Some of those will happen at the Federal level. But many will occur at
the local level, and this bill should include provisions to encourage
communities to enact policies that promote efficient travel.
Finally, we need to make sure that our transportation system is
designed with community mobility in mind. That it includes sidewalks
and bike paths wherever possible. And that it provides new options for
residents who may not have access to a car, cannot drive or choose not
to. This focus will be a change from transportation bills of the past.
But I believe it is necessary to ensure that all Americans are able to
safely travel to school, the doctor or the grocery store.
Chairwoman Boxer, I look forward to working with you and the
members of this committee to draft and pass surface transportation
legislation that addresses the needs of both our metropolitan and our
rural communities. It is important that we invest the resources
necessary to ensure that our surface transportation system is well
maintained, safe, efficient and able to support the needs of our
growing economy.
Senator Boxer. Well, thank you so much, everybody, for your
opening statements.
Senator Inhofe is trying very hard to get right back but
you never know when you get down to that floor what happens.
We are so thrilled. These two are so respectful of one
another that they will not tell me which one of them wants to
go first.
[Laughter.]
Senator Boxer. So, seriously, I said you two decide and
they said no, flip a coin. So, in keeping with our Super Bowl
analogy, we are going to flip a coin. So, why don't you do
that, Paul, and Mr. Donahue, what do you call it?
Mr. Donahue. Tails.
Senator Boxer. What is it? It is heads. Mr. Trumka, you go
first.
STATEMENT OF RICHARD TRUMKA, PRESIDENT, AMERICAN FEDERATION OF
LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS (AFL-CIO)
Mr. Trumka. Chairman Boxer, Ranking Member Inhofe and
Members of the Committee, on behalf of the 12 million working
men and women of the AFL-CIO, I want to thank you for the
opportunity to appear before you today to discuss the urgent
need for investing in our country's infrastructure.
The fact that Tom Donahue and I appear before you today
does not mean that hell has frozen over or unicorns are now
roaming the land. To further strain the support structure of
this building, I would just like to tell you that Tom and I
this morning have agreed to sit down and talk about ways that
we can help U.S. manufacturing as well. So, hopefully, at
another hearing we will be able to come before you again to
talk about manufacturing.
Senator Carper. Mr. Trumka, I do not want to interrupt, but
when I walked up here from the train station this morning I did
see a pig fly overhead.
[Laughter.]
Mr. Trumka. I am not going there.
[Laughter.]
Mr. Trumka. The fact that there are many policy areas where
we have sharp differences, while that is true, we both realize
that our country needs to step up our investment in America for
business as well as for working Americans to succeed. That is
why, following the State of the Union Address, we issued a
joint statement praising President Obama's call for investing
in our Nation's infrastructure.
As you said, quite frankly, there is no more important time
to be thinking long term, to rebuilding a solid economic
foundation for our country and investing in good jobs to
maintain U.S. competitiveness with countries like China, India
and Germany.
Chairman Boxer and Ranking Member Inhofe, we agree with you
about the direct link. In fact, we strongly agree with you,
about the direct link between a strong transportation
infrastructure and a strong economy.
There are nearly 14 million Americans that are unemployed
in the United States and millions more are underemployed or are
stuck in part-time jobs or are simply job stopped looking for
jobs. Our building and construction trade workers have been
particularly hard hit, with national unemployment levels at
22.5 percent. Here in the D.C. area, it is just over 40
percent. It is even higher in some crafts and some areas of the
country. Our construction union halls that once teamed with
workers receiving training or heading to construction sites are
now full of folks sitting on the bench simply waiting for work.
Strong Federal investment in our transportation system has
never been more important to support the economy and to create
and sustain good jobs for U.S. workers than it is right now at
this very moment.
The Department of Transportation, as somebody noted,
estimates that for every $1 billion in Federal highway
investment, accompanied by the State match, creates or supports
nearly 35,000 jobs. At the same time, according to the American
Society of Civil Engineers, we face a $2.2 trillion deficit in
the 20th Century infrastructure that is crumbling and in
disrepair, and a near $2 trillion for the 21st Century
infrastructure that needs to be built, especially in
transportation, communications, and clean energy that we need
to have built immediately.
The latest report card from the American Society of Civil
Engineers gives our overall infrastructure score a D. Our roads
received a D, our bridges only slightly better with a C, our
waterways are a D^ and our rail system a C^. Nowhere, none of
the areas, do we meet today's global standard. That standard is
not sitting still, by the way. It continues to move ahead.
So, the failure to invest in rebuilding our infrastructure
for the 21st Century will result in lower rates of economic
growth and thus lower tax revenues. We believe we cannot solve
our long-term Federal deficit problem if we fail to invest in
the future. When we are reduced to competing on who can make
the biggest budget cuts instead of deciding on how to compete
in the world economy and to secure our future, then I believe
that we are having the wrong conversation at that point.
What we want, and what our Nation needs, is a strong
economy, an economy where business can thrive and where workers
can build a decent life for themselves, where they can afford a
place to live, raise a family, take an occasional vacation, pay
for their children's education and have a dignified retirement.
In short, Madam Chairman, we want to revive the American Dream
so that if you work hard, and if you play by all the rules, you
can succeed in America.
The example of the postwar boom, when deliberate economic
policies created broadly shared prosperity that paid enormous
dividends, shows us the way forward. High levels of public
investment fueled robust GDP and job growth in the postwar
period that reduced the debt-to-GDP ratio from more than 100
percent after the war to less than 30 percent in the 1970s.
During those decades, we built a transportation system. We
built highways, bridges, transits, ports and aviation
infrastructure that was the best in the world. Our economy
boomed because of it. Good jobs were created and we developed a
strong middle class.
But we have simply coasted through the past several decades
and this neglect will require a Herculean effort to restore our
competitiveness in the world.
In his State of the Union Address, President Obama called
for programs that pave the way for the United States to win the
future. We strongly agree with that.
I have not been to China, though I hope to go very soon.
But I am told that when you fly to Shanghai, you land in a
brand new airport, you have high-speed broadband access from
the moment of your landing, and you can get on a high-speed
rail train in the arrival terminal that will take you directly
to downtown Shanghai at over 100 miles an hour. Now, that set
of experiences is simply not available in any city in the
United States. That is a tragedy.
It is not available because we invest less than half of
what Russia does in infrastructure as a percentage of GDP, and
less than one-third of what Western Europe does. If we want to
have a great future as a Nation, we cannot sit by and watch the
future happen elsewhere and not happen here. We can do better
than this. Our country, quite frankly, deserves better than
this.
American wants to work. But the cost of our collective
inaction is already being felt and it is already hindering
millions of Americans from finding that work.
The Texas Transportation Institute's 2010 Urban Mobility
Report estimates that the extra cost of fuel and the loss of
productivity from congestion on our highways alone cost our
Nation $115 billion a year sitting in traffic. So, not only do
we need a reliable and efficient highway system with expanded
capacity, but a 21st Century rail system to supplement our
roadways in moving goods and moving people and in supporting
commerce and easing congestion.
That means investing in high-speed rail, freight rail,
commuter rail and transit systems. To help our transit systems
deal with their budget crisis, we should allow capital funding
flexibility to help them cover their operational costs so that
they do not have to shut down and strand people who depend on
them to go to work and make a living.
Investing in infrastructure projects will also boost our
manufacturing sector. These projects create substantial long-
term employment in manufacturing, design and engineering when
we use the domestic U.S. supply chain to produce the materials
that will be needed from concrete, wire, steel and pipes to
high-speed trains. All of this restores revenues for State and
local public services struggling with budget holds as well.
So, the positive impact of investing in infrastructure can
be maximized by doing a few things to ensure that our
investments not only are a good value for taxpayers, but create
good jobs and ensure the jobs are done right and are done by
the best skilled, trailed and professional work force.
To build a 21st Century transportation system requires a
modern, 21st Century workforce. Craft training in
transportation-related industries has been conducted through
apprenticeship programs for over a century. Transportation
investments should complement and support joint labor training,
management training and apprenticeship programs.
You see, when the infrastructure investments are supported
by Federal resources, Congress should require prevailing wages
and other labor protections, regardless of the funding
mechanisms used, to ensure that taxpayer funded construction
and transportation projects do not undermine good jobs and that
these projects are done by skilled, well-trained local
workforce and not by low-road employers.
Congress should implement strong Buy America provisions by
making sure that we are procuring products such as steel wire
and other materials from industries and businesses within our
shores.
While there is a growing consensus that investing in our
infrastructure is the first and best thing Congress can do for
our short-and long-term economic success, there is no such
consensus on how to fund it at the level that it requires. We
believe that everything should be on the table when looking at
funding sources by utilizing innovating ideas as well as
beefing up revenue streams that currently fund the system.
Madam Chairman, you have pushed for expanding the role of
the Transportation Infrastructure Financing and Innovation Act,
a successful Federal loan and credit enhancement program that
could do a lot more. The President spoke of the need for an
Infrastructure Bank. We should reauthorize the Build America
Bond Program and create or expand other bonding mechanisms. I
just would emphasize that these tools should supplement, not
replace, direct Federal investment.
Wall Street, which would be strengthened with a newer
infrastructure, should also be asked to kick in. Congress could
enact a transaction fee, a very small financial speculation tax
of a half a penny a share so that it is not much of a concern
to real investors but collectively it could raise more than
$100 billion a year. The Federal Reserve could allocate a
portion of its bond authority to buy infrastructure bonds.
All of these ideas will help. But they alone will not
generate the robust levels of funding needed for us to stay
competitive in the global economy. We must rely on, and boost,
our user fee revenue streams, a key component in addressing our
huge infrastructure deficit.
The gas tax has not been raised since 1993. It provides
diminishing levels of funding and should be raised. Other forms
of user fee funding mechanisms, such as creating a user fee
based on vehicle miles traveled, have been discussed.
It is important to say that when considering funding
sources, like user fees or any other funding mechanism, we need
to be sure to pursue a balanced and a fair approach so that we
do not burden one sector of the population over another. User
fees can easily have an unfair and disproportionate impact on
working people if not properly designed.
Private capital has never, and will never, adequately
invest in public infrastructure because private investors
cannot capture the economic gains that infrastructure creates.
So, it is Federal investment in infrastructure that is the
necessary catalyst for future economic growth and to enable the
private sector to effectively compete in a global economy. This
investment is long overdue.
Madam Chairman, it is no accident that Tom and I appear
before this Committee today. Congress, too, needs to come
together, as it has before, and address the most fundamental
need of our country, a strong and efficient infrastructure.
The AFL-CIO stands ready to work with this Congress, this
Administration, with business and others who want to move the
country forward into the 21st Century. We say, together, let us
boldly take on the challenge of investing in America, investing
in our future, and keeping the American Dream alive for our
children and for our grandchildren.
Thank you.
[The prepared statement of Mr. Trumka follows:]
Statement of Richard Trumka, President, American Federation of Labor
and Congress of Industrial Organizations
Chairman Boxer, Ranking Member Inhofe, and members of the
committee: on behalf of the 12 million workers represented by the AFL-
CIO, I thank you for the opportunity to appear before you today to
discuss the urgent need for investing in our country's infrastructure.
The fact that Mr. Donohue and I appear before you today does not
mean that hell has frozen over or unicorns are now roaming the land.
The fact is, while there are many policy areas where we have sharp
differences, we both realize that our country needs to step up our
``Investment in America'' for business as well as working Americans to
succeed.
That's why, following the State of the Union address, we issued a
joint statement praising President Obama's call for investing in our
Nation's infrastructure.
Our shared support for infrastructure investment follows many years
of bipartisan support for exactly the kind of investments we are
talking about today.
Quite frankly, there is no more important time to be thinking long
term, rebuilding a solid economic foundation for our country and
investing in good jobs to maintain U.S. competitiveness with countries
like China, India and Germany. I agree with you, Chairman Boxer and
Ranking Member Inhofe, about the direct link between a strong
transportation infrastructure and a strong economy.
There are 13.9 million unemployed workers in the U.S. and millions
more who are underemployed or stuck in part-time jobs. Our building and
construction trades workers have been particularly hard hit, with a
national unemployment level at 22.5 percent and even higher in some
crafts and areas of the country. Our construction union halls that once
teemed with workers receiving training or heading to construction sites
are now full of folks simply waiting for jobs.
Strong Federal investment in our transportation system has never
been more important to support the economy and to create and sustain
good jobs for U.S. workers.
The Department of Transportation estimates that every $1 billion in
Federal highway investment, accompanied by the State match, creates or
supports nearly 35,000 jobs.
At the same time, according to the American Society of Civil
Engineers (ASCE), we face a $2.2 trillion deficit in 20th century
infrastructure that is crumbling and in disrepair, and a broad array of
21st century infrastructure--especially in transportation,
communications and clean energy--that is waiting to be built. The
latest ASCE report gives our overall infrastructure a score of D. Our
roads received a D, our bridges only slightly better with a C, our
waterways a D^, and our rail systems a C^. Failure to invest in
rebuilding our infrastructure for the 21st century will result in lower
rates of economic growth--and thus lower tax revenues.
We cannot solve our long-term Federal deficit if we fail to invest
in the future. When we are reduced to competing on who can make the
biggest budget cuts, instead of deciding how to compete in the world
economy and secure our future, then we are having the wrong
conversation.
The debate about our future begins and ends concretely with the
question of jobs and how we invest in our future.
What we want, and what our nation needs, is a strong economy, an
economy where business can thrive and workers can build a decent life
for themselves. Where they can afford a place to live, raise a family,
take an occasional vacation, pay for their children's education and
have a dignified retirement. In short, Madam Chairman, we want to
revive the American Dream, so if you work hard and play by the rules
you can succeed in America.
The example of the postwar boom--when deliberate economic policies
created broadly shared prosperity that paid enormous dividends--shows
us the way forward. High levels of public investment fueled robust GDP
and job growth in the postwar period that reduced the debt-to-GDP ratio
from more than 100 percent after the war to less than 30 percent in the
1970s.
