[Senate Hearing 113-748]
[From the U.S. Government Publishing Office]
S. Hrg. 113-748
MAP 21 REAUTHORIZATION: THE ECONOMIC IMPORTANCE OF MAINTAINING FEDERAL
INVESTMENT IN OUR TRANSPORTATION INFRASTRUCTURE
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HEARING
before the
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
FEBRUARY 12, 2014
__________
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COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
BARBARA BOXER, California, Chairman
THOMAS R. CARPER, Delaware DAVID VITTER, Louisiana
BENJAMIN L. CARDIN, Maryland JAMES M. INHOFE, Oklahoma
BERNARD SANDERS, Vermont JOHN BARRASSO, Wyoming
SHELDON WHITEHOUSE, Rhode Island JEFF SESSIONS, Alabama
TOM UDALL, New Mexico MIKE CRAPO, Idaho
JEFF MERKLEY, Oregon ROGER WICKER, Mississippi
KIRSTEN GILLIBRAND, New York JOHN BOOZMAN, Arkansas
CORY A. BOOKER, New Jersey DEB FISCHER, Nebraska
EDWARD J. MARKEY, Massachusetts
Bettina Poirier, Majority Staff Director
Zak Baig, Republican Staff Director
C O N T E N T S
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Page
FERUARY 12, 2014
OPENING STATEMENTS
Boxer, Hon. Barbara, U.S. Senator from the State of California... 1
Vitter, Hon. David, U.S. Senator from the State of Louisiana..... 3
Merkley, Hon. Jeff, U.S. Senator from the State of Oregon........ 4
Wicker, Hon. Roger, U.S. Senator from the State of Mississippi... 5
Whitehouse, Hon. Sheldon, U.S. Senator from the State of Rhode
Island......................................................... 5
Inhofe, Hon. James, U.S. Senator from the State of Oklahoma...... 6
Gillibrand, Hon. Kirsten, U.S. Senator from the State of New York 8
Fischer, Hon. Deb, U.S. Senator from the State of Nebraska....... 9
Cardin, Hon. Benjamin, U.S. Senator from the State of Maryland... 9
Sessions, Hon. Jeff, U.S. Senator from the State of Alabama...... 11
Barrasso, Hon. John, U.S. Senator from the State of Wyoming...... 12
WITNESSES
Donohue, Thomas J., President and CEO, U.S. Chamber of Commerce.. 13
Prepared statement........................................... 15
Response to an additional question from Senator Boxer........ 37
Responses to additional questions from:
Senator Vitter........................................... 38
Senator Inhofe........................................... 39
Senator Sessions......................................... 41
Trumka, Richard L., President, AFL-CIO........................... 44
Prepared statement........................................... 46
Response to an additional question from Senator Boxer........ 53
Responses to additional questions from:
Senator Inhofe........................................... 55
Senator Sessions......................................... 57
Hancock Hon. Mike, President, American Association of State
Highway and Transportation Officials; Secretary, Kentucky
Transportation Cabinet......................................... 60
Prepared statement........................................... 62
Responses to additional questions from Senator Boxer......... 78
Response to an additional question from Senator Vitter....... 80
Responses to additional questions from Senator Inhofe........ 81
Response to an additional question from Senator Wicker....... 83
Ruane, T. Peter, Ph.D., President and CEO, American Road and
Transportation Builders Association............................ 84
Prepared statement........................................... 86
Responses to additional questions from:
Senator Boxer............................................ 103
Senator Vitter........................................... 105
Senator Inhofe........................................... 108
Timmons, Jay, President and CEO, National Association of
Manufacturers.................................................. 115
Prepared statement........................................... 117
ADDITIONAL MATERIAL
Statement of PCA America's Cement Manufacturers.................. 135
MAP-21 REAUTHORIZATION: THE ECONOMIC IMPORTANCE OF MAINTAINING FEDERAL
INVESTMENT IN OUR TRANSPORTATION INFRASTRUCTURE
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WEDNESDAY, FEBRUARY 12, 2014
U.S. Senate,
Committee on Environment and Public Works,
Washington, DC.
The full committee met, pursuant to notice, at 10 a.m. in
room 406, Dirksen Senate Building, Hon. Barbara Boxer (chairman
of the full committee) presiding.
Present: Senators Boxer, Vitter, Cardin, Whitehouse,
Merkley, Gillibrand, Barrasso, Wicker, Boozman, Fischer.
OPENING STATEMENT OF HON. BARBARA BOXER,
U.S. SENATOR FROM THE STATE OF CALIFORNIA
Senator Boxer. Good morning, everybody.
I am so happy to see you all here. This is such an
important issue that we are discussing today. We are focusing
on maintaining Federal funding for transportation, maintaining
Federal funding. That is what is at stake here, for
transportation. Ensuring the long-term solvency of the Highway
Trust Fund and averting a major crisis later this year.
We will hear from our witnesses who are national leaders
representing businesses, States and workers who build, maintain
and utilize our transportation system.
I am so pleased to once again welcome Tom Donohue from the
U.S. Chamber and Richard Trumpka from the AFL-CIO. I always
feel when they are together we have a winning issue. They are
joined by Hon. Mike Hancock, Secretary of the Kentucky
Transportation Cabinet and current President of AASHTO; Dr.
Pete Ruane, President and CEO of American Roads and
Transportation Builders; and Jay Timmons, President and CEO of
the National Association of Manufacturers.
I want to say to all who are here that there will be
devastating impacts felt across our economy if the Highway
Trust Fund is allowed to run out of funds later this year. We
must not let that happen. Here are the sobering facts. CBO and
DOT estimate that the Highway Trust Fund may run out of funds
as early as September 2014, which would create cash-flow
problems for States during the critical summer construction
season. Due to the uncertainty leading up to that bleak
scenario, States are already beginning to develop contingency
plans to prepare for reductions in Federal transportation
funding, which includes cutting pending projects from their
current funding plans. This is terrible for businesses, for
workers and for our Nation.
