[Senate Hearing 116-249]
[From the U.S. Government Publishing Office]
S. Hrg. 116-249
INFRASTRUCTURE: THE ROAD TO RECOVERY
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HEARING
BEFORE THE
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
__________
JUNE 4, 2020
__________
Printed for the use of the Committee on Environment and Public Works
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
41-135 PDF WASHINGTON : 2020
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COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
JOHN BARRASSO, Wyoming, Chairman
JAMES M. INHOFE, Oklahoma THOMAS R. CARPER, Delaware,
SHELLEY MOORE CAPITO, West Virginia Ranking Member
KEVIN CRAMER, North Dakota BENJAMIN L. CARDIN, Maryland
MIKE BRAUN, Indiana BERNARD SANDERS, Vermont
MIKE ROUNDS, South Dakota SHELDON WHITEHOUSE, Rhode Island
DAN SULLIVAN, Alaska JEFF MERKLEY, Oregon
JOHN BOOZMAN, Arkansas KIRSTEN GILLIBRAND, New York
ROGER WICKER, Mississippi CORY A. BOOKER, New Jersey
RICHARD SHELBY, Alabama EDWARD J. MARKEY, Massachusetts
JONI ERNST, Iowa TAMMY DUCKWORTH, Illinois
CHRIS VAN HOLLEN, Maryland
Richard M. Russell, Majority Staff Director
Mary Frances Repko, Minority Staff Director
C O N T E N T S
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Page
JUNE 4, 2020
OPENING STATEMENTS
Barrasso, Hon. John, U.S. Senator from the State of Wyoming...... 1
Carper, Hon. Thomas R., U.S. Senator from the State of Delaware.. 7
WITNESSES
McGough, Steve, Chairman of the American Road and Transportation
Builders Association, and President and Chief Financial Officer
of HCSS........................................................ 10
Prepared statement........................................... 13
Responses to additional questions from Senator Wicker........ 65
Response to an additional question from Senator Whitehouse... 66
Responses to additional questions from Senator Duckworth..... 66
Holtz-Eakin, Doug, President, American Action Forum.............. 69
Prepared statement........................................... 71
Response to an additional question from:
Senator Sullivan......................................... 86
Senator Whitehouse....................................... 87
Fischer, Hon. Greg, Mayor, Louisville, Kentucky, and incoming
President, U.S. Conference of Mayors........................... 88
Prepared statement........................................... 91
Response to an additional question from:
Senator Whitehouse....................................... 100
Senator Gillibrand....................................... 101
Responses to additional questions from Senator Duckworth..... 106
ADDITIONAL MATERIAL
Letter to Senator Mitch McConnell et al. from Advocates for Snake
Preservation et al., May 18, 2020.............................. 151
Letter to Senators Barrasso and Carper from the Alternative Fuels
& Chemicals Coalition, June 2, 2020............................ 159
Statement for the Record of the American Society of Civil
Engineers, June 4, 2020........................................ 168
Letter to Senators Barrasso and Carper et al. from the
Congressional Sportsmen's Foundation, June 3, 2020............. 172
Statement of the Design-Build Institute of America, June 4, 2020. 174
Letter to Senators Barrasso and Carper from the National
Association of Counties, June 2, 2020.......................... 177
Submission for the Record from the National Propane Gas
Association, June 4, 2020...................................... 178
INFRASTRUCTURE: THE ROAD TO RECOVERY
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THURSDAY, JUNE 4, 2020
U.S. Senate,
Committee on Environment and Public Works,
Washington, DC.
The Committee, met, pursuant to notice, at 10:06 a.m. in
room G50, Dirksen Senate Office Building, Hon. John Barrasso
(Chairman of the Committee) presiding.
Present: Senators Barrasso, Carper, Inhofe, Capito, Cramer,
Braun, Rounds, Sullivan, Boozman, Wicker, Ernst, Cardin,
Whitehouse, Gillibrand, and Van Hollen.
OPENING STATEMENT OF HON. JOHN BARRASSO,
U.S. SENATOR FROM THE STATE OF WYOMING
Senator Barrasso. Good morning. I call this hearing to
order.
Before I address the topic of today's hearings, I do want
to say a few words about what is happening in communities
across our country today. This is a time of great pain and
unrest for our Nation. Americans are truly outraged by recent
killings. Anyone who watched the video of the murder of George
Floyd has to be horrified and heartbroken.
The resulting peaceful protests about police abuse against
any American citizen are important and necessary. Our Nation
needs to listen to the voices of African Americans about police
brutality. Every American citizen deserves justice under the
law.
Some of the peaceful protests have been hijacked by violent
criminals. The destruction, the looting, and the arson must
stop. Those who commit these crimes dishonor the memory of
George Floyd, and they dishonor the cause for which the
peaceful protestors first took to the streets. Now is a moment
for Americans to come together, to listen, and to heal.
The goal of this hearing today is to examine how rebuilding
America's infrastructure will help our economy recover from the
coronavirus pandemic. We will examine how bipartisan
infrastructure legislation passed by this Committee will
stimulate economic recovery and growth.
The coronavirus pandemic has resulted in an economic
crisis. As Congress considers what can be done to help the
economy recover, funding our Nation's infrastructure should be
at the top of the list. Investments in highways and bridges
create jobs, reduce the costs of goods and services, and grow
the economy.
A Standard and Poor's study found a $1.3 billion investment
in infrastructure results in 2,900 jobs being added to the
construction sector alone.
In a story published last week in the Cowboy State Daily,
the University of Wyoming economist Rob Godby explained that
infrastructure constructions, he said, is a tried and true way
of recovering an economy that has been impacted by a deep
recession. It is clear that strong, sensible infrastructure
investments create jobs and spur economic recovery.
The Senate has bipartisan legislation ready to go. This
Committee has taken significant steps toward renewing our
Nation's infrastructure investments.
Last month, we unanimously passed two bipartisan water
infrastructure bills, America's Water Infrastructure Act of
2020, and the Drinking Water Infrastructure Act of 2020.
Together, these two bills will help create jobs and protect
communities by rebuilding our aging dams, levies, ports, and
drinking water systems.
They are a perfect complement to the primary focus of
today's hearing, America's Transportation Infrastructure Act,
which this Committee unanimously passed and reported last July.
This historic highway bill authorizes $287 billion over 5
years from the Highway Trust Fund. It will provide record
levels of investment to fix our roads and bridges, to create
jobs, and to boost our economy. It will give States increasing
funding and the certainty that they need for planning projects.
Now more than ever, America needs this highway
infrastructure bill to keep our economy moving ahead.
The alternative to passing our bill would be to rely on
short term extensions of the current law. This would be a
mistake. Our Committee has repeatedly heard expert testimony
that month to month extensions make it harder for States and
communities to plan.
In the past, funding uncertainties from such short term
extensions have led to project delays, cancellations, and
higher costs. These delays would hurt our economic recovery.
We are less than 4 months away from the Highway Trust Fund
authorization expiring. This simply cannot happen, especially
during these pandemic-caused economic downturns.
To make matters worse, the Highway Trust Fund is rapidly
approaching insolvency. Before the pandemic, the Congressional
Budget Office projected the Highway Trust Fund would become
insolvent sometime in 2021. Now, with Americans driving less,
the trust fund will likely run out of money sooner.
This is why I am pushing for the Senate to pass our highway
infrastructure legislation. Our bill is the right medicine for
our roads and our economy. It will help rural communities; it
will help cities; it will help all 50 States.
In its 2014 special report entitled Transportation
Investments in Response to Economic Downturns, the National
Academies of Science Transportation Research Board concluded
that any future transportation stimulus program should allocate
most funds according to established formulas. Our highway bill
does just that by sending 9 out of every 10 dollars directly to
States through formula funding.
Formulas give States the flexibility to address their own
transportation needs. What works for coastal cities may not
work for communities in the heartland.
The formula approach is also the best method for rapidly
aiding economic recovery through infrastructure investments.
America's Transportation Infrastructure Act will also speed
up project delivery by cutting red tape and simplifying agency
reviews. Reducing the time it takes to get environmental
permits means that we can get projects done faster, cheaper,
better, smarter.
While speeding up project delivery, our legislation will
also enhance safety. The bill targets investments to fix our
aging bridges, reduce fatalities, protect pedestrians, and help
minimize vehicle-wildlife collisions. Ultimately, building
safer, longer lasting roads is one of the best ways to protect
communities and to keep our economy moving forward.
Passing America's Transportation Infrastructure Act,
together with our two water infrastructure bills, is critical
for our Nation's economic recovery. I look forward to hearing
from today's expert witnesses on this important topic.
I would now like to turn to Senator Carper for his opening
comments.
[The referenced information follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
OPENING STATEMENT OF HON. THOMAS R. CARPER,
U.S. SENATOR FROM THE STATE OF DELAWARE
Senator Carper. Thank you, Mr. Chairman. I thank you for
your comments.
In the House of Representatives, Senator Inhofe and I used
to serve together. From time to time, we would hear our
colleagues say words that we wanted to be associated with. We
would say, I would like to be associated with the words of that
particular member. I just want to be associated with your
words, especially the beginning of your comments, today.
I want to thank all of our witnesses for joining us. I
especially want to Mayor Greg Fischer from Louisville for
joining us virtually, and doing so at a very difficult time.
It is never an easy time to be a Mayor of a major city. But
today especially, to be Mayor of Louisville is especially
challenging, and our thoughts and prayers are with you and our
gratitude is with you for joining us today, Mayor Fischer.
As the Chairman has said, the recent murders of George
Floyd in Minneapolis, and I would add Breonna Taylor in
Louisville, have sparked widespread civil unrest across our
country. Over the past week, literally millions of Americans
have protested the death of unarmed Black Americans and the
systemic racial inequities and injustice that still pervade too
many aspects of our society.
One of those Americans was a fellow named David McAtee. He
was a small business owner in Louisville some of you may have
heard of. He was shot and killed by authorities while he was
protesting early Monday morning.
According to his family, David was a pillar in their
community, and at his popular barbeque stand, he would actually
literally serve members of law enforcement for free.
We have since learned that the police officers involved
with the National Guard personnel who shot and killed David
McAtee had not activated their body cameras during the
incident.
This institutional failure has only created more feelings
of anger, fear, frustration, and helplessness throughout the
Louisville community and throughout our country.
I know it will come as a surprise to some, but many of our
fellow Americans are feeling real pain and suffering today, and
they have been feeling it for a long time. Meanwhile, our
country is attempting to safely reopen and return to some
semblance of normalcy in the midst of a deadly pandemic, the
likes of which we haven't seen in 100 years.
We are facing the greatest economic downturn and the
highest unemployment rates since the Great Depression.
While most communities are calling for justice through law
abiding, peaceful protests, others have experienced violent
riots and looting.
I don't believe it is hyperbole to say that the soul of our
Nation is being tested as it hasn't been in a long time. The
unspoken question for us today as we gather is, what do we do
about it, and what, if anything, does all of this have to do
with improving our surface transportation infrastructure?