During those decades, we built a transportation, highway, bridge,
transit, port and aviation infrastructure that was the best in the
world, and our economy boomed. Good jobs were created and we developed
a strong middle class. But we have simply coasted through the past
several decades, and this neglect will require a herculean effort to
restore our competitiveness in the world.
In his State of the Union Address, President Obama called for
programs that pave the way for the U.S. to ``Win the Future.'' He said
the U.S. needs:
`` . . . to have the fastest, most reliable ways to move people,
goods and information--from roads and airports to high-speed rail and
high-speed Internet. We must build a 21st century infrastructure for
America's businesses to ship their goods, products and ideas anywhere
in the world. ``
I agree.
Rebuilding our nation's crumbling infrastructure will employ
millions of workers and ensure efficient and timely movement of goods,
services and people throughout the system. Investments in rail, ports
and maritime, transit, roads, bridges, airports and air traffic control
must be made and are desperately needed.
Nowhere do we meet today's global standard. And that standard is
not sitting still.
We are better than this.
I haven't been to China, though I hope to go soon. But I am told
that when you fly to Shanghai, you land in a brand new airport, you
have high-speed broadband access from the moment of your landing and
you can get on a high-speed train in the arrival terminal that will
take you directly to downtown Shanghai at over a hundred miles an hour.
This set of experiences is simply not available in any city in the
United States.
We invest less than half what Russia does in infrastructure as a
percentage of GDP, less than one-third of what Western Europe does.
If we want to have a great future as a Nation, we cannot sit by and
watch the future happen elsewhere and not here.
America wants to work. And the cost of inaction is already being
felt. The Texas Transportation Institute's 2010 Urban Mobility Report
estimates that the extra cost of fuel and loss of productivity from
congestion on our highways alone costs our nation $115 billion a year.
Not only do we need a reliable and efficient highway system with
expanded capacity, but a 21st century rail system to supplement our
roadways in moving goods and people, supporting commerce and easing
congestion. This means investing in high-speed rail, freight rail,
commuter rail and transit systems. Many transit authorities are facing
severe budget crises that are forcing service and job cuts at a time
when demand for public transit is on the rise. These transit systems
need help with their operational costs and we urge you to allow them
the flexibly to use portions of their capital funds for this purpose.
Investing in infrastructure projects will not only make our country
more efficient and put the construction sector back to work, but it
also will boost our manufacturing sector. These projects create
substantial long-term employment in manufacturing, design and
engineering when we use the domestic U.S. supply chain to produce the
materials that will be needed_from concrete, wire, steel and pipes to
high-speed trains. And all this restores revenues for State and local
public services struggling with budget holes as well.
The economic impact of investing in infrastructure can be maximized
by a doing a few things to ensure our investments not only are a good
value for taxpayers, but create good jobs, ensure the jobs are done
right and are done by the best skilled, trained and professional
workforce.
Investing in our infrastructure means also investing in our
workforce. To build a 21st century transportation system requires a
modem 21st century workforce. Craft training in transportation-related
industries has been conducted through apprenticeship programs for over
a century. Indeed, serving an apprenticeship was the original 4-year
degree. Transportation investments should complement and support joint
labor-management training and apprenticeship programs, not undermine
them through investments of precious public dollars in training
programs that fail to deliver for working people, employers and
taxpayers.
When infrastructure investments are supported by Federal resources,
Congress should require prevailing wages and other labor protections,
regardless of the funding mechanism used. This will ensure that
construction and transportation projects create and sustain good jobs
and that these projects are done by a skilled, well-trained, local
workforce, not by low-road employers.
To help workers and businesses in our manufacturing sector receive
the benefit of our investments, Congress should implement strong ``Buy
America'' provisions by making sure we are procuring products, such as
steel wire and other materials, from industries and businesses within
our shores.
While there is a growing consensus that investing in our
infrastructure is the first, best thing Congress can do for our short-
and long-term economic success, there is no such consensus on how to
fund it at the level it requires.
We believe everything should be on the table when looking at
funding sources--including utilizing innovative ideas, as well as
beefing up revenue streams that currently fund the system.
Madam Chair, you have pushed for expanding the role of the
Transportation Infrastructure Financing and Innovation Act (TIFIA), a
successful Federal loan and credit enhancement program that could do a
lot more.
The President has spoken up for the need for an Infrastructure
Bank.
We should reauthorize the Build American Bond program. Other
bonding mechanisms should be created or expanded to provide for
private-sector investment in our nation's infrastructure. However,
these tools should supplement, not replace, direct Federal investment.
Wall Street, whose businesses would be strengthened with a newer
infrastructure, should also be asked to kick in. Congress could enact a
transaction fee, a very small financial speculation tax of 0.05
percent, so small to be of no concern to any real investor but enough
to raise more than $100 billion in revenue a year.
The Federal Reserve could allocate a portion of its bond authority
to buy infrastructure bonds.
All of these ideas would help and should be considered, provided
they contain the provisions necessary to create and sustain good jobs.
But while these financing mechanisms can supplement our needs, they
alone will not generate the robust levels of funding needed for us to
stay competitive in the global economy.
We must rely on, and boost, our user-fee revenue streams as key
components in addressing our huge infrastructure deficit.
The gas tax has not been raised since 1993. It now provides
diminishing levels of funding and should be raised. There have been
discussions about creating a user fee based on vehicle miles traveled.
This, along with other forms of user-fee funding mechanisms, needs to
be considered.
We are willing to look at and consider all possible solutions to
ensure robust levels of funding.
Public infrastructure, by definition, is the investment in projects
that produce a broadly healthier economy. Private capital has never and
will never adequately invest in public goods because private investors
cannot capture the economic gains infrastructure creates. Investing in
our nation's infrastructure is a key role of government because it is
simply something the private sector cannot do on its own.
Federal investment in infrastructure is the necessary catalyst for
future economic growth and to enable the private sector to effectively
compete in the global economy. This investment is long overdue.
We need a robustly financed infrastructure bill, and we need it
now.
Madam Chairman, it's not an accident that Mr. Donohue and I appear
together before this committee today. It demonstrates that the need and
urgency of the work to be done is not just recognized by one side of
the political prism. Congress, too, needs to come together and address
the most fundamental need of our country, a strong and efficient
infrastructure.
The AFL-CIO stands ready to work with this Congress, the
administration, business and others who want to move our country
forward into the 21st century. Together, let's boldly take on the
challenge of investing in America, investing in our future and keeping
the American Dream alive for our children and our grandchildren.
______
Responses by Richard Trumka to Additional Questions from Senator Inhofe
Question 1. America's interstate system is now over capacity and
nearing the end of its useful life. Truck traffic is estimated to
double over the next 30 years. Our infrastructure's needs have been
detailed in this Committee numerous times. They are staggering to say
the least. What will be the impact on jobs, businesses and our economic
competitiveness if we fail to address our nation's crumbling
infrastructure?
Response. Failing to address our nation's crumbling infrastructure
will have devastating effects on our economy. Delays and congestion
already cost our economy $115 billion a year, and that number is
steadily climbing. Our future economic well-being depends on an
efficient and reliable transportation system. We simply cannot compete
in a global economy by relying on an aging outdated transportation
system that cannot handle current loads in many areas, let alone in the
future. As I stated in my testimony, ``if we want to have a great
future as a Nation, we cannot sit by and watch the future happen
elsewhere and not here.'' We are not just talking about spending, but
rather making investments that pay all of us huge dividends in the long
run. Good jobs and strong businesses rely on a transportation system
that can meet our needs to move people, commerce, and commodities
efficiently and reliably.
Question 2. It is no secret that our needs exceed the resources
available in the Highway Trust Fund. We are not going to raise the gas
tax, and finding new revenues for transportation is becoming more of a
challenge. The President failed to address this in his budget. How do
you think we can close the gap between the staggering needs and the
limited recourses available in the Trust Fund?
Response. The trust funds receipts have become woefully inadequate
to meet our transportation infrastructure needs. If we rely on existing
revenue streams, at best we will be able to slow the decline of our
system. I have said that everything should be on the table when it
comes to revenue. I stand ready to work with Congress, business, and
others to find solutions to provide the levels of funding that we need.
I doubt there is a silver bullet solution to this problem. A variety of
funding sources will be necessary to get us where we need to be. I
outlined some ideas in my testimony, and I stand ready to discuss
others.
______
Responses by Richard Trumka to Additional Questions from
Senator Lautenberg
Question 1. Just over 2 years ago, President Bush signed into law
my legislation to reauthorize Amtrak. But now, House Republicans want
to go back in time and bankrupt our nation's intercity passenger rail
service. More people, including many business travelers, take the train
between New York and Washington D.C. than fly. How devastating would it
be to the business community, particularly in the Northeast, if Amtrak
were forced to cut services or even shut down?
Response. Shutting down or even cutting Amtrak service in the
Northeast Corridor would have a severe impact on the national economy,
since this congested region produces one fifth of the U.S. GDP. Many
workers use Amtrak as their primary mode of transportation to and from
work. Our already congested highways cannot adequately handle their
current loads during peak hours. Reducing the availability of alternate
modes of travel, such as Amtrak, would only exacerbate this congestion
and make it more difficult for business to operate.
Question 2. Last week, Vice President Biden announced the
Administration's plans to invest $53 billion over 6 years in high-speed
rail. At the same time, House Republicans want to slash high-speed rail
funding and some Republican Governors have given back high-speed rail
grants. How will bold investments in high-speed rail help the U.S. to
attract and retain businesses and good jobs?
Response. There are numerous studies that show our country's
serious deficiencies in all modes of transportation. We need bold
investments in infrastructure across the board, including high speed
rail. These investments will create thousands of good middle class jobs
in areas of the country where unemployment is high. Construction of
high-speed rail with prevailing wage requirements will ensure quality
work at fair pay. The Obama administration's strong commitment to Buy
America requirements means these investments will spur economic
investment in our manufacturing sector and create thousands of new
jobs. Finally, Amtrak and its experienced workforce should be utilized
to implement the high speed rail initiative. Investment in high speed
rail is an essential step toward meeting our future needs to move
people, commodities, and commerce efficiently across the country.
Question 3. It's estimated that our nation loses $115 billion every
year in lost time and productivity because of just sitting in traffic.
How would setting a national freight policy and providing more funds
for freight projects beyond just air and highways create jobs and
promote greater productivity?
Response. Our existing transportation system is already being
utilized beyond its designed capacity, and this is hurting our economy.
The rising demand for freight rail puts strains on a system that is in
dire need of additional investments and improvements. We applaud
President Obama's focus on multi-modal investments that will help our
rail sector, make the nation's ports more efficient, and lay the
foundations for long term economic growth.
Question 4. Amtrak has proposed building a new ``Gateway Tunnel''
under the Hudson River to increase high-speed rail and commuter rail
service. The current rail tunnels are 100 years old and at capacity.
New Jersey AFL-CIO President Charles Wowkaneck has said this project
will ``create thousands of construction jobs'' and ``expand access to
good paying jobs throughout the region.'' What will it mean for job
creation in New Jersey and the region if we fail to build a new rail
tunnel under the Hudson River?
Response. New Jersey AFL-CIO President Charles Wowkanech is right
when he says ``the project will create thousands of good paying
construction jobs in the region.'' Not only do we need to create those
jobs, but workers need to have efficient and reliable access to where
the jobs that match their skill sets are located. We have a mobile
workforce, but workers need to be able to get to their jobs. System
constraints that keep workers from getting to their job weaken our
economy and prevent us from reaching our maximum employment and
economic potential. The decision whether to open new routes to move
goods, services, and people around the country is a choice between
growth and stagnation for the local and regional economy.
______
Responses by Richard Trumka to an Additional Question from
Senator Carper
Question. There was some interesting polling data on transportation
that appeared in the Washington Post on Monday. 93 percent of voters
say that improving our country's transportation network is very or
somewhat important. However, it is clear that Americans do not have
substantial confidence in the Federal transportation program because 71
percent of voters oppose an increase in the Federal gas tax. How should
the transportation reauthorization bill spend existing resources better
and restore Americans' trust in transportation?
Response. This poll clearly shows that voters understand the
transportation infrastructure needs facing our country. They see these
needs every day as they commute on our crumbling bridges and highways.
They see the delays and congestion in our transportation system that,
studies show, cost the economy $115 billion every year. As I said in my
testimony, if we want to bring our transportation systems up to the
level we need to compete in the global economy in the 21st century, all
ideas for robust funding for infrastructure need to be on the table.
But there is no doubt that people want to make sure their tax dollars
are invested wisely. That means we need policies in place to ensure
that infrastructure projects come in on time and on budget and are
built by a skilled and trained workforce. If we do that, then not only
can we help get America back to work, but help can also lay the
foundation for long term economic growth.
______
Responses by Richard Trumka to Additional Questions from
Senator Sessions
Question 1. The stimulus bill was advertised as being needed to
``rebuild our crumbling infrastructure.'' However, only about 5 percent
of the $800 billion in the bill went to infrastructure. Even those
meager funds have been slow to pay out. As of last year, only 30
percent had been spent. Do you think that the stimulus bill adequately
prioritized rebuilding our infrastructure, or should more of the money
have gone to roads and bridges?
Response. We thought the Recovery Act was too small to fill the
hole in our economy caused by the loss of $13 trillion in wealth in
2008 thanks to the financial crisis and the collapse of the housing
bubble. Of course we would have liked to see more infrastructure
investment in the Recovery Act. We would have also liked to see a
surface transportation bill, like the one proposed by Congressman
Oberstar, enacted at the same time as the Recovery Act, or shortly
thereafter.
Question 2. As you may know, the Administration has proposed $53
billion for ``high-speed rail'' in its budget submitted to Congress.
Multiple states, including Wisconsin and Ohio, are pulling out of the
existing high speed rail program due to concerns about cost overruns.