According to Georgia's department of transportation, if
Federal funding is cut, ``We wouldn't be able to fund any new
projects.'` Officials from other States have made similar
statements and the effects are very negative, to say the least.
As States postpone putting construction contracts out to bid,
business will be more reluctant to invest, and that impact will
be felt throughout the entire economy.
Let me be clear. The pending Highway Trust Fund shortfall
must be addressed by an infusion of funds. Otherwise, CBO
estimates that obligations for new projects in 2015 would need
to be reduced to zero, zero. This would result in Federal
highway, highway safety and transit funding being cut by $50.8
billion in 2015 with almost 1.8 million jobs lost. Only old
projects could be funded. No more new projects.
Again, this means that States will be unable to obligate
any Federal funds for any new projects perhaps as early as this
summer. It is critical for our Nation to continue investing in
our aging infrastructure. Therefore, preserving the Trust Fund
needs to be our No. 1 priority in this committee and other
committees and in the Senate and the House. We must work
together to find a sweet spot for the dependable bipartisan
source of funding for the Highway Trust Fund. A strong
transportation system is vital to ensuring the economic
competitiveness of the United States of America. This requires
maintaining Federal investments in our transportation
infrastructure.
A report last year from the National Association of
Manufacturers, and I am so happy they are with us today, found
that 70 percent of U.S. manufacturers believe America's roads
are getting worse, and 67 percent believe that infrastructure
is important enough to American businesses that all options to
fund investments should be on the table. I thank NAM for that.
Roads and bridges are not Democratic, they are not
Republican. And I am so proud of the bipartisan support on our
committee, from my Ranking Member, Senator Vitter, to every
member on this committee. I have met with almost every one of
them. It is our intention to report out a bill, and I am hoping
for a five or 6 year bill.
I have begun discussions with Chairman Wyden and Ranking
Member Hatch on funding the Highway Trust Fund. They know they
have that responsibility. And I know we will all work with
them.
To all of our witnesses, tank you for being here and for
your advocacy for a strong transportation system. We need you
now more than ever. You have been with us through these battles
before, and we have won those battles because of our unity. So
whatever our differences may be in other areas, and we know we
have them, but we don't have them here. Being partners is
critical to our success.
With that, I would turn to my Ranking Member, Senator
Vitter.
OPENING STATEMENT OF THE HON. DAVID VITTER,
U.S. SENATOR FROM THE STATE OF LOUISIANA
Senator Vitter. Thank you, Madam Chair, and thanks to all
of our witnesses. Thanks for today's hearing, Madam Chairman.
It is very appropriate that as we hopefully are finalizing a
WRDA conference, our first big piece of infrastructure work on
this committee, and we are very hopeful about that, we
increasingly turn our attention to our next big infrastructure
work, which is the next Highway Bill. We are both excited to do
that and are both actively doing that.
Thanks to our witnesses. You represent a diverse group of
interests. But collectively, you represent a strong and common
voice on this issue.
Infrastructure is a critical component of our Nation's
economy and our quality of life. First class infrastructure is
fundamental to connect people and communities. It is a critical
building block for our economy. In 2011 alone, the U.S.
transportation system moved 17.6 billion tons of goods, valued
at almost $17 trillion. However, as the Chair suggested, just
last week CBO came out with their updated projections for the
Highway Trust Fund. That trust fund is accelerating toward
bankruptcy faster than anticipated. Action must be taken before
the end of the Fiscal Year to avoid what the chair described, a
nearly 100 percent drop in new Federal funds in Fiscal Year
2015. The economic impact of such a drop would resonate far
beyond the lack of direct investment into our infrastructure.
Inaction would drastically disrupt the project delivery supply
chain, the efficiency and cost of movement of our goods and our
overall competitiveness.
The Highway Trust Fund was intended to not only facilitate
the unique characteristics of funding transportation
infrastructure, but also to provide funding safeguards for the
highest priority projects. Putting such a structure on a sound
fiscal footing will restore the stability and certainty of the
trust fund that is so vital to economic growth.
I have to say, some believe that for some reason it is a
core conservative principle to adhere strictly to our current,
flawed mechanism in perpetuity and that is all there should
ever be to meet our infrastructure demands. I don't understand
that at all, and will be advocating for solutions that go
beyond that.
What I do understand is concerns about a net tax increase
for cash-strapped middle class families. And I will be seeking
a solution that fully addresses our Highway Trust Fund needs
while not imposing such a net tax increase.
When the trust fund structure was first established, it was
designed to build the interstate highway system, and it was
structured based on the simple principle that first you map out
and define a detailed plan. You come up with a cost to complete
that plan, and then you build a user-based financing structure
to complete that task. Such thinking not only produces a
certainty of a 13 year authorization bill, but it also
established good government accountability and trust from
system users.
However, that type of thinking is almost unrecognizable in
our transportation funding structure today. The actions of the
last 6 years represent a significant departure from the intent
of the Highway Trust Fund and have prolonged economic
uncertainty not only in the direct investment of our
infrastructure but also the type of long term investment that
drives economic development at home and makes us more
competitive abroad.
If we are going to be successful in restoring that type of
structure, we fundamentally have to put trust back in the
Highway Trust Fund. To me this means we can't keep adding
programs and eligibility to the trust fund that are narrowly
focused, that don't build or maintain infrastructure or do very
little to benefit those who pay into the system. It means the
trust fund needs to be even more transparent than before to
rebuild that trust. We need to be able to show where taxpayer
dollars are going and where future investments may or may not
be utilized on a project by project level.
And finally, we must rebuild that trust by continuing to
reduce the cost burden and impact of red tape and bureaucracy.