I am convinced that every member of this Committee
understands that it is our duty as public servants to serve all
of our constituents, even the ones who haven't voted for us and
maybe never will. Right now, that means listening to those
among us who have oftentimes gone unheard and to try and put
ourselves in their shoes, golden rule, put ourselves in their
shoes to not only acknowledge the pain that people of color are
experiencing in our country and the racism that too many of
them face, but to do something about it.
Here is the good news: We can do something about it. In the
midst of all this turmoil lies opportunity. It is our job to
find that opportunity and work together to move this country,
which we love and revere, as imperfect as we are, forward.
That brings us to the subject of today's hearing.
Infrastructure can be a part, a big part, of a greater, multi-
faceted solution that brings equity and opportunity to all
communities, but where and how we invest really matters.
Infrastructure can refer to water that is safe for us to
drink when we turn on the faucet; it can refer to safely
treating the effluent we create before it finds its way into
our waterways and our groundwater. Infrastructure can refer to
broadband deployment for farm communities and many urban areas
where students have found it almost impossible to keep up with
their schoolwork because they lack Internet access.
Today, we focus on a critically important part of our
Nation's infrastructure: Our roads, our highways, our bridges,
our railways, and our transit systems.
I know we don't always think of it this way, but they are
not only important in moving all kinds of cargo across America,
as well as giving the American people the freedom to go where
they want and where they need to go, but colleagues, our
transportation infrastructure, done right, can also help to
connect and uplift communities by expanding access to
opportunities such as schools and better paying jobs that may
not have been accessible to those who have always found
themselves living on the wrong side of the track.
That is why we need to ensure that the infrastructure
investment we make and the roads, highways, and bridges we
build help us create a more nurturing environment for job
creation and job preservation for all of our communities.
In Delaware, for example, the construction of the soon to
be completed Christina River Bridge, just south of our Amtrak
station, is helping to spur the redevelopment of South
Wilmington. That is a part of our city that is prone to
flooding when heavy rainstorms, like the ones we had last
night, occur.
Fortunately, innovative measures were underway not to just
help address the flooding, but also to improve connectivity for
residents. This new bridge with pedestrian and bicycle lanes
will expand access to new educational opportunities and to
jobs, thousands of jobs.
While the bridge will facilitate and alleviate traffic in
the area, it will also help to grow the customer base for small
businesses along our burgeoning Christina Riverfront.
That is just one example of the kind of win-win investments
we can and should be making in more of our infrastructure,
those with environmental, community, and economic benefits. So
as we discuss here in Congress today the many ways our country
can begin to recover from this pandemic, and how we can help
all communities in need, it is ever more important and timely
that we talk about investing in our Nation's infrastructure.
The surface transportation reauthorization bill that we
unanimously approved out of this Committee in July, last July,
America's Transportation Infrastructure Act, is a good start to
addressing those two challenges.
For example, as the Chairman has said, our bill would
increase highway funding by some 17 percent over baseline in
the first year, which would help stimulate our economy.
At the same time, our bill would help address the climate
crisis by investing $10 billion in low emission and resilient
transportation projects over the next 5 years.
As a side comment, I was talking yesterday with our
colleagues John Kennedy from Louisiana and Cindy Smith from
Mississippi. They tell me that something like 20 hurricanes are
now being forecast to occur or make it to the Gulf of Mexico
this summer. Twenty. It is unbelievable. So making investments
real requires dollars.
Actually, for years, I have been talking with our
colleagues on both sides of the aisle about how to go about
funding infrastructure and the urgent need to address the
looming Highway Trust Fund shortfall. But in a few short
months, that conversation will become even more urgent. This
pandemic has greatly affected, as the Chairman has said, the
use of our Nation's infrastructure and how we maintain funding
for it.
Meanwhile, the public health safety measures demanded by
this pandemic have greatly reduced travel, and our
infrastructure is paid for, largely, as we know, through user
fees, including tolls, motor fuel taxes, vehicle excise taxes,
registration fees, and the like. All these revenue sources have
declined, in some cases, quite dramatically.
A lot of States, cities, counties, and tribal nations are
trying right now to balance their budgets by deciding between
furloughs, service cuts, or canceling contracts. We owe it to
them to reauthorize our surface transportation programs and
fund them in sustainable and predictable ways.
All that said, while investing in infrastructure can assist
with long term economic recovery, it is not sufficient on its
own. This economic downturn is almost without modern precedent,
and the coronavirus is likely to be with us, unfortunately, for
some time to come. So we must rise to meet the unique
challenges and scale of these crises.
Fortunately in recent days, I have had conversations with
dozens of our colleagues on both sides of the aisle, Democrat
and Republican alike, and there appears to be an emerging
bipartisan agreement not to reward fiscal mismanagement at the
State and local level, not to bail out unfunded pension plans,
but to do our part to help address the grave and unparalleled
impact on State and local budgets, on school districts, and on
rural hospitals.
We can provide some of the assistance that is needed by
continuing to invest strategically and dependably--I will say
that last one again, and dependably--in the transportation
infrastructure of our communities. If we do, I am confident
that we will find America off the ropes and back on the road to
an economic recovery in the future that is stronger, more
sustainable, and more equitable for all of us.
I don't know a lot of Latin. I know a little bit. Two of my
favorite words are carpe diem, let's seize the day. I think
that is probably good words for today.
There is another one, too, and we are reminded of it every
time we vote in the Senate chamber, and it is e pluribus unum,
from many, we are one.
Senator Barrasso. Thank you, Senator Carper. We appreciate
your comments and your leadership and the bipartisan nature of
this bill.
In a few seconds, we will hear from our witnesses.
I did want to just make sure that the members knew, to just
get a better sense of the order in which we are going to speak
and ask questions today, we are going to try to just go
strictly by seniority, since so many members are joining us
remotely, and it will be easier to keep the record that way.
Today, we are joined by three individuals. First, Mr.
Steven McGough, who is the Chairman of the American Road and
Transportation Builders Association; Doug Holtz-Eakin, who is
the President of the American Action Forum; and Hon. Greg
Fischer, who is joining us remotely, Mayor of Louisville,
Kentucky, and the incoming President of the U.S. Conference of
Mayors.
I want to remind the witnesses that your full written
testimony will be made part of the official hearing record, so
please keep your statements to 5 minutes, so we will have time
for questions. I look forward to hearing the testimony.
Mr. McGough, we would like to start with you.
STATEMENT OF STEVE MCGOUGH, CHAIRMAN OF THE AMERICAN ROAD AND
TRANSPORTATION BUILDERS ASSOCIATION, AND PRESIDENT AND CHIEF
FINANCIAL OFFICER OF HCSS
Mr. McGough. Thank you.
Chairman Barrasso, Senator Carper, and other members of the
Committee, thank you for holding today's hearing about the role
Federal infrastructure investment can and should play in the
economic recovery.
I am 2020 ARTBA Chairman Steve McGough, President and CFO
of HCSS, a national company that provides software solutions to
help improve construction companies' business operations.
Let me begin by emphasizing two points. First, shovel ready
projects are not a solution to the Nation's current economic
challenges. While transportation infrastructure improvement has
positive job and salary impacts, the real value comes from
putting in long term assets that increase the efficiency and
productivity of the entire economy.
According to the Federal Highway Administration, goods
movements over the Nation's highways account for 73 percent of
the value of domestic freight. Industries like wholesale and
resale trade and manufacturing are two of the largest users of
transportation services in the economy and utilize freight
shipments for 58 percent to 65 percent of their needs.
Second, Federal highway investment is a major contributor
to each of your States' infrastructure networks, but it is
effectively a silent partner. We have developed a way to
correct that shortcoming.
In 2018 alone, States utilized nearly $31 billion of
Federal highway funds to begin construction activity on over
24,000 highway improvement projects, with a total value of
$66.7 billion.
Thanks to the new interactive ARTBA highway dashboard,
policymakers and the public alike can see how Federal highway
resources were deployed by each State in a given year, dating
all the way back to 1950. We have compiled each State's top 10
Federal aid projects, the total number of projects, and the
type of improvements advanced that year. The dashboard uses
data from the Federal Highway Administration to shift the
conversation about Federal highway investment from
apportionment tables and obligation charts to outcomes and
benefits.
Mr. Chairman, the Federal Highway Program is widely
regarded as one of the most meaningful and popular of all
Federal discretionary spending activities. Now, we can
articulate why.
As an example, Wyoming in 2018 used $309 million in Federal
highway funds to advance 262 projects with a total value of
$370 million. The largest single recipient of these funds was a
$20 million resurfacing projects in Sweetwater County.
Of the Federal aid projects Wyoming moved forward with that
year, 66 percent were for reconstruction and repair work.
This information not only demonstrates the value each State
receives from highway investment, but also highlights the
potential numerous benefits from the 5 year reauthorization
proposal this Committee approved last July. America's
Transportation Infrastructure Act would increase highway
investment 27 percent over the next 5 years.
Your proposal includes common sense policy reforms that
will expedite the delivery of needed infrastructure
improvements and maximize the impacts of Federal resources.
More importantly, the bill's investment growth stands in stark
contrast to the purchasing power focus of the past 15 years.
We have given each of you a snapshot of how your States
benefit from the highway investment in 2018. Imagine what could
be accomplished with the resources you proposed.
Mr. Chairman, the recent forecast from the Congressional
Budget Office that it could take a decade for the U.S. economy
to recover from COVID-19 pandemic is sobering. This outlook is
also disturbing in the context of the Nation's infrastructure
deficit. State and local highway spending needed 8 years or
until 2015 to recover from the pre-Great Recession levels,
while GDP recovery occurred in 3 years.
That lag in highway and bridge improvements activity could
illustrate the challenging road ahead for our infrastructure
network absent proactive action, such as enactment of the
America's Transportation Infrastructure Act. Your proposal is
both a robust highway program reauthorization and a
foundational opportunity for economic recovery and growth.
Mr. Chairman, the transportation construction industry is
not here asking for Federal relief. Instead, we seek to be part
of the solution to spur the meaningful economic recovery this
Nation so desperately needs.
We urge the other Senate committees with respective
jurisdiction over their portions of the State transportation
programs to act quickly in order to facilitate final passage of
America's Transportation Infrastructure Act.
Thank you for convening today's hearing. I look forward to
your questions.
[The prepared statement of Mr. McGough follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Barrasso. Thanks very much for your helpful
testimony.
I would like to turn to Mr. Doug Holtz-Eakin.
STATEMENT OF DOUG HOLTZ-EAKIN,
PRESIDENT, AMERICAN ACTION FORUM
Mr. Holtz-Eakin. Chairman Barrasso, Ranking Member Carper,
and members of the Committee, Thank you for the chance to be
here today to talk about the role of infrastructure in the
recovery from the pandemic recession.
With a minor correction to the Ranking Member, this is a
downturn that is unprecedented in modern history. In the past 2
months, we have seen a record fall in consumer confidence; we
have seen a record 1 month decline in retail sales; we saw a
week in which 6 million Americans filed claims for unemployment
insurance, 10 times larger than any previous week in history.
