[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
AMERICA'S INFRASTRUCTURE:
TODAY'S GAPS, TOMORROW'S OPPORTUNITIES,
AND THE NEED FOR FEDERAL INVESTMENT
=======================================================================
HEARING
before the
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, D.C., SEPTEMBER 25, 2019
__________
Serial No. 116-15
__________
Printed for the use of the Committee on the Budget
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
______
U.S. GOVERNMENT PUBLISHING OFFICE
38-007 WASHINGTON : 2020
Available on the Internet:
www.govinfo.gov
COMMITTEE ON THE BUDGET
JOHN A. YARMUTH, Kentucky, Chairman
SETH MOULTON, Massachusetts, STEVE WOMACK, Arkansas,
Vice Chairman Ranking Member
HAKEEM S. JEFFRIES, New York ROB WOODALL, Georgia
BRIAN HIGGINS, New York BILL JOHNSON, Ohio,
BRENDAN F. BOYLE, Pennsylvania Vice Ranking Member
RO KHANNA, California JASON SMITH, Missouri
ROSA L. DELAURO, Connecticut BILL FLORES, Texas
LLOYD DOGGETT, Texas GEORGE HOLDING, North Carolina
DAVID E. PRICE, North Carolina CHRIS STEWART, Utah
JANICE D. SCHAKOWSKY, Illinois RALPH NORMAN, South Carolina
DANIEL T. KILDEE, Michigan KEVIN HERN, Oklahoma
JIMMY PANETTA, California CHIP ROY, Texas
JOSEPH D. MORELLE, New York DANIEL MEUSER, Pennsylvania
STEVEN HORSFORD, Nevada WILLIAM R. TIMMONS IV, South
ROBERT C. ``BOBBY'' SCOTT, Virginia Carolina
SHEILA JACKSON LEE, Texas DAN CRENSHAW, Texas
BARBARA LEE, California TIM BURCHETT, Tennessee
PRAMILA JAYAPAL, Washington
ILHAN OMAR, Minnesota
ALBIO SIRES, New Jersey
SCOTT H. PETERS, California
JIM COOPER, Tennessee
Professional Staff
Ellen Balis, Staff Director
Dan Keniry, Minority Staff Director
CONTENTS
Page
Hearing held in Washington D.C., September 25, 2019.............. 1
Hon. John A. Yarmuth, Chairman, Committee on the Budget...... 1
Prepared statement of.................................... 4
Hon. Steve Womack, Ranking Member, Committee on the Budget... 6
Prepared statement of.................................... 8
Carol Ellinger Haddock, P.E., M.ASCE, Director, Houston
Public Works, On Behalf of the American Society of Civil
Engineers.................................................. 10
Prepared statement of.................................... 13
Christopher A. Coes, Vice President of Land Use and
Development, Smart Growth America.......................... 23
Prepared statement of.................................... 25
Adie Tomer, Fellow, Metropolitan Policy Program, The
Brookings Institution...................................... 32
Prepared statement of.................................... 34
R. Richard Geddes, Ph.D., Professor and Director of the
Cornell Program in Infrastructure Policy, Cornell
University, and Visiting Scholar, American Enterprise
Institute.................................................. 44
Prepared statement of.................................... 46
Hon. Seth Moulton, Member, Committee on the Budget, testimony
submitted for the record................................... 56
Hon. Sheila Jackson Lee, Member, Committee on the Budget,
statement submitted for the record......................... 102
Hon. Rosa L. DeLauro, Member, Committee on the Budget,
questions submitted for the record......................... 108
Answers to questions submitted for the record................ 110
AMERICA'S INFRASTRUCTURE: TODAY'S GAPS,
TOMORROW'S OPPORTUNITIES, AND
THE NEED FOR FEDERAL INVESTMENT
----------
WEDNESDAY, SEPTEMBER 25, 2019
House of Representatives,
Committee on the Budget,
Washington, D.C.
The Committee met, pursuant to notice, at 10:02 a.m., in
Room 210, Cannon House Office Building, Hon. John A. Yarmuth,
[Chairman of the Committee] presiding.
Present: Representatives Yarmuth, Moulton, Khanna, Panetta,
Horsford, Jackson Lee, Omar, Sires, Peters; Womack, Johnson,
Woodall, Smith, Flores, Norman, Roy, Timmons, Crenshaw, Hern,
and Burchett.
Chairman Yarmuth. The hearing will come to order.
Good morning, and welcome to the Budget Committee
Committee's hearing on ``America's Infrastructure: Today's
Gaps, Tomorrow's Opportunities, and the Need for Federal
Investment.''
I want to welcome our witnesses here with us today. This
morning we will be hearing from:
Ms. Carol Ellinger Haddock, Director of Houston Public
Works for the city of Houston, testifying on behalf of the
American Society of Civil Engineers;
Mr. Christopher Coes, Vice President of Land Use and
Development for Smart Growth America;
Mr. Adie Tomer, Metropolitan Policy Program Fellow at The
Brookings Institution; and
Dr. Richard Geddes, Professor and Director of the Cornell
Program in Infrastructure Policy at Cornell University, and
Visiting Scholar at the American Enterprise Institute.
I will now yield myself five minutes for an opening
statement.
With each passing day our nation's infrastructure becomes
more inadequate for today's demands and increasingly more
dangerous for American families. If we as a Congress want to
prepare our economy and our nation for a rapidly changing
future, we must dramatically improve and modernize our
infrastructure.
A strong economy depends on strong infrastructure to
function effectively. Unfortunately, according to the American
Society of Civil Engineers' 2017 Infrastructure Report Card,
our overall infrastructure grade is a D+, meaning that it is in
poor condition and at risk.
Our roads are crumbling. Tens of thousands of bridges are
structurally deficient, and roadway congestion continues to sap
our time and productivity.
Many rural communities are still cut off from broadband
access and are unable to benefit from advancements like
telehealth services.
As severe weather becomes more frequent, cities and
communities along our rivers and in coastal areas are put in
danger by levees that might not withstand the next large storm.
I know in my district on the Ohio River, we are currently
relying on water pumps that are more than 100 years old.
But it is not just Americans living near our waterways that
are at risk. Our entire country is paying the price. Current
infrastructure gaps are anticipated to cost the United States
$3.9 trillion in GDP and 2.5 million jobs by 2025 due to lost
productivity.
Failing infrastructure will cause U.S. businesses to become
less efficient, raising the cost of doing business and forcing
those costs onto consumers.
From 2016 to 2025, American households are expected to lose
on average $3,400 in income every year due to infrastructure
deficiencies. Despite all of these costs, federal
infrastructure spending has been on the decline and has failed
to come anywhere close to meeting growing needs.
If we want American businesses and workers to succeed, we
need to start investing in bold structural changes that will
strengthen our economy and prepare us for the future. Instead
we just squandered $1.9 trillion on the Republican tax law that
overwhelmingly benefitted the wealthy and did nothing to
improve our nation's economy or prepare us for the future.
If we had invested anywhere close to that amount in our
nation's infrastructure instead, the impact would have been
transformative. That is because in the short term, every one
dollar invested in improving our infrastructure systems boosts
economic output by $1.50 or more, making it a powerful economic
stimulus.
In the long term, investing in core infrastructure like
transportation, transit, and utilities will boost economic
productivity and increase economic growth by simplifying supply
chains, lowering shipping costs, and reducing roadway
congestion.
This growth will not only strengthen our nation's fiscal
outlook. It will also spur increases in employment and wages
for years to come. Since more than 75 percent of infrastructure
jobs are focused on operations rather than construction, many
of these jobs will provide long-term stability for working
families across the country.
The economic case for investing in infrastructure is clear,
but the public health aspect alone should compel us to act. As
shocking as it still is, we have water systems that are
poisoning our families. Lead pipes in Flint, Michigan, created
a water crisis that caught national headlines and highlighted a
shameful failure of government.
But it is not an isolated case. Just look at Newark, New
Jersey; Portland, Oregon; Pittsburgh, Pennsylvania; Providence,
Rhode Island. All have issues with lead contamination in their
drinking water, and they are not the only ones.
How is it that in the wealthiest country in the world it is
easier for a millionaire to get a tax cut than for hundreds of
thousands of families to get safe drinking water?
Our nation's infrastructure bill is overdue, and it is
already costing us our health, our safety, and our economic
potential. These are investments that at one point or another
we will have to make if we care about the wellbeing of our
communities and want to remain competitive in the global
marketplace.
By investing now, we can modernize our infrastructure and
incorporate new technologies and greater resilience into our
plans. We can address sustainability and public health needs
while growing our economy and creating good jobs.
This is not a should do. It is a must do. So I look forward
to hearing from our witnesses on infrastructure's role in the
strong economy and how federal investment can provide
opportunities for both short and long-term economic growth
while preparing our nation for the future.
I now yield to the Ranking Member, Mr. Womack, for his
opening statement.
[The prepared statement of Chairman Yarmuth follows:]
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Mr. Womack. I thank the Chairman and thanks to the panel of
witnesses that we have today. Chairman Yarmuth, thanks for
holding this very important hearing.
From the post roads outlined in the text of the
Constitution to the development of the transcontinental
railroad, from the creation of the interstate highway system to
the evolution of our electric grid, Americans have continually
shown that we are a nation of builders. Infrastructure is part
of the core foundation that has created and moved the America
we all know.
Today you would be hard-pressed not to see the overwhelming
impact infrastructure has on our lives. An extensive network of
roads, airports, railroads, public transit systems, and
waterways is vital to the mobility and the strength of
families, businesses, and our economy.
As we move forward in the 21st century, it is imperative
that our infrastructure keep pace with the people and nation it
supports.
Thankfully, infrastructure has historically been a priority
for both parties. This bipartisan spirit has served our country
well, and it will be important as we work to rebuild and renew.
There will, of course, be challenges. While the federal
government has a vital role to play, empowering state and local
authorities to lead on this issue is fundamentally important.
On this Committee alone, our members represent 36 distinct
congressional districts, encompassing nearly 27 million
Americans, all of whom have different priorities. A rural
district in Arkansas might need increased highway lanes for
long haul trucks. A more condensed, populated district might be
focused on public transportation.
This reality is critical for us to recognize as we
prioritize scarce federal dollars on the Budget Committee. We
have to rethink how we plan, how we fund, and how we build
infrastructure. Smart and strategic investments will not only
strengthen communities and boost the economy, but also ensure
responsible use of taxpayer dollars.
My home state of Arkansas is a leader in innovative
approaches to infrastructure, learning through partnerships
with states such as Missouri to obtain funding to complete the
critical Bella Vista bypass or the communities of Northwest
Arkansas pooling resources to create and maintain Northwest
Regional Airport, the State's Airport of the Year, or Governor
Hutchinson's Highway Funding Plan.
The message is clear. Infrastructure cannot be built and
maintained without continued state and local investment.
But it is not just about funding. Government red tape and
burdensome permitting regulations have also throttled progress.
In Dr. Geddes' written testimony, he explained that these
bureaucratic processes take on average over five years to
complete, with some of those decisions taking more than two
decades.
While it is important to ensure we protect the environment,
we must do so in a way that makes these important projects
feasible. We will hear today that a highway project may require
ten different federal agencies considering 16 separate
permitting decisions to obtain approval.
When I was mayor of Rogers, Arkansas, I wanted to work with
partners who understood the needs of my city. That is what
Washington should be doing: listening, not mandating. We do not
need roadblocks or unnecessary directives. What we need is a
federal government that acts as a strategic partner, one that
bolsters states' efforts, not hinder them.
Infrastructure investment will transform and modernize our
systems to support American families, create jobs, make U.S.
industry more competitive, all while unleashing economic
opportunities.
Mr. Chairman, I want to thank you again for holding this
very important hearing, and I look forward to hearing from our
esteemed panel about how we can do just that.
And I yield back.
[The prepared statement of Steve Womack follows:]
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Mr. Yarmuth. I thank the Ranking Member for his opening
statement.
In the interest of time, if any other Members have opening
statements, you may submit those statements in writing for the
record.
Once again, I'd like to thank our witnesses for being here
this morning. The Committee has received your written
statements, and they will be made part of the formal hearing
record.
Now, you will each have five minutes to give your oral
remarks. Ms. Haddock, you may begin when you are ready.
STATEMENT OF CAROL ELLINGER HADDOCK, P.E., M.ASCE, DIRECTOR,
HOUSTON PUBLIC WORKS, ON BEHALF OF THE AMERICAN SOCIETY OF
CIVIL ENGINEERS; CHRISTOPHER A. COES, VICE PRESIDENT OF LAND
USE AND DEVELOPMENT, SMART GROWTH AMERICA; ADIE TOMER, FELLOW,
METROPOLITAN POLICY PROGRAM, THE BROOKINGS INSTITUTION; AND R.
RICHARD GEDDES, Ph.D., PROFESSOR AND DIRECTOR OF THE CORNELL
PROGRAM IN INFRASTRUCTURE POLICY, CORNELL UNIVERSITY, AND
VISITING SCHOLAR, AMERICAN ENTERPRISE INSTITUTE
STATEMENT OF CAROL ELLINGER HADDOCK, P.E., M.ASCE
Ms. Haddock. Good morning. My name is Carol Haddock.
Chairman Yarmuth, Ranking Member Womack, and Members of the
Budget Committee, thank you for inviting me today to
participate in this important discussion on the need to invest
in our nation's infrastructure.
As I said, my name is Carol Haddock, and I currently serve
on the Board of Direction of the American Society of Civil
Engineers. I am also a licensed professional engineer in the
state of Texas.
ASCE is the nation's oldest national engineering society
and represents over 150,000 civil engineers who serve as the
stewards of infrastructure here in the United States and around
the globe.
In my professional life, I serve as the Director of Houston
Public Works, a department that is responsible for Houston's
public streets, drainage water, wastewater infrastructure for
over 2.3 million Houstonians.
In Houston, we are still in recovery from Hurricane Harvey
and are already facing more challenges from the recent weather
events, including severe flood damage just this last week. In
three days, remnants of tropical storm Imelda dumped more than
30 inches of rain in the Greater Houston Area, making it our
most significant storm since Harvey.
We are flood weary. We have faced four 500-year flood
events in the past four years alone. Our already vulnerable
infrastructure simply cannot bounce back without major
reinvestment.
While state and local governments have certainly stepped up
to the challenge, I will start by saying that there is, indeed,
a federal government vital role to play in developing and
funding a comprehensive solution. Our Founding Fathers
recognized that for reliable interstate commerce, you need
reliable infrastructure.
Every four years since 1998, ASCE has evaluated our
nation's infrastructure to provide a comprehensive look at
current conditions across 16 categories and assess if we are
prepared for the future. We assign letter grades just like you
received in school.
In our 2017 infrastructure report card, our nation's
cumulative grade was a D+. That is not a grade I would be proud
of.