The Chair and I are hard at work putting significant reform
ideas together in a new bill that can rebuild that trust and
that can start the process and get the Finance Committee moving
as a full partner on the finance piece.
So we hope to be moving such a base bill through the
committee to encourage the Finance Committee to take it up and
address the finance piece as a full partner. So I very much
look forward to your testimony, very much look forward to that
work of rebuilding trust in the Trust Fund so that we can fully
finance our clear infrastructure needs. Thank you.
Senator Boxer. Senator Vitter, thank you. I think this
gives the signal that we are very much of one mind as how to
proceed, which is very important.
Here is the situation. We have several votes at 11:30. So I
am going to ask Members to keep their remarks to about 4
minutes, if you can, your opening remarks. And we will turn to
Senator Merkley.
OPENING STATEMENT OF HON. JEFF MERKLEY,
U.S. SENATOR FROM THE STATE OF OREGON
Senator Merkley. Thank you, Madam Chair.
I think this is a very important project, that we pursue
renewal of MAP-21. I know Oregon's Department of Transportation
is very nervous about the pending shortfall in the Highway
Trust Fund. If our States have to delay projects, that of
course results in much higher costs. It also results in a
direct impact on jobs within the State. We anticipate that we
would have a challenge, we would lose about 5,000 jobs in
Oregon if we don't succeed in this effort during 2015.
So I am very aware that America is spending only 2 percent
of its GDP on infrastructure. Europe is spending 5 percent,
China is spending 10 percent. The experience of going to
Beijing 10 years apart, saw Beijing go from bicycles to bullet
train in that time period.
Our 2 percent can't even repair the aging infrastructure we
have from World War II. We have to do more. Let's get it done.
It is terrific to have Chair and Ranking Member working
together to help take this project forward. It is extremely
important to our economy and to the infrastructure that will
fuel our future economy.
Senator Boxer. Senator, thank you for your support and our
comments.
We will turn to Senator Wicker.
OPENING STATEMENT OF HON. ROGER WICKER,
U.S. SENATOR FROM THE STATE OF MISSISSIPPI
Senator Wicker. Thank you, Madam Chair, and thank you,
Ranking Member Vitter, for holding this important hearing.
Bipartisanship is breaking out all over in the Congress. It
continues today and as we debate Federal transportation
reauthorization, I hope we can build on this success. Funding
transportation infrastructure is a combined Federal and State
responsibility. We need to do better, because the Nation
deserves better, as Senator Merkley said. We need to pass a
reauthorization that lasts longer than 2 years.
Earlier in this Congress, this committee held a hearing on
the implementation of the provisions of MAP-21. Most of these
provisions have yet to be enacted. State departments of
transportation need the certainty of a long-term
reauthorization to plain, maintain, build and expand.
That said, we should still proceed with caution. We need to
continue to let the States be the laboratories for best
practices. More than 30 States are considering or have
considered increasing revenues for transportation
infrastructure. Over a dozen of these States have committed and
passed these increases into law. We should allow and encourage
these experiments to continue. Let the States be the proving
ground for some of the more radical or innovative proposals
that have been brought forward. What may work in one State may
not work for all States.
There are other issues that need to be addressed. We need
to examine the root causes of our current situation. Over the
last two decades, the buying power of gas tax revenues has
slowly declined, not only as a result of increasing maintenance
and construction costs, but also as a result of increasing fuel
efficiency. We need to ensure that all users shoulder an
equitable burden for the wear and tear on our Nation's roads.
Finally, Madam Chair, we need to safeguard the integrity of
the gas tax as a user fee. We have an obligation to the users
who are paying the fee, an obligation to ensure the revenues
are going to their intended purpose; namely, building and
maintaining our Nation's roads and highways.
Thank you, Madam Chair.
Senator Boxer. Thank you so much, sir.
Now we will turn to Senator Whitehouse, followed by Senator
Inhofe.
OPENING STATEMENT OF HON. SHELDON WHITEHOUSE,
U.S. SENATOR FROM THE STATE OF RHODE ISLAND
Senator Whitehouse. Thank you, Chairman, for calling this
hearing. It has not been that long since we were able to pass
MAP-21 in an overwhelmingly bipartisan fashion. We did that
because we recognized the value of investing in our
transportation infrastructure, projects that put Americans to
work and ensure that our goods and services can get efficiently
to market.
That bipartisan view is reflected in today's hearing. That
bipartisan view is reflected in today's hearing, which brings
together groups that don't agree on many things, but they do
know that building roads and bridges can create quality jobs
across the Country and help our economy move forward.
That is nowhere more important than in my home State of
Rhode Island, which still suffers an unemployment rate of 9.1
percent. We have no shortage of transportation projects that
could put Rhode Islanders to work. The I-95 corridor runs
through our capital city and the Providence Viaduct there,
built in 1964, is showing its age. Its deck is badly
deteriorated, the steel girders are cracked, wood plans have
been installed to prevent concrete from falling off the viaduct
onto cars crossing it below. And similarly for the Amtrak
trains that go underneath it.
Happily, with the help of a TIGER grant and other Federal
funds, that project has broken ground, and a replacement bridge
on one way of the highway is under construction. But there is a
lot more work to do on the northbound lane, where Route 6 and
Route 10 converge with Highway 95 there. And that central
location in Providence is just one example of how Federal
transportation programs are necessary and can help put people
to work.
Less than 2 years ago, we put MAP-21 into place with some
important reforms. But the thing we were not able to get done
was to solve the problem of the diminishing and soon to be
vanishing Highway Trust Fund. So it is headed for zero, and
when it gets to zero, that is going to be a real disaster for
transportation and infrastructure. So I am particularly
interested in hearing from areas where our witnesses might find
common agreement as to how we can address the central issue for
the next reauthorization bill. I don't think just raising the
gas tax is going to help, as mileage increases, electric cars
emerge, and hybrid cars also cut into the value of the gas tax
as a source for highway infrastructure.