In April, we saw 20 million Americans lose their jobs;
again, 10 times larger than any single 1 month job loss, the
previous one being the demobilization from World War II. We saw
the unemployment rate jump over 10 percentage points; again, 10
times larger than any previous 1 month increase in
unemployment.
And the Congressional Budget Office forecasts that during
the second quarter of 2020, the size of the U.S. economy will
shrink by 11 percent. In the worst year of the Great
Depression, 1932, the economy shrunk by 12 percent. We are
going to experience a comparable decline this spring.
So this is an unprecedented, both in its source and its
depth and speed, economic downturn in the United States, and
properly, a lot of policy response has been focused on staving
off further decline and reversing it.
The Federal Reserve has moved quite aggressively to provide
liquidity and additional lending facilities for the private
sector. Congress has moved with remarkable speed, and I think,
a tremendous scale to address this crisis with Families First
and CARES and the paycheck protection increase efforts. You are
to be complimented and congratulated for those efforts. I think
they are exactly what the doctor ordered.
But they are not everything that we are going to need.
There is a part of this recovery that Mr. McGough just pointed
out that is actually quite important. The Congressional Budget
Office points to a very slow return to the levels of economic
activity that we had in January of this year. And in their
projection, unemployment remains quite elevated, over 8 percent
at the end of 2021.
So there is a place in the response to this pandemic for
durable, long term investments that can address that challenge
past 2020, past 2021, and infrastructure is exactly right for
that.
This bill that the Committee had passed last July is ideal
in three ways. First of all, it is clearly better than a
failure to reauthorize, or a choppy month to month funding
approach, which would be a headwind to a recovery that is
already going to be difficult enough.
Second, it addresses the supply side of the economy, the
capacity to deliver goods and services through the supply chain
quickly and efficiently. I think it is just realism to expect
that the virus will be around for a while. We will continue to
face supply disruptions, whether they be regional lockdowns, or
the ongoing need to reconfigure our economy to work in the
presence of the virus.
Businesses are going to physically change a lot of their
workplaces. There will have to be PPE, there will have to be
testing, there will have to be a whole variety of
reorganizations that will cost money, make goods and services
more expensive, and inhibit the delivery of those in the
economy.
To the extent we can have policies which target the supply
side and provide cost reductions and efficiencies that allow
the economy to operate more effectively in the presence of
those necessary adjustments to the virus that will have durable
and very lasting impacts. I think those are an important part
of thinking about policy going forward.
These are the kinds of investments that I think will be
done well. There is a sad history of taking what would be an
otherwise sensible transportation or other infrastructure
project and trying to front load it, rush it, call it stimulus,
and in the end, undercut the basic objectives of the programs.
That is not going on here.
You are using programs that have been effective, are well
understood, the money will be distributed at the appropriate
pace. I applaud you working on the red tape to have the
projects happen faster.
But they will come online at times the economy needs it in
the years to come, and that is something that we need to also
have in addition to the other dramatic efforts.
Thank you for the chance to be here today, and I look
forward to the chance to answer your questions.
[The prepared statement of Mr. Holtz-Eakin follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Barrasso. Thanks so much for your testimony and
being with us today.
Also joining us remotely is Mayor Greg Fischer from
Louisville, Kentucky, incoming President of the U.S. Conference
of Mayors.
Mr. Mayor, we appreciate your doing this. I know you
committed to be here prior to the tragedy that is affecting the
country right now. I know you have lots going on. We appreciate
your being here, and we are looking forward to hearing from you
now.
STATEMENT OF HON. GREG FISCHER, MAYOR, LOUISVILLE, KENTUCKY,
AND INCOMING PRESIDENT, U.S. CONFERENCE OF MAYORS
Mr. Fischer. Thank you Chairman Barrasso and Ranking Member
Carper and members of the Committee.
There is no doubt that it is busy times in America's cities
right now, we have much to do. I really appreciate the
opportunity to participate in this hearing remotely, so thank
you for the flexibility.
I am Greg Fischer, the Mayor of Louisville, and Vice
President of the United States Conference of Mayors, as you
noted.
I commend you all for holding this timely examination of
how infrastructure investment can help get our country back on
the road to recovery.
Before I talk about that topic that has brought us here
today though, I would like to acknowledge the crises that
Louisville and cities all across our country right now are
currently facing. That is the COVID-19 pandemic, which we
thought was a big enough challenge, and now we have challenge
in our streets of America protesting so many things, but first
and foremost among them the effects of systemic racism.
My community is mourning the death of two residents who
died in interactions with law enforcement, Breonna Taylor, and
David McAtee. We join Americans nationwide in mourning the
deaths of George Floyd, Ahmaud Arbery, and just way, way too
many others.
Systemic racism haunts and hinders our progress as a
Nation. We have to learn to work together at all levels of
government to address the concerns of our African American
communities and implement real policy reforms to ensure
justice, opportunity, and equitable outcomes for every
American, regardless of their skin color.
Infrastructure plays a really big role in addressing some
of those challenges locally. With your support, Mayors can
promote equitable economic growth through infrastructure
investment.
So let's talk about the impact of the coronavirus on
cities. The Conference of Mayors has been doing everything we
can to support our communities throughout the pandemic. We
struggle to understand how and when we will fully recover,
because of the depth of the economic challenge. We want to
thank you and your colleagues for passing the CARES Act and
taking other actions to help us at the local level.
Yet despite these significant actions, unfortunately, more
needs to be done, including providing fiscal relief for cities,
counties, and State governments, more relief that can be used
more broadly to support the fall off in our general revenues.
Congress must provide flexibility for cities like
Louisville to use our allocations from the coronavirus relief
fund to address our revenue losses. Local governments need
additional funding to support our ongoing response after
December 30th, 2020.
We are working to finalize budget recommendations for the
new fiscal years that begin for most cities on July 1st, so we
need action and resolution from Congress as soon as we possibly
can get it.
National recovery must focus on metro areas. Our metro
regions are the engines of the U.S. economic growth, accounting
for 91 percent of gross domestic product and wages.
Unemployment rates were higher in April in all 389 metropolitan
areas, according to data released by the BLS yesterday. Another
1.9 billion Americans filed unemployment claims last week, and
the national unemployment rate may exceed 20 percent. If our
economic output does not get back on track, obviously our
Nation will be in trouble.
As a logistics hub, Louisville can attest that
infrastructure investment creates jobs. UPS employs more than
20,000 full time local workers here in Louisville. Our local
infrastructure supporting UPS's Worldport has attracted
hundreds of other businesses across multiple industries. So we
ask that you look at ways to increase your funding commitments
to local jurisdictions.
Cities will not be able to lead, as we previously have, in
drawing our share of revenue commitments to infrastructure,
including highways to support the movement of goods. Mayors
must have more say to ensure that Federal investment fulfills
our community needs.
In my fuller testimony to you all, I talked about our
Reimagining Ninth Street Project. The complete street's
redesign of the corridor will help our city to heal the
physical, racial, and social divide between west Louisville,
our lower income area of the city, and our downtown and
neighborhoods to the east.
Our requested Federal grants will help grow economic
activity in the very places that need it most, like our
opportunity zones. We will improve quality of life and safety
outcomes for all facility users.
The plan also includes dedicated transit lanes for our Bus
Rapid Transit system. Our partners at TARC, that is our transit
authority, provide transit service to 40,000 riders daily, and
80 percent of those trips are employees and students.
Transit is important to our economic and work force
development. Our residents and essential workers need access to
jobs, education, commerce, healthcare services, and clean air,
no matter what zip code they are in.
I would like to convey our support for the Committee's
efforts to address climate resiliency, reduce carbon emissions,
and fund alternative fuel structures. I appreciate the sub-
allocation of funds to local areas to support our emissions
reduction strategies.
Local government needs your help to harden our
infrastructure systems to withstand natural disasters and
extreme weather events, like the flooding we have experienced
locally here from the Ohio River.
Cities, counties, and towns own and manage about every 4
out of every 5 miles of highways and streets, managed, again,
by cities, counties, and towns. So we would welcome your
commitments to support our needs in this area.
In closing, Mr. Chairman, Ranking Member, and Committee
members, we support your efforts to advance legislation to
renew the Nation's surface transportation law. Infrastructure
investment can facilitate the job growth and economic recovery
we desperately need. We encourage you to direct Federal
resources to our Nation's metro areas.
On behalf of the Conference of Mayors, I would like to
express our appreciation for the opportunity to join you this
morning and share our views. I would be pleased to answer any
questions that you have.
[The prepared statement of Mr. Fischer follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Barrasso. Well, thank you so very much, Mayor
Fischer, for taking the time to be with us today. I know you
will have a number of questions from the members. We appreciate
all of your comments.
We will start with 5 minute rounds of questions.
I want to start with Mr. McGough if I could. In your
written testimony, you commended this Committee for developing
the American Transportation Infrastructure Act with unanimous,
bipartisan support. The House Democrats have just released a
bill that was purely partisan, did not involve the Republicans
at all in the efforts.
I just want to ask, how important it is that surface
transportation legislation advances in a bipartisan fashion, as
our Committee has done?
Mr. McGough. Well, Mr. Chairman, transportation is one of
the few areas that consistently receives strong support from
both sides of the aisle. Surface transportation bills in the
past have historically, when you add the votes up, have been
bipartisan in nature.
The House, the Senate, the White House, have all expressed
interest in moving an infrastructure bill forward this year,
but we have less than 120 days. We need an outcome, so we need
movement. That is going to take true bipartisan support in both
the Senate and the House to move this forward.
Senator Barrasso. Can I ask you, Mr. Holtz-Eakin, because
you talked about the tens of millions of people who have lost
their jobs in the country due to the coronavirus. How would
providing stable, long term funding for highway infrastructure
projects help improve the economy, help create jobs? Are all
types of infrastructure projects equal when it comes to the
long term economic recovery, or is highway spending
particularly effective?
Mr. Holtz-Eakin. So, imagine that it is 3 months ago, when
we are essentially at full employment with record low
unemployment rates and wages rising across the spectrum and
especially at the low end. In those circumstances, a well
designed surface transportation infrastructure program can
continue to raise the productivity of America's businesses; it
can continue to increase the efficiencies and allow cost
reductions for those businesses. That shows up as a higher
standard of living for America's workers in those
circumstances. I think those benefits last, probably, a long,
long time and are a reason to have these programs in place
continuously.
In these circumstances, there is the additional benefit of
providing some opportunities for work where others have
disappeared. There is little question that even if we are quite
successful at returning the 18 million individuals who were
identified as temporarily unemployed in April, suppose we
miraculously got them all back to work, we are going to have to
find additional employment opportunities for many people who
used to be in hospitality and leisure and used to work in some
of the theatres and casinos and cruise lines that are going to
be diminished in scope and size over the next couple of years.
So there are new opportunities for employment; there are
benefits to the economy. The one that I want to emphasize in
these circumstances is the impact in offsetting what is going
to be a more costly way of running America's businesses. To the
extent we can offset that is a huge help.