Studies by economists and consultants, including Alain Enthoven,
William Grindley and William Warren, have placed the cost of the
California line alone at between $62-$213 billion, well above the
official estimate of $43 billion. The cost of a ticket from San
Francisco to Los Angeles would likely cost $190 according to the
studies, which is more than the cost of a plane ticket. Considering
that the train would also be slower than a plane, it seems dubious that
people would actually ride the train in the significant numbers. The
only part of the U.S. where a high-speed train could even begin to make
economic sense is in the Northeast Corridor. However, Amtrak estimated
such a train would take 25 years to build and cost $117 billion. Given
the extremely limited resources of our country, and high-speed rail's
apparent lack of practicality, do you think that is the wisest use for
our transportation dollars, or should more be spent on road instead,
which we know every State needs more of?
I believe we need to bring our 20th century infrastructure up to
date in all modes of transportation to help us compete in the 21st
century. Of course our highway system is crumbling and is being
utilized beyond its designed capacity in many areas. In coming decades
we will need to support the needs resulting from population growth and
the growth of business. That's why we believe in a multi-modal
transportation system. Rail--whether transit, freight, or high speed
rail--will have be part of the solution. It is unfortunate that the
Governors in some states have turned down Federal funding for high
speed rail. It reminds me of cities that didn't want to be on the
interstate highway system when it was proposed by the Eisenhower
administration, then years later had to figure how to get connected to
it. Clearly, the current amount of revenue coming in to fund our
transportation system is insufficient even to bring our existing system
up to date, and unfortunately this funding shortfall pits one mode of
transportation against another. Our future transportation needs will
require investment in a multi modal approach if we are to remain a
strong economic leader in the global economy. Transportation
infrastructure spending is an investment that, history has shown, will
pay huge dividends for year into the future.
Senator Boxer. Thank you very much for that testimony. We
look forward to hearing from Mr. Donahue next.
STATEMENT OF THOMAS J. DONAHUE, PRESIDENT AND CEO, THE U.S.
CHAMBER OF COMMERCE
Mr. Donahue. Chairman Boxer, Ranking Member Inhofe and
distinguished Members of the Panel, thank you for inviting us
to be here with you today.
Rich and I may seem like the oddest couple since Felix and
Oscar, but the truth is that business and labor have chosen to
set aside certain differences to focus on achieving shared
goals such as infrastructure improvement, immigration issues,
some national defense questions and, I am sure, going forward,
some questions on how we expand manufacturing. We may not be
Face Book friends, but we can occasionally find some serious
common cause, pool our resources and get some things done.
It underscores a fundamental point about the U.S. Chamber
and that is we will work with anyone who shares our goals of
creating jobs, growing the economy and enhancing our
competitiveness as a Nation. Just last week we were proud to
host the President at the U.S. Chamber to discuss how we can
achieve our mutual objectives of trade, education, innovation
and jobs.
It is in that spirit of cooperation that I urge the Members
of the Congress, beyond this Committee, to set aside their
ideological and partisan differences and unite behind an issue
that all of us should be able to support, the rebuilding of the
physical platform that supports our national economy.
Madam Chairman, I am not going to spend my brief time this
morning recounting the endless parade of statistics about the
deteriorating condition of our roads and bridges, our rail and
air and seaports, our lochs, our dams, our inland waterways and
our electricity grid. The needs have been studied to death and
quantified by many organizations including the Chamber itself.
I would say, however, that my experience in the past as the
head of the American Trucking Association taught me that the
only way to ever make these highway bills and these processes
work is to build an issue where you get urban votes for rural
roads. Urban votes were the issues that Senator Lautenberg was
talking about, the questions of transit and other matters, and
the only way you are going to get enough votes from this
Congress to do the things we have to do throughout the country
is by having a broad multi-dimensional program.
In fact, for years the Chamber has been talking about that
while also sounding the alarm. We have cited the economic costs
of congestion, as Rich talked about, we have underscored the
number of lives lost on the highway every year that do not have
to be lost, we pointed out the negative impact of an aging
transportation infrastructure, and we have outlined the yawning
gap between what is needed to fund a modern system and what we
are actually investing.
We have emphasized the hundreds of thousands of good paying
jobs that could be created if we modernized our highways,
transit systems, airports, seaports, waterways and rails. Last
year, our Transportation Performance Index was the first ever
to establish a direct link between the performance of our
transportation infrastructure and economic growth.
We have provided members of this Committee with a copy of
this unique and important study and I urge you to review it
because we are going to put two more after it on energy and
water and other technology issues so we can see what is the
effect on our global economy, on our competitive position, on
what is going on with infrastructure.
The bottom line is this. If we embrace the status quo and
fail to make the needed investments, the future is not going to
look very attractive to us. If we do not change course, the
Index projects that over the next 5 years, the economy could
forego as much as $336 billion in lost growth as transportation
networks continue to deteriorate.
Fortunately, and it is pretty obvious to all of you, there
is another path. By making the necessary investments and
implementing needed reforms, we can transform our
transportation networks, making it far easier for people and
goods to move quickly and safely across the country and around
the world.
So, how do we move forward on rebuilding America? We must
begin by reauthorizing SAFETEA-LU. We must do so following
these core principles.
First, the Congress must ensure Federal transportation
policy, programs and resources are oriented around our national
needs. Over the years, these programs have devolved into
political redistribution of Federal dollars instead of
thoughtful investments benefiting the Nation as a whole. We
need to focus our investment for performance that will add to
long-term economic growth.
Second, we must adopt strategies, and technologies, by the
way, that will reduce congestion, improve mobility in urban
areas, and maximize the use of existing assets. For the average
motorist, nothing underscores the dilapidated state of our
infrastructure and its shrinking capacity than widespread
congestion. The Texas Transportation Institute, which you
mentioned, just updated the Urban Mobility Report and you heard
from Rich the tremendous amount of money that is going down a
rat hole because we are not investing in our infrastructure.
Third, the bill must help ensure rural connectivity. The
majority of the United States' natural and agricultural
resources are located in rural areas. Congress should provide
Federal investment in small communities and rural areas to
support connectivity to major economic population centers.
Madam Chairman, I would mention that years ago when I ran
the truckers, lots of people in California were working all the
time on how you get more of what you sent to Washington back. I
said at a meeting out there once, if we do not build some roads
in Las Vegas and through Nevada, you are never going to get out
of Southern California. That is the thing that we have to
explain to people. You might have huge economic centers around
this country, but they are connected by major rural areas and
we have to invest in all of those locations.
Fourth, we believe that Congress should develop a
comprehensive freight program to ensure adequate capacity,
reduce congestion, and increase through put at key highway,
rail, waterway and intermodal choke points, all national
infrastructure. The growth in international trade, oh, and, by
the way, domestic trade, is overwhelming intermodal freight
capacity and it is only going to get worse. The Federal
Government currently does not have a comprehensive plan to
accommodate and support existing and forecast freight flows. It
needs one now.
Fifth, we believe the Congress and the Administration must
maximize the use of existing infrastructure and streamline
project delivery for new infrastructure. Better strategies and
the smart use of technology can help us get the biggest bang
from our existing buck. That is just as true for nuclear power
facilities as it is for rails, bridges, ports and most of our
infrastructure. That is why we urge this Committee to ensure
that the Nuclear Regulatory Commission is properly re-licensing
its existing plants without further delay.
Speaking of licensing, our citing and permitting process
for new infrastructure is well beyond deeply flawed. I mean, we
are excited that we have new ways to do this and we are cutting
the time. You wonder why the money that was put aside for
stimulus could not have been put to work with shovel ready
projects. We have plenty of shovel ready projects. We do not
have any permit ready projects. There is a whole industry in
this country that takes years and years and years until we
finally go build a road or fix a bridge. Quite frankly, we
could save a hell of lot of money and build a lot of
infrastructure if we just fixed that.
Put simply, it takes too damned long to build anything in
this country. The result is inefficiencies across the system,
increased project costs and trouble with financing. Who is
going to invest in a 30 year project? They want to know when it
is going to get done.
Finally, the bill's guiding star must always be safety. It
is a national disgrace that 34,000 Americans die on our
highways every year or 100 people every day. We can do better.
Let me say a word about funding. I want to say, Rich, thank
you for starting. I am not sure that I am going to jump up and
down and suggest the transaction tax because you should know
money goes where it is welcomed and it may end up in Hong Kong
tomorrow morning because it will not pay a tax. But I really
think that you raised the issue. That is the big question. How
do we pay for it?
There needs to be a vigorous dialog on funding and
financing. But first we have to agree on the direction in which
we are going. We will soon enough get to how much will it cost
and how do we pay for it. So, I would simply say everyone needs
to keep an open mind.
I am well aware of the fiscal constraints facing the
Congress, the battles that are going to take place here. But
the arguments have been made that this money returns on its
investment. We have to avoid cutting off our nose to spite our
face. Without proper investment and attention to this
infrastructure, the United States' economic stability, its
potential for job growth, our competitiveness and our quality
of life are going to change. So, it is not a time to cut back.
Now is the time to leverage public resources against
private investments. There is $180 to $200 billion sitting
there in the private sector ready to invest in infrastructure
if we can compress the time, get the projects going and get
underway.
For our part, the Chamber and its Americans for
Transportation Mobility Coalition, which, by the way, involves
a whole number of labor unions, are ready to work with everyone
to make this happen.
Madam Chairman, America astounded the world in the 20th
Century by building the most advanced, extensive and efficient
transportation system. As was stated in your own comments, it
fueled our economic growth, it expanded our horizons, and it
made us the envy of the world.
So, it is time from my view, and our citizens believe, it
is time to go do it again. You have to find the money. We have
a system right now of user fees that should not be abandoned.
We are prepared in questions and discussion and following up to
this to talk about our vigorous support from ways to fund this.
So it is time for us to get on with it because sufficient,
smart and judicious investment in our infrastructure is where
it all begins.
If you think about our infrastructure, it is this table on
which we are going to play our Monopoly game of commerce. If we
do not have it, we are going to pay a horrific price for it.
Thank you very much for inviting me.
[The prepared statement of Mr. Donahue follows:]
Statement of Thomas J. Donohue, President and CEO,
U.S. Chamber of Commerce
Chairman Boxer, Ranking Member Inhofe, and distinguished Members of
the Senate Environment and Public Works Committee: thank you for the
opportunity to be here today to explain the urgency and the importance
of Federal leadership and investment in highways and public
transportation. Now is the time to work on a bi-partisan basis to pass
the legislation that will maintain, modernize, and expand this critical
surface transportation infrastructure: reauthorization of the Safe,
Accountable, Flexible, Efficient Transportation Equity Act: A Legacy
for Users (SAFETEA-LU reauthorization).
Public and private investment in the economic foundation of the
United States is critical for long-term economic prosperity. The United
States' global competitiveness is dependent on construction and
maintenance of a world class infrastructure. As the President
recognized in his State of the Union address, lasting jobs grow where
infrastructure is strong.
The needs have been studied to death and quantified by many
organizations including the U.S. Chamber. In fact, for years, the U.S.
Chamber has been sounding the alarm about our nation's deteriorating
and underperforming transportation infrastructure.
We have cited the economic costs of congestion on the ground, in
the air, and at our ports. We have underscored the number of lives
needlessly lost to poor roadway conditions. We have pointed out the
negative impact an aging transportation infrastructure system has on
our ability to compete globally.
We have outlined the wide gap between what is needed to fund a
modern system and what the U.S. is actually investing. We have
emphasized the hundreds of thousands of good-paying jobs that could be
created if we modernized our highways, transit systems, airports,
seaports, waterways, and rails.
Last year, the Chamber became the first organization ever to
measure the performance of the transportation system and to make a
direct link between the performance of transportation infrastructure
and economic growth.
is the transportation system working for the u.s. economy
Last year, using well-respected experts, the Chamber developed a
way to measure transportation infrastructure performance nationwide and
in each of the 50 states. This project, called the Transportation
Performance Index (TPI) shows how well the U.S. transportation system
is serving the needs of businesses and the overall U.S. economy.
To build the TPI, we asked businesses, economic development
experts, and public sector agencies what mattered most when it came to
transportation infrastructure. They gave us feedback that fell into
three categories. The first was supply: the availability of
infrastructure is a key consideration for businesses when deciding
where to locate their facilities. The second was quality of service: is
the infrastructure reliable, does it provide predictable service, and
is it safe? The third category was utilization: can current assets
sustain future growth? Utilization is a key consideration for companies
like FedEx and others that look 20 years into the future to inform the
decisions and investments they make today.
Based on their input, we identified indicators in each mode of
transportation, and then weighted and combined them (much like the Dow
Jones Industrial Index) to give a picture of the transportation
system's performance.
From 1990 to 2008 (that last year for which complete, publicly
available data was available), the TPI increased about 6 percent
overall. In contrast, U.S. population grew 22 percent, passenger travel
grew 39 percent, and freight traffic grew 27 percent. Given these
facts, it is a testimony to business ingenuity that the national
results are not worse. Businesses work around transportation challenges
by scheduling deliveries in off-peak hours, implementing flexible
employee work policies, and substituting information technology for
transportation services. There are also countless stories of
transportation infrastructure owners using the engineering equivalent
of duct tape to hold infrastructure together and crafting creative
operational strategies to enhance throughput.
In contrast, as we projected out to 2015, we estimate that the TPI
is going to decline at a rate of nearly one point per year. We will
observe more traffic congestion, breakdowns of the inland waterway
system and delays at airports. We will lose 0.3 percent of Gross
Domestic Product (GDP) for every one point decline in the TPI,
translating to $336 billion based on 2008 GDP.
The Chamber's Transportation Performance Index proves that
enhancing the performance of transportation infrastructure is a vital
part of creating sustainable, long-term growth . . . growth our nation
desperately needs.
the high cost of underperforming transportation systems
The TPI tells us that without addressing the transportation
problems in this country we will undermine economic growth.