I thank the Chairman, I thank the Ranking Member, who I
understand is next door meeting with some constituents. I
appreciate the panel being here together, even in some unusual
pairings.
[Laughter.]
The Chair. Thank you. In my opening statement, I talked
about how we have already begun talks with Senators Wyden and
Hatch, because it is their purview to fund this. They are very,
I think they are excited with the challenge, not that it will
be easy. Nothing is easy.
Senator Inhofe.
OPENING STATEMENT OF HON. JAMES INHOFE,
U.S. SENATOR FROM THE STATE OF OKLAHOMA
Senator Inhofe. Thank you, Madam Chairman. I do have a long
and brilliant opening statement to give. But I will listen to
you and submit that and just for the record make a couple of
comments.
Senator Boxer. Without objection.
Senator Inhofe. There is one paragraph in here that I do
want to actually read. As I see it, we have four choices moving
forward, one based on CBO estimates, and if we don't find any
new revenue in the trust fund, we are looking at a 90 percent
cut in the program in less than 8 months. And some data
actually has that figure at 100 percent.
Second, we simply, this is something we will talk about
later on, transferring from the general fund. Third, raise
revenue. And four, in the absence of answering the first three,
before MAP-21 expires we once again rely on a series of short-
term extensions. This is something I want to avoid.
And I have to say, confession is good for the soul. Our
problem, and it seems like every year, and I have been involved
in these every year since I was on the T&K Committee in the
House many years ago. It is not so much with the Democrats but
with the Republicans. There is this passion for some
Republicans to get the conservative ratings and somehow when
something big on spending comes along, they use that as an
example. But that is the bad news.
The good news is, over on the House side, and I was
privileged to go over, you guys need to understand this, you
already knew this, I got all 33 of the House Republicans on the
T&I Committee in one room. This was right after we passed this
out of the Senate. I told them about the guys that were
demagoguing this on the floor. I said, I know a lot of you guys
are conservative. So I gave them my pitch as to the liberal
vote would be to vote for extensions, the extensions that we
had, nine extensions between the last two cost about 30 percent
off the top. That is not something that conservatives should be
doing. And I am not saying it was my influence there, but all
33 of them voted in favor of it and enthusiastically supported
it.
So I think we are making some headway there. Again, I look
at the trust fund, and you just can't tell me that maintaining
unused, vacant Federal properties at $25 million a year is more
important than reauthorizing a highway bill. There are a lot of
things that come out of the general fund. And I think we are
going to have to look at that. We may end up having to do that
anyway, like we did last time.
But if you read the Constitution, Article I, Section 8, it
says clearly that the main thing we are supposed to be doing
here is defense and infrastructure. So my case rests, we will
go after it.
[The prepared statement of Senator Inhofe follows:]
Statement of Hon. James M. Inhofe, U.S. Senator
from the State of California
Thank you chairman Boxer. And thank you to our panelists
for making the time to be here as well.
As we are all aware, CBO released their projections of the
Highway Trust Fund last week that show that the accounts are in
some real trouble. While this wasn't unexpected, it is
unacceptable that we continue to ignore the failures of the
White House and Congress to commit to consistently funding
multi-year transportation bills. We are not just talking about
the construction jobs the President mentions, we are talking
about the decision companies make when they are looking to
expand and, in many cases, relocate back to the US yet are
faced with an ill-equipped surface transportation network. As
we focus on failed Unemployment Insurance extensions, we should
be spending our time addressing the causes and not the symptoms
of our economic woes. Whether we are facing a series of short-
term extensions or long-term reauthorizations of MAP-21, I can
assure you I will not let the Federal highway program cease to
be the backbone of our economy as it has been for close to a
century.
As I see it, we have four choices moving forward: One,
based on CBO estimates, if we don't find any new revenue in the
trust fund, we are looking at a 90 percent cut in the program
in less than 8 months, and some data actually has that figure
at 100 percent. Two, we simply transfer more money from the
general fund. Three, we raise revenue. And four, in the absence
of answering the first 3 before MAP-21 expires, we once again
rely on a series of short-term extensions to keep the program
on life support.
Now as many of you have heard me say over the years,
dramatic cuts to the Highway program is not something I am
going to let happen. We've turned to the general fund in the
past and though it should be a last resort, it is ultimately
something we will have to return to without consensus on new
long-term, sustainable revenue. Realistically, the General Fund
is our only option in the short run as we're looking at a
Highway Trust Fund that is going to have difficulty meeting its
obligations sometime before the end of this fiscal year.
Looking forward, if we want to do a 6 year bill like we should,
CBO estimates we'll need $100 billion, or around $16.6 million
a year in new revenue or general fund transfers. Raising
revenue for the Highway Trust Fund should be our first focus,
but the reality is that it's going to have to come from the
general fund in the short term and you can't tell me that
maintaining unused or vacant Federal properties at $25 million
per year is more important than reauthorizing the highway bill
which could provide jobs that Americans desperately need.
Finally, I do not believe that short-term extensions are the
answer. Our states, industries, and economy need long-term
authorizations that ensure funding and allow for the planning
of big, long-term projects of regional and national importance.
I have often said the conservative position is to prevent short
term extensions, because as history showed us after 9
extensions between SAFETEA-LU and MAP-21, we lose 30 percent of
the Highway Trust Fund's resources when we fail to achieve
longer term funding bills. I believe we can do better.
Senator Boxer. You always make a very good case. I just
want to point out that in addition to your talking to the Tea
Party members of there, I had tea, or coffee with quite a few
of them. I enjoyed it, actually, and we did get tremendous
support. Remember, Senators Wyden and Hatch are going to decide
how this is paid for over there in that committee.
Senator Gillibrand.