I am cognizant of my experience after the terrorist attacks
of September 11th, 2001. We realized we had a threat to the
American public, and we had to address that threat.
But we also had to operate the economy in the presence of
that threat, and we didn't fully appreciate that the cost of
standing up the TSA, the cost of inspecting every container
that came into the United States, the cost of armoring every
headquarter against invasions, was going to take productive
capital away from other tasks.
If you think back to that period, we tried conventional
stimulus multiple times, 2002, 2003, 2005, 2008, to no great
effect, because we weren't addressing the problem. What I like
the most about this hearing and about this bipartisan bill is
that it is targeted right on what will be the problem, and I
think that is a big change from what we did back then.
Senator Barrasso. Thank you.
Mr. McGough, you mentioned in your testimony that
infrastructure is in dire need of repair. You urged Congress to
make strategic investments in infrastructure to spur meaningful
economic growth. So I want to talk a little bit about just the
difference between the amount of money we put into, say,
highways and bridges compared to the money we put into transit
in terms of what we need to do.
The U.S. Department of Transportation estimates that the
investment backlog for highways and bridges is about eight
times higher than it is for transit, in terms of the backlog
right now. The last two major highway authorizations--Senator
Inhofe was so involved in the last one, well, he was involved
in all of them--have provided over 80 percent of the funds
authorized from the Highway Trust Fund go toward highways and
bridges.
So do you support maintaining this traditional highways-
transit split in our next authorization, about 80 percent
highways and bridges, 20 percent transit?
Mr. McGough. Mr. Chairman, ARTBA supports maintaining the
traditional split that we have seen between highway and transit
spending. The solution is to increase both highway and transit
investment, and not suggest that one is a bigger priority than
the other.
Senator Barrasso. At a point in you testimony, you talked
about my home State of Wyoming, the $300 million in Federal
Highway Funds, the hundreds of construction projects,
significant, sensible investments in highway and bridge
infrastructures like we have just described. It helps Wyoming.
It benefits States because every State has programs to this
effect.
How important to the construction industry is stable, long
term funding for surface transportation infrastructure
projects?
Mr. McGough. It really boils down to certainty. Like any
business, the difference between a short term or long term bill
is the same for our businesses. If you look out and you don't
know where your funding is coming from next year, you make
business decisions based on that. You make business decisions
whether that is to purchase software, to buy equipment, expand
your facilities.
The same thing goes with State DOTs. They have no certainty
of the funds, and short term planning really leads to short
term decisions. The whole key for successful economic growth is
a multi-year bill that gives the States, gives the contractors
the ability to plan and know what to expect.
Senator Barrasso. Thank you.
Senator Carper.
Senator Carper. Mr. Chairman, I would just observe from the
responses to those first questions that you have asked, that
this is an exceptional panel, and we are delighted, seriously,
and we are blessed with a lot of great witnesses. But today, I
think these witnesses are just more than punching well above
their weight, and we are glad that you made time for us,
especially.
I am going to start off with a question I have for Mayor
Fischer.
He leads a major city not far from where my sister and her
family live in Winchester, Kentucky, and not far from where my
mother lived the last 3 years of her life and just had received
the best care in the world. So I have a special warm spot in my
heart for Kentucky and the people of Kentucky.
I would ask my first question of Mayor Fischer, and that
is, as we think about making Federal investments in our
communities that can assist with economic recovery and bring
equity and equality, how can we ensure that Federal investments
provide access and opportunity to all individuals, no matter
what neighborhood they live in, no matter what their zip code
is? Could you just give us some thoughts on that, please?
Mr. Fischer. Yes, thank you, Ranking Member. I think this
is a tremendous opportunity to show the power of the citizens'
money at work as we dedicate and increase allocations
responsible for minority business participation in these
contracts. A lot of the infrastructure development in our city
would take place in and around communities in need. Many of
them are opportunity zones, as well.
I would just like to echo the prior comments on the
consistency that we could have this around funding year after
year would allow the creation of more minority owned businesses
as well, and give them the type of certainty that they could
move forward, that they could employ local work force as well.
These are good jobs in infrastructure, and we have ample
opportunity for the work in our city, whereas we have $300
million of maintenance that is required just on our sidewalks
and roads alone, while our local government is becoming
increasingly strapped for other needs.
So there is no question there can be an equity overlay on
this. Our city government uses a racial equity lens with all of
our investments. It has been systemized to what we do. So it
would be a tremendous opportunity to lift up our communities in
need.
Senator Carper. Thank you for that response.
Sometimes we focus too much, here on Capitol Hill, on where
we disagree. I like to focus on where we agree. One of the
biggest issues, and several of you have already commented on
this, is how do we pay for this stuff that we are talking
about? How do we pay for our roads, highways, bridges, and
transit systems?
Here are a couple of areas where I think that Democrats,
Republicans, and folks on this Committee led by our Chairman
agree, we agree that things that are worth having are worth
paying for, not just putting on the Nation's credit card and
continue to add to our debt as if it does not matter.
We agree that those who use our roads, highways, bridges,
and our transit centers have an obligation to help pay for
them. We agree that there is no silver bullet when it comes to
paying for transportation infrastructure, but there are a lot
of silver BBs, and some of them are bigger than others.
And we agree that the source of funding must be
predictable, and it must be sustainable. It cannot be stop and
go. The last thing that folks need when they are building
roads, highways, bridges, and transit systems is wondering
whether or not the money is going to be there the next week,
the next month, or the next year.
With that in mind, let me just ask of each of you, and we
will start with, it is Mr. McGough?
Mr. McGough. That is correct.
Senator Carper. Has anyone ever mispronounced your name,
Mr. McGough?
Mr. McGough. Maybe a thousand times.
Senator Carper. Today?
Mr. McGough. Not today.
[Laughter.]
Senator Carper. Well, my question of you, Mr. McGough--we
will get it right--what advice would you have, we will start
off with you, what advice do you have to give us, my colleagues
and me here on the dais, our staffs, about the importance of
paying for infrastructure, maybe give us some advice on
convincing some reluctant members around the country on the
need to pay for that transportation infrastructure, and how to
structure some existing fees and some new fees in order to
avoid both a negative impact on our economy, and to be
sustainable, even after we transition away from motor fuels
over the next decade?
Mr. McGough. Thank you, Senator Carper. ARTBA has long
supported a motor fuels tax increase as the most effective,
transparent, and equitable way to pay for surface
transportation infrastructure improvements. As you mentioned,
Senator, there is no silver bullet to a complex problem.
That is why ARTBA has been steadfast and consistent in
supporting any and all highway user fee proposals since the
Highway Trust Fund revenue crisis began 12 years ago. I will
tell you, it is going to take a unique combination of a number
of things, and we agree wholeheartedly the users of the system
should be paying, and for anything that's worthwhile, will cost
us the dollars to do that.
Senator Carper. Thank you.
Doug.
Mr. Holtz-Eakin. I think, looking forward, and I have
written on this, and we have had this conversation, that motor
fuels taxes are not the appropriate base anymore, and that it
makes sense to move toward something like a vehicle miles tax
with adjustments for weight and axles, which cause the damage
to roads and bridges. That is the endpoint; you want to end up
there at some point in the future, when it is feasible.
Then working back, you could legislate that now and
implement it over time, so that the Highway Trust Fund becomes
sustainable.
But I don't think you should raise taxes in 2020, and I am
not even sure about 2021. This is not the right time to sort of
provide additional headwinds to the economy. So have the
conversation, get it financed in a durable and sustainable way.
I think that VMT is the future, but I don't think you should do
that this year.
Senator Carper. Yes. I would like to say that vehicle miles
traveled is the future. We need a bridge to the future; in
fact, we need a couple bridges to the future, and so, thank you
for that.
Mayor, your thoughts please, and then my time is expired.
Mr. Fischer. Yes, thank you so much. Mayors are agnostic as
to where the funding comes from, but it has to come from
somewhere.
I think part of this, too, is kind of a culture shift that
we need to have in our country where citizens are proud of
their infrastructure. We have the Ohio River Bridges Project
here, which is a $2.5 billion project completed about 5 years
ago, paid with tolls, so user fees.
But in America, it costs, the great American dream. We want
everything, but we don't want to pay for anything, and we all
know it doesn't work that way. So we have to get back to a time
when we looked at our city buildings and our infrastructure,
and whatever we invest in as a public, and say that makes me
feel good, just like having public health properly funded as
well.
As we talk about the money, let's talk about the
collective, too, about we are proud as Americans, as
Louisvilleians, and these are the kind of things we funded
together.
We also have to look to the future, obviously, with more
and more electric vehicles. So as was noted, how do we figure
out how to tax vehicle miles traveled, local occupational taxes
directed to our transit authorities as well.
And a gas tax is part of that, I believe. So it is a
portfolio of diversification with an umbrella of pride around
it, how about that, that Americans say, when we invest in
things that help us all, that is something that is required for
a strong America, and I am happy to be an investor in that.
Senator Carper. I like that, umbrella of pride.
Thank you very much.
Senator Barrasso. Thank you, Senator Carper.
Senator Inhofe.
Senator Inhofe. Thank you, Mr. Chairman.
I am going to get into another subject here, and I would
like to address this to Mr. McGough.
First of all, the FCC has just done the Ligado order, which
would allow, it says, Ligado to repurpose the spectrum around
GPS.
This would have a devastating effect on military. I chair
the Senate Armed Services Committee, so I was naturally, that
is where my concern was. In fact, there is one general that
said this would pose ``the most significant non-combat threat
to our national security of my lifetime.'' That is what a big
deal it is.
We had a great hearing; people understood it; it was well
articulated. But it also affects everybody else, all of
America.
We had, I think, we were allowed 30 days to file a motion
for a reconsideration for a petition for a reconsideration of
this thing, and there are eight petitions representing some 22
organizations.
One of those was ARTBA. You filed this petition with the
American Farm Bureau, and the Association of Equipment
Manufacturers. So what I would like to ask you is, can you
speak to the impact this order would have on your members and
on the construction industry?
Mr. McGough. Thank you, Senator.
The transportation construction industry is using more new,
innovative equipment on job sites from tasks like surveying to
utilities, grading control, enhanced material applications.
This equipment uses GPS.
The Ligado proposal network shows significant interference
with GPS and other signals, likely. Interference would be
disruptive on job sites and can jeopardize safety and will most
surely cause project delays.
Currently, there are over 900 million GPS receivers
nationwide. Ninety-nine percent of those are operated by the
private sector, none of which will be compensated under this
order.
Even more concerning, if you look at the job site level,
when you do have interference, the FCC order is to direct you
to a 1-800 number. It seems illogical that you would have
construction workers not realizing where their interference is
coming from, and that that would not cause project delays as
far as getting to a time of resolution.
We would urge the FCC to revisit their orders and the
impacts that the Ligado order would have on everyday users that
depend on a reliable GPS system.