Our national transportation system is critical for long-term
economic prosperity, supports Americans' high standards of living that
has driven economic expansion, and is the backbone of our business
supply chain.
As the President recognized in the State of the Union address,
lasting jobs and economic development grow where infrastructure is
strong. The President said, ``Students of history will remember that
America is the Nation that built the transcontinental railroad, brought
electricity to rural communities, and constructed the interstate
highway system. The permanent jobs created as a result of building the
transcontinental railroad or the interstate highway system came from
businesses that opened near a town's new train station or a new off-
ramp.''
Almost 30 percent of the nation's economic output is totally
dependent on international trade. As we seek to double exports over the
next 5 years by exporting to the 95 percent of the world's population
that lives outside of the United States, our transportation system must
be up to the task. It will also be critical to our competitive
advantage as a nation as competitors invest in their own infrastructure
to compete with the United States.
Quality transportation infrastructure unleashes competitive
advantage by leading to lower production costs making U.S. businesses
more efficient, making the United States a desirable location for new
and existing businesses, and also making U.S.-produced goods and
services more competitive in the global economy. However, deteriorating
infrastructure in the United States may actually be contributing to
increased costs and decreased efficiency for American businesses
(Cambridge Systematics, 2008). The consequences of an underperforming
system are hundreds of billions of dollars annually in wasted fuel,
lost productivity, avoidable public health costs, and delayed shipments
of manufacturing inputs, consumer goods and other items critical to the
underlying growth of our businesses.
Without smart investment the U.S. infrastructure American
businesses will to lose ground to major international competitors.
Recognizing the benefits of well-developed infrastructure, both less-
developed and emerging market competitor countries are preparing their
transportation systems to move away from producing low-wage goods to
producing the types of products that require the specialization of
labor that transportation infrastructure makes possible (Praxis
Strategy Group and Kotkin, 2010).
While the United States has maintained its position at the top of
the overall World Competitiveness Yearbook rankings (IMD, 2010), the
U.S. sub-ranking for Basic Infrastructure has degraded since 2005. The
World Economic Forum also performs an annual infrastructure ranking in
the Global Competitiveness Report. The result is similar: U.S.
transportation infrastructure is falling behind.
America's entire transportation infrastructure--roads and rails,
airports and seaports, inland waterways and airways--the proud legacy
of generations past, needs repair and replacement as well as expansion
to handle future growth. To head off this future and have a
transportation system that supports a 21st century economy, the United
States needs a high level of investment targeted at improving
performance across all modes and across the country: we cannot just fix
a few bottlenecks or address the problems in one city or state.
Congress has an array of legislative opportunities to tackle our
transportation challenges. From the analysis of our TPI findings, the
Chamber believes that formulating policies, programs and investment
strategies, four items should be on top of the to-do list:
Get transportation infrastructure to a State of good
repair.
Fix congestion today.
Create capacity for the future by both optimizing of
systems and building physical capacity.
Target last mile infrastructure--in particular intermodal
freight access--and bottlenecks.
highway and public transportation focus: safetea-lu reauthorization
Of course, today, we are talking about two aspects of the nation's
transportation system in particular: the roads and bridges that are an
essential aspect of supply chains and personal mobility, and the public
transportation networks that move our employees and America's citizens.
In November 2008, the Chamber's board of directors approved a set
of recommendations that describe high-level objectives the business
community deems necessary for a successful bill.
Below are selected U.S. Chamber recommendations I would like to
highlight today (others follow the written testimony):
Congress must ensure Federal transportation policy, programs, and
resources are oriented around national needs related to U.S. global
competitiveness, international trade policies, interstate commerce,
interstate passenger travel, emergency preparedness, and national
defense.
Overall, there is a need to reform and refocus Federal
transportation policy and programs to better align with national goals
and priorities. Over the years, the number of Federal aid highway and
transit programs has expanded creating 108 different funding categories
varying widely in purpose. Programs--even formula programs--have
devolved into a political redistribution of Federal dollars.
As businesses plan for the future the U.S. Government must invest
with a purpose. There needs to be a way to make thoughtful investments
in regionally and nationally significant projects. Americans need to
think strategically as to where these investments go, to create a
system that creates a competitive advantage for the U.S. economy. For
example, Canada developed and deployed strategies a national approach
known as the ``Gateways and Corridors Strategy'' that is a shared
vision of goods movement with the private sector.
The scope of activities supported by the Federal programs means
that Federal dollars can be spent on anything from Interstate bridges
to city sidewalks, new transit systems to Federal Lands' roads, museums
to intermodal facilities. The list goes on and on. While there are many
potential uses of Federal funding, each with a constituency, now more
than ever--especially when the fiscal environment and knowing that new
funding is going to be difficult to come by--taxpayers need to have
faith that the cents per gallon they pay at the pump are being invested
in high priority transportation projects that will produce better
transportation system performance and in turn, long-term economic
development and growth, and permanent jobs.
Federal programs should continue to emphasize safety and
maintenance efforts
Every day on our highways and streets, more than one hundred people
are killed by fatal crashes. In 2009, more than 33,000 individuals died
on the roadways and another five million were injured. This number can
be and must be drastically reduced by making our roads and roadsides
safer and more forgiving. According to a study by the American Road and
Transportation Builders Association, in 2006, roadway condition is a
contributing factor in more than half--52.7 percent--of the nearly
35,000 American deaths resulting from motor vehicle crashes each year
and 38 percent of the non-fatal injuries.
There is a clear national interest in ensuring adequate passenger
mobility, particularly in large metropolitan areas. Congress should
develop Federal policy and programs that support congestion mitigation
and improved mobility in urban areas by providing incentives for the
adoption of strategies and use of technology that maximize the use of
existing facilities, supporting public transportation capacity,
availability and ridership strategies, and highway capacity where
appropriate.
Much of America's economic activity is based in metropolitan areas.
The 100 largest metropolitan regions in the United States account for
just 12 percent of the land area but contain 65 percent of the
population, 69 percent of all jobs, and 70 percent of the nation's GDP.
The largest 100 metropolitan areas also serve the majority of our
transportation activity, handling 72 percent of all foreign seaport
tonnage, 79 percent of all U.S. air cargo tonnage, 92 percent of all
air passenger boardings, and 95 percent of all public transit passenger
miles traveled.
Traffic congestion is, quite simply, one of most--if not the most--
vexing and critical problems to address. The authority on the costs of
congestion, the Texas Transportation Institute, just updated its Urban
Mobility Report, and the news isn't good. Congestion costs the American
public $115 billion a year lost in time and wasted fuel, or $808
dollars out of the pocket of every motorist. There is not a one-size-
fits-all solution to congestion relief. In some places it requires more
physical highway capacity. In others, technology and smarter
transportation strategies that increase throughput are the answer.
Cities in other countries are using innovative management approaches
including congestion pricing: this is an option that we are open to as
well. And as you well know, investment in public transportation is
critical for congestion relief and mobility.
While the U.S. population is increasingly shifting away from rural
areas into massive ``megaregions,'' ensuring rural connectivity is a
vital to the national interest.
The majority of the United States' natural and agricultural
resources are located in rural areas. Further, smaller communities must
build and maintain the full range of infrastructure regardless of
population size. Congress should ensure improved rural connectivity by
providing Federal investment in small communities and rural areas to
support connectivity to major economic and population centers.
Congress should develop a comprehensive freight program to ensure
adequate capacity, reduce congestion, and increase throughput at key
highway, rail, waterway, and intermodal choke points.
The Federal Government currently does not have a comprehensive plan
to accommodate existing and forecast freight flow.
When it comes to goods movement, particularly important is the
``last mile'' infrastructure that links people and products to their
final destinations: whether travel is by rail, marine or air
transportation, or by roads or public transportation itself, without
the last mile no journey is complete.
High priority corridors need attention. For example, the LA-1
corridor is a fragile, two-lane highway and the only artery to
America's Energy Port--Port Fourchon. It is the critical link between
the land-side support services and America's domestic energy production
in the Gulf of Mexico.
Infrastructure investment also plays a role in speeding border
crossings. Nearly one-third of all trade on the U.S. Canada border is
intra-company delivery of input materials, which means that anytime
delayed at the border lowers the competitiveness of our businesses and
serves as a tax on the consumer. Furthermore, no one would argue that
the current border infrastructure was designed for today's traffic
flows. This has a negative impact on the ability of Customs and Border
Protection to effectively execute their mission of facilitating
legitimate trade, and securing our country.
Given the transportation sector contributes roughly one-third of
all carbon emissions and is responsible for the consumption of two-
thirds of the nation's petroleum resources, any climate change
legislation is bound to have significant down-stream ramifications for
transportation users.
The Chamber encourages Congress to consider the preservation of
American jobs and the competitiveness of U.S. industry when devising
policy. Furthermore, any approach to climate change should be
international in scope, should promote the accelerated development and
deployment of greenhouse gas reduction technology, should reduce
barriers to developing climate-friendly energy sources, and should
encourage energy conservation and efficiency.
The Chamber also believes that Congress and the administration can
do a great deal more to speed up project delivery.
According to the Federal Highway Administration (FHWA), major
highway projects take on average about 13 years to get from project
initiation to completion while project development activities under the
Federal Transit Administration's (FTA) New Starts program average more
than 10 years. Delayed project delivery creates inefficiencies across
the systems, translates into increased project costs, and can undermine
finance plans. Congress should looking at efforts like the I-35W Bridge
reconstruction in Minnesota, which took just over a year from start to
finish, as a model.
The Federal Government should continue to support research,
development, and application of improved technologies that improve
infrastructure design, construction, maintenance, financing, and
operations, and increase safety and enhance the environmental
sustainability of the U.S. highway and public transportation systems.
paying for highway and public transportation needs
There needs to be a vigorous dialog on funding and financing, but
first we have to agree on the direction we are going. Too many times in
the past all of us--elected officials, interests, the media and the
American people--have started with the questions of ``How much is
needed?'' ``How much do we have to work with?'' I commend the committee
for starting with ``What we need, what can we do, and what are the
benefits?'' We will get soon enough to ``How much will it cost and how
will we pay for it.''
So my point on paying for it all is that everyone needs to keep an
open mind. I am well aware that Members of Congress and the Obama
administration are faced with difficult fiscal circumstances. It is
clear that Federal budget and appropriations processes appear dominated
by discussion of deficit reduction, and Americans expect their leaders
to make tough choices just as they have for their own households.
However, without proper investment and attention to our infrastructure,
the United States' economic stability, potential for job growth, global
competitiveness and quality of life are all at risk.
Investments in the nation's highways and public transportation
systems are a core Federal Government responsibility. For the good of
our economy Congress must continue to increase investment in our
infrastructure: now is the wrong time to cut back.
There should be strong incentives for investment of private sector
resources and leveraging of public dollars to the greatest extent
possible. Barriers to private investment including regulations and
administrative processes that make project delivery take far too long
should be removed or reformed. Every State should have laws that not
only allow, but welcome, private investment. I know you are well aware,
Madam Chairman, of the power that expanding the TIFIA (Transportation
Infrastructure Finance and Innovation Act) program holds. It is one of
the best deals around: each dollar of Federal funds can support up to
$10 in TIFIA credit assistance and leverage $30 in transportation
infrastructure investment. In fact, I spoke yesterday with Los Angeles
Mayor Antonio Villaraigosa about his plan to unlock the gridlock in Los
Angeles with accelerated investments in a suite of public
transportation projects called 30/10 using TIFIA, and TIFIA could be
expanded and applied elsewhere in the country. These ideas are just a
few that can help bring private investment and strategy public dollars.
Now, all of that said . . . public-private partnerships and lower-
cost Federal credit programs are not substitutes for direct Federal
investment: they are financing and project delivery tools.
Although there are many potential tools to provide financing
assistance, these tools do not actually generate revenue or support
guaranteed funding levels. By guaranteed funding, I mean the
predictable, multi-year dollars provided largely by formula to states.
This is the bread and butter for maintaining and modernizing our
existing highway and transit infrastructure. Investments in the
nation's highways and public transportation systems are a core Federal
Government responsibility. Therefore, Federal resources provided from
the Highway Trust Fund (HTF) to states should provide stable, certain
funding over a multi-year period.
other transportation needs
Of course, addressing highways and public needs is not sufficient
to improve the performance of the nation's transportation system and
prepare for future demands.
If the U.S. is going to double exports--and many of those exports
like grain, aggregates, and coal rely on a reliable inland waterway
system--we cannot neglect the oldest avenue for goods movement in the
U.S.--our waterways. The mouth of the Mississippi River needs dredging:
barge companies are losing $640,000 per day while waiting for the Army
Corps of Engineers to literally clear a path to the Gulf Coast and to
the customers around the world waiting for U.S. exports of grain,
aggregate, and energy products. It takes the Army Corps 20 years to do
a project, and to make matters worse, Congress dribs and drabs out
money. For example, a $158 million flood plain project in West Virginia
is getting appropriations at the rate of $1.5 million per year. This
approach makes this low-cost form of transportation unreliable and
gives our competitors in these low margin products a real edge.
It is past time to prepare for the opening of the Panama Canal in
2014, but there is still tremendous uncertainty over whether the United
States will be ready. Intermodal connections at the Port of Norfolk are
insufficient for offloading that volume of cargo. The Port of Miami--
one of three East Coast ports with Federal authorization to dredge deep
enough to accommodate Super Post-Panamax ships--must have a Federal
appropriation to stay on track for dredging and create 33,000 trade-
related jobs.
When the economy rebounds, the freight rail industry will go back
to experiencing real capacity shortages. It is important to note that
America's freight railroads operate almost exclusively over
infrastructure that they build and maintain with their own private
funds. From 1980 to 2009 they invested more than 40 cents out of every
rail revenue dollar to maintain and improve their rail network
infrastructure and equipment. The freight railroad industry requires a
balanced, common-sense regulatory system so it will continue making
record investments in its own capacity. Congress should help build
future capacity and deal with today's bottlenecks by enacting a freight
rail investment tax credit to encourage private capital investment.