Decades ago, even centuries in some cases, we laid the
groundwork for our complex system of roads, bridges, water
systems, and electrical grids that connect and power our
communities. And just like the roof on our home, when we
neglect to maintain it for a while, our systems are showing
real wear and tear. They have sprung leaks, worn down, and they
have become less reliable.
It has been clear to the engineering community and it is
becoming even more clear to the greater public that the U.S.
has only been paying about half of its infrastructure bill.
Between 2016 and 2025, the investment gap total across the 16
infrastructure sectors has projected just over $2 trillion.
Failing to close that gap risks rising costs, failing
business productivity, decreased GDP, lost jobs, and ultimately
reduced disposable income for every American family. If these
issues are not addressed, poor infrastructure can cost each
American family $3,400 a year, or $9 a day, in personal
disposable income. That is money out of our pockets going to
car repairs, gas, and time wasted in traffic.
This expense is really a hidden tax that we are all paying
when the federal government kicks the can down the road.
That number reflects a gradual degradation over time, hard
to discern, but I will tell you coming from Houston these
numbers seem conservative.
The opportunity to modernize our infrastructure systems
must be done right. We must prepare for the future by utilizing
new approaches, materials, and technologies to ensure that our
infrastructure is more resilient and sustainable to extend the
life of our existing infrastructure when possible, to expedite
repairs and replacement, and to promote cost savings.
My career has been in the water sector, and I am
continuously amazed by what my peers are doing to push the
envelope of what is possible. New methods and technologies
allow plants to treat more wastewater, often discharging the
cleaner product back to the environment, turn waste into energy
and help communities to better manage precious water supplies
through reuse.
It is an exciting time to bring our infrastructure into the
21st century if we finally give it the attention and funding it
deserves. However, if we were to achieve lasting progress, the
federal government must provide that critical leadership to
increase investment from all levels of government and the
private sector.
To address these needs our infrastructure investment must
increase from the current 2.5 percent to 3.5 percent of the GDP
by 2025. To get the most return on our investments, ASCE
believes that project costs must be considered over the entire
lifespan, not just design and construction, but especially
operations and maintenance.
We also believe that federal investment should not replace
but rather leverage state, local, and private infrastructure
investments.
We must ensure that infrastructure owners and operators
charge and that Americans are willing to pay rates and fees
that reflect the true cost of using, maintaining, and
modernizing all infrastructure, including our water,
wastewater, transportation, and energy.
At a minimum, this Congress must address these federal
infrastructure priorities. Fix the Highway Trust Fund. The
federal government has always been a leader in strengthening
our surface transportation network. ASCE is on record as
supporting a 25 cent increase in motor fuel tax.
In addition to fixing the Highway Trust Fund, we face a
looming crisis with the FAST Act rescission. A $7.6 billion
annual reduction will impact all 50 states if nothing is done.
Other things Congress must address this year are to
eliminate the cap on the passenger facility charge at airports
and ensure that all funds in the Harbor Maintenance Trust Fund
are used for their intended purpose. Currently there are $9
billion in unappropriated funds.
ASCE thanks the Committee for holding this hearing on a
topic that affects the quality of life, economic prosperity,
and livelihood of every American. I look forward to answering
your questions.
[The prepared statement of Carol Ellinger Haddock follows:]
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Mr. Yarmuth. I thank you for your testimony And I now
recognize Mr. Coes for five minutes.
STATEMENT OF CHRISTOPHER A. COES
Mr. Coes. Good morning, Chairman Yarmuth, Ranking Member
Womack, and Members of this Committee. Thank you for the
opportunity to testify today on the need for federal investment
in infrastructure to create communities of the future.
I am Christopher Coes, Vice President at Smart Growth
America, where I work with over 300 real estate development and
investors across the country who are investing in American
cities and small towns today.
America's crumbling infrastructure is hurting our economy,
our environment, and our quality of life. The need for federal
infrastructure investment has never been greater.
However, how we invest is more important than our level of
investment. Currently our land use and transportation policies
have promoted subsidized sprawl, which has become too expensive
and unsustainable at a time when we must be focusing on
rehabbing and fixing the current system to meet the new
challenges of the 21st century.
According to a recent 2019 Smart Growth report, office,
retail, and multifamily built-in walkable communities have
achieved over 75 percent price premiums over their non-walkable
competitors. Whether it is in Louisville, Kentucky; West
Jefferson, North Carolina; or within the Boston Metro, we are
constantly seeing communities take the lead and embracing a
smarter investment strategy in walkable, pedestrian friendly,
and sometimes transit oriented investments to achieve higher
economic and social returns.
While investments in transportation and mobility options
are critical, unfortunately, it is not sufficient. In SGA's
core values, why American companies are moving downtown, we
have learned that Fortune 500 companies, start-ups,
manufacturers are moving to communities that have a great
quality of life for their employees. This includes
transportation options, but employees are also attracted to
places and locations with vibrant neighborhoods that feature
affordable housing options, restaurants, nightlife, and other
amenities that really require walking distance or a short
drive.
Unfortunately, there is a widening gap between American
cities and small towns that have the right infrastructure mix,
the right housing mix, and amenities and those that do not.
When identifying areas ripe for opportunity fund
investments, we discovered that only 2 percent of all the
opportunity zones met the market demand for walkabout places
and locations that have reliable access to job markets.
This means over 20 million Americans living in opportunity
zones today for the last several decades have been forced to
spend more than half of their household income on housing and
transportation, thus limiting their ability to save, invest in
themselves, or support local businesses, which is what we do in
real estate.
Thinking about housing and transportation together reflects
how people actually live, and it is critical to understand the
enormous up front infrastructure cost barrier to neighborhood
revitalization and attracting new private investment in our
communities today.
Now is the time for federal investment in holistic
neighborhood retrofit policies that encourages greater private
investment in infrastructure, that promotes mixed use
development, and encourages mixed income and affordable housing
when possible.
This is why Locus is working with several members of the
House Ways and Means Committee to create new incentives to
support neighborhood rehab projects that include public
infrastructure costs beyond those associated with specific
buildings, while rewarding those projects that include
attainable housing.
To make communities investment ready, federal investment
has to go beyond just roads, bridges, and transit, but it has
to be about modernizing our schools, brownfields, our water
infrastructure, and rural broadband.
Additionally, as climate change intensifies, federal
investment must ensure our communities are more effective in
being economic and fiscally resilient and maintaining
mitigation to those effects.
Lastly, federal infrastructure investment should be based
on a national vision that in America no matter where you live
or who you are, you can enjoy living in a place that is
healthy, prosperous, and resilient. This vision will require
new lines of and new forms of partnerships between the federal
government and the private sector in order to also shift the
current infrastructure paradigm focused on a handout to a way
out.
If we do this, I believe we can help communities become
more vibrant and resilient while ensuring future investments
address and not exasperate the historic inequities that we find
in rural America, communities of color, and low wealth
communities.
In closing, I would like to thank the Committee for this
opportunity to speak on the need for a smarter federal
infrastructure investment strategy and sharing our ideas of how
the private sector could be a partner to achieve that.
Thank you.
[The prepared statement of Christopher A. Coes follows:]
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Mr. Yarmuth. I thank you for your statement.
And now, Mr. Tomer, you are recognized for five minutes.
STATEMENT OF ADIE TOMER
Mr. Tomer. Good morning, Chairman Yarmuth, Ranking Member
Womack, and Members of the Committee. I appreciate the
invitation to appear before you today.
It was obviously really easy to prepare for this speech
after such a slow news day yesterday. So thank you for the
timing, too.
[Laughter.]
Mr. Tomer. I want to thank you for tackling such an
essential topic, the future of American infrastructure and the
federal policy frameworks that manage and invest in those
networks.
I want to spend my time this morning focusing on some of
the broader themes that are in my written testimony. The past
few years have been a really dynamic time for the topic of
infrastructure reform. Seemingly all at once in major
newspapers that do not normally cover the topic, we are hearing
a growing consensus about the need to support infrastructure
modernization through congressional action. That is a really
positive development.
Infrastructure is an essential enabler of economic growth,
whether serving as a platform for industrial innovation,
fostering social opportunity, or protecting the natural
environment.
Simply put, effective infrastructure policies drive
national success, and with these calls for infrastructure
reform, Congress gets a truly once in a generation opportunity
to physically shape the future of our country. But what does
genuine reform look like?
And I genuinely mean that question. What outcomes does
Congress hope to achieve?
I respectfully submit to all of you that the primary answer
cannot be spend more. The conversation cannot start with the
amount of money we are going to invest.
It is true that some of our infrastructure systems require
capacity expansions, significant upgrades, digital
modernization, and that more spending is typically warranted.
It is also true that federal spending levels as a share of
GDP are less than decades past. But the amount we spend on
infrastructure should not be the primary reason to motivate
reform. Spending is not an outcome. Spending is an output.
Our problem actually is waywardness. When the nation gets a
collective feeling that we need to reform policy frameworks,
whether it is healthcare, education, infrastructure, when we
can all sense something is amiss, it is a telltale sign that
our current policy frameworks are not delivering outcomes we
want.
That collective feeling is not about spending. It is about
a deeper set of collective failures, and this is the exact
state of infrastructure policy, especially at the federal
level. A lack of clarity around exactly what we want to
achieve.
Consider what motivated the federal policy frameworks that
we all follow today. Their authors crafted policies that
responded to the challenges of their time, issues like
connecting cities across state lines, delivering telephone and
cable lines, and stopping sewage dumping into our rivers and
streams.
If you were to start from scratch today and write a fresh
set of national objectives, a set of concepts that could bring
prosperity to all people, for business success, genuine
stewardship of our natural environment, is that the list you
would write?
Do you feel like we lack city-to-city connectivity in this
country right now? Are there not enough telephone cables in our
communities anymore?
The truth is we have long outgrown these objectives, much
of it due to our own prior success. The federal government and
their public and private partners built out the networks we
dreamed up on paper.
But today we have new challenges, ones just as serious as
our predecessors. Income and wealth inequality have skyrocketed
to levels we have not seen since the Gilded Age. Digitalization
is rapidly reshaping entire industries in the regions where
businesses call home. The climate is undergoing changes we
cannot afford financially to ignore. And finally, local fiscal
capacity is stressed in the face of regional economic
divergence.
I respectfully submit that our conversation should start
here, with a frank debate about the outcomes we want to
achieve. Congress and your partners and the general public have
a truly special opportunity. We can define these new outcomes,
a new set of goals, and reorient our policies to achieve them.
I recognize this is not easy work. Current legislation is
just sitting there, staring all of us in the face, and the
shortest path is to edit it along the margins.
From a political perspective, that is a sensible move, but
it will not directly attack those same challenges, nor will it
magically bring new outcomes to the fore. For that we have to
be openminded and consider entirely new approaches.
So what do I mean? Here are just a few short examples. If
transportation is steadily damaging our climate mores here, if
the loss of open land is leading to longer commute times and
higher infrastructure bills, is it time for the federal
government to seek a more hands-on approach to land use policy?
If inequality is a sizable issue and people cannot even
afford basic services, should we develop an affordability lens
to how we structure infrastructure policy?
If economic competitiveness is lagging, if we want more
entrepreneurialism and well prepared workers, and we are not
leveraging all the data that is out there, should we enact a
robust digitalization program?
Developing and building consensus around clear outcomes can
serve as jumpstart to the reform conversations we all want to
have. But this all starts with a fresh perspective.
If we want to maximize value from the infrastructure
networks we have already built and strategically prioritize the
networks we will build in the future, we need to escape the
path dependencies we have built for ourselves and adopt a new
set of economic, social, and environmental goals.
Thank you for your time today.
[The prepared statement of Adie Tomer follows:]
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Mr. Yarmuth. Thank you very much for your statement.
And now, Dr. Geddes, you are recognized for five minutes.
STATEMENT OF R. RICHARD GEDDES, PH.D.
Dr. Geddes. Thank you.
Chairman Yarmuth, Ranking Member Womack, and distinguished
Members of the Committee, thank you very much for the
opportunity to appear today before the Committee on the topic
of America's infrastructure.
My name is Rick Geddes. I am a professor in the Department
of Policy Analysis and Management at Cornell and founding
Director of the Cornell Program in Infrastructure Policy.
I am also a Visiting Scholar at the American Enterprise
Institute.
I want to make several key points during my oral remarks.
First, the United States faces severe challenges in the
funding, financing, and permitting of its heavy civil and
social infrastructure. Although funding and financing of
infrastructure are related, they are conceptually distinct. The
main challenge the United States faces today is inadequate
funding of infrastructure, which refers to the underlying
dollars needed to pay for it.
Declining revenue from the federal gas and diesel tax is
devolving responsibility for funding to state and local
governments by default.
Second, the United States can adopt innovative approaches
used successfully in many other countries to help state and
local governments fund and finance their infrastructure. Those
include encouraging more private involvement through public-
private partnerships, encouraging greater funding on their own
through value capture, and creating an asset recycling program.
Finally, I urge Congress to address the exceedingly long
time periods required to get projects permitted in the United
States.
Regarding funding for infrastructure, taxes on gas and
diesel fuel, which provided a reliable funding source for
decades, are now under stress. They are typically not indexed
to inflation at the state or federal level, and they generate
less revenue as drivers shift into more fuel efficient vehicles
and some vehicles that do not use fossil fuels at all.
That is putting a strain on state transportation budgets at
a time when infrastructure is aging and in need of expensive
repairs and upgrades. I suggest several key reforms to help
state and local asset owners operate and maintain the nation's
infrastructure.
The first is to encourage state and locals to engage in
value capture. Value capture is the concept that infrastructure
assets that have been maintained in the same way for decades
can generate more value through innovative approaches to
management and release enormous latent value in those assets.
One simple example is to move the location of the salt
sheds along highways that may have been in the same place for
decades. The value of that real estate that the sheds are on
may have gone up over time. You can move the shed to a lower
valued parcel and then lease or sell the real estate that the
shed was on before. That is one example.
Another example which requires federal action is to allow
states to develop interstate highway rest stops. Section 111 of
Title 23 of the United States Code prohibits states from
including shops and restaurants and other commercial activity
at hundreds of highway rest stops, which is a restriction going
back to the 1950s.
If states had the option of developing those rest stops,
they could concession out the food, concession out shops, and
they could gain new funding for infrastructure via those
concession fees.
The question is how to incentivize such value capture
through a comprehensive program. I here suggest Congress follow
the successful example of Australia, which created an asset
recycling program a number of years ago. Under this program,
the federal government of Australia gave state and local asset
owners a bonus, 15 percent in the Australian case for every
dollar they raised via value capture in the program.
Critically, the program is called asset recycling because
the newly raised funds from the program are always plowed back
into the infrastructure owned by that same jurisdiction. That
is, they do not go into some other use.