Senator Inhofe. I appreciate that, and during this hearing,
I did take the time to look up and find that there is, that
Ligado has actually spent well in excess of a million dollars
on lobbyists. So they are busy out there working. Someone is
concerned about the amount of money that is going to be
involved in this thing.
The second thing, what I mentioned to Mr. McGough, is as
the Chairman said, I chaired this Committee for quite a while.
This is the one area, you know, people in Washington, every
time they want to spend money, they call it an investment.
In this case, it actually is an investment. It has an
effect on everything else that comes up, and we see the return
on this investment when companies locate new facilities and
community.
We have experienced that in my State of Oklahoma. So I
would like to have you kind of elaborate a little bit about
what kind of return we would get on this investment.
Mr. McGough. Well, Senator Inhofe, as repairs and upgrades
are made to the highway, street, and bridge networks, drivers,
businesses, shippers, transit riders, will all save time and
money. These users benefit as a result of decreased congestion,
less money spent on vehicle repair, and safer roads.
A study commissioned by the U.S. Treasury Department found
that for every dollar in capital spent on select projects, the
net economic benefit ranged from $3.50 to $7.00. The trucking
sector estimates $74 billion is added to the cost of goods due
to congestion on our roads. So we are spending the money
without the economic benefit. We just don't see it because it
is buried in the cost of our goods and services.
Senator Inhofe. I want to also say, and I will say to both
of my good friends, the Chairman, and the Vice-Chairman, that
this is an area where it is popular. It is about the only tax
you can find that is popular.
I can remember several of our good friends, without
mentioning names, who were a few years ago running for
Governor, and we are talking about spending and all that. They
made the mistake of talking about infrastructure, and
immediately, they were jumped on. So there is a very strong
positive effect that we have when we talk about how we are
going to be doing funding; yes, that's going to be a problem.
I appreciate one of the statements that you made about this
is not the time that that can be done, but the fact that it
eventually is going to have to be done. So I appreciate it very
much, and this Committee.
I get more comments on this bill, I would say to the
Chairman, than anything else that when I go back to Oklahoma.
Good.
Senator Barrasso. Thank you, Senator Inhofe.
Senator Cardin.
Senator Cardin. Well, thank you, Mr. Chairman, and let me
thank all of our witnesses.
It is a good follow up to Senator Inhofe that the two of us
are in total agreement. Infrastructure does bring us together.
It is a critically important area for us to make advancements.
Our Committee has always worked in a very bipartisan manner.
Now that we recognize that over the last several decades,
we have seen a decline in the percentage of our economy that
has been devoted to infrastructure spending, we need to do
smart investments coming out of COVID-19. I particularly
appreciate the comment by Doug in regards to how we pay for it
now.
I am for paying for it. But coming out of this COVID-19, we
are looking for how we can create jobs. We recognize that. We
have put trillions of dollars into the economy because we know
the impact COVID-19 has had in our economy.
Now, we need to look at how we can create the jobs that
have been lost from COVID-19. Investing in infrastructure gives
us that opportunity to create good jobs.
But at the end of the day, as Senator Inhofe has pointed
out, we also have an economy that can perform better for the
people in our community, as well as give us a greater economic
competitiveness. At the end of the day, we end up with a
product that helps our constituents and helps our economy.
I am a strong proponent of looking at a robust
infrastructure package, and our Committee has already passed a
bill on this, in order to come out of COVID-19 with a stronger
economy.
My question is to Mayor Fischer. As we look at putting
together an infrastructure package, every community is
different. I was proud to work in a bipartisan way to create
the TAP Program, the Transportation Alternative Program, which
gives additional funding at the discretion of local governments
for what is best in their community.
In my State of Maryland, we need to have a balanced
approach on infrastructure. Transit is critically important to
the people of the Baltimore-Washington region, so we want to
invest in transit. We want to invest in neighborhood
improvement type projects. We don't want to see one size fits
all at the national level.
As a Mayor, can you tell me how important is it for you to
have discretion as to how transportation programs are handled
in your community, and having the ability to have the Federal
Government as a partner in developing those types of
transportation programs?
Mr. Fischer. I appreciate the question, Senator. Obviously,
I think the best government is the government that is closest
to the people. We have long term plans in terms of Move
Louisville that create a vision for what is possible a decade
out, but then we have near term plans for what it is that we
are trying to do today.
To give you some perspective on the challenge, Louisville
represents about 33 percent of our State's GDP, but we get 3
percent of the funding for transit and for roads. There is this
huge disconnect in terms of where the economy is being created
and where the money is flowing toward that.
So the more that we can tie that into our local
transportation planning, tie that into our arterials that feed
into our highway system, to our complete streets where people
sit outside and enjoy our great restaurants here in Louisville,
it is that type of systemic approach toward transportation and
public transit on top of that, and sidewalks on top of that, as
pedestrian as that sounds, pun intended.
That is really important to create a great city, and the
feel for a city where traffic is moving as seamlessly as
possible, reducing congestion, and making sure our air quality
is as good as it can be.
Senator Cardin. Well, I thank you for that. In working with
Senator Inhofe and now with Senator Capito on the Subcommittee
on Infrastructure, we have recognized our States are different,
so we try to give flexibility so that it can work in all parts
of our country.
It is one of the reasons why we had a unanimous vote in our
Committee, and I hope as we move forward, yes, it is important
to invest today in infrastructure. We may not pay for it
completely, but that is to get our economy back on track.
This is a good investment, like we have done already in the
CARES Act. Let us look in a smart way to give the flexibility
to the States and local governments to do what is best for
their community.
Again, I thank you for you testimony. I thank all of our
witnesses for their testimony.
I can just underscore what Senator Inhofe said, we are
going to work bipartisan to get a strong infrastructure package
moving in this Congress.
Senator Carper. Mr. Chairman, could you yield to me for
just 10 seconds?
Senator Barrasso. Yes, Senator Carper.
Senator Carper. I am reminded, as I am listening to what
Ben was saying, unfortunately, everybody says we need to invest
in transportation infrastructure. Almost never do I hear
anybody say this is the time to do it. It is always over the
horizon or around the corner.
We have used in recent weeks and months the term turning on
the economy, the light switch versus the dimmer switch. I think
with respect to funding, I agree, 2020, I don't think is the
right time to raise taxes or fees. But I think we should start
turning up the dimmer switch in 2021 in a variety of ways.
Because it is always around the corner, it is always over the
horizon.
Next year, I think we might be able to turn on the dimmer
switch, provide some of the revenues that are needed, and just
send a signal that we are not going to walk away from this and
simply put it on our Nation's credit card.
Thank you.
Senator Barrasso. Thank you.
Senator Capito.
Senator Capito. Thank you, Mr. Chairman, and thank you all
for being here today, and I join my voice in the chorus of
being very excited about the infrastructure package.
Senator Cardin and I worked this through our Subcommittee.
We built a lot of sustainability of materials and everything
into this to hopefully build a longer life.
I wanted to ask the Mayor a question quickly on the
flexibility that you are asking for. Because this is an issue
that Senator Sullivan has a bill that I am on asking for the
dollars that have gone to the smaller States to be able to have
the Governor use the flexibility for city, county, and State
lost tax revenue.
Our State has a gas tax, and I would include that in the
package of lost tax revenues that would be important to a
Governor. Do you have a thought on this in terms of what you
see in Kentucky or in Louisville?
Mr. Fischer. Yes. Our gas tax has been a declining source
of revenue for our State for quite some time. As a result of
that, we get less and less every year as well.
But I would definitely have this total bucket of all the
funds that are available so that we can look at that as a
system and allocate those to the places where we have the most
vehicle miles being traveled, where the greatest economic
impact is coming from, as well. We have to take care of our
rural brothers and sisters as well. But the dynamism of the
economy is in the cities, certainly here in Louisville, and
Kentucky, and throughout the rest of the country as well.
The more that we can look at it as a system and not
Balkanized into these different funds, I think that is the way
that we maximize the funding.
Senator Capito. Well, like our State of West Virginia is
down 27 percent in their gas tax.
I will say also to the credit of our State, we passed a
State referendum 2 years ago that actually raised our gas tax,
and actually said, this is important to us as citizens to have
our potholes filled and new construction and all the things
that in a mountainous State and a rural State are sometimes
very difficult to maintain.
Mr. McGough, I wanted to ask you about bridges, because
this is my State also where 21 percent of our bridges are
deficient.
So when we were writing this highway bill that we have all
talked about today, one of the set asides that I worked really
hard in and wanted to make sure we were able to include is the
$6 billion set aside that actually dedicates to bridge repair.
We have seen a lot, some large bridges across the country
collapse to calamitous endings, but we also know in all of our
areas, we have bridges that can't be used for school buses,
can't be used for heavier trucks, and are a danger, really, in
the communities. My State is one of these.
You highlight that in some of your comments. But when we
ask CRS to report on this, I don't know if you are aware of
this, they said that we are actually making better progress in
our bridge repair than maybe the ARTBA had assessed in their
report. Are you aware of that discrepancy in those two reports?
Mr. McGough. I am not aware of the discrepancy. I am aware
that we are gaining ground on fixing our bridges as far as the
percent deficient. But when you look at that, the number of
years, decades that it would take to fix our bridges, that is
the real challenge.
The dollars still need to be coming in to be able to fix
the ones that are deficient. So while it may look better year
to year, the real challenge is, how many years is it really
going to take, in your case, in your State, to fix those
deficient bridges.
Senator Capito. Right, and that is why I absolutely
insisted that we include this in the package, because it is
important not just in my State, but also a lot of other States.
Just on the issue of construction companies now, I know a
lot of them have gotten PPP loans, a lot of them, some of them
are, it seems like, when you are on the highway, there is a lot
of construction. But I am sure it is a lot less than it was.
What are you seeing in terms of safety of your workers?
What are you seeing in terms of confidence of rebuild?
Mr. Holtz-Eakin, I don't know if you have a comment on
where you see this construction industry could help pull us out
of where we are right now. I think, it would be an important
part. And then we will get to health of workers.
Mr. Holtz-Eakin. I guess what I would emphasize is that the
supply chain is a really important part of the economy, and
keeping it going in the face of the virus is actually a
priority. It is one of the things we manage to do pretty well.
But that does say that if you have truck drivers, rail
personnel, cargo pilots, and the attending crews, they should
be a top priority for PPE and the ability to continue to
operate as we go forward.
The virus isn't gone; we are going to have to, at least
over a sustained period, protect them during the course of
their job. That is not to diminish the first responders and the
health front line workers, but people forget about the sort of
economics of that supply chain sometimes, and it is very
important.
Senator Capito. Right. We actually had a hearing in
Commerce yesterday that this point was really hit hard on,
particularly in areas that might be forgotten like rail or
other arenas.
Mr. Holtz-Eakin. The rail folks have been forgotten. It is
important. They move a lot of cargo.
Senator Capito. Right.
Well, I think my time is over.
Thank you.
Senator Barrasso. Thanks so very much.
Senator Whitehouse would be next; he has been in the room,
and I know he has been following it. But I think right now, he
may have had to step away, which would turn us to Senator
Gillibrand.