OPENING STATEMENT OF HON. KIRSTEN GILLIBRAND,
U.S. SENATOR FROM THE STATE OF NEW YORK
Senator Gillibrand. Thank you, Madam Chair. I can't tell
you how grateful I am that you have pulled together this
distinguished panel of witnesses to discuss the importance of
investing in our Nation's infrastructure and transportation
systems.
This is an issue, obviously, that unites both labor and
business. Because the United States cannot maintain our
competitive global edge without a strong network of roads,
bridges and rails to move people and products safety and
efficiently forward. It is as simple as that, but with
deadlines looming to reauthorize MAP-21, and new funding to
shore up the Highway Trust Fund, we run the risk of doing real
damage to our economy if Congress fails to act. There will be
serious consequences for each of our States, for businesses
both large and small, as well as for working families who
depend on our transportation networks just to get to school, to
get to work, to get home safely and reliably.
We all know that the Highway Trust Fund is projected to
become insolvent by the end of the summer. The effect would
have severe impacts in my State of New York. New York has 628
Federal aid highway projects scheduled to begin in 2015 which
requires approximately $2 billion worth of funding. Forty
percent of these projects are on bridges that are in need of
construction or repair. Without the new funding from the
Highway Trust Fund to start these projects next year, New York
State would have to begin restricting the use of roads and
bridges that are no longer safe, or can no longer handle the
capacity for which they were originally designed. This would
result in detours, delays, problems with getting things that
need to be brought into our commerce. It means more time and
money lost for businesses and families who are just struggling
to make it in this tough economy.
New York State is by no means alone. This will hurt every
single one of our States and ripple through our whole
transportation system. So we really can't afford the delays by
Congress. We really have to make sure that Congress acts now.
We risk falling behind other countries that are making these
investments, sending businesses and jobs overseas instead of
bringing them here and keeping them here where they belong.
So the long term consequences of inaction, in my view, are
extremely costly. Thank you, Madam Chairwoman, for holding the
hearing, and I look forward to the testimony of the witnesses.
Senator Boxer. Thank you so much, Senator.
Now we turn to Senator Fischer.
OPENING STATEMENT OF HON. DEB FISCHER,
U.S. SENATOR FROM THE STATE OF NEBRASKA
Senator Fischer. Thank you, Madam Chair and Ranking Member
Vitter, for holding this hearing. Thank you to our panelists
who came today as well.
There is no doubt that our roads and bridges are essential
to the economic health of our Nation. In Nebraska, our
agricultural industry is especially reliant on an efficient
transportation system to move goods from farm to market.
Investment in infrastructure is the key to expanding and
strengthening commerce and promoting opportunity for this
business growth.
With the Highway Trust Fund again on the brink of
insolvency, it is clear that it is time for Congress to put
infrastructure investment back on a sustainable course. I
believe that a limited government should focus its resources on
meeting its core duties. Infrastructure, including highway
maintenance and construction, is one of those important
responsibilities.
As we work on the next highway reauthorization bill, I am
hopeful that this committee will continue to work toward policy
reforms that will ensure that the Federal dollars we are
investing are devoted to tasks that truly add value to the
projects and are not wasted on piling up paperwork that only
serves to fulfill bureaucratic requirements.
While MAP-21 made some needed improvements to accelerate
project delivery, there is still much work to be done. I look
forward to the hearing today and again, thank you. Thank you,
Madam Chair.
Senator Boxer. Thank you, Senator Fischer.
We turn to Senator Cardin.
OPENING STATEMENT OF HON. BENJAMIN CARDIN,
U.S. SENATOR FROM THE STATE OF MARYLAND
Senator Cardin. Madam Chair, thank you for conducting this
hearing. We have a very distinguished panel before us.
It is always a pleasure, I remember last time we had Mr.
Donohue and Mr. Trumpka together on a similar bill here. So it
is nice to see the entire panel together, but labor and
business recognizing the importance of a long-term surface
transportation reauthorization. I want to stress that, Madam
Chair. I think it is critically important that we do a long-
term surface transportation reauthorization, to give
predictability to our transportation program in this Country.
You can't plan transportation needs on a 1-year or 2-year
basis. You have to have at least a five or 6 year
reauthorization bill in order to do the types of modernized
transportation needs that we have in this Country.
As many of the Members of this committee have already
pointed out, and as our panel will point out, this is about
jobs, it will create for our economy. Not only the direct jobs
related to the construction of our transportation needs, but
also establishing the way in which we can attract the type of
economic activities in our community that modern transportation
provides.
It is also important for livability. It took me about 2
hours coming in this morning from Baltimore. That is not
unusual. The traffic around Baltimore and traffic around
Washington, every care we can get off the road into transit,
believe me, helps everyone, not just the person who has a much
nicer experience being able to get to work, but also allowing
the commerce of our highways being able to move more
efficiently, with less cars on the road.
So all that is critically important. I can put a plug in
right now, Madam Chair, we have three major, maybe four major
transit projects in Maryland we would like to get funded.
Obviously, without having long-term reauthorization it is hard
to see those programs move forward. I can tell you, they are
critically important to our national economy, to the Federal
Government because of the Federal work force, but also
critically important for all of our communities.
It is also a matter of our environment, and we have heard
that many times before, in modernizing our transportation
system we also provide a much more efficient way to deal with
our energy needs and can be friendlier toward our environment.
So why aren't we doing this? What is the hurdle? We have to
make the tough decision. The tough decision has to be made in
conjunction with our colleagues on the Senate Finance
Committee, and all the members, I happen to serve on both
committees. But we need to have the revenue necessary to
support a long-term surface transportation reauthorization. And
we have to recognize the realities that the current revenue
flow into the transportation trust fund is inadequate because
it is based upon the gasoline tax. And the gasoline tax, we
have been very effective in bringing down the volume, in regard
to use of gasoline and more efficient engines, alternative
ways.
So we need to look at ways we can have an adequate source.