In Australia, each dollar spent in the 15 percent bonus
generated roughly five times that amount in funds released to
the new value created by the program.
I also recommend a set of reforms to encourage greater
state and local use of public-private partnerships, or PPPs.
PPPs can leverage private capital, expertise, and other
benefits that help scarce transportation and infrastructure
dollars go as far as possible.
Many other countries, including Canada, Spain, France, and
Australia, are decades ahead of the United States in PPP use.
There are several key reforms that would help incentivize PPP
use in the United States.
First, lift or eliminate the current $15 billion cap on
private activity bonds, or PABs, which level the cost of
capital playing field between the private sector capital and
the public sector capital.
Second, private activity bonds should be approved for use
on all public purpose infrastructure, including water projects,
energy projects, and not just transportation projects.
Third, Congress should encourage the creation of state and
regional PPP units. PPP units are quasi-governmental entities
that help state and local governments complete PPPs that are in
the public interest.
I will just close out by saying that infrastructure
delivery at all levels is hurt by very slow environmental
permitting. I believe that that permitting process could be
assisted through the one federal decision concept which would
create a lead agency in the permitting process, set a target of
two years, and the permitting would go through the agencies
concurrently and not sequentially in order to expedite that
process.
Thank you, Mr. Chairman.
[The prepared statement of R. Richard Geddes, Ph.D.
follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Yarmuth. Thank you for your testimony.
Now we will begin the question and answer section of the
hearing. The Ranking Member and I will defer our questions to
the end.
So I now recognize the gentleman from Massachusetts, Mr.
Moulton, for five minutes.
Mr. Moulton. Thank you, Mr. Chairman.
Chairman Yarmuth, I ask unanimous consent that the
testimony of the American Association of State Highway and
Transportation Officials be inserted into the record.
Mr. Yarmuth. Without objection.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Moulton. I would like to begin by citing two things the
Ranking Member said in his opening statement, the first on
bipartisanship and the second on differing priorities of
districts around the country.
Mr. Ranking Member, if I have it right, you said, ``My home
state of Arkansas needs increased lanes for long-haul trucks,
whereas other more urban communities may need more investment
in public transit.''
Mr. Womack. Correct.
Mr. Moulton. First, I would like to point out that highways
are just as public as public transit. Neither would exist
without government investment, and it is the lack of government
investment that has gotten us to the embarrassing state of
America's infrastructure we know well today.
Second, the Ranking Member is right. The transportation
infrastructure investment has historically been a bipartisan
priority, and it must be going forward.
In recent years, however, even this topic has become
partisan, with the conservative billionaires and the Koch
family running campaigns in urban areas against transit
initiatives because they negatively impact the car and oil
economy.
Third and closely related, we need to start making
infrastructure investment decisions based on facts, on real
numbers, and truly understanding the long-term costs and
benefits and the impacts these transportation and
infrastructure investments have on other parts of our lives, on
public health, on community health, on economic development and
economic opportunity.
I will use one example. Virginia has recognized that one of
the best ways to deal with the congestion caused by long-haul
trucks on our highways, which the Ranking Member cited as an
issue in Arkansas, is to invest in railways, something the
federal government has scarcely done since the 19th century.
One single train can easily carry 300 trucks, and for those
of us who support a free market approach to transportation, we
ought not only subsidize highways when rail is safer, more
efficient and better for the environment. Let's invest in both
and give the market a level playing field.
Likewise investing in traditional transit in urban areas is
not always the right answer either. Modern transit systems in
Japan look almost nothing like the old fashioned diesel
commuter trains my home state government of Massachusetts wants
to buy more of as we speak.
So let's make sure we are making investments not based on
the status quo, not simply repairing our roads and bridges as
we always hear, but truly making smart, fact-based, busy savvy
investments in 21st century infrastructure after examining all
alternatives on the table.
Little Rock is two and a half hours from Chicago in all
weather, with no delays, and a nearly perfect safety record, by
high speed rail at Chinese speeds, which is something that
every developed country in the world is investing in, except
the United States.
So let's have a fresh perspective, as Mr. Tomer said, and
have a broader conversation.
Mr. Coes, I would like to begin with you. Earlier this year
I worked with Professor Linda Bilmes from Harvard Kennedy
School to examine the budgetary and non-budgetary costs of the
road economy. She found that in Massachusetts direct budgetary
spending on roads is nearly $6 billion per year and indirect
annual cost, including accidents, congestion, carbon emissions,
pollution, and injuries total approximately $20 billion.
Now, this does not include the full economic cost of the
road economy, which are estimated at about $150 billion more.
Mr. Coes, how can we improve funding decisions to examine
the full impact of different modes of transportation?
Mr. Coes. A great question, Congressman. There are a number
of strategies. We would recommend that at the federal level,
but particularly at the state level working with MBTA, also
with some of your local partners, one of the first strategies
that we find across the country is that many jurisdictions,
also here at U.S. DOT, do not do physical impact analysis on
those infrastructure projects.
So I would, one, emphasize the need for every time we spend
a new dollar on infrastructure that we have a full,
comprehensive review of not only the, as my colleague to my
right suggested, just on the design-build, but also the net
impact on surrounding communities.
One of the second elements I would say is something we have
been doing for a number of communities across the country, is
scenario planning. As we are thinking about new infrastructure
investments, we actually provide a connection between the
transportation investment and the land use and the wholesale
impact.
And that actually provides a much better picture of both
knowing the tax revenue implications, but also the fiscal
impacts on local revenue.
But those are just two simple strategies that both U.S. DOT
as well as State DOT should be incorporating to cover the full
cost of those investments.
Mr. Moulton. And I would just close by saying that sounds
really smart, and we just need to make sure we do it in an
efficient way, like Dr. Geddes recommends, so that we do not
just have a lot of bureaucracy, but we can truly understand the
full economic cost of these decisions.
Thank you, Mr. Chairman.
Mr. Yarmuth. The gentleman's time has expired.
I now recognize the gentleman from Missouri, Mr. Smith, for
five minutes.
Mr. Smith. Thank you, Mr. Chairman.
I will say it one more time. I say it every time that we
are having a hearing in this Committee. It has been 157 days
since we were supposed to pass a budget. This Committee has not
even presented a budget, and that is the sole purpose of this
Committee.
Nancy Pelosi, Speaker Pelosi said that a budget is a
statement of your party's values. Yet she refuses to even have
one member of her party to file a budget to show the values of
her party.
Is her values of her party infrastructure? We are having
hearings on it, but they are not filing a budget. I am asking
them to file a budget. This is the Budget Committee. So we
could discuss a budget.
It has been 157 days since it was supposed to have been
passed. Not filed.
If we are going to talk about infrastructure, I think we
need to talk about the inequality not of wealth, but the
inequality between rural versus urban. That is a huge issue a
lot of folks just do not want to look at. But it is a real
issue.
I represent 30 counties in Southeast Missouri, everything
20 miles south of the City of St. Louis to about 20 miles east
of Springfield, Missouri. We call it the bootheel of Missouri.
Nine of my 30 counties do not have 911 service in their
county. You are talking about better roads and bridges, which
are needed. My people need to have 911 service. That is about
public safety. That is inequality.
The folks in rural Missouri deserve to have the same public
safety that the folks in the urban areas have.
The problem is that nine out of those 30 counties do not
have 911 service in their county, but guess what. They do not
even have cell phone service to call 911 in the counties that
we do have 911 providers.
We hear people on the other side talk about 5G, how we need
5G. We need some kind of connectivity in rural America.
And so I think when we are talking about infrastructure,
that is the first item in priorities that we need to talk
about. There are Americans that have worse cell phone service
than the people in the jungles of Colombia. That is a problem.
And so if we actually do not want to leave anyone behind
and if we want to care about inequality, look at rural versus
urban. It is a real issue, and I challenge anyone on that side
of the aisle to stand with me and try to address the rural
versus urban divide because it is real. It is absolutely real.
The health and safety of the people in rural America, they
should have 911 service. They also should be able to have
Internet service. And do you know what? They should be able to
have nice highways.
But unfortunately, it is very difficult to build new
highways because we also have the national forest, and because
of the national forest, there's so many, there's over 70
different environmental procedures you have to go through in
order to build a new shoulder, let alone a new lane on a
highway in numerous counties in my congressional district
because we have part of the national forest.
My people should not be left behind because of government
policies or just because it is a zip code that they have lived
in. My family has lived in this area for seven generations. It
is my home. We were there before Missouri was even a state.
And the opportunity that is with my friends and neighbors
should be the same opportunity of anyone that decides to live
in a big city.
And so when we are talking infrastructure, Mr. Chairman,
that needs to be the front priority about health and safety on
infrastructure.
I want to point out we all know Hoover Dam. Hoover Dam took
roughly five years to build. That was in the early 1930s,
during the Great Depression. You stand on Hoover Dam, and you
look over, and you see that big bridge. That bridge was built
in the 1980s, started in the 1980s, but it took almost two and
a half decades to build because of the environmental policies
and the permitting processes in order to get it.
These are areas that we can transform to help make things
happen quicker, most efficient.
With that, Mr. Chairman, I see my time has expired and I
yield back.
Mr. Yarmuth. The gentleman's time has expired.
I now yield five minutes to the gentlelady from Minnesota,
Ms. Omar. Oh, I am sorry. I am wrong. The gentleman from New
Jersey, Mr. Sires.
Mr. Sires. Thank you, Mr. Chairman.
Well, I come from a very different district than my
colleague. Just to give you an idea, I come from a town that is
one square mile, and it has got 53,000 people in it, and the
town next to it is one and a half square miles, and it has got
about 70,000, and then there is Hoboken, New Jersey, which is
one square mile, which his another 53,000 people.
Our priority is obviously moving people. We have a very old
infrastructure. Many people in that district go to where the
jobs are, which is New York. We have every form of
transportation you can think of, and the latest one is those
little scooters that go around all over Hoboken. Okay?
So we have every kind of infrastructure, and the
infrastructure is very old, and obviously, states have to
contribute to fixing the infrastructure, but there has to be an
assistance to those states.
New Jersey just raised the gas tax 41 cents above what it
was because the Transportation Trust Fund was being depleted
from poor management and people tapping into the Transportation
Trust Fund.
So any kind of money that is ever put on gas has to be a
dedicated fund and only be used for transportation. It cannot
be a piggybank where people can go in there in any of the
states or even the federal and try to take money out of it.
I have been fighting for the Gateway Tunnel, which is a big
project in my district. I have also been fighting for the
Portal Bridge. The Portal Bridge in my district is 110 years
old. It is the lifeline of the Northeast Corridor. It is 110
years old, and when you open it sometimes, it does not lock
properly, and they have to use a sledgehammer to put it
together.
New Jersey has committed $600 million to fixing this. They
cannot do it all alone.
So, Mr. Tomer, when you say that money is not everything,
it has to stop. I am wondering do we freeze the money and
rethink everything.
I mean, states just cannot do these things by themselves,
and mind you, mind you the Gateway Tunnel and the Porter
Bridge, we are in a region that generates 20 percent of the GDP
of this country, and it is a region that sends money to
Washington year in and year out. We are not one of these--well,
I do not want to say what my friend calls them, but we do
generate a lot of money.
So when you talk about freezing the money given, that we do
not need any more money, I cannot agree with you. I mean, in
Houston, obviously, what they went through, they need help and
even though Texas is a rich state.
I get it, you know, but they generate also money that comes
to Washington. So some of that money has to get back, and
believe me, I have been in state government, and I know about
regulations. I know about governments and that it is impossible
to work with. It took me months just to get a bus stop put in
across the street from where I live because New Jersey Transit
was not moving fast enough.
So I do get that we have to reform and speed up our
permitting, but I just cannot agree with you, Mr. Tomer, that
we do not need more money.
You know, we definitely need the assistance of the federal
government.
And New Jersey is not just the turnpike. I hate to bring
that out to everybody. You know, we are not just the turnpike,
but the turnpike is getting very expensive, and 35 percent of
the traffic on the turnpike comes from out of state. So when
they increase the tolls, I do not mind too much because a lot
of other people do contribute to it.
But it just states are just being overburdened with the
infrastructure being so old, and they need assistance. It is
not that, you know, we just want to throw money at these
projects. We need the federal government to step in and assist
so people can continue or these regions can continue to send
money to the federal government here.
Because when you generate 20 percent of the GDP of this
country in a region, I think they deserve a second look when
they have an infrastructure project that they need help on.
So I was going to ask you a question, but I talked too
much.
Thank you.
Mr. Yarmuth. The gentleman's time has expired.
I now recognize the gentleman from Ohio, Mr. Johnson, for
five minutes.
Mr. Johnson. Thank you, Mr. Chairman, and thanks to all of
the witnesses for being here today.
You know, from that little mule farm I was born and raised
on to my 27 years in the Air Force and as a small business
owner and then my work in corporate America, here is what I
learned.
No matter what the system is, whether it is the human
system that we walk around in everyday, our bodies, a
transportation network, an IT system, an automobile, about 75
percent of the life cycle cost from cradle to grave of a system
is in operations and maintenance.
It is easy to put those systems in place. It is much, much
harder to keep them up, and so there is no question that
improving our nation's infrastructure will lead to greater
economic growth and the development of rural America, and
Congress has a responsibility to provide the states certainty
so that they can build and maintain infrastructure that our
communities need.
Rather than kick the can down the road again, Congress
should work together across the aisle collectively, in a
bipartisan way, to find a permanent, sustainable solution for
the Highway Trust Fund, and we ought to do it in a way that
does not put the burden on those that are the most needy.
Look at rural America. I mean, do not get me wrong. I
understand, and I agree that those that use the highway system,
they are the ones that need to help pay for it. I get that.
But who are the ones that are the most disproportionately
affected by a use tax when we do that? It is those that live in
rural America that have to drive 30, 45 minutes to get to work
or to the hospital or to the grocery store, to check on Mom and
Dad.
So we have got to make sure that we go about this the right
way.
Dr. Geddes, you know, I believe Congress should consider a
variety of possible solutions, and I have got some ideas of my
own, but in your opinion, what are some of the options for
providing a permanent funding source for the Highway Trust
Fund?
Dr. Geddes. Yes. So thank you, Congressman.
You know, the Highway Trust Fund was a tremendous benefit
to the United States. Federal gas taxes were increased heavily
in 1956 to pay for the design and construction of the
interstate highway system, and for decades it provided a
reliable funding source.
Now we have got vehicles some of which do not burn gasoline
at all or fossil fuel, some of which get wildly different----
Mr. Johnson. And people in inner cities are not driving
that much. They are taking mass transportation or riding bikes
to work or walking to work or whatever, right?