Senator Gillibrand. Thank you, Mr. Chairman, Ranking
Member. Thank you for holding this hearing today. I am really
grateful that we have this chance.
It should go without saying that the impacts of COVID-19 on
New York have been massive and are felt in every part of our
economy, including our transportation systems. Our transit
agencies across the State are experiencing staggering losses in
revenue due to sharp decreases in ridership. That is true in
New York City and in smaller cities across the State.
They all need our help. Public transit is an absolute
lifeline for New Yorkers. The MTA has experienced a decrease in
ridership of more than 90 percent during this pandemic.
This decrease is not because people in New York all of a
sudden no longer want or need public transit. It is because
people need to stay at home in order to stay safe.
But despite the decreased ridership, it remains absolutely
essential that our subways, buses, and rail continue to operate
so that healthcare workers can get to the hospitals to take
care of sick people, and so people can continue to get their
groceries and make other essential trips.
For so many of our citizens, particularly our lowest income
community members and communities of color, those are the ones
who are hit hardest by COVID-19. Public transit is not simply a
choice; it is actually a necessity.
Continuing to provide Federal funding to replace the lost
fare revenue so that our public transit system doesn't shut
down is also essential. Once this crisis has passed, as it
will, riders will come back. We have to ensure that transit
agencies have the resources necessary to ensure those riders
are safe.
Limiting transit options and relying on more vehicle
traffic in a densely populated city like New York is not the
answer. It will leave those who can afford to drive in gridlock
and congestion, and those who can't, stranded.
The people left stranded will include seniors, people with
disabilities, our veteran community, and many of the workers
who have proved to be so essential during this pandemic.
I am not going to allow that to happen. So while I
appreciate the opportunity to hold this hearing today to talk
about the role of infrastructure in our recovery, we need
action by the Senate as well. We need to listen to our States
and our cities that need our help, and they need that help
right now.
Infrastructure legislation in the Senate is almost always
bipartisan, but a highway-only recovery bill would not be a
bipartisan approach to address the true needs of this
unprecedented crisis.
Mayor Fischer, my question for you is, what do we need to
be doing to make sure that our public transit agencies are able
to safely and reliably operate during this pandemic?
Mr. Fischer. Thank you, Senator.
There are a multitude of challenges there in our city. You
have the whole need for social distancing when you are on our
transit system as well.
So our transit system, the local government funds it at
about $10 million a year. It runs a structural deficit. As you
all well know, the Federal Government provides most of the
local funding, so it is most of the funding.
It is a question of, how do we operate in this new
environment. Some people are now suggesting that people need to
commute more in single cars to stop the spread of the virus.
So we are in this tremendously dynamic world right now,
where people really aren't sure what the answers are.
Oftentimes, they are polar opposites of each other when they
are given.
Within those constraints, we are working on our safety
issues within our transit system as we get our economy back to
work.
But if I could, I just want to say one other thing. Around
America right now, in our downtown areas, most of our
businesses are boarded up, literally. So while we are focusing
on the pandemic right now, we have got to get a relief valve
here so that our streets are calm throughout America, so we can
open up the economy as well.
That is just the reality we have in our cities right now
where the house is burning, more or less. It is much calmer
here in our city and many cities as well, but I just want to
really emphasize on top of the coronavirus, this is a real
issue that we don't understand how much longer is going to be
going on.
But we have got to be speaking to our people to say we
understand, and here is what we are moving forward, when we
expect our economy to be coming back.
Senator Gillibrand. Can you talk about some of the benefits
of having a reliable public transit system on economic
development and the ability to recover?
Mr. Fischer. Absolutely. So when we think about the impact
of the coronavirus, the people who were most impacted were our
front line workers who, in most instances, could be our African
Americans, our Latino community, obviously everybody is aware
of the disproportionate impact of COVID-19. Twenty-three
percent of our population here is African American; about 31
percent of the deaths were African American. That is low, too,
compared to most of our cities.
The ability to have public transportation to get these
folks safely to work to a job that pays a living wage, by the
way, is what should be happening here, is absolutely essential.
Also part of that is to make sure it is a housing solution
that oftentimes, most every city in America has a lower income
area, unfortunately, that oftentimes is not where the jobs are.
So in our housing strategies, to have affordable housing
throughout the community so people can get to jobs simpler is
also an important part of the long term solution.
Senator Gillibrand. Thank you, Mr. Chairman.
Thank you, sir.
Senator Barrasso. Thank you.
Thank you for your comments, I appreciate it.
Senator Cramer.
Senator Cramer. Thank you, Mr. Chairman and Ranking Member
Carper, both, and to this outstanding panel.
I agree with Senator Carper. We have got the A Team in
front of us, and I appreciate this discussion very much. I
think it is a timely discussion.
I have been a strong advocate for including transportation
infrastructure as part of recovery since the very beginning,
because it has a number of advantages. Some of you have talked
about that.
First of all, it does have the advantage of creating
immediate stimulus. Although it is not the primary purpose of
building a transportation infrastructure to create jobs for
building it, building things stimulates the economy. People
working stimulates the economy.
It has the additional advantage the profitability of the
private sector as its main purpose, the movement of goods and
services, tourists, products, whether they are manufactured in
St. Louis and going to California, or tourists going to
Yellowstone or Delaware, or corn and wheat going from North
Dakota to feed a hungry world.
But third, it is our responsibility. It is the
responsibility of the Federal Government to lead a highway
transportation bill and other transportation infrastructure. So
it is the perfect time to do it.
To that end, that is why I wrote an op-ed at the very
beginning of the discussion about the recovery promoting this,
and I am glad we are having this hearing to do exactly that.
Dr. Holtz-Eakin, I have appreciated your testimony a lot,
and you referenced a ``patient strategy to bolster the supply
capacity of the economy over the medium to long term.'' Very
well said.
In fact, in North Dakota, when oil was booming and
everything was high, prices were high, labor was high, concrete
was high priced, everything to build anything was very high
priced, but we needed to do it.
When oil prices went back down, our State had the wisdom
and the foresight to continue building infrastructure when the
costs of everything were lower. So when they came back, when
the prices came back and the boom came back, we were well
situated. So I think there is a good example there for us to
follow.
My question, first of all, for you, Dr. Holtz-Eakin, we are
really good in this town at kicking things, kicking the can
down the road, right? Would you just, as an economist, maybe
share with us some perspective on the difference between, or
the advantages to a long term, well thought out infrastructure
bill versus, say, a short term, even a 1 year extension?
Mr. Holtz-Eakin. Oh, I think there is an enormous
difference. This has come up already in terms of planning
horizons. If you only have a short term extension, you are
going to build things that have some sort of return over the
short term, but they may not be the best thing over the long
term. So now you have effectively diverted the funds to an
unproductive use when you should have built them into a better
long term plan.
My frustration with a lot of the proposals that have come
up over the past couple years on the ``big infrastructure
bills'' has really been twofold. No. 1, they start by saying
infrastructure, and pretty soon, everything is infrastructure
because they want to get in.
The good thing about this is it is what it is. It is a
surface transportation reauthorization, and that is a part of
infrastructure and good.
The second thing is the short term focus. Again and again
and again, we can spend a trillion dollars this year, and maybe
you can. But isn't the better thing to do to take a system that
identifies high value projects and fund them in a sustained way
so that they benefit for a long, long time? It is refreshing to
see that approach.
Senator Cramer. Mr. McGough, I would think even from a
construction standpoint, there is some efficiency to Mr. Holtz-
Eakin's point, to a long term plan. Is there not?
Mr. McGough. There is both the efficiency and the
productivity from, especially from a long term planning
standpoint. Even if you think out 5 years, that is long term.
We need, in the Nation, the ability to rebuild a lot of our
roads and bridges.
If you look even at the ARTBA report for your individual
States, those numbers of new lane miles is only set at 4
percent across the country. Most of those dollars are for
reconstruction and repair and things along those lines, or
additional lane miles within existing right of way. So it is
very important that we maintain that course and that we put a
robust bill in front of the full Senate and ultimately, in
front of the President.
Senator Cramer. Let me throw a hand grenade into the middle
of the room.
Our President is a builder; he is a developer, and he loves
low interest rates. I have heard him say both publicly and in
private conversations, we should borrow a couple trillion free
dollars, by that I mean interest free, to which I tell him, it
is still debt. We should borrow a couple of trillion dollars
and do it big.
Does that make sense, and whether it is a couple trillion
or half a trillion, does it make sense in this economic time to
do something like that, Mr. Holtz-Eakin, from your economic
standpoint?
Mr. Holtz-Eakin. No, that is not a good way to formulate
the problem, I don't think. If you are borrowing a trillion
dollars, you still have budgetary trade offs on where it is
going to go, and you should put it in its most high value use.
To just in advance, to decide that that is going to be
infrastructure, to find somehow, without checking other
potential investments, is a mistake.
So I like approaches that have an objective which is a
highly connected national surface transportation network with
efficiencies. That is a well formulated problem that I can
understand funding. Taking a trillion dollars and throwing it
at everything under the sun is not a well formulated approach.
Senator Cramer. Thank you.
Senator Barrasso. Senator Braun.
Senator Braun. Thank you, Mr. Chairman.
First of all, I don't think there is any one of us here
that doesn't believe that infrastructure across the entire
spectrum of it, Senator Gillibrand is right, in some places you
need that. In many places, roads, and bridges.
I come from a recent example of where we made the hard
decision in Indiana. I was sitting in on the Roads and
Transportation Committee and Ways and Means, and got into the
stark reality, when I followed the commissioner of highways out
the door of the committee room, and I was talking about a road
I was interested in. He said please, don't bore me with that.
Tell me how you are going to help pay for it.
We did some interesting things in Indiana. I was an author
of a bill that was nowhere in the country. It was a regional
development authority bill that allowed enterprising local
governments to put more skin in the game. We teed it up the
next year, and have got early stages of a road project in
place.
I don't know how what we are dealing with now is going to
impact that. But somehow, we have got to convince people here
where we borrow money for everything we do, we don't even cover
maybe 23 percent of our current budget, we are borrowing to
cover it, so it is no good.
We got 48 out of 50 stakeholders that were willing to pay
user fees in Indiana to come testify and say, we want to pay
more in road taxes. I know that diminishes in effect each year.
How do we, how do any of you convince the people that use
the roads to come here and convince us that we need to adjust a
user fee up that hasn't been changed since 1993?
Mr. McGough, could you start first, and then I would like
to go around the horn.
Mr. McGough. Well, from ARTBA's standpoint, I had mentioned
it earlier, that we have been consistent in supporting any and
all highway user fees, and we believe that the users of the
system should use that. I know through the years that people
have stepped up and said that they were willing to pay more.
I mention it just from the road congestions, the safer
roads, what is costing the truckers, if you look yearly, which
is ultimately being passed on to you and I in the cost of our
services.