I would hope we would be open to things such as using carbon
fees or other ways to get the revenue necessary. I know that
transportation is a bipartisan issue. Senator Inhofe has been
one of the great leaders on moving forward on infrastructure.
Senator Vitter also strongly supports this. So let's also try
to find a way that we can get the revenues that are adequate,
so that we can have the type of transportation reauthorization
that is befitting the record of this committee and befitting
our Country.
Senator Boxer. Senator, thank you. You raise a good point,
a few of our members do sit on Finance, which is going to be
extremely helpful working with Senators Wyden and Hatch, who
both have expressed interest in working with all of us.
So now we are going to turn to Senator Sessions. And I want
to remind everyone we have four votes, I believe it is four
votes, at 11:30.
OPENING STATEMENT OF HON. JEFF SESSIONS,
U.S. SENATOR FROM THE STATE OF ALABAMA
Senator Sessions. Madam Chair, thank you for the hearing.
It is important. Our infrastructure situation is facing a
financial challenge in the future, and we are all worried about
it. I believe it represents a valid, legitimate expenditure of
Federal dollars. A lot of things we do around here are not
valid and legitimate Federal interest. But I think certain
infrastructure projects certainly are.
We had the Director of Office of Management and Budget
testify before the Budget Committee yesterday. Just for
example, today, he testified, that last year interest on the
debt that we pay out of our revenue that comes in was about
$230 billion. He projected last year at the end of 10 years
that would rise to $830 billion. This year he says in 10 years
from today that annual interest payments will be $890 billion
in 2024. This is a stunning diversion of money from productive
use to an unproductive use. And the result, and a big part of
the problem is the huge deficits we have been running up in the
last few years. We have almost doubled the deficit in a few
years. We will have doubled the deficit since 2007.
So I know everybody wants to spend money. And I know you
all have projects you want to spend. But Mr. Elmendorf told us
that we are on an unsustainable path. You will hear that
deficits are going down. They will go down for the next 2
years. But after that, they start an uncontrolled, steady,
increase every year, and the deficit in the tenth year will be
a trillion dollars, again.
So we are in a real difficult place. I just would say to
you, everybody comes before us with good projects they want to
spend money on. I would say to you, those who believe in
highway and infrastructure should never forget how you were
taken to the cleaners in the Stimulus Bill. We spent $840
billion on the Stimulus Bill. Only 40 of it went to roads and
bridges. It went to every kind of social program. And Mr.
Elmendorf told us when it passed that you will see an increase
in GDP in the short run, but over 10 years, carrying another
trillion dollars in debt will actually reduce GDP over 10
years.
So I just would say to you, colleagues, and to the
witnesses today, we have a big challenge before us. If we don't
watch it, we can put us in a position where we have another
financial crisis and Mr. Elmendorf warned us that could happen.
We are in a danger area, our debt situation is in the red zone.
So Madam Chair, the bill we passed last year, I think we stayed
within reasonable limits in the budget. I know you tried to do
that, and Senator Vitter worked hard on it, Senator Inhofe. And
we were able to maintain a level of funding at minimal level we
thought was necessary.
So I just would say, that is going to be an even bigger
challenge this year. I look forward to working with you.
Senator Boxer. Senator, same here. I happened to be here
when we did balance the budget. And I think we can it again if
we are smart about it. But I think the important thing about
highways is we have that self-sustaining trust fund, which is
so critical. I have always supported that. That is operational,
we spend what we take in. We have to be smart about it, I agree
with you. Of course we have long-term problems we have to deal
with.
So it is my pleasure now to call on the ranking member of
the subcommittee that is going to work so hard on this, Senator
Barrasso.
OPENING STATEMENT OF HON. JOHN BARRASSO,
U.S. SENATOR FROM THE STATE OF WYOMING
Senator Barrasso. Thank you very much, Madam Chairman and
Ranking Member Vitter, for holding the hearing. I appreciate
and share your commitment to ensure that the Highway Bill
program continues. I also want to thank our panel for being
here today to testify.
When we can get the business and labor communities at the
same table, I think that sends a very strong message to all
Members of Congress and both parties that this program must
continue. The Highway Reauthorization is truly, to me, a jobs
bill. We need more red, white and blue jobs in States like
Wyoming, California, Louisiana and all across the Country. I
think setting up roadblocks on construction projects with
excessive red tape doesn't really create meaningful jobs that
we need all around America.
For our State departments of transportation and for
contractors, the highway program is already complicated enough.
We need a program that cuts down on burdensome paperwork and
puts people back to work. The Highway Trust Fund needs a
solution that is reliable and responsible.
The question before us is how do we accomplish this in a
fiscally responsible manner. In order to meet the highway
system's national needs, rural States must have flexibility to
use Federal dollars that serve the national interests. We need
to protect the taxpayer and ensure our States can continue to
execute their transportation plans.
Wyoming, like many of our other rural States, is a bridge
State. It is critical that we maintain our Nation's bridge
States that move the flow of commerce across America. So Madam
Chairman, I hope this committee will hold more hearings on the
implementation of MAP-21, and as ranking member of the
Transportation and Infrastructure Subcommittee, I look forward
to bringing the rural western perspective as we write the next
reauthorization bill.
Thank you, Madam Chairman, Ranking Member Vitter, for your
leadership in holding the hearings.
Senator Boxer. Thank you, and thank you for your leadership
as well.
Now it is your time, so let's get right to it. We are very,
very pleased with this panel and we call on Tom Donohue to
begin, from the Chamber of Commerce, President and CEO.
STATEMENT OF THOMAS J. DONOHUE, PRESIDENT
AND CEO, U.S. CHAMBER OF COMMERCE
Mr. Donohue. Thank you very much, Chairman Boxer, Ranking
Member Vitter and distinguished members. We appreciate that so
many are here.