Dr. Geddes. Right, right. One issue with the Highway Trust
Fund, of course, is fairness or equity, and back in 1956, we
talk about both horizontal and vertical equity, if I may.
Horizontal means if you use something, you pay in
proportion. If you use certain kilowatt hours of electricity,
you pay in proportion to use, and the Highway Trust Fund was
like that back in 1956. The Buick sedan got about the same as a
Chevy sedan, et cetera.
But now, of course, technology has changed that, right?
Because it is the same four-door sedan, one could be old; one
could be electric, and they pay wildly different in the gas
tax.
The other is the vertical equity, and that is the notion
that wealthier people would pay more, right? And now we have
wealthier people who own a Tesla, pay nothing in gas taxes. A
poor person or family with a Ford F-150 pickup truck would pay
a lot more.
So in both the vertical and horizontal senses of fairness,
it seems like the gas tax idea has become weaker over time. So
that is why in my testimony and my research, you mentioned it;
I am moving towards more user fees.
So most economists like prices or rates or fees, and the
idea of allowing state and locals more pricing and tolling is
standard. There were pilot programs in that last highway bill
to encourage that.
So if we move to a new system, I would very much like it to
be a user fee based system, but subject to what you just said
about fairness issues, right, so that we are not
disproportionately charging poor or urban, whatever the group
is, more than the others.
Mr. Johnson. Yes, I appreciate that.
Dr. Geddes. I am sorry. That is my long answer.
Mr. Johnson. No, and I appreciate that. You know, I believe
any discussion on infrastructure, we talk about the Highway
Trust Fund, but one of the other really critical, important,
rural infrastructure issues is broadband and building out
broadband.
I know that is not funded out of the Highway Trust Fund,
but in rural areas like Eastern and Southeastern Ohio, where
most of my district, six and a half hours long, from an hour
outside of Cleveland to an hour outside of Cincinnati; most of
my district has inadequate broadband service.
In a digital economy, that is a death knell in the coffin
of rural communities.
So we have got to work on that, too.
Mr. Chairman, I yield back.
Mr. Yarmuth. The gentleman's time has expired.
I now recognize the gentleman from California, Mr. Peters,
for five minutes.
Mr. Peters. Thank you, Mr. Chairman.
I want to thank the witnesses.
I want to start with a couple of agreements. I want to
agree with Mr. Tomer that we ought to fund outcomes, and we
ought to identify where we want to go before we start spending
money on it.
There is a new move to resurrect earmarks, so-called
congressionally directed spending, and that is all about
funding projects, projects in your district, and I think even
beyond that, some people just think about throwing money at
projects without thinking about the results you get.
So I want to endorse your analytics as a way to approach
this.
Mr. Smith has gone, my colleague from Missouri, but I think
regulatory reform has to be part of this. We should not be
throwing away money on permitting that is needless when we know
what we want to do.
I mean, I think we can achieve high standards. We should
aim for high standards. Sometimes we can do that much more
efficiently. We ought not to be imposing extra costs on
taxpayers when we do not need to.
I think that is certainly something we should be open to
talking about on both sides of the aisle.
Mr. Coes, I wanted to know. You talked about building
smarter, denser neighborhoods. What is the federal government's
role in that? What do you think that we could do?
I think that is largely a local issue, but how can the
federal government provide support and the right incentives for
that?
Mr. Coes. Well, thank you for that question.
So first and foremost, what we are finding from the private
sector market in terms of creating these walkable places
whether it is in downtown Thomasville, Georgia, or Bentonville,
Arkansas, is that oftentimes to build that mixed use or two-
story building, you have to improve the water infrastructure.
You have to improve the stormwater infrastructure.
But if you do a real estate deal, oftentimes you cannot
generate revenue off that infrastructure in the first couple
years. So, what can the federal government do?
Well, actually in the FAST Act, the federal government
actually said it will provide low interest loans to local
communities and real estate communities who are trying to rehab
rural main streets or transit-oriented development.
Now, fortunately, the bureaucracy has now allowed residents
or local communities and real estate development communities to
actually access those dollars, but by providing low interest
loans that have a longer timeline than your traditional capital
markets, you can actually finance those rural and main street
infrastructure improvements, as well as COD.
Now, the flip side of that is that that is also an
opportunity to generate new revenue for the federal government
through value capture because the private sector just needs a
longer timeline to finance infrastructure.
But because what I mentioned early in our research we are
seeing whether it is in Thomasville downtown, whether it is in
Louisville along the BRT Dixie Highway where the BRT line is
coming in, when you increase density, when you bring people
closer to their job, when you bring them closer to their
churches, when you bring them closer to their mom and dad, you
actually increase the value.
You actually allow people to have more money in their
pockets. As a real estate developer, that means we can charge
more rent. The land values go up, and guess what. If the
federal government was actually a real partner, you could
actually take some of those resources and reinvest it back in
infrastructure across the country.
Mr. Peters. Right.
Mr. Coes. And right now we are missing a real partner.
Mr. Peters. So I agree with that. I think that makes sense.
I think the thing that we should do, and this is consistent
with the bill I have introduced called Build More Housing Near
Transit Act, I do not know if you are familiar with it, but the
idea is that the federal government should ask communities in
which we invest what are you going to do to make sure that
there is ridership on this investment that we are providing for
you.
And that supports the idea of building communities closer
in, not reproducing, but rather repairing infrastructure that
is existing, and I think we should do the same thing with
things like investments in what are quintessentially local
things like water and sewer.
If we are going to help, we have to expect back results
that help us on the budget side and help us achieve our
objectives.
I also wanted to say that I do not think it is all about
money. I think it is naive to think that there is not a lot of
money involved, and I want to just note that the Committee for
a Responsible Federal Budget estimates that spending a trillion
dollars on infrastructure, if it is debt financed, would
actually shrink GDP in the long term because of the effect of
debt.
Now, we have gone too long in this room and in this
building without talking about how to pay for stuff. We had a
tax cut that was tremendously irresponsible, but I think over
the last few years the notion of paying for things has kind of
gone out of fashion to our detriment, and I think that is
wrong.
I wanted to ask Mr. Geddes what you thought along the lines
of a vehicle miles traveled fee. Is that, from an economist's
perspective, is that the right way to pay for things, given the
things like the Tesla?
Dr. Geddes. Yes. Thank you, Congressman.
Absolutely. So there is a long literature going back
decades on BMTs. Out west they call them rucks, road usage.
There is different names for road usage charges.
There is also mileage-based user fees, MBUF, and the state
of Oregon, as we know, has been an absolute leader in
implementing and moving notably instead of the state gas tax,
not in addition to. Instead of the state gas tax, they are
charging a per mile fee. You know, it is a road usage charge.
To the economist, absolutely in favor of it.
Mr. Peters. I am out of time.
I also wanted to just mention that a carbon tax with some
refunds to deal with underserved areas I think is also
something we should be considering here.
And I yield back.
Mr. Yarmuth. The gentleman's time has expired.
I now recognize the gentleman from Texas, Mr. Roy, for five
minutes.
Mr. Roy. I thank the Chairman.
I thank all of the witnesses for taking your time out of
your busy schedules to be here and to address this body.
I am particularly grateful to see Ms. Haddock here from my
home state of Texas. Thank you for making that trip.
I, too, want to echo my colleague from Missouri's comments
about the fact that we are sitting here and have not passed a
budget. This is the Budget Committee, and it would seem that
that would be the basic duty of our Committee to do and for the
body to pass a budget. So I think we should try to get back to
focus on that.
But I would also point out that as we sit here, and we have
been here about an hour, and I do not know; maybe we will be
here another hour. We are racking up $100 million of debt per
hour in this country. So while we have been sitting there,
there is another $100 million of debt racked up.
Next hour, another $100 million of debt, and we just keep
ticking along acting like nothing is going on, just moving
along from impeachment inquiry to press conference to who knows
what will be taking up the time of this august body today
besides dealing with the fact that another $100 million of debt
has been racked up in an hour.
Now, one of my colleagues suggested, of course, that the
significant culprit of this reality is the tax cut two years
ago. Apparently, in December of 2017, we were running a
surplus. Apparently, the tax cuts that were put in place in
December of 2017 are driving the deficits to epic proportions
because I do not know. A trillion dollars a year in deficit
spending apparently can be made up by a $100 billion of an
increased revenue on the back of a tax cut change in policy.
It just strikes me as surreal that we continue to get in
this infinite do-loop about talking about a tax cut which is
put in place to create economic growth and to put more money in
the pockets of those that create jobs.
And we can have a robust debate about what the right tax
rates could be, but do not pretend that we did not have a
massive deficit in December of 2017, and that we are going to
solve it by throwing a higher tax rate in place, whether it is
for businesses or individuals.
We are here to talk about transportation instead of those
larger issues, but they are all germane. From my standpoint on
transportation, representing Texas and Texas 21, in particular,
the I-35 corridor between San Antonio and Austin, Texas is,
shall we say, busting at the seams and is going to continue to
get worse. And we have got a real problem we are going to have
to address there in Central Texas, right?
There is massive growth between Austin and San Antonio. We
have got 1,000 people a day moving to the great state of Texas,
often seeking refuge from other states that are maybe not quite
a prolific in terms of economic growth and have higher
regulatory climates. I see it every day.
A woman came up to me the other day in an event in my
district saying, ``Well, I have got no other place to move to,
and I just moved here from California. Can you please keep
Texas strong?''
I said, ``Well, every time I go to Washington, I am trying
to keep Texas strong.''
And I guess one of my questions I would have for you, Mr.
Geddes. Is there a federal law that prohibits states from being
able to do whatever those states want to do for their own
infrastructure?
Three-quarters of infrastructure spending is state and
local; is that right, give or take?
Dr. Geddes. Right. I think that number is roughly correct.
It might be closer to 80.
Mr. Roy. Right.
Dr. Geddes. But your first point, Congressman, is very
salient. There are a lot of restrictions going back to the
1950s and 1960s on how states can use the interstate highway
system.
I just pointed out one in my testimony, which is one of my
favorites, which Section 111 of Title 23, which restricts the
development of highway rest stops. And that is why you drive
into a rest stop on a dark night, and it may have bathrooms, a
few maps, and some vending machines and that is it.
From an economist's perspective, that is an enormously
valuable asset that the state cannot develop because of this
old law, and states have asked for permission, I believe, for
that to be relaxed.
Mr. Roy. Right.
Dr. Geddes. And that is a prime example of value capture.
You can concession out the restaurants, et cetera, and there
were other examples I could give.
Mr. Roy. Well, thank you for that. I am sorry we have such
a short time, and another question here that I think is really
important.
Some states are donor states. Some states are not, right?
Is Texas a donor state?
Dr. Geddes. I believe it is a donor.
Mr. Roy. Texas is a donor state. Texas is a donor in terms
of our gas tax policy.
Dr. Geddes. I know New York is a donor. My state is a
donor.
Mr. Roy. To the tune of about $200 million a year, upwards
of a billion dollars depending on how you factor in the total
backfill that is coming in from general revenue.
Dr. Geddes. Right.
Mr. Roy. I would also note that we are spending about a
half a billion dollars a year to secure the border of the
United States in Texas because this body failed to secure the
border.
I am just pointing out that there is a lot that needs to be
done, but I am just looking at Texas and saying we would like
to get our money back. Thanks.
Mr. Yarmuth. The gentleman's time has expired.
And now I recognize the gentlewoman from Minnesota, Ms.
Omar, for five minutes.
Ms. Omar. Thank you, Chairman and Ranking Member.
Thank you all for coming to chat with us today.
America has a long history of building some of the most
impressive infrastructure systems in the world, and investing
in these vital networks is part of what makes this country
exceptional.
But unfortunately, we are falling behind and have been for
several years. Since 2010, China has sent roughly 8 percent of
its GDP on infrastructure, and on average, European countries
spend the equivalent of 5 percent of their GDP.
But here in the United States, we are only investing about
2.4 percent, and we have been putting off a backlog of
maintenance needs that is about an investment of $2 trillion,
which makes me think to myself how can a great country like
ours continue to be great when we are unwilling to make the
kinds of investments that will make us so.
So, Mr. Tomer, in your expert opinion, do you feel like the
United States has kept in pace with other developed nations
when it comes to this investment string?
Mr. Tomer. Yes, thank you for the question, Representative
Omar.
And I am glad you asked, and I also get to correct the
record from Congressman Sires' comment in my direction. I do
believe we need to spend more. I do not believe we are keeping
up with our developed and, frankly, even developing or emerging
economies here as well.
The challenge there is making sure we understand exactly
what we want to invest in.
So just a very quick metaphor, for anyone who either rents
an apartment or owns a home, right, of any size, you could
infinitely invest in that property, whether it is art on the
walls, changing out your roof, expansions, what have you. We
have to make difficult decisions.
So the question is, yes, we clearly need to spend more. We
know about the failing grades. We know about water,
infrastructure that is not working, a lack of broadband
infrastructure in rural and urban neighborhoods.
The question is: how do we pick what we invest in? How do
we have vertical collaboration, federal, state, local? And what
is the role of the private sector to work alongside the public
sector?
So, yes, to invest more. The question is doing it wisely.
Ms. Omar. And furthermore, how is this country's global
competitiveness and long-term growth potential impacted by the
backlog we currently have in maintaining the needs of the aging
infrastructure network?
Mr. Tomer. Yes, thank you again, Representative.
The world is rapidly digitalizing everywhere. Emerging
economies are banking via mobile phones, right? And digitally
banked, at that.
Meanwhile the scooters that many of us see in our
communities, including right here in Washington, you need a
digital bank account to be able to use those. You need a smart
phone. You need to know how to use a smart phone.
And I am not trying to pick on any employer. In fact, I
think it is a good thing, by the way. To apply for a job at
McDonald's you often need to have a digital resume. You need an
email address. You need to have a way to be able to submit that
resume and then check your email to see, right, what the
response is.
We are woefully behind on the levels of digitalization we
should have, which when we are truly still either number one or
number two, depending on the data, the wealthiest country in
aggregate in the world.
So we need a stronger case to digitalize everyone, and that
is probably one of the most glaring elements I see in terms of
economic competitiveness. Many of our regions and households
who live in them and businesses are fully digitalized, but
there is still so much more ground to go.
Ms. Omar. Do any of you have anything to add?
Dr. Geddes. May I comment, Madam?
Yes, I think it is a wonderful question. One thing I really
think we should stress in terms of spending is, again, what we
spend it on, and we have been blessed in this country to have a
mature transportation system for decades that gives us
unprecedented connectivity.
China, of course, is still building it out, right? But what
we face is a problem with operation and maintenance, and that
gets back to Mr. Johnson's point. The spending really needs to
address this deferred maintenance problem that we have in the
United States.
We do not need to build another interstate highway system.