I think it is time for Congress and the President, what was
agreed, what has been said since 2016, and what has been said
again this year, is to move forward with the bill to fix and
put in a long term sustainable multi-year bill that we can
count on as an industry, and it is been shown through the years
to be bipartisan.
It is one of the more popular programs if you poll the
American people. I think that it is time to make some tough
choices and move forward.
Senator Braun. Thank you.
Mr. Holtz-Eakin. I don't have a magic solution to that, but
I think one of the real hurdles is making sure that there is a
strong connection, an observable connection between the fee and
the ultimate service the people get back.
If they feel they are paying a ``user fee,'' and they don't
see a highway that is being kept up in good shape and is
congested, they start to wonder, is this really worth doing,
and that becomes a problem.
Then it is just literally a tax; it is not a fee for
service. So structuring the fees as close to the ground so
people can see the link between what they pay and what they
get, which we have done some, I think is a key part of the
problem right now.
Senator Braun. Thank you.
And Mayor, when you answer the question, we have a thing
called Community Crossings Grant in Indiana where we offered
county and city governments the ability to get more money from
the State if they put a little more skin in the game.
Do you have anything like that available to you, and what
do you think of that idea to kind of stretch the Federal
dollars that might come in on any project as well that is a
separate thing, but a way to maintain and pay for roads, paid
for primarily by city and county governments?
Mr. Fischer. Yes, Senator, thank you from my neighbor here,
just to the north of us.
No, we do not have a program like that, but anytime you can
get that type of leverage or match that we totally want to take
advantage of a situation like that.
I can just provide an observation of the cities around the
country and different Mayors. To the previous comment, when
citizens can say, if I pay this fee, and I am going to see this
project come to fruition, you see a very high rate of success
in those projects. I think it is in the neighborhood of two-
thirds, so you are seeing billions and billions, it could be
trillions of projects that are basically being locally funded
taking place around the country right now.
There has been an increase in the local government matching
of Federal funds in particular. The chart that I provided to
you all shows that local government's increase in funding has
gone up 116 percent from the period 2001 to 2015, versus the
Federal Government's 55 percent. So you are seeing more and
more activity from local governments in these areas with more
difficult budget situations, obviously.
A prime example of what you are talking about here too,
Senator, is the bridge that connects your State and my State,
the Ohio River Bridges Project, which is driven by user fees,
tolls. It has really helped both create jobs, I am a business
guy, I just happen to be Mayor, but then the movement of
transit throughout our city and our region as well.
Last thing, Kentucky does not allow localities to have
specific referenda on projects. We would love, and we are
working with our State government, but we would love a Federal
issue here that says if locals want to vote on local projects,
let them vote on local projects, and let them pay if they want
to pay.
Senator Braun. Thank you.
Senator Barrasso. Senator Boozman.
Senator Boozman. Thank you, Mr. Chairman, and thank you all
for being here. We do appreciate it very much.
Mr. Holtz-Eakin, you have had a very distinguished career
being in economic policy and have been a great help in the past
through the years.
I think you made a great statement when you talked about
shovel-ready projects. That is great; that creates some jobs.
But the real benefit is the economic activity that comes after
that if they are worthy.
President Eisenhower, because of military reasons, built
the interstate system. As a result of that, we became a leader
in the sense of being able to move goods and services also.
That lessened prices to consumers; that is a great thing.
Now, with globalization, not only are we worried about,
again, the efficiencies, helping our producers now selling to
our own population, but also trying to compete with
globalization.
Can you talk a little bit about how important it is as we
try to, and the logistics, how important that is, being able to
compete with a worldwide economy?
Mr. Holtz-Eakin. We are in constant competition with
countries around the world, workers around the world, and we
have to make sure that our workers have at their disposal the
best technologies and the most efficient operating
surroundings. There are some very particular things that come
again and again, not all of which are solvable in this
Committee.
But the connectivity between different modes is an ongoing
problem in the United States, from ports to trains, and trucks
to airplanes. And there are some high congestion areas that
just jump right out on the West Coast.
Solving those has a big impact on the domestic economy, but
also a big impact on our competitiveness. Because you spend a
lot of money internally just getting stuff in and out. So I
think that is very important.
There are some things that we know going forward are going
to be more important. I think we are not going to see
commercial air travel for leisure purposes be what it used to
be, but air cargo and the capacity of planes to fly closer
together, carry greater volumes, an air traffic system that
looks forward and is better, these are all the kinds of things
that are core infrastructure for a 21st century when you are
competing globally.
Senator Boozman. Yesterday, I was in a hearing in the VA
Committee, and the Secretary of the VA was there. He was
telling us that in the last few weeks, they had hired thousands
of VA employees using the abilities that under this very
difficult circumstance, where normally that would take a year.
It is amazing.
Can all of you talk about, and we will start with you, Mr.
McGough, about the importance of a 1 or 2 year project, that
could be a 1 or 2 year project actually being closer to a
decade project, if we can just reduce some of the--and again,
doing it in the correct way.
A great example of that is the bridge that fell down in
Minneapolis that was done in a year, that project. I don't know
how long it would have taken if you did it in the conventional
way.
How important is that? How would that save us money and
allow us to get some of these projects done?
Mr. McGough. Well, what you have in the bill that you
passed last July when I said common sense reforms, a lot of it
is codifying the One Federal Decision and getting the lead
agency when it comes to transportation. We would look to the
DOT.
But being able to get reviews down to a 2 year window and
moving forward, that is where a lot of your challenges come
with moving projects forward.
It is the time to get construction started, and as you have
seen in projects that have been fast tracked for accelerated
delivery, that those roadblocks get out of the way, and you see
what happens.
What we need as a Nation is some of those common sense
policy reforms, where the average person, if you told them how
long it would take to get a project up off the ground, they
find it hard to believe that that is true. We need to shrink
that timeline; that is where your efficiencies are going to be.
Mr. Holtz-Eakin. It is enormously important on a project
basis, obviously. But as a flavor of what is really at stake,
my organization keeps track of every regulation issued by the
Federal Government.
Over the 8 years of the Obama administration, it issued a
major regulation, something that cost the private sector more
the $100 million, at an average rate of 1.1 per day for 8
straight years, at a total cost of $890 billion, for $100
billion a year.
The Trump administration's approach to regulatory budgets
has essentially stopped that in its tracks. There has been a
modest increase; it was a negative coming into the pandemic.
That has an enormous difference in economic performance. We saw
that.
In this pandemic, the emergency waivers that we have seen
across the Federal agencies have allowed people to do things
flexibly and respond quickly. I think that has been just a huge
success.
And to the extent you can make the progress you have in
your bill, or codify things that have been done under emergency
waivers, I think that would be valuable.
Senator Boozman. Very good.
Mr. Mayor, can you do it very quickly, or the Chairman is
going to yell at me?
Mr. Fischer. OK, I will be quick. Thank you.
Great project management cannot be replaced, and obviously
you want projects streamlined, and we always want safety at the
forefront of all of these things. As we are doing that, we have
got to remember that there are equity issues around the
environment.
So there has to be an environmental justice issue overlaid
on all these types of things, so our low income neighbors don't
feel like, OK, here we go again, we are going to get the short
end of that stick. The streets are clearly talking to us; that
is not the right way.
I just want to make a plug for one more thing: value
engineering. We took our Ohio River Bridges Project from a $4
billion budget down to $2.5 billion, and it is a beautiful
piece of infrastructure. So having the different ways to look
at projects from gold plated to functional is very important so
you can maximize all this.
And then, Senator, there are hundreds of billions of
dollars of shovel-ready projects available today throughout
America as well, as we work out untangling our bureaucratic
messes on the other side, so people can get started on the work
today.
Senator Boozman. Thank you, Mr. Chairman.
Senator Barrasso. Thank you very much, Senator Boozman.
Senator Van Hollen.
Senator Van Hollen. Thank you, Mr. Chairman. Thank you and
the Ranking Member, and the witnesses who are here with us
today.
Let me just say at the outset that I was pleased to be part
of the bipartisan vote in our Committee, in the EPW Committee,
in support of the Highway Authorization Bill, a 5 year bill. As
you know, Mr. Chairman, the Senate Banking Committee, on which
I also serve, has jurisdiction over transit, the Senate
Commerce Committee has jurisdiction over heavy rail.
We have not marked up a transit bill in the Senate Banking
Committee. I would look forward to doing it just as soon as
possible. So it is hard to compare what is happening in the
Senate EPW Committee with the House.
As you know, the House Infrastructure Committee has
jurisdiction over all of those components, not just highways,
but also transit and heavy rail.
I hope we can get moving in the Senate on a bipartisan
bill, but I would insist before any final vote in the U.S.
Senate on a highway bill that it be merged with a bipartisan, a
transit bill; this is a 5 year authorization bill we are
talking about, and it needs to include transit.
I just checked, and every infrastructure bill that has
passed the Senate in recent times has had both roads, but also
transit, and it needs to stay that way.
So I hope we can get moving in the Banking Committee and
the Commerce Committee as fast as the EPW Committee did. I
commend you for moving quickly on a bipartisan basis on that
piece. But really, we need all those pieces to come together,
even in the Senate, just as the House needs to come together on
all those elements.
To Mayor Fischer, thank you for acknowledging in your
opening comments the painful issues that we have to sort out as
a country with respect to systemic racism that are manifesting
themselves again and again and again, most recently, with the
murders that you mentioned. We need to get to the bottom of all
those issues.
I do believe this part of making sure we have an economy
that works for everybody, we need good transportation systems,
both roads and highways, but importantly, transit systems.
So, could you talk about the importance to the city of
Louisville about transit, and whether you agree that as we move
forward in the Senate on the bill that passed the EPW
Committee, it is also essential that we move forward on the
transit reauthorization?
Mr. Fischer. Thank you, Senator.
Yes, I just want to reemphasize the cries that we are
hearing from the streets of America right now, and this is all
of America, folks, and so we can't just say, we are going back
to business as usual. If that is the case, this will continue
and continue and continue with great damage, not just to human
potential, but to our economy as well.
So the question is, what are some concrete investments that
can be made that sends a signal to our communities that have
been on the short end of the investment stick for a long period
of time that their lives are going to become better? Public
transit is one of those ways, because our African American
communities, our low income communities, disproportionately
count on using public transportation in our city, which is
still primarily a car based city.
So a system that works well, that gets them quickly to
their job; the average user of public transportation in
Louisville has a commute that is twice as long. People that
don't use public transportation, multiple stops, trying to go
get groceries, taking care of kids, it is a complicating factor
to their life on top of the burdens that they already have.
So this is a quick investment that could be made that sends
a message to people that are suffering that says, I hear you.
That is the most important thing that people want to hear right
now, is that we hear what they are saying, and that we are
providing help.
So, Senator, for those and all the other reasons that I
have talked about previously, this investment is critical to be
part of this bill.
Senator Van Hollen. Thank you.
On the financing question, because as we all know, EPW has
authorization jurisdiction, but we need the money to make all
this really work.
A question on financing, Mr. Holtz-Eakin; it is good to
connect with you again, even virtually, but I am curious.