As many of you said this morning, reauthorization of MAP-21
promises to be a difficult fight. But it doesn't have to be. In
fact, there is a broad consensus on a number of fundamental
principles. We all agree that our infrastructure system is a
critical national asset, that it drive growth, jobs, safety,
mobility, trade and enhanced global competitiveness. We all
agree that we are running out of money to fund the system. We
all agree that the Federal Government must take a leading role
in making sure our infrastructure system contributes to a
strong economy.
We all agree we need a predictable, stable and growing
source of revenue for today, an immediate funding solution for
tomorrow and in the long term, we need an expanded and new
system. When you look at the big picture, the simplest, most
straightforward and most effective way to generate enough
revenue is by increasing Federal gasoline and diesel taxes.
Remember, it is 19 years or 20 years since we increased the
Federal diesel tax. The gas tax, and this is what I was going
to say, has not been increased since 1993. Cars are more fuel-
efficient, trucks are much more fuel-efficient. I know
something about that, you will remember. People are driving
less and inflation has eaten into purchasing power.
As a result, the Highway Trust Fund is simply going
bankrupt. We are already borrowing billions of dollars from the
general fund. Next year there will be a $13 billion cash
shortfall and by 2020, it could be as much as $100 billion.
Even here, that is a lot of money.
A moderate increase in the gas tax phased in over time
would provide the necessary funding, preserve the important
user pays principle and provided needed stability. How do we do
that? First, let's start by having some courage and showing
some leadership. For once, let's do what is right, not what it
is politically expedient.
Second, let's educate the public and your fellow lawmakers.
Polls show opposition to gas tax and increases are
significantly overblown. A San Jose University researcher
recently found that 58 percent of the public would support a
gas tax increase if they knew where it was going and how it was
going to be spent and it was going to be applied to building
roads and bridges and transit systems. Voters want to know
where the money is going and that it is not going to be wasted.
Far too many people are unaware of the important reforms
that eliminated earmarks and pork barrel spending long
associated with infrastructure funding. Let me say
parenthetically, occasionally it helped get a vote. But with
that not here, we are going to have some really good arguments.
So let's also be clear, well, I often thought after the
committee decides what all of the issues they are going to
fund, then the members ought to be able to pick one out, you
know, to go home. But let's get into that another day.
Let's also be clear about the consequences of decreasing
these investments. It means higher costs for goods, more
congestion, and increased accidents as well as reduced mobility
and reduced competitiveness. Business is absolutely committed
to aggressively pursuing this education effort.
And third, let's get busy building political support. On
this panel you have the combined support of business, labor,
construction, shippers, regulators, and in addition, truckers.
Yesterday I had a meeting with the leaders of the American
Trucking Association and the leaders of the AAA. They would
significantly support a modest and thoughtful increase in the
gasoline tax. Add that to the people who are here, this is
getting to be a rather supportive group.
It is interesting to note that last year six States, three
with Republican Governors and three with Democratic Governors,
enacted bills to increase their overall State fuel taxes. The
sky didn't fall and their economies have not collapsed. Both
Republican and Democratic Presidents have approved modest gas
tax increases, including Ronald Reagan. So it can be done.
Increasing the gas tax and fuel tax is the right answer. It is
tough, but it is doable.
Now, let's keep in mind that public money is only part of
this equation. We must increase private investments as well.
The private sector is prepared to pump as much as $250 billion
into public-private partnerships, or P3s, if only certain
barriers would be removed. We also must continue to
aggressively root out waste in the system, which members
indicated is underway, much of it caused by permitting delays
and obstacles, as well as to make sure funds are spent on
genuine priorities. Long term, the Chamber is willing to
entertain different proposals for new and additional public
funding mechanisms. However, currently, we don't see any way to
support any proposal that eliminates the Federal role,
undermines the user pay principle or unfairly singles out
specific industries to foot the bill.
Very quickly, a couple of quick thoughts in conclusion. We
know that won't work. Scaling back or eliminating a dedicated
source of Federal funding means greater congestion, higher
transportation costs, more accidents and poorly maintained
roads. If we give up on the Highway Trust Fund and rely on the
general fund, we will never be able to execute long-term
capital projects. We would have to cut other programs and
engage in more deficit spending, and we would have to debate
funding every single year.
So I believe, Madam Chairman, devolving responsibility to
the States means we will lose our national system. None of
these approaches supports a growing sustainable source of
funding. We need to pass a long-term authorization and the
people at this table are ready to help you. Thank you very
much.
[The prepared statement of Mr. Donohue follows:]
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Senator Boxer. We greatly appreciate that. And it is my
honor to introduce Mr. Richard Trumka, President of the AFL-
CIO.
STATEMENT OF RICHARD L. TRUMKA, PRESIDENT, AFL-CIO
Mr. Trumka. Thank you, Chairman Boxer and Ranking Member
Vitter, for having us appear before your committee today.
Three years ago, Tom and I appeared before this committee
asking for reauthorization of the Surface Transportation Bill.
And since then, he and I have spent more time than either one
of us would like to admit trying to get this done. While we are
not quite ready to schedule vacations together yet, we really
are willing to come together and anxious to come together to
get this important issue solved for the good of the Country.
Because reauthorization of the Surface Transportation Bill
has been the most important jobs legislation that Congress
considers. It is a very, very big priority for us. While the
economy has improved, job creation remains sluggish. The
construction sector alone is down 1.6 million jobs from pre-
recession levels. So we not only need jobs, but good jobs. It
is estimated that each billion dollars of Federal investment in
transportation creates 35,000 well-paying jobs, the type of
career jobs that can support a family, a child's education, a
secure retirement and a middle class life. These investments
not only create jobs, but spur economic growth, ensure our
Country's long-term economic global competitiveness, and
improve the quality of life of our citizens.
For those in Congress still pushing an austerity agenda
when it comes to infrastructure, let me just say this. If your
house has a leaky roof, not fixing it won't save you any money.