We need to take care of the one that we have, and I think we
need to think carefully about how we can create policies. That
is why I stressed public-private partnerships that include
operation and maintenance in the contract.
And spending more money on that operation and maintenance
to improve those ASCE grades, I think, is the focus.
Ms. Omar. And deferred maintenance sometimes can be very
costly. There was a highway that went down in my home state,
Highway 35, and not only were lives lost, but it cost us
greatly economically to be able to rebuild that.
Investing in 21st century infrastructure is critically
important. It is one thing that I have been talking about, and
the investment and the expansion of our broadband should be a
priority for all of us.
So thank you all for being here and speaking on that. I
yield back.
Mr. Yarmuth. The gentlewoman's time has expired.
I now recognize the gentleman from Tennessee, Mr. Burchett,
for five minutes.
Mr. Burchett. Thank you, Mr. Chairman, Ranking Member.
The Highway Trust Fund I feel like is in terrible shape,
and as a nation, we need to be looking into new ways to fund
our nation's infrastructure.
And I apologize. I walked out. This might have been asked
1,000 times, and if it is, this is 1,001, but I would really
like to hear what you all have to say.
You know, however, with the rise of these electric
vehicles, which I always kind of get a little tickled when
somebody says, ``I am saving the environment. I am riding a
bus,'' or, ``I am riding an electric vehicle.''
In Tennessee, you know, it is usually one of those coal-
fired plants that puts that electricity out, although our coal-
fired plants are doing a lot better than they used to.
Of course, we theorize with these electric vehicles, and
they are growing in efficiency in the automobile industry. I
feel like it is time to start looking into a new source of
funding.
Dr. Geddes, what would be your recommendation for financing
our country's infrastructure?
Dr. Geddes. So thank you, Congressman.
That is one of the big reasons I made a distinction between
funding and financing in my testimony. The underlying problem
is really funding, which you point to.
Mr. Burchett. And you can just call me Tim. When they say
``Congressman'' up here, I usually just keep walking because I
know they are talking to one of these old guys back here.
Dr. Geddes. Call me Rick.
Mr. Burchett. All right, Rick.
Dr. Geddes. But that is why I am like a broken record. I
say VMT fees, VMT fees because if you are driving an electric
vehicle----
Mr. Burchett. I know what VMT stands for, but Dan Crenshaw
beside me does not. So why do you not tell him what it means?
Dr. Geddes. For Dan's benefit?
Mr. Burchett. Yes, sir, for Dan's benefit.
Dr. Geddes. It is a vehicle miles traveled fee, and it is
just a per mile fee, and it is just the same way we charge for
electricity or natural gas, per therm or per gallon of water,
right? You just charge per mile of road use.
Mr. Burchett. Now, I am a gear-head. So what are you going
to do? Are you going to put it on the odometer? Is it going to
be another one of these electronic devices that you all want to
put on something that a lot of the folks in east Tennessee are
a little leery of?
Ms. Haddock. I have got you. So this is why the state of
Oregon is a state we always look to because they have done
three pilot projects over a decade to address exactly those
questions. How do you do it?
There are different ways that sort of dial in the level of
privacy you can have. One, I call it the all you can eat
version of using the roads. You pay, I think, a quarterly fee,
and they do not monitor anything. They do not monitor your
odometer. They do not monitor your location.
There is another one that is a little box about this big.
All cars have a USB port now, that monitors your car's
speedometer.
Mr. Burchett. All your cars do, not all of mine.
Dr. Geddes. Not in Tennessee?
Mr. Burchett. I have got a 1961 International Scout and a
1969----
Dr. Geddes. I drive an old Chevy, just for the record.
Mr. Burchett. All right.
Dr. Geddes. But the little box on the new car would monitor
the speedometer.
If you know what the speedometer of the car is doing, you
know how many miles it has traveled. The privacy is perfectly
protected.
For maybe younger people who do not seem to care about
privacy at all, you can use a gismo like this, and it gets down
to the submeter level where your car is, and you can charge
based on those movements. That is, you know, maybe the lowest
cost per mile, but it is the least private in some sense.
So really states, and California is looking very seriously
at this; Minnesota is looking very seriously at this road usage
charge or vehicle miles traveled.
What it does, it divorces the use of the road from the fuel
the vehicle uses. So you can have an electric vehicle, but
everybody uses the same lane mile. You charge for the lane mile
rather than the fuel use, and that is why so many policy wonks
like me like it.
Mr. Burchett. I say a lot, me included, are going to have
to die off before we actually buy into that because I can see a
lot of pitfalls of that, especially some of my conservative
folks.
Of course, we are constantly having to prop up the Highway
Trust Fund with other accounts, and I would to start with you,
sir, and just real quick before I run out of time. How do you
all suggest that we get our spending under control?
Mr. Tomer. I believe firmly in setting up these outcomes
that we care about and understanding the revenue streams that
are coming in, as well as exactly what you all were just
exchanging about. What are those future revenue sources?
You know, relative to other accounts across the federal
government, the Highway Trust Fund actually has much more
concrete set of barriers, not to mix metaphors.
Mr. Burchett. Right. In Tennessee, we manage our money very
well. Our legislature balances budget and things like that, but
one thing we did not do when they put the gas tax in, they did
not put a multiplier in. Now, they have had to go back and bump
it up again, and I worry about that.
Of course, you cannot take into account electric vehicles
and things like that.
Any of you all? Ma'am?
Okay. That is fine. We are good.
Ms. Haddock. And I will say that it is about spending, but
it is about how we spend and what we are spending it on. And
because we are not spending it on the operations and
maintenance, we are spending a lot more in the replacement and
repair down the road.
And so if we were making those investments along the way to
make sure that the infrastructure we built was staying in the
best state of repair. If you do not change your oil, eventually
your engine is going to need a lot more work than if you just
did that routine maintenance along the way.
So how do we control it? We do that routine, annual,
planned, and it needs to be budgeted over years and decades,
funding to support the operations and maintenance.
Mr. Burchett. I do not yield back any of my time, Mr.
Chairman. I apologize.
Thank you for your indulgence, and thank all of you all.
This has probably been one of the more informative committees,
and this has been one of the more informative meetings in that
committee.
Thank you all.
Mr. Yarmuth. The gentleman's time has expired.
I now recognize the gentleman from Georgia, Mr. Woodall,
for five minutes.
Mr. Woodall. Thank you, Mr. Chairman.
And thank you all for being here.
I appreciated, Ms. Haddock, when you said federal funds
should be used to leverage, not replace state and local funds.
When we talk about operations and maintenance, in
particular, though, if I am going to leverage state and local
funds and those states and localities plead poverty because
they have a lot of other things they are also working on, I am
not casting aspersions on their motives, but just the fact that
they do not budget for it.
Then what? Do I go ahead and pay 100 percent of the cost
with federal dollars, or do I allow those assets to fall into
disrepair facing the larger outlays in the future that you
described?
Ms. Haddock. So the best way to tackle these moving forward
is to make sure that up front we have the agreements. One of
the things that in Houston that voters have supported and have
been willing to do is to not only have fees, but to raise fees
when they are dedicated to the purpose for which they are set
up for.
And back in 2010, and we affirmed this past year, our
voters actually dedicated a drainage fee specifically to deal
with stormwater in the city of Houston, and that money is used
for improvements in the infrastructure.
So it has to be a partnership, and it has to be that
agreement up front where we as local entities, when we sign
onto these things, that we have it dedicated in a way that we
cannot override; that we have it in the agreements, and we have
it in the legislation. We have it in the agreements moving
forward to make sure that does not happen.
There are competitions. We have people that are trying to
figure out how to get from paycheck to paycheck to do the
things that they need to do.
Mr. Woodall. And that is in a community where the only
thing you have more of than water is tax revenues, right? I
mean, Houston is on fire economically in ways that a lot of the
rest of the country hopes to achieve.
Mr. Coes, you said, which I appreciated, it is not how we
invest. How we invest is more important than how much we
invest, though I know how much is important also.
Are there circumstances in aging infrastructure, whether it
is in rural America or whether it is in urban America, where
retrofitting is more expensive than starting all over again, or
is it universally true that repairing that wastewater facility
that has not been maintained in 50 years is superior to
building a new community right next door?
Mr. Coes. I would say based on our research, traditionally,
fiscally, from a fiscal responsibility standpoint, investing in
existing communities is cheaper than building new communities.
Generally, in my hometown of Thomasville, Georgia, we had
to do that same dilemma. Do we invest in our downtown, which
needed a new stormwater system, new source, because we wanted
to provide more housing, or do we build more suburban
development out closer to 319 towards Tallahassee?
We did a both/and approach, but one of the things we did do
in the situation is that we actually forced the developer not
to actually just invest in the short-term investment on the
project, but actually dedicate revenues long term to actually
take the cost of that future infrastructure off the city rolls.
I think unfortunately for too often, the federal government
and state governments have not allowed and created that level
of framework or partnership to ensure that we are actually
capturing the full cost of these infrastructure costs.
Mr. Woodall. Yes, I think about all of our conversations in
suburban America--I represent suburban Atlanta--about mass
transit, and I think about what Dallas did, right? You built a
brand new line out there, and then you built a brand new
community on what was a cornfield yesterday, and now you have
built the infrastructure.
Professionals are finding it effective to break new ground
instead of rehabbing old ground.
Mr. Coes. And largely because, unfortunately, this country
has a diversity ecosystem of communities that have been
dedicating, who have different assets. But there is a pent-up
demand for walkable urban development, and developers are now
finding whether it is in South Florida, in California and also
in Dallas, where we would take the lead.
If the federal government will not or if the state and
local government will not take the lead, we would do it. But
unfortunately, that also comes with certain consequences
because we will go to locations that have the least resistance.
And this is why I made the point earlier this I not just a
conversation about the federal government spending more money
on infrastructure. If the local government and state
governments are not ensuring that local land use decisions,
their local economic development decisions are ensuring that
those initial federal assets are being leveraged at the highest
cost, you would have more examples of bad infrastructure not
being the economic returns that we need.
Mr. Woodall. I read Mr. Tomer's testimony and Dr. Geddes'
testimony, and, yes, we can get Brookings and AEI on the same
page. You would think we would be able to get some work done
around here.
But the Hoover Dam example we heard earlier is absolutely
true. We need to demonstrate to taxpayers they are going to get
a rate of return on their investment, and, yes, they get a
dollar's worth of value out of a dollar's worth of new taxes.
I agree with Mr. Peters. It is shameful that we are deficit
financing the Transportation Trust Fund. That was the lone user
fee we had left that was working in this country. If we are
going to spend more, we have got to raise more.
But I cannot promise a dollar's worth of value when
building a state road. It takes about three and a half years
less permitting-wise than building a federal road.
I ask the two of you gentlemen as my time expires. We can
get on the same page about deficit financing. We can get on the
same page about prioritizing.
Can we get on the same page that whether we solve it a
little or solve it a lot, that we have got to deliver projects
faster because time is money?
Dr. Geddes. Yes. Yes, Congressman. So, the one federal
decision I think is a terrific step in the right direction
where you get the permitting.
So as I note in my written testimony, a number of agencies
have to weigh in, getting a number of permits, Clean Water Act,
Clean Air Act, Endangered Species Act, et cetera, to get a big
project permitted.
But the process can continue concurrently so the agencies
are sort of working together through one lead agency. So the
key is there is a lead agency, and that that agency sort of has
responsibility to shepherd it through the process and, I think,
at some point make a decision for the other agencies if they
are dragging their feet.
So either permit the project or do not and have a target. I
have talked to people in my world. They think this target of
two years. Just having the target is a really good thing.
Of course, there are other issues, but I think that is a
very good step in the right direction, and I would urge
Congress to think carefully about, I guess, extending that. I
think the Senate has done something on that, and codifying that
in the next reauthorization bill.
It is deplorable really how slow the United States is to
get big, important projects delivered, even small projects.
Mr. Woodall. I thank you.
And I thank you for your indulgence, Mr. Chairman.
Mr. Yarmuth. Absolutely. The gentleman's time has expired.
I now recognize the gentleman from South Carolina, Mr.
Norman, for five minutes.
Mr. Norman. Thank you, sir.
I want to thank each one of our people at the table.
Let me just reemphasize what Mr. Roy and Mr. Smith said. To
not have a budget is inexcusable. For us to be sitting here
flying blind, you would not do it in your business. You would
not do it in any family budget.
But that is a different discussion for a different day at a
different time.
Now, infrastructure. Everybody, Democrat and Republican,
will agree infrastructure is important. The question is how do
you prioritize it. Is it broadband? Is it roads? Is it bridges?
I was with a bridge manufacturer who makes the equipment
that goes under bridges that instructs the pilings, and he said
something that was pretty startling. He said, ``What it is
going to take, Congressman, is a couple of bridges collapsing,
which is going to happen, and then maybe you will prioritize.''
Each one of you are educated in different fields. From
prioritization, I get that it is our responsibility, but from
prioritization, how would you rank each individual thing, and
where do we spend the money?
We have more needs. We have got a lot of wants, but we have
got a lot of needs.
How would you from where you sit prioritize where we put
the money? And God help us if we find out where to pay for it.
But where would you put the money?
Ms. Haddock. I think it was punted to me first.
So as a civil engineer, we are always going to lean on life
safety first, water, wastewater, transportation, you know,
flooding. I mean, they are almost all equal, but I will say the
water and wastewater are critical not just to the service that
we provide people on a daily basis, but to the national health.
Then when you layer in transportation and stormwater on top
of that, that is when you begin to get to the national economy.
Our commerce relies on that reliable, sustainable
infrastructure, and you cannot ignore broadband, communication,
all of those things because currently our commerce depends on
all of those things.
You know, you cannot run the scooter without the cell
phone. Well, that is a simple local example, but the truth of
the matter is that even our interstate freight movement,
whether it is rail, whether it is in the waterways, whether it
is freight on wheels, the communications system that makes all
that happen across it is important.
So when you ask me to prioritize, what I would say is that
we need to generate funding sources tied to each of the uses
that are tied back to the user fees, and so it is not
necessarily that we compete one against each other. It is that
we marry them up with the appropriate funding sources to make
sure that they are all funded and that they are all able to
move forward.
Mr. Tomer. That was great. I will add on top of that.
Because so much, and I mean this in a lower case UA, there
are so many utilities in the infrastructure sector, and that is
a big reason we want the MTPs that provide that kind of utility
pricing for transportation. We have natural dynamics to kind of
get those user fees aligned.
One of the major challenges we have in the country and what
is motivated by comments today is there are what economists
would say are uninternalized costs, right? Negative
externalities, positive externalities.
That is part of the reason we have, and this body is so
perfect for it, right, to come together and figure out, well,
what are our shared priorities, right?
What does it mean to have affordability for everyone in any
district, right, to get to work no matter how long the drive
might be?