During this period of time, we just essentially had emergency
$2.3 trillion spending to respond to the emergency of COVID-19.
I think all of us recognize that investing in our
infrastructure is one of those long term investments that will
pay dividends to our country. Interest rates are low. I have
supported a whole variety of financing mechanisms. But I am
interested at this point in time whether you think deficit
financing infrastructure makes sense for our economy.
Mr. Holtz-Eakin. As I said in my opening remarks, I think
there is a place for this kind of an infrastructure investment
in the recovery strategy. The emphasis thus far has been on
front loading things, checks, unemployment insurance; that has
been highly effective.
Believe it or not, disposable personal income in April went
up $2.1 trillion at an annual rate. That is stunning, and it is
because of the CARES Act and the $3 trillion in government
transfers.
So that has been the focus. I think there does need to be
this longer term, more patient approach.
As a matter of doing business in 2024, I would hope it
would be paid for, and that you would have a good user fee in
place. As a matter of doing business in 2020, it is less
important.
The response to the crisis is the most important thing
right now, and that involves taking care of the economy at the
expense of tidying up the budget. There will be harder work to
be done from a budgetary point of view past the pandemic, but
now is not the time to do it.
Senator Van Hollen. So, if I may, very briefly, Mr.
Chairman, just to follow up on that. Look, we all want a 5 year
paid for bill; that would be the best thing. But as I
understand your answer, you do support some immediate
infrastructure investments as part of the emergency response
that would be paid for like the rest of the emergency bill by
deficit financing. Is that correct?
Mr. Holtz-Eakin. Yes. Part of it can be deficit financing;
I have no problem with that. I want the infrastructure to be a
sensible long term program that in other circumstances, we
would do. I would like it to come online beginning now so that
its benefits accrue in 2021 at the earliest, 2022, 2023. We are
going to need that as part of the strategy.
Senator Van Hollen. Thank you.
Thank you all very much.
Thank you, Mr. Chairman.
Senator Barrasso. Thank you.
Senator Carper.
Senator Carper. Thanks very much.
I want to go back to something that Doug Holtz-Eakin said
to us, maybe in his opening statement, but I think he alluded
to the fact that State and local governments, they vote fairly
regularly to raise user fees to pay for infrastructure in
normal times.
These are not normal times, but over 30 States have raised
their user fees in the last, say, half-dozen or so years to pay
for transportation infrastructure: Roads, highways, bridges,
transit, and so forth.
And we find that it is perilous for us to even tiptoe
close, even in a full blown economy, the longest running
economic recovery in the history of the country over the last
11 years, and we are still almost fearful to say, Well, we
ought to pay for transportation infrastructure.
There is a reason why something that is so hard for us is
really easy to stay level. One of the reasons why is the
ability that a State legislator has or a Governor has, speaking
as a former Governor, in putting together a capital budget that
says that these are the projects we want to build, county by
county by county, roads by roads, and so forth, and in order to
be able to afford those and have the benefit in those counties
or those cities, we are going to raise a user fee. It might be
a couple of pennies, it can be a dime or a nickel, whatever,
but here's what we are going to get out of it.
In Delaware, Delaware's a little State, about 100 miles
north to south, and 50 miles wide. The Federal Government pays
not an inordinate amount of the share, but a significant part
of the share, and we have any number of projects that are 80-20
Federal-State, like you and other States do.
I go to the ribbon cuttings for any significant, almost any
significant transportation improvement project that has State-
Federal money. I go to the ribbon cuttings at the end of the
day, and I explain to people that are there, this is great, we
are going to have this great project, and then we have a ribbon
cutting, say look what we have done, and we have also paid for
it, and here is how we paid for it.
We can do that in Delaware. It is harder to do in
California, or big States like Texas, but we can do it. It is a
part of the challenge, to make it clear to our constituents why
we are going to raise a user fee, and what is the benefit from
doing that.
I want to go back again and say, I agree fully with Doug.
The future is vehicle miles traveled, whether it doesn't matter
if you are driving a car, truck, or a van, if you are using
gas, you are using diesel, you are using electric, you are
using hydrogen for fuel cells, it doesn't matter. You ought to
be paying your fair share. If you have a heavier vehicle that
creates more damage, then you pay more through the vehicle
miles traveled. That is where we ought to go.
If I could use a light switch, and do that, like, tomorrow,
well, that is what I would do. We don't have a light switch in
this case, we are going to use a dimmer switch. But I think we
can use that dimmer switch in a smart way that moves us toward
that future, and that is vehicle miles traveled.
I want to close with two quick questions, one for Mayor
Fischer.
Again, Mayor Fischer, we thank you so much for your
leadership and wish you well in Louisville, and the
constituents that you have there, and wish you good luck as you
assume the presidency of the National Conference of Mayors.
Here is the question. We talked earlier about uncertainty,
and we are still looking at a lot of uncertainty with respect
to the economic recovery. How does that uncertainty affect
efforts to budget, including your transportation budget for the
coming year, which I believe starts July 1st, and how important
is it that any Federal aid come prior to the start of that
fiscal year, or maybe as soon thereafter as possible?
Mr. Fischer. Thank you, Senator.
Stability and knowing what our outlook is is
extraordinarily important right now. Three of the riots going
on around America, demonstration, civil unrest, we furloughed
about 400 people. If we do not get more relief from the Federal
Government, we are talking about 600 to 800 people more out of
a job. Sixty percent of our budget is made up of first
responders.
So the people that we are asking to help us get through the
pandemic and now keeping peace in our streets, their jobs are
at risk. To send that kind of message in today's environment
just boggles the imagination. So what we are doing is we will
use our rainy day fund to get through this as long as we can.
But cities across America desperately need a signal from
the U.S. Senate and all of Washington that help is on the way,
here is what it looks like, so that we can keep our cities
running. If we can't keep our city government running, the
economy is not going to come back. It was tough enough with the
pandemic, but now with civil unrest, we just can't afford to be
laying people off, No. 1, loss of jobs and just loss of
stability as well.
If you guys can't pass anything before July 1st, send out a
broad signal that, here is what is coming, it is coming in mid-
July or mid-August, but we really need to say yes, it is
coming, or you guys are on your own, so we can figure out where
we are going to go from there. So any early visibility would be
really appreciated by everybody all over America, the cities,
and towns.
Senator Carper. Thank you, Mayor Fischer.
Mr. Chairman, I have one more question, if could ask one of
Mr. McGough?
Senator Barrasso. Go ahead.
Senator Carper. Thanks so much.
Mr. McGough, a number of States and cities have large or
substantial rainy day funds. We started one, created one the
year after I was elected the State Treasurer and Pete DuPont
was elected Governor. We had the worst credit rating in the
country under his leadership. We created a rainy day fund,
which today has approaching $400 million, which is a lot of
money for a little State. It is not going to be $400 million at
the end of this year, I will assure you.
But a lot of States and cities have large or substantial
rainy day funds that are quickly depleted due to the virus, and
they are now facing the prospect of running out of money, as we
are in Delaware, not too far down the road.
Our Federal Transportation Funds are a critical component
of overall transportation spending. But our State and local
partners provide maybe the lion's share in many instances for
transportation funding.
Question: if the Federal funds remain consistent, how will
construction funds and related industries be impacted by the
reduction in State and local revenues, and would you agree that
Federal action to begin backfill as least some of the lost
State and local funds is critical to economic recovery and
growth?
Mr. McGough. Senator Carper, I would agree. I believe from
at least the State DOT standpoint, it would be a backstop that
the loss in revenues from their portion of the motor fuels tax
decreases is significantly affecting their budget.
Ten States have currently canceled or delayed projects to
the tune of $5 billion. Thirty-two States have projected that
they expect to have cancellations or delays in projects.
The money for the State DOTs is just for preservation. This
doesn't change the need for a robust, multi-year infrastructure
bill. That is what it is really going to take to put our
economy back on track and get the growth that we need.
Senator Carper. Thank you.
Mr. Chairman, just a closing thought, just with you and our
colleagues, thanks again for this hearing, and I want to thank
our staffs for helping to put together just a terrific panel.
Not everybody was able to participate, we have, as you
might know, a bunch of other hearings going on, and some of
them are really important, too.
So not everyone could be here, but it is been just a
wonderful hearing. We would like to continue to follow up with
you down the road.
Mr. Chairman, you and I have both talked about leadership
before, and I think a lot about it; I know you do, too.
I think leadership is the courage to stay out of step when
everybody else is marching to the wrong tune. Think about that.
Leadership is the courage to stay out of step when everyone
else is marching to the wrong tune. Not sure who said that, but
I will say I said that, at least today.
Another thought on leadership is the words of Camus, a
French philosopher. He used to say leaders are purveyors of
hope. Think about that. Leaders are purveyors of hope. We are
talking here about a lot of reasons for economy, equity, why it
is important for us to adopt thoughtful legislation, to design,
adopt, and fund it.
But the other plus here is hope. There are a lot of people
in our country right now that don't have a lot of hope, and we
can help provide a good measure of that, a good shot in the
arm. They say, hey, they can work together, they can get stuff
done that will actually us in our everyday lives and futures.
That is what is at stake here, and I am encouraged that we
are doing the right thing. My hope is we, by our example, we
can encourage some of our colleagues in the Senate and the
House to do the right thing as well.
Thank you.
Senator Barrasso. Well, thank you so much for your
leadership and your partnership in this entire process.
We have letters supporting what we are doing that are here
for the hearing, and I would like to enter in to the record
letters of support we have received recognizing the need for
action on highway infrastructure legislation and tout the
benefits of the bill that we have passed in a bipartisan way.
They include letters from the American Association of
Highway Transportation Officials, the Portland Cement
Association, the National Stone, Gravel, and Sand Association,
and ITS America. ITS America stands for the Intelligent
Transportation Society of America, so we have all sides covered
here, Senator Carper.
[Laughter.]
Senator Barrasso. Without objection, those will be
submitted.
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Senator Carper. Mr. Chairman, I would also ask unanimous
consent to submit one more for the record. It is a report from
the American Public Transportation Association on these
singular benefits of transit including reduced congestion,
traffic safety benefits, better air quality, economic
development, and more. It turns out $1 billion invested in
transit can result in, I am told, in some $5 billion of
economic growth, and that is a pretty good deal where I come
from.
Thank you.
Senator Barrasso. And put a lot of people to work, as well,
so thank you so much for that. Without objection, those are all
submitted.
[The referenced information was not received at time of
print.]
Senator Barrasso. I want to thank all of you for your
testimony.
I agree with members of the panel on both sides of the
aisle that said we have the A Team here today, all three of
you. I want to thank all of you.
There are no more questions from those of us here.
Other members may submit questions for the record. We ask
that you respond to those, so the hearing record will then stay
open for the next 2 weeks.
I want to thank all of the witnesses for your time and your
testimony.
Thank you, Mr. Mayor, for joining us remotely.
The hearing is adjourned.
[Whereupon, at 11:56 a.m., the hearing was adjourned.]
[Additional material submitted for the record follows:]
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