The Chamber is pleased to see attention to investment in aircraft
equipage and air traffic control technologies to expedite the
transportation to NextGen and add capacity. It will also have the
benefits of reducing emissions and increasing safety, and we also have
to address aviation needs on the ground.
In short, there is a system of transportation networks, and they
all must function well to support competitiveness.
in conclusion
Today we are not talking about stimulus . . . we are talking about
growing the economy in a fundamental, ongoing way.
Delaying investment will not make transportation problems go away.
Instead, conditions and performance will get worse. Materials, labor,
and land will get more expensive and our businesses will be less
competitive. Opportunities to save lives will be missed. Americans are
already paying dearly for inferior transportation, through lost
productivity, wasted fuel, and tragically, more crashes.
There should be no further delay on a multi-year authorization of
the Federal highway and public transportation programs. The Chamber's
business members large and small engage in long-term planning that
relies on assumptions about the economic foundation of our country.
Passage of a strong highway and public transportation authorization
proposal with bi-partisan support will help to set the table on which
these companies and their employees conduct business.
Madam Chairman and Members of the committee: you understand the
urgency and importance of getting to work on SAFETEA-LU
reauthorization. For our part, the Chamber and the Americans for
Transportation Mobility Coalition is ready to work with you, the AFL-
CIO, and anyone else to move forward with investing in America's
economy. There is no greater priority than economic growth.
The bottom line is that the U.S. is missing a huge opportunity to
ignite economic growth, improve our global competitiveness, and create
jobs. This is not just ``transportation for transportation's sake.''
Without more robust economic growth, the U.S. will not create the 20
million jobs needed in the next decade to replace those lost during the
recession and to keep up with a growing workforce, will not have the
revenue to get the deficit under control, will not have the ability to
keep pace with global competitors, and will not be able to provide our
children and grandchildren with a better future. As we emerge from the
deepest and most painful recession since the Great Depression--and as
our recovery limps along--it is necessary to tap into every available
source of economic growth available.
U.S. Chamber of Commerce Policy Declaration
Transportation Infrastructure-General
preamble
It is time to strategically plan and invest in the U.S.
transportation system. Transportation infrastructure capacity is more
vital than ever to the success of U.S. industries. A well-designed,
interconnected transportation network with adequate capacity and
efficient management has significant economic and social benefits to
the nation's economy. In order to keep pace with transformations of the
national and global economies, the U.S. transportation system needs to
expand, modernize and adapt to the changing and growing needs for
freight movement and passenger mobility. Long term underinvestment in
transportation infrastructure is having an increasingly negative effect
on the ability of the United States and its industries to compete in
the global economy.
policy objectives
1. Promote the link between sound transportation infrastructure
development programs and our nation's economic productivity,
international competitiveness, and quality of life.
2. Promote increased public and private investment in
transportation infrastructure in order to maintain and improve economic
growth, jobs, safety, mobility, and interconnectivity.
3. Ensure public funding is spent efficiently and effectively at
the Federal, State and local levels. At the Federal level, priority
should be given to safety needs, the facilitation ofcommerce and
passenger mobility.
4. Encourage the efficient use of existing transportation
infrastructure, promoting polices and new technologies that will
maximize freight and passenger mobility, ease congestion,and improve
safety.
5. Encourage transportation infrastructure policies consistent with
energy, environmental and security policies.
funding
1. Government at all levels should make public investments in
infrastructure at levels commensurate with needs.
2. Costs of transportation infrastructure should be borne primarily
by the users of the transportation system. However, funding and
financing models for transportation infrastructure necessarily will
vary among and within modes of transportation.
3. Private investment in transportation infrastructure that
promotes economic growth, safety, mobility, and interconnectivity
should be encouraged alongside strong, publicly funded programs.
4. Whenever possible, the provision of commercial transportation
services (e.g. trucking, freight rail, and air travel and cargo) should
be left to private enterprise functioning in a competitive market, and
the costs of those services should be borne directly by the customers
of the services through market prices.
revenue diversion
1. Transportation taxes, revenues, and other user fees should be
reinvested in transportation infrastructure and services.
2. Costs of non-transportation objectives should not be imposed on
the transportation system, and Federal transportation infrastructure
funds should not be conditionally linked to the enforcement of non-
transportation infrastructure mandates.
3. Transportation trust funds should be maintained as separate and
distinct accounts for budgetary purposes and budgetary firewalls should
be maintained.
4. Transportation trust funds should maintain adequate balances to
protect against insolvency but should not maintain uncommitted
surpluses.
regulations
1. The need for additional transportation regulations should be
balanced with the Nation's needs for improved economic productivity,
international competitiveness, and quality of life.
2. In implementing environmental, fuel economy, health, safety, and
technological feasibility programs that affect transportation, the
Federal Government should ensure that its standards and other
regulations are economically practical for industry as well as cost
effective to consumers.
3. Government agencies should ensure that regulation does not
unnecessarily impede or delay the development and deployment of
innovative products or processes that may improve the quality,
performance, or durability of our transportation systems.
__________
U.S. Chamber of Commerce
Recommendations to Congress Regarding
SAFETEA-LU Reauthorization
defining the national interest and the federal role
The U.S. Chamber of Commerce believes that Federal
transportation policy, programs, and resources should support U.S.
global competitiveness, international trade policies, interstate
commerce, interstate passenger travel, emergency preparedness, and
national defense, which are compelling national interests.
policy objectives
Therefore, the Federal Government bears significant responsibility
to ensure that efforts advancing the following policy objectives are
prioritized and funded.
Modernization and Maintenance.
Highway, transit, and intermodal assets identified as
being in the national interest should be brought into a State of good
repair and modernized. Congress should outline a comprehensive plan
involving Federal, State, local, and private stakeholders to
define and identify highways, transit, and intermodal
assets in the national interest,
establish performance measures to guide government
investment, and
incorporate technology and safety upgrades, including
open standards-based information technology, into
modernization, maintenance and preservation activities to the
greatest extent possible.
Safety
The U.S. Chamber supports a continued Federal role in ensuring a
comprehensive, results-oriented approach to safety through national
safety goals, performance metrics, and complementary plans to guide
investment.
Incentives should be provided for applying best practices and
advanced safety technologies and equipment.
Freight Mobility
A national freight transportation program for identifying
and funding Federal, state, and metropolitan efforts to ensure adequate
capacity, reduce congestion and increase throughput at key highway,
rail, waterway and intermodal choke points is needed.
The program should include a national freight
transportation plan built on performance measures and should include a
comprehensive survey of key freight corridors and other assets.
A national freight transportation plan should incorporate
the development of new capacity, access routes to major water ports and
airports, access routes to border crossings and international gateways,
operational strategies to improve utilization of existing assets, and
strategic intermodal investments to expedite freight movement.
The plan should guide government project selection and
prioritization.
The program should not dilute other Federal
transportation priorities.
Urban Mobility
Federal policy and programs should support congestion
mitigation and improved mobility in urban areas by
providing incentives for the adoption of strategies
and use of technology that maximize the use of existing
facilities,
supporting public transportation capacity,
availability and ridership strategies where appropriate, and
supporting increased highway capacity where
appropriate.
Rural Connectivity
Federal investment in small communities and rural areas
should primarily support connectivity to major economic and population
centers.
Investment should be guided by national connectivity
goals, population density thresholds, and standardized measures of
access.
Environment and Energy
Our country's energy goals will only be met by a
commitment to technology innovation and to all types of available
energy sources.
Climate change policy choices have major economic
consequences and should not be made without adequate opportunity for
debate by lawmakers. Any and all policy decisions relating to the
control or reduction of greenhouse gas emissions should be based on a
complete understanding of scientific, economic, and social
consequences, in order to ensure balanced industrial growth, economic
progress, high-quality living standards, and a healthy environment.
Any and all climate change policy decisions must
preserve American jobs and the competitiveness of
U.S. industry,
provide an international, economy-wide solution,
which includes developing nations,
promote accelerated development and deployment of
greenhouse gas reduction technology,
reduce barriers to developing climate-friendly energy
sources, and
promote energy conservation and efficiency.
The voluntary use of all forms of public transportation
that can be demonstrated to be energy efficient and cost-effective
should be encouraged in a way that does not restrict individual choice
among competing transportation modes.
Strategies for improving air quality in regions of the
country that do not meet Federal standards (e.g., NAAQS nonattainment
for a criteria pollutant) must recognize the importance of
technological innovation and modernization of the economic base in
achieving environmental quality, and must not place an undue burden on
economic development.
methodology
Program Consolidation and Accountability
Federal programs should be reorganized and consolidated
around specific, overarching national objectives to ensure that
planning is more comprehensive and projects reflect the Federal role.
Project approval and funding should be linked to economic
benefits and performance-based outcomes.
Performance-based outcomes should be achievable and cost-
effective for consumers and economically practical and feasible for
industry.
States and localities should be allowed to pursue
solutions that work best locally to meet their unique transportation
needs. If those solutions are implemented with Federal funding, they
should measurably contribute to addressing national interests.
Research and Development
The Federal Government should support research,
development, and application of improved technologies that
improve infrastructure design, construction,
maintenance, financing, and operations, and
increase safety and enhance the environmental
sustainability of the U.S. highway and public transportation
systems.
Project Delivery
The Federal Government should improve and make consistent
the project review and approval process for all modal investments to
ensure the completion of transportation infrastructure improvements in
a timely and environmentally sound manner.
The Federal Government must shorten the time it takes to
complete environmental reviews and must support other measures to speed
project delivery once they clear environmental review.
The Federal Government should encourage private sector
involvement to help expedite project delivery.
Life cycle costs should be utilized in Federal-aid
projects where appropriate.
funding
Federal Funding Levels
Funding levels should be directly tied to fulfilling the
Federal responsibility in meeting the national interest.
Current revenue streams are not sufficient to maintain
Federal-aid highway and transit programs at existing service levels,
nor will they be sufficient to meet projected future highway and
transit needs.
Additional revenues are required, and the U.S. Chamber
will evaluate funding levels in relation to proposed policies and
programs that support the national interest and reflect an appropriate
Federal role.
Federal Revenue Principles
A user fee-based trust fund, protected by budgetary
firewalls, should be the backbone of Federal highway and public
transportation investment.
Funding guarantees, which provide support for stable,
long-term capital planning, should be maintained. General funds
supporting transit programs should be guaranteed.
Unobligated revenues should not be allowed to accumulate
in the Highway Trust Fund beyond amounts necessary to meet cash-flow
requirements.
Revenue mechanisms should be structured to ensure that
the purchasing power of revenue sources keeps pace with inflation.
Congress should develop a road map for a sustainable
revenue model that maintains an equitable distribution across all
system users, provides adequate and predictable revenue, and is
administrable with minimal overhead.
Funding allocations from the Highway Trust Fund should be
strictly assigned only to transportation purposes.
Private Investment and Financing
The Federal Government should encourage project financing
and delivery approaches that attract private investment.
The Federal Government should expand its role as a
financing partner and a lender of last resort.
Congress should lift the cap on private activity bonds
for highway and transit infrastructure.
Earmark Reform
Earmarks can undermine the integrity of Federal
transportation programs and should be limited if they are not related
to, or are only tangentially related to, transportation infrastructure,
do not address the goals of Federal transportation
policy, and
have limited or no national benefit.
Any funds earmarked for specific projects in the next
authorization should be obligated during the authorization period.
Conditions for Chamber Support of Increased User Fees
The U.S. Chamber would support an increase in user fees
if Congress advances a reauthorization bill that realistically achieves
the following:
A refined Federal role, oriented to achieve national
interests.
Significant program reform emphasizing performance
management and accountability to ensure that costs are
minimized and benefits are maximized.
Improvement in the integrity of user fees by limiting
earmarks and non-transportation spending.
New opportunities to access private sector funding
sources.
The establishment of a road map for a sustainable
revenue.
Senator Boxer. Well, let me say it to both of you. You were
eloquent and to the point, and it is refreshing for us to see
you sitting side-by-side. I am excited that you are going to
work together on a manufacturing initiative.
I can only just say, from my perspective, that you really
are a hope for us because there are some great divides on so
many issues around here and if we can make you two the symbol
of coming together because the country, not to steal from your
name, the country trumps politics, that is where we have to go.
There is a very important issue coming our way. I do not
know if colleagues are aware of this. When we passed the HIRE
Act, it took care of funding for quite a ways out, until, I
think, September 2012, because we were all so nervous about
losing funding. However, the authorization for all the projects
runs out on March 4th. So, we have, right in front of our face
we have a potential crisis. If we do not reauthorize, then
everything will stop for those projects. So, obviously, this is
a real problem.
Now, the good news is that Senator Inhofe, Congressman Mica
and I all agree we should just have a clean authorization and
get that out of the way and work out this new 6 year bill.
There are some who may want to cut and change the
authorization. This would be awful since we have already paid
for this. We have it figured out.
I guess what I would like to get you both on the record is
this question. What would be the impact on the construction
industry if the funding for that authorization were to be cut
or delayed? Either one can answer first.
Mr. Trumka. Devastating. I mean, projects that are started,
people would be laid off, local economies would be hurt, a
nascent recovery that we are talking about trying to take root,
it would have a setback, it could push us back toward
recession. It would be a tragedy for the country and for
thousands and thousands and thousands of workers and small
businesses.
Senator Boxer. OK. Mr. Donahue, do you agree?
Mr. Donahue. It might be worse than that. You know, we are
not, we are some period of time away before we get a lot of
people back working in the housing industry. You showed the
pictures of all of the football stadiums. One of the reasons,
collateral reasons, to push hard on the question of
infrastructure construction is because that is a place a lot of
these people can go work.
Senator Boxer. Right.