What is that worth it to us?
We have to start putting a price on that on top of the
actual infrastructure itself. Combined, that is how you get to
the right kind of model of how we then prioritize what we need.
We can bring some financial accountability here, but it is
powered by actually our shared values, right, and what matters
to us.
Dr. Geddes. Congressman, can I add a footnote to your
footnote?
You know, I wrote a little book on public-private
partnerships because I believe in this approach, and other
countries are using it. One of the strongest reasons to use
public-private partnerships is you get signals from the private
sector about project priorities.
In other words, if you bid out a project and the private
sector will not touch it, maybe that is telling you something
about the viability of that project.
There are reasons to subsidize projects, right, that do not
generate enough money from user fees, but it is the issue of
project selection, Congressman, and the private sector
involvement through a PPP structure which is wrapping these
different elements of project delivery together in the big
contract really helps with the project selection issue.
So that is just my footnote.
Mr. Norman. I thank each one of you, and I appreciate your
participation. I yield back.
Mr. Yarmuth. The gentleman's time has expired.
I now recognize the gentleman from California, Mr. Panetta
for five minutes.
Mr. Panetta. Thank you, Mr. Chairman. I appreciate that you
are holding this hearing, and obviously, thank you to the
Ranking Member as well, as all the witnesses who are here, and
your preparation to be here and obviously your work that you
have done in order to get to this position. So thank you very
much.
I represent the central coast of California, and obviously
what I hear from my constituents is infrastructure is needed in
that area on a number of projects. Right now we are working on
one that deals with a flood plain and dealing with the place
called the Pajaro River and the Pajaro River flood plain that
it affects.
Now, obviously, Ms. Haddock, if I may address some of my
questions to you, I know you are critically aware of the
importance of the Army Corps of Engineers and their work on
these types of flood control projects.
But I am sure you are also aware that there is a
substantial backlog in Corps projects, which does tend to
disproportionately impact areas like the areas that surround
the Pajaro that are of low socioeconomic backgrounds in those
areas.
And so I was wondering, Ms. Haddock, did you do work with
completing flood control projects that affected low income
communities in Houston?
Ms. Haddock. So prior to joining the city of Houston, I did
work with the Harris County Flood Control District, and we did
partnered projects with the U.S. Army Corps of Engineers
throughout the city.
Mr. Panetta. Exactly.
Ms. Haddock. I will say that the current, at the time,
which was in the 1990s, into the early 2000s and also even
through today, that the processes and equations that we are
required to follow to demonstrate a project be implemented or
not do depend largely on the value of what is being protected.
Mr. Panetta. Yes.
Ms. Haddock. And when you do that, it does result in low
income and lower valued properties being further down the list.
Mr. Panetta. Understood, and based on those many hurdles
that are constantly and consistently put up by a number of
agencies, do you have any best practices you can share with us
in order to get over those hurdles, especially to protect low
income areas like that?
Ms. Haddock. So I will say that, first off, I do believe
that it is necessary to have a cost-benefit analysis when you
look at it because we have to determine that it is a good
investment, to begin with.
Mr. Panetta. Understood.
Ms. Haddock. But some of the things that we have done in
Houston is take the value of the land out of the equation and
convert it to the number of people that are protected versus
the value of the things that are protected.
When we're looking at transportation projects, we look at a
car equals a bus boarding when we are looking at replacing a
roadway.
We are changing the framework that we look at the benefit
in the project, to not just be directly tied to pure economics,
to allow us to have more flexible ways to prioritize where is
the best investment in that.
The other thing is that we have to look very closely at the
community itself. The land may be cheaper, but the impact to
the community may be greater whenever you bring in larger
infrastructure in those areas.
So we have look very carefully to balance those as we look
to implement projects.
Mr. Panetta. Let me ask you something. Obviously, in my
area, as you know, which can be known as the salad bowl of the
world or berry bowl of the world, depending on which specialty
crop you grow, but obviously, what about taking into account
certain agriculture and certain agriculture lands that are
around these projects as well?
Would that be a recommendation of yours as well?
Ms. Haddock. Well, I believe that we need to look at every
part of our economy that supports the nation, and so
agriculture and the ability to provide in the food supply is
important at home.
Mr. Panetta. Yes. And now look. I mean, obviously in
dealing with the Army Corps, as good of work they do, kind of
as you alluded to, they can be difficult, and sometimes they
can just say no.
That being said, if the Corps is unable to fund a project,
but, say, in these types of communities, do you have any
recommendation as to where we can turn for funding for
assistance with flood mitigation?
And I would open this up to the board.
Ms. Haddock. So, I would start off by saying that
mitigation has been shown that for every dollar you spend in
mitigation, you save $6 in future disaster recovery.
Mr. Panetta. That is right.
Ms. Haddock. And so it is really important that we
recognize that that investment in mitigation is not just about
that up-front equation; that investment in mitigation is about
long-term benefit to our budgets and our spending down the
road.
But it is not just about the money either. It is also about
the emotional- the toil on people as they go through disasters.
In Houston, we are weary of flooding, and to have that repair
money come to put us back in the same place where we were
before the flood is not necessarily the appropriate place to be
spending the money.
We need to invest this recovery money to be more resilient
and more sustainable as we move forward, so that next time we
are not having to respond in the same way.
But how do you do that up front in a project is one of the
things that we face on a daily basis as we look to implement
projects.
You really have to have, as my colleagues down here have
said, you have to have a plan for where you are going, and then
you have to make sure each dollar you invest and each project
you implement is working you towards that plan.
Mr. Panetta. Understood. Thank you for your work, and I
look forward to working with the Army Corps of Engineers with
that advice.
Thank you, Mr. Chairman. I yield back.
Mr. Yarmuth. The gentleman's time has expired.
I now recognize the gentleman from Texas, Mr. Crenshaw, for
five minutes.
Mr. Crenshaw. Thank you, Mr. Chairman.
Thank you all for being here today on what is a pretty
productive discussion, especially to a constituent of mine, Ms.
Carol Haddock, who came up from Houston for this hearing.
As Carol is, of course, aware, we have a flooding problem
in Houston. In fact, I just got back from my district where we
had horrible flooding for the second time that I have been in
Congress, which has not been very long.
It is actually part of the reason I got into politics.
Hurricane Harvey landed a sucker punch to Houston. One part of
my district, Kingwood, is at the bottom of a 2,500 square mile
funnel, where all of the watersheds empty into. So it creates a
problem: how do you prevent flooding in a place like that?
It is a bit of creative engineering, but a lot of local
permitting, county drainage decisions, channel dredging and dam
maintenance, all of which are important parts of that equation.
In Houston, federal support has been a blessing and
sometimes a curse. We have received plenty of funding, but
sometimes that funding is so delayed, like the $4 billion in
HUD funding, and we are so weighted down with red tape that
funds become inoperable.
So my question for Ms. Haddock, outside of the funding
itself, what are your key concerns on being able to deliver
improvements and flood mitigation for the city of Houston?
Ms. Haddock. Thank you for that question.
That is something we could probably talk about for hours,
but the struggle that we have in Houston is a combination of
deferred maintenance, existing infrastructure that was not ever
envisioned for the type of activities that we are asking it to
perform today.
The lake that overflowed, that Kingwood was flooded by, was
designed to be a water supply lake without gates or releases
for flood control. It was designed for one purpose. It was
built for one purpose, and that was not an Army Corps of
Engineers design. It was actually the city of Houston was
largely involved in that.
But it is one of those things that it is not just the money
that is coming today. It is the infrastructure that is in place
today that we are having to evaluate and look at.
A lot of times when funding comes to us, the public gets
very frustrated that it is not being spent faster, but
infrastructure projects take years.
If we have a plan in place and we know where we are going
to go, it still can take a year or two to design that
infrastructure before we can construct it, and as you said this
morning, or just now, in less than two years we have had
another event in Houston.
Mr. Crenshaw. This gets to something else I said about the
red tape surrounding that federal funding. Can you speak really
briefly to that and how that affects the local level engineers
actually receiving that funding?
Ms. Haddock. So my experience, and I have been in the flood
control arena most of my career, has been that the funding that
you see from a major flooding event, that the first
infrastructure funding you see is five to 10 years after the
event, but that is the first time that it is available for you
to put projects in the ground.
We have projects in the ground in Houston that were from
Tropical Storm Allison in 2001, that were in place just before
Hurricane Ike in 2008, and we are still working with 2015 and
2016.
How can we speed that up? I would say in communities that
are capable of dealing with a direct allocation, that if we
could directly allocate that funding to the local community so
that they can implement it quickly----
Mr. Crenshaw. If you have a partner like Harris County
Flood Control District.
Ms. Haddock. Absolutely.
Mr. Crenshaw. Trustworthy.
I want to shift gears, because we have very little time, to
the Houston Ship Channel. Could you talk briefly about the
impact of the current proposed widening of the Ship Channel and
the impact, the economic impact and engineering impact that
would have on Houston?
Ms. Haddock. Not just Houston.
Mr. Crenshaw. The world.
Ms. Haddock. On a large portion of the country and the
world, absolutely.
So the Houston Ship Channel is one of the largest ports in
the country, bringing in foreign and domestic tonnage and
dividing that up and spreading it throughout the country,
whether it is through rail or wheels or other ways that it
distributes out of that.
And so having the Houston Ship Channel widened and deepened
to be ready to accept the new larger ships that are available
to access the new Panama Canal is not only essential for
Houston and Texas. It is actually essential for the United
States.
Mr. Crenshaw. I will end with a discussion on traffic.
Houston like many big cities has a real problem with traffic.
We could build more highways. Well, actually we cannot build
more highways, right? There is no more space for it. Going
underground does not seem logical either.
What is the city of Houston doing? Are there any innovative
ideas coming up on the issue of reducing traffic and
congestion?
Ms. Haddock. So some of the discussions that we are having
not necessarily on the highways, but on the streets in the city
of Houston is that if we are going to widen a roadway, that any
additional lanes that would be added would be dedicated solely
to high occupancy in transit, that we would not add lanes for
single occupancy vehicle cars.
We have also got a robust off-road network of bikeways
being built, but you know, that is going to be years before
that is built out to a point that it is safe for people to
commute long distances. You can commute five to 10 miles easily
today.
But we need to look at other ways to add capacity that do
not involve us sitting individually in our individual cars
driving to our locations. We need to look at alternate ways to
bring that additional capacity into our system.
Mr. Crenshaw. Thank you. I am out of time.
Thank you, Mr. Chairman. Thank you all.
Mr. Yarmuth. The gentleman's time has expired.
I now yield five minutes to the gentleman from Nevada, Mr.
Horsford.
Mr. Horsford. Thank you, Mr. Chairman, very much.
I have been hearing from my constituents in Nevada that we
simply cannot continue to wait until it is too late and too
costly for us to fix our crumbling infrastructure. In 2010,
Nevada's total population has grown by nearly 300,000 new
residents, making Nevada the sixth fastest growing state in the
country.
And as our state grows, so does our need to expand our
transportation and infrastructure needs. While our roads and
bridges need desperate attention, we must also consider our
community's broader infrastructure challenges, everything from
dams to modernizing our schools.
For example, the American Society of Civil Engineers gave
Nevada a D- rating on our dam system.
Additionally, of the 17 school districts throughout Nevada,
they all require some level of modernization in our facilities
to help prepare students for high tech careers in the future.
I recently met with a group of constituents from White
Pine's Main Street Association in the rural part of my district
in Northern Nevada, and in that meeting they shared with me the
need to update their storm drainage system and the fiber optic
lines at the Ely Roadway Rehabilitation Project.
It is a project that is now on hold because of lack of
federal funding.
So these are examples of what happens when federal
investment is not available. Nevada's infrastructure is not
being met, and it is unacceptable.
So, Mr. Tomer, you have been involved in efforts to make
infrastructure a component of regional planning and economic
development. That is most effectively done at the local level
as each community's circumstances and needs will be different
like the ones in White Pine County.
Are there things that we can and should do at the federal
level to help communities and their development efforts?
Mr. Tomer. Yes, thank you for the question, Congressman.
And you know, one of the hardest issues we face in the
country, and I apologize if this does not apply directly to
your rural constituents that you mentioned, but is a tremendous
amount of jurisdictional fragmentation.
We colloquially use the term ``city,'' right? And Las Vegas
just I am saying is the largest metropolitan area in Nevada is
a perfect example of this, right? We say it casually, but when
you go to the strip hotels, you are not in actually Las Vegas,
right?
Mr. Horsford. The county.
Mr. Tomer. Right. So this level of fragmentation causes
immense amount of challenges, not just on the transportation
front, but also the water and even sometimes telecom.
And the answers here are complicated, but there is no
question that our original founding documents were not
intended--I think in my mind of like a place like Boston,
right, you know, where they were not imagined to extend beyond
those municipal borders.
So the question is: how can the federal government serve as
a jumping off point for regional conversations around--and,
again, I am not touching schools or other elements that are
more complicated, frankly, but transportation systems are
inherently regional assets, as are water and other essential
infrastructure.
How can we provide a platform for our regional governance
to be more aligned with the way we casually term out city names
the same way?
Mr. Horsford. Thank you.
Nevada also has over 32,000 miles of roadways that require
attention. More than 500 bridges in Nevada are over 50 years
old and would require approximately $133 million for repairs.
To address congestion in the region, the Interstate 11 plan
which would connect Phoenix and Las Vegas, the two metropolitan
communities in the United States that currently do not have an
interstate, would be developed.
And I am proud to have worked on that both at the state
level when I was in the state senate and we made advancements
here. But just a couple of weeks ago I had over 150 business
people here from the Metro Chamber of Commerce who came to D.C.
to remind Congress and the administration that this is an
important infrastructure project that will enhance the
economies of the communities along its route, create
opportunities for economic development and job creation, and
better connect businesses to those new markets.
So what could we be doing for projects like this as we
reauthorize the highway trust bill, but also making sure that
we have investment for these major types of projects like
Interstate 11?
Ms. Haddock, could you speak to that?
Ms. Haddock. So you asked a very wide based question there
to challenge me on that. What I will say is that, as we are
looking at this infrastructure investment, that new
infrastructure and renewal of existing infrastructure
definitely have to be balanced as we are looking at that,
creating those new opportunities for connectivity, creating
those new areas where we do not currently have that
connectivity. It is absolutely important.
It goes back to the comment earlier. We have to know where
we are going. That was not part of the plan. You have made it
part of the plan, and now we have to invest in that and
continue to move those things forward.
But we also have to be willing to invest in the operations
and maintenance beyond the initial construction if we are going
to continue to improve our infrastructure throughout this
country.
Mr. Horsford. Thank you so much.
I know my time has expired. It is a very important issue,
Mr. Chairman, and I look forward to working with you under your
leadership to advance these priorities.
Mr. Yarmuth. The gentleman's time has expired.
I now recognize the gentlewoman from Texas, Ms. Jackson
Lee, for five minutes.
Ms. Jackson Lee. Mr. Chairman and to the Ranking Member,
let me thank you so very much for this particular hearing.
Just about five days ago, the city of Houston experienced
what I know many of our citizens, Harris County, and in the
surrounding counties feared that they might be facing Hurricane
Harvey again.
The reason, of course, is because of our particular
topography. Certainly Members of Congress tried to make their
way home as quickly as possible, but as I was getting reports,
I was seeing the fear in my constituents in particular because
Imelda would come. It started and then it started and stopped
and started again.
And I think the greatest damage was done in the subsequent
downpour that I am told by my local officials, some 43 inches
were scattered throughout the region, and I know there is still
standing water.
We live every day with the crucialness of the need, in
spite of our outstanding residents that include Carol, if I may
call her a dear friend, thank her for her leadership along with
all the other witnesses, but we live in a state of crisis in
jurisdictions and topographies like Florida along the southeast
coast.
As Dorian made her way up, I had just spoken to the
leadership in the Bahamas. They are still suffering.
So I think that we need to really pull up our pants legs,
if we will, and pull up the pants and really get back to the
business of investing in infrastructure, and I know that we
have a sincere problem because in the 19th century, and as we
move forward into the 20th century, the 19th century was in the
early stages of the railroad, but in the 20th century we can
find that we did more investment in infrastructure than we have
been able to document in the 21st century.
Certainly the 21st century sounds like a margin
terminology, but here we are talking about the gaps in funding.
So I want to pose some questions. First of all, go directly
through to the point of concern, and that is the decline in
federal, state, and local investment in infrastructure over the
last two decades.
If you would share what you think the reason is for that,
and in your pithy answer because I have a follow-up and I see
the clock is ticking, Carol, why do we not start with you?
You know, are there structural issues, such as private
collection processes, overlapping jurisdictions with the
federal government?
What do we think has contributed to that trend because the
overall population of the United States is being impacted
negatively?
Ms. Haddock. So I will start by saying that many of the
fees that are generated and in many cases the property taxes
that back the investment in our infrastructure have been
relatively flat. I mean, we have talked about the gas tax not
being indexed and has not been raised since 1993. If you adjust
that for inflation, we see a 40 percent reduction in actual
buying power.
So a lot of that reduction in investment has been directly
attributable to the revenues and the funding going into it not
growing with the costs of infrastructure investment. So that
has been it on some cases.
You asked about the problems of overlapping jurisdictions
between state, federal, and local. I would say even within
local, the comment earlier about Nevada.
You know, in Houston you know that we have over 27
different cities just in Harris County that are overlapping
those jurisdictions. And so we are all working within that. We
are all working within the fees that we have available to us.
The state of Texas has made more money available recently.
That is a little bit different than some of the trends that we
are seeing nationwide, but that is still not addressing the
fact that----
Ms. Jackson Lee. My time is going. So let me thank you for
a very thorough answer.
Let me as Mr. Coes and let me see if you can also, Mr.
Tomer, fit in.
First of all, there should be smart infrastructure, and it
should be environmentally responsive to the needs of those
communities.
Would you respond to that?
And let me put on your mind we have a project in Texas, I-
45. It is important, but it is abusive to minority and
impoverished communities. I am fighting it. I want it to be an
effective infrastructure project, but I want it to embrace the
neighborhoods.
Would you respond to how those can match together, if you
would?
Mr. Coes. Thank you for that, Congresswoman.
If we are honest, the legacy of U.S. infrastructure
spending has been tied to race, and we are literally digging
ourselves out of that ugly legacy, and we cannot afford to not
retrofit these neighborhoods that have been either disconnected
from opportunities through roads or through even rail
infrastructure, and one of the biggest challenges and to my
comments earlier is that federal investment has to be a leader
because it was federal investment that started.
Mr. Tomer. Yes, I will just say very quickly, you know,
Houston has a massive measure coming up in November to invest
in itself. The, you know, ballot measures around transportation
and also economic development pass at basically a three-quarter
rate across the country, and it is really effectively higher
than that because often when you lose, you come back with a
better one and they win.
That kind of gets back to our shared point here of locally
you know what you are getting. You know how you are investing
your future. That is the same call we have here at the
Congress, right? Outline what our future growth pattern is and
how you can build that partnership.
Ms. Jackson Lee. Mr. Chairman, you have been very kind, and
the Ranking Member, and all I would say is that this is our
business, and we need to get engaged in this business to help
our local leaders here, but also to help the American people.
I yield back. Thank you.
Mr. Yarmuth. The gentlewoman's time has expired.
Now I yield five minutes to the gentleman from California,
Mr. Khanna.
Mr. Khanna. Thank you, Mr. Chairman. Thank you for your
leadership in convening this hearing to highlight the
importance of infrastructure.
I was encouraged by the comments of Representative Johnson,
who brought up rural broadband and the need for an investment
in rural broadband in this country.
China is spending $22 billion to hook up 98 percent of its
country on high speed Internet, and the estimates I have seen
is $40 billion would get high speed Internet access, affordable
high speed Internet access to every American.
Is there any reason that we should not just do this as a
nation to be competitive in the 21st century on a bipartisan
basis?
Mr. Tomer, since you are nodding, maybe we could start with
you and then have everyone else chime in.
Mr. Tomer. The dangers of body language.
Does not that Chinese example you cited sound like
investment in the future to everyone in this room today?
You know, that is what we are looking for in
infrastructure. There is absolutely a massively impactful
consensus to be built in both chambers of Congress, across both
partisan lines on how this can benefit. It is a rural
challenge. It is an urban challenge. Right?
Even in Silicon Valley, there are those who live without
broadband, and for those of us who are parents in the room, we
know how much our classrooms are digitalizing. What happens to
those students who go home, even if they have digital access in
their schools, again, whether in a rural or urban classroom and
they cannot connect to the Internet?
We are putting ourselves at a structurally speaking
economic disadvantage in the future because those are our
future workers. Those are our future entrepreneurs.
So absolutely I hope we can make this investment.
Mr. Khanna. Anyone else want to comment? Dr. Geddes.
Dr. Geddes. If I may, yes. Thanks, Congressman. I would
like to comment.
I totally agree, and it is interesting to look at the way
China is doing that. You know, the question for all of this is
how do you pay for it. It is all about funding. Delivery PPPs
are important, but it all about the underlying money.
One of the policy issues I would like to get on the table
is the notion of tax increment financing, which is a technique
the Chinese have used, in some ways other communities. Places
in Boston are using it, and it is the idea that the
infrastructure increases the value of the property that the
infrastructure is installed in and you capture some of the
increased value through a tax. It is a portion of that, and you
bond against the increased tax revenue to install the
infrastructure to begin with, basically moving that value that
the infrastructure creates in the future into the present, bond
against it to install the infrastructure. It works.
So I would urge Congress to think about look at what other
countries are doing. Look at what some cities in the United
States are doing. Expand on that. Encourage other localities to
do it because it really is all about the funding.
Mr. Khanna. Thank you, Dr. Geddes.
My final question is about economic growth. The President,
I disagree with a lot of things. One of the things he does is
market. Four percent economic growth he sold his tax plan as.
Now we are barely at a 2 percent economic growth, but no one is
asking what happened to the 4 percent that we were promised.
The reality is the American Society of Civil Engineers, as
Ms. Ellinger knows, has projected that a $2 trillion
infrastructure budget would create 5 percent economic growth. 5
percent.
Starting with you, Ms. Ellinger, my question is: do you
believe that infrastructure investment would actually achieve
more economic growth than the President's tax cuts and the
President's tax policy?
Ms. Haddock. So, I am going to dance around that question a
little bit. What I do know is that investment in infrastructure
will have a direct positive impact to the economy, short-term
and long-term, through the jobs that are created thorough
design and construction, but more importantly, through the 75
percent of the overall cost of infrastructure that go into
long-term operations and maintenance jobs.
It is direct. It is tangible, and it is long lasting. So
ASCE absolutely believes and supports that investment in
infrastructure is investment in this country.
Mr. Khanna. Mr. Coes?
Mr. Coes. I would say that, while I agree with my
colleague, there is such a thing as bad infrastructure
investments and that if we are to continue to do the same thing
we have been doing for the last 20 years, we will stay where we
are, which is at 2 percent growth.
Mr. Khanna. Any other comments?
Mr. Tomer. Yes. I am happy to say on the record a tax cut
can be absolutely supercharging for growth. That tax cut was
not structured for long-term growth, and we saw that due to
corporate stock buybacks as optional. You know, example number
one.
So, you know, cutting taxes can absolutely be something on
the table, and exactly to Christopher's point, you know, making
sure that we structure infrastructure investment can lead to
long-run returns, but we need to make sure that we are
designing those effectively as well.
Dr. Geddes. If I may, Congressman, so I want to echo the
point it is possible to have bad infrastructure investment. It
is how do you invest, and you know, some projects can be
enormously socially valuable and others not so, which is why,
you know, we advocate rigorous benefit-cost analysis for all
the projects. So targeting is key.
Mr. Yarmuth. The gentleman's time has expired.
I now yield 10 minutes to the Ranking Member, Mr. Womack.
Mr. Womack. I thank you very much, and a very enlightening
panel today.
First of all, I wish my friends on the other side would
just quit demonizing the Tax Cuts and Jobs Act. It creates
millions of jobs. It has raised wages in a lot of areas. It has
created lots of opportunity for people that needed that
opportunity, and I just do not think it should be the pinata
that it has become because it is an easily attacked sort of
program.
And I do not necessarily believe that the Tax Cuts and Jobs
Act by itself is what our economy needs. It needs a lot of
things, and we have done a lot of those things. I think tax
cuts are important, but I also think reg. reform is important,
and we have done a lot of reg. reform, which I think helps
stimulate the economy.
But I am not going to get too far down that road because I
have got some other things I want to look at.
But on the subject of taxes, I mean, we have all pretty
much said that we have got to, even though I think you, Mr.
Tomer, said not just throw more money at the problem, but in
everything that we are talking about today, we need to throw
more money at the problem.
And we know that the Highway Trust Fund is part of the
issue. In 1993, the last time it was raised, it was not indexed
for inflation, buying power with that kind of money, and we
have got cars getting better mileage.
But here we are advocating now doing something with the
Highway Trust Fund which is going to be a tax increase on the
lower and middle class, disproportionate to the high income
people.
It was said earlier. If somebody has a Tesla, they do not
really pay it, but somebody that drives as, I think somebody
said, a Ford F-150. I am not picking----
Dr. Geddes. An old F-150.
Mr. Womack. An old one pays disproportionately more for
those increases.
So I do not know where that sweet spot is going to be, but
I would like to just kind of throw a question out for the
panel. You graded the infrastructure at a D-plus. I think that
is how you characterized it. Do not let me put words in your
mouth.
Can you grade America on its ability to plan for the
future?
And so as a backdrop to my question, let me just tell you
when I was a mayor for 12 years, I operated under a philosophy
with all of my staff that we were going to do things based on
what we called the ``mayor after next'' philosophy. That we
were going to build things where we could today, not to benefit
the near term, but to serve the interests for a generation from
now.
How are we doing in America on planning for the future,
maybe the generation after next?
Ms. Haddock. The generation after next. So you started your
question with do we have the ability, and that answer is
absolutely, I believe we have the ability. The question is do
we have the courage.
We have not planned for the generation after next today,
and I do believe that our predecessors did, and that much of
the infrastructure that is wearing out today is infrastructure
that was planned for the generation after next.
And so your question for me is really one that all of us
have responsibility in addressing. Part of it is we have to
have a consistent, reliable, and dependable source of funds so
that we can plan for the future. That involves all of us. It
involves federal, state, local, private, and that it is beyond
a year or two, that it is beyond even five years.
Planning in my world is 50 to 100 years. We are planning
water supplies. We are planning water infrastructure for 100
years from now.
But the one thing that we also have to consider when we are
planning is we do not know what the next change in technology
or the next change in things that are coming down the road. If
we planned for transportation based on 1950s vehicles, we would
not be building the right infrastructure today for the
generation after next.
Mr. Womack. Can I throw a prospect at you?
Ms. Haddock. Absolutely.
Mr. Womack. In terms of looking down the road. This is hard
for people to imagine. What about vertical takeoff--in terms of
mobility, people moving around?
We are about to see, and in fact, we are seeing it today,
where drones are delivering someone's prescription or package
that they bought online. What about the ability to move people?
Are we thinking long term about those kinds of things?
That is generation after next kind of stuff.
Ms. Haddock. So I will take a point of personal privilege
and say that the American Society of Civil Engineers is asking
ourselves those questions right now, and we have invested
financially and we have invested our personnel resources in
developing a future world vision, one that is a virtual world
based on real world data, on real projections forward as to
what a future world might look like.
And we have looked at one that is an island, dealing with
water. We are building those out as we go. We will be rolling
the first one out this fall on what it looks like to live with
and in water.
Mr. Womack. I know this, that it is important that we deal
with today. I also think we have got to spend a little time in
thought looking out to the future as to what the long-term
needs are going to be.
But we do have the today needs, and that is where we are
back to. So I want to bring us back to the present. What is the
right mix of federal and state and local P3 involvement in
terms of the mix of leveraging precious resources?
And I want to come back to resources here in a minute, but
what is that right mix? Should we have formula dollars set
aside so that the whole country benefits with a slice off for
competitive stuff so that if a local community wanted to put
more skin in the game, then they would score, if you will, and
qualify?
Mr. Coes. At Smart Growth America, through our
Transportation for America campaign, we believe that you should
have a mixture, but we should have key priorities for each of
those buckets.
For example, the formula dollars, we believe, should be
dedicated for repair. After you have reached a certain level of
service, then you should be able to use those formula dollars
to do expansion and other innovative activities.
Also, we have seen what happens when you have competitive
grant programs which allow metropolitan areas, local cities,
who may be the State DOTs like the TIGER Program to have access
and actually allow major innovation.
So having an all of the above priority, but attach specific
priorities to each of those buckets is very essential to make
this work.
Mr. Womack. Dr. Geddes, I want to ask you a quick question
about reforms to the whole regulatory process. We have already
established, and it is pretty much without debate, that the
regulatory process in building infrastructure no matter what it
is, water and sewer, or roads and bridges, does add layers of
cost.
What reforms, if you can be kind of specific, two or three
things? What would be the top two or three things we could do
right now to help lower those costs and shorten that time frame
to go from, as we say in the military, flash to bang?
Dr. Geddes. Yes. So, again, I support this notion of one
federal decision where there is a lead agency that has
responsibility for shepherding that project through the
process, and then there are many different agencies that have
to be involved in permitting a big project, and that lead
agency would help it occur concurrently rather than
sequentially, which has drawn out the process, and also putting
a time limit. Either make a decision to permit the project or
not.