Mr. Donahue. Now, remember how this works. Fifty percent of
the money we spend on infrastructure, roads and bridges and so
on, comes from the Federal Government, 25 percent from the
State, and 25 percent from the NPOs and the local. By the way,
they are all integrated. So, it is not a matter that, you know,
the Federal Government decides when they are going to do this,
when they are going to authorize and when they are going to
send it, it is all tied in. Where is the State's money coming
from, where is the local money coming?
That is why the people in Los Angeles have set up their own
deal. They have taxed themselves so that they can go out and
put together a program with their local money and do four or
five major infrastructure projects in a way that they figured
out how to pay for, they figured out how to get investment in
it.
But the whole integrated system falls apart when one of the
people, one of the participants, does not play. It is not just
a matter that the Federal money is not there, a lot of the
State money which was going to be put together with Federal
money to build something, they are not, you are not going to
find a Governor that is going to put that money up if he does
not know where the Federal money is.
This, this system, is under great stress right now. I
understand all the politics about this. You know, nobody wants
to talk about user fees because they are taxes. Well, we have
been doing this since Dwight Eisenhower and we better get, if
you have another way, I am glad to hear about it but I have not
seen it. We should not get rid of that.
We should reauthorize this whole bill. My own view is, it
is not so difficult to up the funding in something you have. It
is very, very difficult to create new funding right now. I hope
that we all have the courage, particularly if you could think
about the fact that both of us here would support a rational
movement forward on authorization, on getting rid of the red
tape that slows this down, and on acquiring incremental
resources to do this now.
Senator Boxer. Well, thank you.
My understanding is that in 20 minutes the House Committee
is meeting to do a clean reauthorization and extension of our
bill. This is very critical because, again, we cannot afford to
send a signal to the Governors, as you point out, as both of
you point out, that this would be a disaster.
I just have one last question. Looking over funding, as you
point out, is very, very difficult. I believe there is an
argument to be made that people who use the roads should pay
for them.
Now, the good news is the truckers have come forward and
they said look, we are willing to take a hike in our user fee,
the Diesel Tax, if others come forward. They have agreed to
come forward. God bless them. Nobody else really has done it.
So, I wanted to ask you about something I think is an
interesting user fee. Forty percent of the imports that come
into this country come into the Port of LA/Long Beach and then
they get distributed throughout the country. They are obviously
coming from Asia and they get distributed through the net,
whether they are going to Tulsa, where are they going in
Nebraska, where are they going into New Jersey or Oregon or
Vermont. They are going to go across our great Nation in big
heavy trucks. Big, heavy trucks.
We could put a very reasonable user fee on those
containers. We are looking at different levels and say, listen,
you are bringing your goods in. If we are going to deliver
them, we have to have roads to deliver them on. So, are you
both open, without knowing the, I do not expect you to say yes
or no, but would you be open to working with us on developing
something like this?
Mr. Donahue. I know a little bit about this because, as you
know, I used to run the truckers and I am on the board of Union
Pacific Railroad and we move a lot of that stuff around. My own
view, without speaking for the Chamber right now, my own view
is that 40 percent would dissipate in a hurry if you put a user
fee on the containers.
I am not, you know, depending on what it was, because when
you are bringing stuff from Asia, you have a lot of options.
The options are Canada, there is Mexico, there is Seattle,
there is, you know, it is a, I have been through this in a
significant manner from a business point of view. You know, it
is the same thing, Rich and I will have a conversation about a
transaction tax because of the ability of money to move so
quickly to other places around the world.
I think people would begin to talk about creative ways of
doing this going forward, including private investment, as soon
as we do what we can do right now. I mean, the bottom line is
simple. We have a system. We have not for 17 years increased
the Federal Fuel Tax.
Let me tell you about those big trucks you were just
talking about. In that 17 years, they have more than doubled
their miles per gallon. So, you are taking an 80,000 pound
truck that has doubled its miles per gallon in 17 years and it
is now paying half of what it paid before.
By the way, the reason the truckers, and they are really
good people, I have great respect for them, the reason they are
willing to go for a fuel tax, and the only way they will do it,
is if you are going to put it in the roads and bridges and to
improvements because that is what costs them money. Slow downs,
congestion, poor roads is costing truckers a fortune.
Senator Boxer. So, just to sum up your view, you believe if
we were to have a user fee on a container paid for by the
Chinese company that is shipping it----
Mr. Donahue. It would be paid for by the local company that
it is bringing it in. The Chinese would not pay it.
Senator Boxer. Well, not necessarily. Maybe there is
another way to do it. But let us just say we put it on the
importer as a fee that we think could pass muster at the WTO
because it is a user fee. You are saying that those importers
will go elsewhere. That is your thought.
Mr. Donahue. I did not say they all would. I think some
would in a minute. By the way, our exports to China are
increasing in an explosive way. If you put a fee coming this
way, they will put a fee going that way. It is just more and
more costs.
What we have is a system. You get into a big fight every
time you, I do not mean you, but every time you get a creative
way to do something. There is some of them we would support.
But I do not want to go anywhere until we finally say, look, we
had a great system, we have a great system, and we are now
getting half the money we should from cars and trucks because
of their efficiency and there has not been an increase in 17
years. This is a pretty simple equation.
Senator Boxer. So, you like Tom Carper's idea better than a
cargo fee?
Mr. Donahue. Madam Chairman, you should know that there are
people behind me that are staring right through my back. You
know, there are folks at the Chamber that talk about all our
members and what they think. I think I know a lot about this. I
have spent my life in transportation and logistics and I am
telling you, we need to reauthorize this thing in a hurry for
all the reasons that we have talked about, all the people we
need to put to work, and we need to put some more money in it.
It would be a lifetime's effort to go out and try to put in
some of these things, creative things, because of all of the
other committees of jurisdiction and all that. You control the
ability to put the money in here and get it reauthorized.
Senator Boxer. It would actually be the Finance Committee
that would have to do it. So, Tom Carper's idea of raising the
gas tax one penny that he did with Voinovich a month for 24
months, that idea you like better, I am just trying to get it
on the record, than----
Mr. Donahue. I like, I would like an appropriate increase
in the Federal Fuel Tax, recognizing that you are collecting
half of what you used to. Now whether it is a penny a month and
all that, I could then immediately jump in and say maybe we
ought to go ask the people that run all the gasoline pumps and
everything how much it would cost to increase it every month or
could we increase it every 6 months or something, it would
probably save a lot of money.
Senator Boxer. I understand. I understand your point. Some
people drive electric cars and they do not pay any, anything,
and they are using, and we love that there is no exhaust coming
out but they are not paying anything for the roads. So that is
why the vehicle miles traveled that Richard Trumka talked about
is interesting. I do not like the idea of putting some spy
thing in people's cars to do it. I would do it on an honest
basis where you just every year you pay your registration and
you pay a fee for vehicle miles traveled without having, just
do it on the honor system.
But I hear your point, Mr. Donahue. The reason I was
focused in on you on this is because you made a point I frankly
did not think that much about before which is that we have a
system in place and to create a new system is controversial and
we do not know the unintended consequences. That is basically
your point.
Mr. Donahue. Yes. My point is that it is a fair system that
we have in place. I do agree with Rich that some people are
affected in any tax of that type, but I think everybody agreed
if we can maybe figure out something on that. But we need to
get the money for infrastructure, and there are a lot of, you
know, private money, banks, all this stuff everybody is talking
about, I will look at all of those. But the bottom line is we
ought to, 17 years is a long time. The States have all stepped
up to it.
Senator Boxer. Thank you.
Senator Inhofe.
Senator Inhofe. Thank you, Madam Chairman.
Well, first of all, I do apologize, particularly to Mr.
Trumka. I had to go and introduce a bill. I missed the first
half of your remarks. However, the second half was very
interesting. You specifically came up with ideas that I think
are worth pursuing in terms of the big problem we have here. We
can talk about all of these other things, but somehow we are
going to have to fund it.
I also want to compliment the Chairman. When she used this
visual of the 20 stadiums, I happened to be in that stadium
doing the coin toss and I looked around at the 100,000 people,
and sometimes you need that kind of visual to really know how
many people are out of work, how many people could be driving
this machine instead of riding on it right now.
So, I would also say that a lot of times we get in these
things with people from New Jersey and some of the more mature
States back there and they think that they have a bigger
problem than we do. That is not true. Because when we started
this thing, we started the Highway Trust Fund, we started it
back in Eisenhower's time. That is the stuff in my State of
Oklahoma that is rotting out right now.
Just the other day we had a lady, a mother of two small
children, in Oklahoma City, driving and a bridge, something
this big, it killed her. That could have been avoided. We know
which of these structures have passed their life. Oklahoma was,
at the last, I think it is Missouri and Oklahoma shift back and
forth as to the poor condition of their bridges. So, it is not
just in the industrialized East, it is all over this country.
I would say also that several of my colleagues talked about
when they were Mayor and so forth. When I was Mayor, I took the
hard position and passed, actually passed, a sales tax increase
for infrastructure because no one else would do it.
Now, just on the Highway Trust Fund, I want to recall to
your memory what happened back in 1998. In 1998, we always had
surpluses in that. That was before we had all of the
hitchhikers climbing on. I remember when Bill Clinton was
President of the United States, he actually took $9 billion out
of the Highway Trust Fund and I ended up being the only
Republican to vote against the Balanced Budget Act of 1998
because of that.
Now, to me that is a moral issue. You know, we tell these
people they are paying this tax and that money is going to go
to doing the infrastructure. We ought to be honest with that.
I compliment you, Mr. Donahue, in bringing up the
streamlining issue. That is something nobody wants to talk
about. But I would like to somehow get that between my staff
and your staff to kind of put a tag on that so we know what
this is really costing us in terms of all of the hoops that you
have to go through to get something done.
Let me just say that, well, I will start with you, Mr.
Donahue. You made the statement that between $180 and $200
billing is sitting out there. Where is that sitting right now?
Mr. Donahue. It is private capital, both domestic and
international, that has been put aside in investment funds that
are prepared to invest in infrastructure projects.
By the way, there is a lot of capital lying around. You
know, this is a great investment. If you make a deal with your
State, and they are going to put up a certain percentage of the
investment in some new project, and you have a means of
repaying it, and you will pay it back over 30 years, it is a
great investment.
There are more and more funds putting themselves together
to invest in infrastructure projects, even some of them buying
roads. I had to try and deal with some people that were all
upset about that because somebody had bought a road from
another country. I said, they cannot take it home.
[Laughter.]
Senator Inhofe. Yes, the point you make is good. You show
that it is a good investment. Who is investing in these? We
have Saudi Arabia, we have all these countries that are
investing in our infrastructure over here and it is because it
is a good deal. They are not doing it because they love
America. They are doing it because it is a good return.
Mr. Donahue. People that have a lot of money to invest,
national investment funds, people in private equity and the
hedge fund business that have lots and lots of money, Senator
understands about a lot of this, to invest, they are looking
around for, you know, a certain percentage of their investments
they want very, very structured, assured returns. Then some of
their investments they want to take a more risky approach. This
is a sure, good deal and as soon as we get it going, as soon as
you start working that behind a solid Federal/State program,
there will be a lot more money in this system.
Senator Inhofe. Well, then I would go further to say that,
to show you how all philosophies are joining together on this,
I had a long visit with Senator Kerry the other day. He was
talking about his Infrastructure Bank ideas, which I, there is
some merit to something where there is a, in this case, his
provides for not grants but loans. So, I think it is something
that is much more sellable.
I would ask you, Mr. Trumka, have you had that presentation
yet? I know that TIFIA has worked. It is too small. But this is
a way of maybe getting, biting into the amount that we would
have to pay for a 6-year, the kind of bill that we would need
to have. Have you had chance to look at some of those ideas?
Mr. Trumka. We have and we are interested in working with
you to make them work. One other thing that I might add is the
labor movement right now is collectively trying to put together
a $100 billion fund from our pension funds to do infrastructure
investment because of what you said. The return can be good,
but we create jobs in the process, we help the country out. It
is a three-fer for us, so we are working very diligently on
that to try to get it done from public funds, private funds,
Taft-Hartley funds that we are working together with.
Senator Inhofe. I appreciate that. The last thing I would
mention, Madam Chairman, you got very close to asking the same
question, but the cost of not having a program in place, where
you have 6 years.
Now, I do come from the private sector, as you know. In
fact, one of the reasons I ran for Congress is the over-
regulation of the private sector. But anyway, as I watch these
things that are taking place right now, I really believe that
we have the dynamics here to get in there and to look at some
things that have not been looked at before. In my State of
Oklahoma, people do not know this, we are actually navigable in
Oklahoma. Did you know that? Not many people do. That is why
intermodal is important, and all that. But we have to do this.
The question that I thought the Chairman was going to get
to was something that she and I have faced. The last time was
the last day of the fiscal year before this last fiscal year on
the floor of the Senate as it neared midnight. We, I said to
her, if you can go over there and pick up, we needed about $12
billion at that time to come up with a 12-month extension
instead of this month-by-month thing, we came very close to
getting that done. I have to admit it was the Republicans, not
the Democrats, that killed that idea. We have failed in that
respect.
The cost of going from short period to short period, as
opposed to getting in there and knowing what you are going to
be able to spend over the next 6 years, organize your labor so
that it is going to be there and the ability of the contractors
to have their, it is all coordinated, someday I would like to
either comment on that now but put down, for the record, the
costs of month-to-month versus something that is a 5 or 6 year
reauthorization bill.
Mr. Trumka. Actually, we would prefer to see a 10-year
reauthorization because----
Senator Inhofe. I am with you.
Mr. Trumka. Because if we could do that, we could begin to
crowd more private funds into this and augment what we are
doing. If there is a way we can work together to stretch that
out, I think both of us would be willing to work on that.