And I think the lead federal agency model, one federal
decision is one term that is being used, is a good way to do
it.
And then I understand just having a target, just saying
whatever the number of years is, two, three years, you know,
probably at most, but certain ten years to permit a project is
absurd, and it is really hurting the country.
I think I know the Senate has done some work on this. So I
would urge that.
But could I circle back to your earlier----
Mr. Womack. Absolutely.
Dr. Geddes.----comment about the federal role? Because it
is something that concerns me in my work on policy analysis in
infrastructure.
People forget who the owners of the infrastructure are.
Ownership matters. The federal government actually owns
relatively little infrastructure. The entire interstate highway
system is owned by the states. Cities own a ton of
infrastructure.
So they are the ones ultimately who have the responsibility
of doing the O&M, the operations and maintenance. I think the
federal role is changing more to facilitating state and local
government doing the best they can to take care of it, but also
using innovative, using the latest technology.
As we all know, the technology of infrastructure is
changing at breakneck speed. We need to encourage state and
local governments to adopt that technology more quickly, but
also make every dollar of funding that they have go as far as
possible, and that is a public-private partnership in my view
and why I totally encourage that.
And I think the federal government should do more to
encourage PPP use.
Mr. Womack. Mr. Tomer, before he began to answer that last
question of mine, I thought I saw a light bulb come on. Did you
have a comment that you wanted to make?
Mr. Tomer. Yes. I will try to be really quick.
I love transportation. It is my area I focus the most, but
we cannot forget these other sectors are there, too. So when
you talk about the right mix, you know, in particular this body
moved back on funds for local water infrastructure in the
1980s, right? Do we want to bring those back is a question.
You know, we are talking a lot about broadband today. You
know, Representative Khanna and Representative Smith represent
vastly different kinds of places in terms of their economic
fundamentals. Both mentioned broadband, right?
But what does that mean when typically the private sector
delivers that right now, but we know it is not reaching every
community?
So talking about that mix, it really depends which one you
are talking about, and I actually think, you know, to conclude
really quickly, I think Dr. Geddes said it well. Because the
ownership is state, local, and private, what are the incentives
for scalability that makes sense for the federal government?
What is that future competitiveness that you all care about
and how can you incentivize that as local action?
Those can be really good North Stars here.
Mr. Womack. My final question, and I know I have gone a
little bit over, but I want to come back to Ms. Haddock for
just a minute because she said something in her testimony that
I think kind of got lost on this audience today, and I want to
credit her for mentioning it.
It is not in your prepared remarks. You talked about a
rescission, a rescission that is going to happen beginning in
October of 2020, that last year the FAST Act, $7.5 billion.
Sometimes Congress can get its own way, can it not?
So I will give you just a few seconds to elaborate.
Ms. Haddock. So right now if no action is taken, there will
be a $7.6 billion annual loss to transportation funding for 10
years that will impact all 50 states. It will impact every DOT
throughout the nation.
And ASCE and many of our partners are specifically asking
that the Congress take action to eliminate the rescission, to
make sure that it is not rescinded and make sure that we do,
indeed, keep that funding in transportation.
I agree with my colleagues here, for the right projects,
for the right investments, but to keep that funding in place.
Do not allow that funding to go away.
Mr. Womack. Thank you. And thanks to the panel.
Mr. Chairman, I just want to congratulate you on having a
really good panel. You know, it is kind of nice to be able to
finally come into this meeting room and engage a panel where we
are not all at each other's throats and that there is pretty
much universal agreement on some of the larger issues that we
have.
And it must be bipartisan, and if we are going to be
successful in its outcome, it will have to be in a bipartisan
way.
And I thank you for the time this morning.
Mr. Yarmuth. The gentleman is perfectly welcome. Thank you
for the discussion.
I yield myself now 10 minutes for my questions.
And I will start by saying I am not going to debate the tax
cut either, but I do want to respond to many of my colleagues
who at every hearing mention the fact that we have not passed
the budget.
In fact, we do have a congressional budget in place. It was
the Bipartisan Budget Act of 2019, which established reasonable
discretionary limits and the usual controls on other spending
and revenues, and 65 of my Republican colleagues voted for it.
And we also have passed appropriations bills for 96 percent
of the total discretionary budget. So we certainly, I think,
have indicated to the public what our values are in the
majority.
I love where this discussion went. My stock speech when I
am speaking at home begins with my assessment that we are at a
very interesting juncture in our history where our past is
catching up with us and the future has gotten here faster than
we anticipated.
And in areas such as infrastructure and race relations,
immigration policy, our past is catching up with us, and on the
other hand, climate change is happening and having an impact
far sooner than we thought. Artificial intelligence is here far
sooner than we thought, and a lot of technological changes are
here before we thought they were.
Self-driving vehicles, I remember when I got here and
somebody mentioned a self-driving vehicle and do we need to
start thinking about policies for that, and they said, ``Oh,
that is 25 or 30 years away,'' and of course, it is already
here.
So I always say we have a real significant problem in
Congress because at our optimum efficiency, we move at 10 miles
an hour. I would argue that with Mitch McConnell, my Senator,
and in charge of the Senate it is two miles an hour, but
anyway, very slowly, and the world is moving at 100 miles an
hour.
So how do we make policy that can possibly accommodate the
pace of change? And I have often said we need futurists in
Congress so that we can start making policy or at least
discussing policy in a way that is done in the context of
knowing what is about to happen or having a sense of what is
likely to happen in the near future.
We generally make policy as if nothing is going to change,
and that is, I think, the danger of the way that a lot of
people look at infrastructure spending, and this panel, of
course, is fully aware of the changes that are impacting what
we do.
And I also use the example of high speed rail. My Vice
Chairman here talked about high speed rail, and there are a lot
of people who think we ought to be investing in it, but then we
have self-driving vehicles, which mean most likely in 20 years
we will have self-driving vehicles that can go 200 miles an
hour, in which case who is going to take a high speed train?
Because you can get there faster, just someone in your car and
taking off.
That does not mean we should not consider making
investments in high speed rail, but it also means that 30 years
from now it may look like the dumbest money we ever spent.
And I think about that and your comment, Ranking Member,
about vertical takeoffs. It is still science fiction, but I saw
a video the other day of somebody who is in a flying vehicle,
and who knows how long that will take to impact what we do.
So I am really interested, Ms. Haddock, in getting hold of
your projects, your forecasts, because I think that is
something that the Congress could well utilize.
I do not have too many questions because you all have been
sitting here a long time, and several people have asked the
ones I wanted to talk to.
But, Mr. Coes, you referenced Louisville in your testimony,
and one of the things that is very special about that project,
in Louisville and the southwestern part of the community, which
for my entire life, which is now getting up there pretty long,
basically isolated a huge portion of the population in our
county from the rest of the community because it was virtually
impossible for them to conveniently get to downtown to share
all of the amenities that we share, to get to parks, to get to
and so forth.
That was one of the items that we mentioned in making the
case for the TIGER grant, which is facilitating this project,
that it was not just economics. This was very much a cultural
and sociological impact that it was going to have.
And I think about things like the health impact of
transportation. I hear constantly from people who have such a
hard time getting to their doctor, to the hospital, to get
their checkups, to get their dialysis, whatever it happens to
be.
And then on the job and employment front, however many
people have the very, very difficult time taking a job because
of transportation.
And we have a decent bus system in my community, but not a
great one, and I was astounded to hear the other day about
somebody who is an ex-felon being reintroduced into society,
very much employable, has a job, working his way back, and he
takes a bus two and a half hours every day to and from. Five
hours he spends on a bus, and he lives 20 miles from his place
of employment.
So there are so many aspects of this subject that I am glad
we are talking about it.
I just want a quick question, and I am going to yield some
time to the Vice Chairman.
When we are talking about kind of the rehabilitation aspect
of infrastructure, so we have 600,000 bridges that are in need
of repair and $2 trillion to catch up, how some of your revenue
suggestions apply to those things. I mean, it is hard to put a
toll on a bridge that has been there for 50 years and you are
fixing.
What are the options for providing that kind of funding?
Dr. Geddes. Yes, Congressman. So that is one of the main
reasons why I stressed the asset recycling and value capture
aspects in my testimony, because, you know, it is very
difficult politically to toll a currently free facility. It is
possible if you add a lane, if you add capacity, to have tolled
new capacity, but existing capacity, it is very hard.
But, of course, these bridges are old, and they need a lot
of operation and maintenance. So if you structure an asset
recycling program that focuses on generating value from the
existing infrastructure, which has been managed in a certain
way for decades, and where new techniques, whether it is lease;
it does not have to be a sale. It could be selling an old
parking garage or a parking lot.
Just doing the inventory, there is kind of a famous
example. New York city did an audit and discovered that the
city owned 1,100 vacant lots in the city. Now, that is just
inefficient use of the asset.
And then, of course, the next step is to figure out what is
the best use, right? So an asset recycling program includes all
of those things. The key word, recycling, means taking those
resources, keeping them within that governmental entity, but
putting them back into the infrastructure that needs it the
most.
So if it is an old bridge that the ASCE tells us is in
trouble, get that bridge properly operated and maintained.
So my proposals really are about generating as much
funding, squeezing as much funding as you can out of existing
infrastructure with new and innovative management techniques.
Mr. Yarmuth. I thank you for that, and I yield the rest of
my time to the Vice Chairman.
Mr. Moulton. Thank you, Mr. Chairman.
Mr. Coes, I just wanted to go back to you quickly. ``Foot
Traffic Ahead, 2019'' was released in June that demonstrates a
link between socially equitable communities, walkability of
neighborhoods, successful, affordable transit options.
Denver has invested $5.5 billion in light rail, commuter
rail, bus traffic, transit. They are ranked as the second most
walkable metro area in the U.S.
Boston has an 83 percent real estate premium, generally,
and a 74 percent GDP per capita premium over the lowest ranked
city in the foot traffic index.
So what are these links among accessibility of transit,
walkability, and economic opportunity development?
Mr. Coes. Thank you for that question, Congressman.
Here is the reality we have learned in the real estate
industry. We are in a fierce global competition for talent.
Talent has a specific location it wants to be in today, and it
is an environment that allows them to interact with each other,
to be able to actually walk down H Street and actually have
drinks during H Street Festival while actually coming up with
the idea and not have to do it with a car.
Maybe a car is involved. Unfortunately, in America, we have
very few locations both in our rural areas and also our major
urban cores that actually meet that market demand, and what we
are seeing both here in the United States but across the globe,
that those who are higher educated, those who are looking for
opportunity are gravitating to cities that have these options.
Unfortunately, in your case, in Boston metropolitan, it is
that because we have few places, the rents of those places are
going so high, they cannot keep up with the market demand and
are actually pushing the residents who have been there for so
long, the businesses that have been there so long out into
environments that actually causes them to spend more money on
transportation, therefore creating a cycle of poverty that they
cannot get out of.
Mr. Moulton. So a great example is, and when this has
happened in Manhattan, a lot of people moved to Brooklyn. The
City of Lynn I represent is exactly the same distance by train
from downtown Boston as Brooklyn is from downtown Manhattan,
but there is one train an hour. You can imagine the seven-
train.
Mr. Coes. Right.
Mr. Moulton. If just one of the lines to Brooklyn ran once
an hour. So that does not work so well.
And, incidentally, Mr. Chairman, this kind of gets at the
issue, the hypothetical issue you raised with high speed rail.
High speed rail has a whole bunch of benefits well beyond
just the fact that you can get from Place A to Place B. It
influences the kinds of communities that develop around it, and
it has major capacity advantages over cars, even if they could
go 200 miles per hour, which would be a little challenging,
given that the interstate system was designed for 65.
But this is why, I think, that we have to get into more of
this, and I am running out of time, but, Dr. Geddes, I saw you
nodding your head there, too.
Anything to add on this point?
Dr. Geddes. Well, in general, and Congressman Yarmuth's
point is well about looking to the future, and I urge us to do
that in the strongest possible terms.
And just as an indication of, you know, what I think is the
future, I formed a 501(c)(3) nonprofit with a couple of
colleagues to do research on the hyperloop, right? People say,
``Oh, it is crazy,'' or whatever.
But the high speed rail is pushing a column of air in front
of this train. It is old technology. There are innovations
going on in this sector that are astounding and occurring much
faster than we think.
So if we are thinking ahead, I would urge Congress to put
more money into research on those sorts of technologies.
Mr. Moulton. I agree.
Dr. Geddes. I remember a couple of years ago people said,
``You are crazy.''
Mr. Moulton. I totally agree with you. I do think you
should talk to the Japanese about Maglev because they are a
little ahead of us.
Dr. Geddes. Okay. But you get my point.
Mr. Moulton. Yes, yes. I agree.
Dr. Geddes. We should leapfrog on that technology.
Mr. Yarmuth. I would love to yield time to the Ranking
Member.
Mr. Womack. I know this hearing is about to come to an end.
I meant to ask a question of Dr. Geddes earlier.
You talked very briefly about tax increment financing. Why
are we not seeing more TIF work?
And maybe there is around the country; certainly not in our
state, and the problem in our state is that we have a uniform
rate of taxation on property tax, and the first 25 mils or
whatever goes into the education pool. So the ability to bond
projects is limited by the remaining property tax.
So why do we not see more?
Dr. Geddes. That is a great question, Congressman.
To Mr. Moulton's point, I was at a meeting in Boston where
Boston has used different types. There are all of these flavors
of tax increment financing that I, frankly, do not fully
understand, but Boston communities have used it to increase
transit access in Boston in a very successful way.
Now, to your question, Congressmen, why have not other
communities? I think so much is education. It is just about
understanding a new delivery technique.
I love the state and local infrastructure asset owners that
I deal with all the time, but there is a traditional way of
delivering projects in the United States that involves tax
exempt municipal bonds. It involves what is called design-bid-
build bidding process that I do not have time to get into.
But I think a lot of it is just getting these ideas out
there, getting education, and then just putting the policies in
place that facilitate this.
I think tax increment financing could be used much more
extensively, has been used in Boston and other cities, and is
being used around the world to fund the infrastructure. So the
key is it is a funding technique.
So I am not sure I have a full answer for you.
Mr. Womack. Thank you.
Mr. Yarmuth. Well, I thank the Ranking Member for that
contribution.
And I want to remind all of the members, all three of us
who are here, that if we have any questions, we can submit them
in writing to the witnesses, and they would respond within
seven days. And with that, I want to thank the witnesses again.
It has been a very stimulating discussion and hearing, and I
thank you for your time and your wisdom.
And without objection, this hearing is adjourned.
[Whereupon, at 12:26 p.m., the Committee was adjourned.]
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