Mr. Donahue. The thing, because it was interesting, Madam
Chairman, to look at the participants today, people that have
been Governors and Mayors, and when you go to talk to Governors
and Mayors now and say, oh, well, we are going to have a 3-
month program or we are not sure when we are going to authorize
it or it is going to be, they throw their hands up because they
cannot risk their 25 percent unless they know that the Federal
guys are going to keep doing what they are supposed to be
doing.
I just, you know, maybe in the process of doing this it
would be a good idea to get, in fact we will help you do this
and you can, too, to get a whole lot of Mayors and Governors to
communicate here and say look, this is what is keeping us from
hiring more people.
Senator Inhofe. Thank you.
Mr. Donahue. You are asking all of the right questions.
Senator Boxer. Well, thank you.
Senator Lautenberg.
Senator Lautenberg. Very interesting. As we listen to one
another, this thing gets in my way.
[Laughter.]
Senator Lautenberg. Take my wife's word for it. I am not
hard to hear.
Ben Franklin once said, ``New Jersey is like a beer barrel,
tapped at both ends with all the live beer running between
Philadelphia and New York.'' Well, we do not like the
characterization. But it is kind of replicated by the volume of
traffic that goes from Washington to New York, up to Boston, I
mean, the whole Northeast Corridor. We are a thoroughfare and
the wear and tear that is on our roads is hardly made up for by
the tolls that are paid. It is the same tolls that people who
live and work in New Jersey have paid to go to work everyday.
What we have seen, and it is, I listened very carefully to
what you said, that there is all this capital around waiting
for the first card, as I see it, to be played by government.
But it ultimately has to be paid for by the users, be they cars
or trucks. I think if we could redesign our system, we would
have separate roads for trucks and separate passageways for
cars. It would be, that must have been discussed ad infinitum
when you were in the----
Mr. Donahue. Do you not remember that we exchanged on that
a couple of times? I would be careful about offering the trucks
that opportunity. They will take it.
[Laughter.]
Mr. Donahue. Then the cars will have to pay for their
roads.
It is interesting, but you are on the right track. The
people that have money to invest in this issue, from all
different sources, and different ways of eventually collecting
it, are all looking at one thing. Are you in the game or not?
If at 50 percent, the Federal Highway Trust Fund started by
Dwight Eisenhower, remember, it was a National Defense Highway
System, if the Federal Government, and they collect the money
from the users for the most part, if the Federal Government is
going to take a long-term look at this, finally get over these
short-term extensions, and authorize the Federal Highway Trust
Fund, everything else will follow. In my opinion.
Senator Lautenberg. Well, that fact is that everybody here
is saluting the modal transportation opportunities. Obviously,
rail is a giant part of that. When I look here, President Bush
signed into law legislation I wrote to reauthorize Amtrak. Now
the House, the Republicans, want to go back in time and
bankrupt our Nation's intercity passenger rail service.
More people, including business travelers, take the train
now between New York and Washington rather than fly. The trains
are crowded. So, we have to invest in expanding the capacity of
the rail service in that corridor. But here we see an attitude
that says, stop giving Amtrak any money. How devastating would
it be to the business community, particularly in the Northeast
or the heavy traffic areas, if Amtrak were forced to cut down
services and cut services, shut down?
Mr. Donahue. Is that a question?
Senator Lautenberg. Yes, it is a question.
Mr. Donahue. If you take the last part of your comment,
which I think was when you said particularly in the heavy
corridors which would be in the Northeast and on the California
Coast and so on, I think it would be a serious problem, as it
would be with transit commuter rail in California and New York
and other places. I am not sure I would agree with the same
thing with going to Montana or something like that with four
guys on the train, but that is just my own personal view. I
would associate the point you made that in the congested,
heavily used corridors it would be a mistake to take away that
option.
Senator Lautenberg. You know, the funniest thing is that we
are paying more for gasoline today. Right here in Washington I
saw gas at $4.20 a gallon, one place in a very particular area.
The worst part is that the drivers, the taxpayers, have been
paying the higher prices and it is going into the pockets of
sheiks or into the companies. You know my business background.
Profits are OK. They are good. But when you see the kind of
money that is being made by the oil companies, and that is not
going into the roads, it is going into the yield on investment.
It is shocking when you think about the price of gasoline
in France and the U.K. and places like that is much closer to
paying for the service they have, the roads, I think, are much
better and in most of these places the cars are smaller and
there is better, more efficient use of gasoline.
But America is not designed like that. We are between the
oil companies, the automobile companies and the big, huge job
markets there. We have agreed to keeping the automobile as the
principle mode of transportation. It is very hard to break the
habit.
I do not know. We have to get this done. We just had a
meeting with the Governor of New Jersey and the New Jersey
Delegation in terms of getting another tunnel, expanding
capacity of Amtrak, another tunnel across the Hudson River. It
has to be because otherwise, well, mention was made of spending
your life someplace. Well, I spend half my life when I am in
New Jersey in traffic and it is not fun, you know, between the
toxic fumes, the delays and the cost and cash going to the
people that are not our friends. We are in a hell of a spot.
We want to do this thing. The question is how we get it
funded. I went to the private sector to see if there is any
interest in investing in rail service there and there is
interest, a lot of interest. But they are going to want a yield
on it and part of what we have to worry about is who makes the
decision about raising the tolls, who makes the decision about
raising the rail tickets that have to be purchased.
So, thanks very much to each of you. It is an enlightening
experience to see both of you there, not manacled or anything
like that, and talking friendly. Keep that when you are in the
private rooms as well.
Mr. Donahue. Well, it is much better when we are in a
private room.
Mr. Trumka. That is true.
[Laughter.]
Senator Lautenberg. Thank you very much.
Senator Boxer. I am stalling only because Senator Carper is
trying to get back here. But if he is not here in 5 minutes, we
will let you go.
But I might as well ask, just building on your point, Mr.
Donahue, how difficult it is to get new ways to pay for things?
I mean, it is a reality. I mean, it is a tough reality. The
reason that I decided that TIFIA was a good way to go, rather
than another new wave, is because it is there.
Mr. Donahue. Right.
Senator Boxer. As Senator Inhofe said, it is funded at a
very low level. But it is there. The beauty of TIFIA, and I
want both of you to expand on this, is that if the Federal
Government steps up, or even the private sector steps up, and
they know there is a stream of revenue that is definitely
coming, and here we have a circumstance where we are fighting
over a 3-year bill, a 6-year bill, a 10-year bill, in the case
of some of our local friends, Mayors and such, they pass this
bond that is going to bring money in for 30 years, 30 years.
So, we know there is a stream of funding there.
So, if TIFIA steps out with virtually no risk, comes in
front and says, we will front the money, to me this is a
beautiful idea. I was so excited when the Los Angeles people
came to me because it was actually Mayor Villaraigosa but also
the Chamber there, the unions there, everyone together, a
couple of years ago, and we were able to work together and get,
Senator Inhofe, the first TIFIA loan in a while.
To them, it resulted in a huge check going, it was a $500
million check that went to Los Angeles based on this stream of
revenue, and the cost to the Federal Government $20 million.
That is the risk for a $500 million check, $20 million. So, it
is a way to leverage, leverage, leverage.
So, I would like to know if you would both expand on that--
--
Mr. Donahue. There is one other thing and it is really
important to focus on. It is going to do 30 years worth of
development in 10 years.
Senator Boxer. Right, which means----
Mr. Donahue. It is going to front load all of that and it
is going to save $500 or $600 million by front loading the
action and not paying it with expanded money. I think, you
know, why it is great to talk about, and I think it is great
that they went and got the money, they found a source to pay
for it, they got the private investment, but I like to say they
shortcut lots and lots of the bureaucracy and they put
themselves in a position where they are going to do 30 years
worth of development in 10 years.
Senator Boxer. It is just great.
Mr. Donahue. I talked to the Mayor yesterday and told him
charge on. We will put you on a platform to tell people about
it.
Senator Boxer. Wonderful. Do you have any comments on that?
Mr. Trumka. Sure. We absolutely support the concept. Not
only will it do 30 years of work in 10 years, it will create
160,000 new jobs, it will create 77 million new boarders on the
transit system and it will eliminate 521,000 pounds of mobile
sources of pollution in the process. It is done with the
cooperation of everybody out there. It is a great project. We
support it.
Senator Boxer. Well, I am hoping to work with Senator
Inhofe so that we can make this really a major piece of our new
transportation bill as, again, picking up on Mr. Donahue's
point, it is not a new program, it would just be an expansion.
It is just a way to get those jobs going and have this
certainty out. Yes, Senator Inhofe?
Senator Inhofe. I would at least say, I will end up where I
started off, and that is this is an area where government is
supposed to be doing it. I have often said, with my
conservative writings and all that, national defense and
infrastructure, that is what we are supposed to be doing here.
So I really do appreciate it. I do apologize for the brief
interruption. I had to leave and I know that Senator Carper
wants to get into this debate so I appreciate your being here
very much.
Mr. Trumka. Thank you.
Senator Boxer. Senator Carper.
Senator Carper. Thanks very much. We had a, the Democrats
had a retreat last week down in Charlottesville and we spent
about 2\1/2\ weeks, I mean 2\1/2\ days together, talking about,
among other things, moving the economy and jobs and the
economy. We talked about deficits, what course we need to take,
they were talking about how do we implement health care reform
in a way that gets better outcomes for less money, not just
extend coverage to people that do not have it, but how do we
actually get better outcomes for less money.
One of the pollsters that was there, and I am sure Senator
Boxer knows this, but one of the pollsters who was there, we
had one polling person, laid down an in depth benchmark poll
with, I do not know, 1,000 or so folks around the country, and
the question was is the deficit a problem? Yes, it is. It is a
big problem. It is a very big problem.
What do we do about it? The poll actually walks people
through domestic discretionary spending. What should we cut?
Well, there was not much that they really wanted to cut. They
went over to the defense side and said, what do we want to cut
on the defense side and there was not much to cut there either.
They kind of went through the retirement programs, Social
Security, Medicare, Medicaid and the VA and stuff like that,
and people are not really all that jammed up about cutting
those either.
Then in a pollster kind of thing he said if Congress
decides to turn it back to us, are there any questions or
comments and one of our colleagues, Al Franken of Minnesota,
stepped forward, and he has a pretty good sense of humor.
Senator Franken? Al said, as only he can say, I think it was
Jeff Garin, he said Mr. Garin, you know what we need? Jeff says
no. Al says, I think we need a new public.
[Laughter.]
Mr. Donahue. An educated public.
Senator Carper. That is for sure.
I understand Senator Boxer talked to you about the revenue
side of this and I was out of the room, I was bounced over to
the Finance Committee here to be able to question Secretary
Geithner. So, I missed that back and forth. I want to just
drill down on it just a little bit. I appreciate what I think I
understand you two have said.
I want to say to Mr. Trumka, thank you very much for your
comments about working, billing off the user fee that we have
in place. It is all well and good that we try to figure out how
to create revenues out of vehicle miles traveled, and we ought
to do a very serious demonstration, I think, of that to see
what are the pitfalls of that and how does it work.
When I was Governor, I had the opportunity, several times,
to call for increases in taxes or revenues that went into our
Transportation Trust Fund. Of the things I am proudest in my
time of Governor is that we ended up with a AAA Credit Rating
for the first time in our State's history.
But the premise behind what we worked on in Delaware,
besides revenue, is environment, just really nurturing for jobs
and job creation. Well, we believe in paying for things that
are worth having. If they are not worth, if we are not willing
to raise the money to pay for them, we are just not going to
have them. That is our premise. I think the same should be our
approach with respect to transportation. We want this stuff, we
want roads, highways, bridges, rails, whatever. Then you pay
for this stuff.
A guy named Samuelson, an economist name Samuelson,
suggested a couple of years ago, I read his OpEd, he said let
us raise the Gas Tax a penny a month for 48 months, so he said.
A penny a month for 48 months. It will do several things.
No. 1, it will give us the money to actually have a world
class transportation infrastructure again. No. 2, he said, we
could probably use some of that money for deficit reduction.
No. 3, he said, it could actually send a price signal to
people who are going to be buying cars, trucks and vans. When
they are looking out there considering what to buy, and they
are looking at something that gets 18 miles per gallon and they
are looking at something that gets 40 miles per gallon, maybe
they will be more inclined to buy the vehicle that gets 40
miles per gallon. So, he says it sends a price signal over time
to encourage people to buy some of the more energy efficient
cars that are being created. That was his proposal, a penny a
month, 48 months.
George Voinovich and I took that idea and we said, let us
not go that, be that bold, but a penny a month for 25 months,
10 cents for deficit reduction, 15 cents for transportation.
The Commission itself said well, we will not be that bold, but
what we will do is basically a penny a quarter, a penny a
quarter over 15 quarters, and use the money just for
transportation, not for deficit reduction.
I just would like for you to, just thinking about that
specific proposal, and tell me what you think, would you like
it or would you not?
Mr. Donahue. Well, when you were away, Senator, I was drawn
into a clear discussion of the fact that it has been 17 years
since we increased the Federal Fuel Tax. Major trucks and cars
are getting twice the miles per gallon they were getting back
17 years ago. Therefore, in many ways we are collecting half of
what we should be collecting in relation to the extraordinary
increase in the number of miles driven.
Second point, in response to the Chairlady, I made it clear
that we are going to have to move soon because this is an
integrated system of the Federal, State and local people with
50, 25 and 25 percent, and nobody is going to put up their side
in the State and the local until they know the Federal part of
it is going to be there.
So, we are, and this is where Rich and I really agree, we
are sitting here not looking about creating more jobs, we are
looking at the possibility of losing more jobs. So, this is the
we can do it now system and I would, I would get a long-term
reauthorization with some additional revenue and I would put
into it a series of let us go figure this out over 2 years, the
other questions that are being raised.
The one point I raised about a penny a month or a penny a
quarter, you have to take a little time to go look at what it
takes to do that at every fuel pump in this whole country.
There might be a better way, like to do a nickel and then
sometime later a nickel. I think you might save a whole lot of
money. On the other hand, we might hire a lot of people to go
around and change the gas pumps. I mean, I am not really sure.
Senator Carper. Yes. As it turns out, that is not a very
hard thing to do.
Mr. Donahue. So, where we are, where the Chamber will be on
this issue, notwithstanding all of the political arguments
about taxes, we will support it.
Senator Carper. Thank you. That is good to hear.
Mr. Trumka, you mentioned touchstones briefly. Would you
just go back and revisit this for me again, the issue of a very
slow, modest increase in the gas tax over a period of 3 or 4
years, by maybe a penny a quarter. I think you spoke to this
already but I would just want you to restate it.
Mr. Trumka. Oh, I thought you were talking to him. Sorry
about that.
We would support that kind of a tax, too. We think that a
user fee ought to be dedicated to transportation though. It
should not be used and raided for other things. We would
support an increase in that tax to get these jobs started
immediately because, as I said earlier, we have 14 million
Americans out of work. We need to get them back to work.
Senator Carper. Alright. Thanks very much. Thanks, Madam
Chair.
Senator Boxer. Thank you. We are so pleased that we have
been joined by Senator Baucus. He and Senator Carper were at a
hearing of his committee and, as you probably know, Senator
Baucus is the Chairman of our Subcommittee on Transportation.
So, we are really happy.
Senator Baucus. Thank you, Madam Chairman. I would ask that
my statement be added to the record.
Senator Boxer. Without objection.
Senator Baucus. You both are great leaders. You have large
followings. You think a lot about our country. How do we
develop a national consensus on infrastructure that includes
both urban and rural, and avoids the question that often
arises, a lot more from my State, you have too much in your
State, etcetera. How do we get this, make this into a more
national program of infrastructure construction so that
Americans realize we are all in this together, we are one
country?
Mr. Donahue. Well, just before you came in, Senator, I made
the point that when I used to run the trucking association I
had to always tell the truckers when they were upset about
transit, the money going to transit, I said that is not the
issue. The issue is that it is urban votes for rural roads. So,
in other words, the issue was the system supports what we need
in the urban centers and it supports what we need in the rural
centers.
I mentioned to Chairman Boxer that many years ago in
California the truckers were mad about having to pay for roads
in Nevada. I said, OK, so do not pay for roads in Nevada. How
are you going to go east? Are you going to drive all the way up
to San Francisco and start across?
Senator Baucus. Let us say Montana. In Montana, 60 percent
of truck traffic does not originate in Montana.
Mr. Donahue. That is exactly right. So that is why we have
an integrated system, and that is why it gets a little funny
when every State wants to get 105 percent of the money they
send in back.
But the bottom line is, this is a, this is an education
system, and you have a very rare opportunity here because the
business community, that part of which I represent, and the
labor community, that part which Rich represents, has just said
that it is so fundamental that we get a reauthorization here
and it is important that we add funds to it, probably the
easiest way through the existing system, but the big thing we
said is we will publicly support it.
Senator Baucus. Mr. Trumka, your thoughts on how we can
develop a national thinking about this, avoid the parochial
sector and the battles we often get into.
Mr. Trumka. Well, I think that we first of all need to
begin to educate the American public more about the job aspect
that this creates, about the way that this makes us more
competitive as a Nation in a global economy, and what it can do
to make us more efficient, the savings that can be done.
Then I think we have to restore America's trust in the
transportation programs. I think we do that by doing quality
projects. I think we do them right, we do them on time, and we
forget bridges to nowhere so that the public does not have
something to point at to say, that is the problem with this,
that we do projects that are actually needed, that are going to
make us more efficient and be able to compete a lot better.
I think that all of things you talked about, the tax on the
incoming products, is something that ought to be on the table.
It ought to be debated so that this is shared, can be shared,
equally. I think we need a dedicated user fee and I agree with
Tom about that and I know that we need to get this thing
reauthorized very, very quickly. But I think all sources of
funding, at some point, need to be on the table and need to be
discussed.
Senator Baucus. There is a big gap here. I think it is a
Rockefeller Commission study out just recently----
Mr. Donahue. That was interesting.
Senator Baucus. Sorry?
Mr. Donahue. That was interesting.
Senator Baucus. Yes, very interesting. As I recall, about
two-thirds of Americans want better infrastructure in America.
They want it. Two-thirds of Americans do not want to pay for
it.
Mr. Donahue. Well, that is the great thing about being
American.
[Laughter.]
Senator Baucus. Well, I think the gap is worse now that it
has been in the last, now than it has been in a reasonable
period of time. I am not going to name all of the reasons why,
I have my own personal ideas as to why that has happened, but I
do believe it has happened.
Mr. Donahue. I do believe it has and----
Senator Baucus. Well, how do we address that?
Mr. Donahue. Well, I think in addition to the things that
Rich and I talked about, the thing that sent Americans in the
right direction is talking about getting rid of congestion and
improving mobility. I, you know, I think it is fair to say,
sir, that the political battles that we have had across this
Nation in both parties, purely bipartisan battles about taxes,
and to include a user fee like this as a tax or a tax increase
is fundamentally unfair. It may be politically, you know,
attractive, but this is not a, this is to go use a road, man.
The Chairman made the point that the truckers are ready,
now, have committed. They are ready to go support this because
they are looking at the roads they are running on and saying we
are in trouble. I think you could build one really good
coalition. I think Rich's point is very important. We have to
educate people about this.
Mr. Trumka. There is a, probably this is something that Tom
and I will disagree on, but people do not want to pay in some
instances right now because they truly cannot. Wages in the
country have been stagnant for nearly 30 years right now. Their
budgets have been stretched tighter and tighter, hidden fees
have been foisted on them, whether it is educational fees that
they now pay for a bigger share than they did before, so they
are at the stretching point.
While I think they understand the importance of
infrastructure and how it can help their lives be better,
anybody that commutes into this city would know that they are
at the stretching point. This is one place where I think we
could actually help them by seeing, by moving from a low wage,
high consumption strategy in this country to a higher wage
consumption strategy in this country, so that if more people,
for instance, had collective bargaining, a greater share of the
wealth would be given to them.
When they were making money, you did not hear a squeak
about giving money on the tax. It is whenever their budgets and
the wages were stretched to the minimum that they began to
recoil at it. So, I think we need to look at that as well.
Senator Baucus. Well, I do not think there is much
disagreement among members of this Committee and between the
Committee and you two. But I will say this. I think we have to
think much more critically, much more creatively, as never
before, to try to figure out how we bridge that gap. Because
right now the politics in this country make it very difficult
to find the resources that address the need. It is very
difficult.
There are Senators, I will not mention any names, but they
think we should cut infrastructure spending. Cut. Not build
infrastructure, but cut. That is not helpful, from my
perspective. But I just urge us all to listen to all of the
goals and utter the right words that might save us and so
forth. We have to think a lot more critically and creatively
than we have in the past.
But I thank you very much for your contributions.
Mr. Trumka. Thank you.
Mr. Donahue. Thank you.
Senator Baucus. You have added a lot to this and I deeply
appreciate both of you.
Thank you, Madam Chairman.
Senator Boxer. I am going to say, Senator, your question is
very important. I think their presence here today, and the
eloquence of their testimony they gave us, and their commitment
to stand by our side, is very strong.
That may be one way we can regain some trust here, just
because we are coming together at a time where, we held up,
before you came, can you show Senator Baucus just one of those
posters? We held up, the staff held up, 20 of these posters,
Chairman Baucus. It is the Super Bowl, 100,000 people. Two
million workers unemployed, 20 of those posters we stood up and
showed. That is who is unemployed just in the construction
industry.
So, we have an imperative. I just want to get back and then
we will close this off. Excuse me, I have the end of bronchitis
or something here.
Custom fees. Every country levies them. The question is
should we take a bigger percent of them?
Mr. Donahue. I am not sure, Madam Chairman, that I heard
that. Did you say customs fee?
Senator Boxer. Yes. U.S. customs fees.
Mr. Donahue. If you talk to the customs people, of course
they will tell you about all of the pressure they are under and
all of the money they need that they are not getting.
I think, my closing statement, because I would like to
leave on a very positive note, is that I believe you are on the
right track here trying to move in a quick order to keep in
place some good programs, to try and put more people to work
and for sure not lose people from their jobs. I recommend that
you start by using what we have to get this done, and then we
would be happy to participate in discussions that go beyond
this later on.
Senator Boxer. Good. That is fair.
Senator Sanders, would you close up shop here?
Senator Sanders. Sure.
Senator Boxer. Good. Thank you both immensely for this. It
has been extraordinary.
Senator Sanders. Madam Chair, my apologies for jumping in
and out, but I had two other hearings that I had to go to and I
think this is extremely important.
Let me close with the fact that so many people from
different political persuasions understand the need to rebuild
our infrastructure. I think that is very significant. There
will clearly be differences of opinion of how we fund it.
In my view, the middle class in this country is in steep
decline. Poverty is increasing. I come from a rural State where
people not infrequently travel 100 miles to and from their
jobs. Raising the gas tax on those people who make $11 or $12
an hour is not something that I am sympathetic to.
On the other hand, I think Mr. Trumka makes an important
point in his presentation, and that is that we are in the midst
of this recession right now primarily, in my view, because of
the greed and recklessness and illegal behavior on Wall Street.
In recent years, Wall Street has captured about 40 percent of
the profits in this country where we have lost over 40,000
factories and manufacturing plants.
I would like for Mr. Trumka to say a few words about his
idea about a transaction fee on Wall Street, which I think does
a lot of good. It raises a lot of money. It may curb some of
the speculation that has got us into the problems that we have
right now.
Mr. Trumka, do you want to say a few words on that?
Mr. Trumka. Certainly. I would say that we have actually
lost 53,244 factories in the last decade. So we are hurting.
The middle class is hurting. People are traveling further and
further and further to work. People live in Harrisburg, cannot
sell their house there, commute here because this is where they
found work. So, it is a tough thing. I think in my presentation
I said we have to look at that so that the burden does not fall
on everybody. But I still support the gas tax, as we talked
about.
On the transaction tax, I would say two things. One, right
now you find rampant speculation on the tax. It would be a very
small tax, a half a penny a share, and you find people running
price up in the morning, selling off, running up, selling off,
running up, selling off. Little people cannot participate in
all of that. The long-term investor does not get to do any of
that and he ends up paying the tab for higher fees and
everything. This could stop some of that.
Tom will say that this is fleeting, that if you do this,
money will flee. Well, the London Stock Exchange put a 50 cents
a share tax on theirs and, after doing that Tom, they went from
being the third largest Stock Exchange in the world to the
second largest Stock Exchange in the world. It didn't seem like
anybody fled. They came to it. It is a fair way to raise some
taxes.
Look, Wall Street created a mess. We are paying for the
mess. Everybody believes that they are back to business as
usual. This would be a chance for them to share in some of the
pain. They like to talk about shared pain. It is an opportunity
for them to do that.
We advocated, I mean, people around the world, other
countries are starting to do it from France to different
countries that are now saying this is a good idea, we should do
it, to tame some of the rampant buy ups and sell offs that we
have day in and day out.
Senator Sanders. Mr. Donahue, you no doubt completely agree
with Mr. Trumka on this?
[Laughter.]
Senator Sanders. Do you think it is appropriate that we ask
Wall Street to share of the pain that the rest of American is
experiencing? Do you not?
Mr. Donahue. That is a well crafted question, Senator. The
reason we came here today was to talk about what to do about
infrastructure. I did say in response to the question when you
were at the other hearing that I do believe that there is a
serious question of what happens when you impose those taxes.
I would be very happy to give you some of the views we have
about that and what I encourage the Chairwoman, and encourage
you as well, we are on a very short timeframe to do something
about this highway deal and I think it was March 4th the
program runs out, and I think we ought to go and do that and
then we would be very happy to talk about the half a dozen
other ideas put forward.
I will tell you that I have serious problems about
transaction taxes of every type, but I would be very happy to
sit down and talk to you about it.
Senator Sanders. Well, I think you are right in saying that
the immediate issue is rebuilding our infrastructure, putting
people to work. But we are also, I think you will agree, going
to have to figure out how we fund that expensive proposition.
So, I guess I am the last one here. I want to thank both of
you. I apologize for not being here, but I had two other
hearings. This is enormously important. Thank you very much for
being here and thank you very much for working together on this
issue. Thank you.
The hearing is now adjourned.
[Whereupon, at 12:08 p.m. the committee was adjourned.]
[Additional statement submitted for the record follows.]
Statement of Hon. Max Baucus, U.S. Senator from the State of Montana
Madam Chairman, thank you for scheduling this hearing. We welcome
this excellent panel, representing both labor and business.
A recent Rockefeller Foundation survey shows:
66 percent of Americans think spending on
Infrastructure is important.
But, 71 percent oppose a fuel tax increase.
64 percent oppose tolling existing roads
And, 58 percent oppose paying by the mile.
So, Americans want infrastructure investment, but they question
what they get out of spending more at the Federal level.
They see it at the local level. In Billings, Montana, 254 were put
to work converting Shiloh Road into a north-south artery that in a city
where U.S. 3, U.S. 85, Interstate 90, and Interstate 94 all converge.
It was ``all hands on deck'' as partners worked together at the city,
county, State and Federal levels. This artery includes safety
innovations such as roundabouts, which may well get applied in
Belgrade, Montana and elsewhere in the State.
Shiloh Road shows us that transportation projects provide good jobs
during the construction process, ensure connectivity to the rest of the
country, and help communities attract even more business in the long
run.
This kind transformation feeds economic activity in the region and
beyond.
Compromise is the key. This is the year to do a Highway Bill. We
all know that next year will be consumed with election-year politics.
So, I am very interested in our witnesses' perspectives. I hope we
will discuss transportation needs, job creation and innovative funding.
We need to do a smart bill, focusing on needs and spending American
road users' money wisely.
Thank you, Madam Chairman.