Like the leaky roof, delaying needed infrastructure investments
will only cost us more in the long run, not less.
I recently traveled to China. I was stunned at the speed at
which our largest competitor is progressing. China has been
investing heavily in its infrastructure and the results are
pretty dramatic. During my trip to Shanghai, I visited the
Yangshan deepwater port, the world's largest and busiest
container shipping port. The port, like the high speed trains
that took me quickly and efficiently between China's cities, is
a key investment in China's efforts to upgrade its
infrastructure. It helps them keep up with the Country's growth
of exports.
To get to the port, I traveled on a six-lane bridge that is
20 miles long, connecting Shanghai to the islands where the
port is located. The bridge was completed in two and a half
years, 20 miles of six-lane bridge over the China Sea to an
island in two and a half years. And it employed literally
thousands, thousands of workers.
Prior to the project, nothing was there but a sleepy
fishing village with some islands off in the distance. The
first phase of the project opened in 2004, and by 2013, China
had accomplished its goal of having the world's largest port.
You might say the same thing about high speed rail. We both
agreed that we would do high speed rail a few years ago. Right
now the U.S. has not one single mile of high speed rail. And
the Chinese move more people than our entire domestic airline
industry by high speed rail right now.
So America can do it. We can do it, and we can do it
better.
Now, I didn't come here today to rehash all the data
regarding our Nation's infrastructure needs. Quite frankly, the
facts have been reported. They have been studied and they have
been discussed to death. The conclusions are always the same:
infrastructure investments are vital to job creation, economic
growth and global competitiveness. What remains to be
determined is whether that information will be acted on and
what kind of Country we will leave to our children and our
grandchildren.
The Highway Trust Fund is at a crossroads. Failure to act
will mean our transportation system will decay further.
Construction workers will stay on the bench. Supply chain and
transit workers will lack steady work and our economic and
global competitiveness will be diminished.
Now, many funding ideas have been proposed, but few of them
have been acted on. Other proposals have limited application.
That leaves the fuel tax or some variation of it as the main
source of funding. Raising the revenue will not be easy,
regardless of where it comes from.
But to be blunt, we can't afford to bury our heads in the
sand. A bridge that is deficient today will not be any better
tomorrow. Congress must come together to enact a robust and a
long-term authorization. If business and labor can come before
you united on this issue, and we are united on this issue,
despite our sharp disagreements on a variety of other matters,
I think that should tell everybody something and tell it very
loudly.
We need to be the America that can, not the America that
can't. We are ready to help in a bipartisan way to get that
done because it is so absolutely essential for the well-being
of our Country and its economy.
Thank you very much, and we look forward to your questions.
[The prepared statement of Mr. Trumka follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Boxer. Thank you very much, Mr. Trumka.
Our next speaker, I want to say congratulations, is the new
President of the American Association of State Highway and
Transportation Officials. He is also the Secretary of the
Kentucky Transportation Cabinet. We are very pleased to meet
you, Mr. Hancock.
STATEMENT OF HON. MIKE HANCOCK, PRESIDENT, AMERICAN ASSOCIATION
OF STATE HIGHWAY AND TRANSPORTATION OFFICIALS; SECRETARY,
KENTUCKY TRANSPORTATION CABINET
Mr. Hancock. Good morning, Chairman Boxer, Ranking Member
Vitter and distinguished members of the committee.
Thank you for the opportunity on behalf of AASHTO and the
State DOTs to share our views on the importance of robust
Federal investment in surface transportation, the potential
near-term impacts of the impending cash shortfall in the
Highway Trust Fund and the longer-term impacts associated with
uncertainty and instability of the Highway Trust Fund. I will
have to say I am very encouraged by the remarks I have heard
this morning.
I would like to share two points with you. First, the
threat to the States, the construction industry and the overall
economy is real. It is even closer than originally estimated.
We could face serious economic disruptions as early as this
summer if USDOT delays reimbursements to the States for active
projects already underway.
Second, unless Congress acts to either increase the Highway
Trust Fund revenues or provides additional general fund
support, the States will be unable to obligate any new Federal
funds in Fiscal Year 2015. In both cases there will be
immediate and direct impacts to the States' economies with lost
jobs and permanently shuttered businesses. And there will be
substantial additional economic, social and environmental costs
associated with canceled or delayed projects.
If Congress does not act, the States, even with local and
private partners, simply cannot generate sufficient funds to
fill the infrastructure funding gap.
The Federal Highway Program apportions about $40 billion a
year to the State DOTs for roads and bridges. However, actual
Federal dollars are not provided up front, but rather when the
work is completed and the States submits a request for
reimbursement. Reimbursements to the States are made daily. On
January 15th, USDOT Secretary Fox announced that the Highway
Trust Fund's highway account is likely to run out of money in
August. To prevent insolvency, FHWA may stop reimbursing States
on a daily basis and begin reimbursing once a week, once every
2 weeks or even once a month. A similar slowdown in
reimbursements happened in 2008, forcing the States to delay
payments to contractors. While Congress took care of the issue
5 years ago with the general fund transfer, States are
concerned about the impact of the same situation happening
again as early as this summer.
If a similar scenario happens this year, the contractors,
who many rely on prompt payments from the State, may be unable
to pay their employees, subcontractors and suppliers. For some
construction businesses and suppliers, which survived the
recession but are still operating on the slimmest of margins,
this could simply be the last straw.
When AASHTO testified before this committee last September,
we thought the Highway Trust Fund would stay solvent through
the end of Fiscal Year 2014. But it now appears that Congress
will have to act before the August congressional recess to
ensure that the Highway Trust Fund will have enough money to
reimburse the States for past commitments.
As Congress considers ways to address the short-term crisis
of not being able to pay for projects that are already
committed, it should also consider a long-term solution that
keeps the Highway Trust Fund solvent well into the future.
Without a long-term solution, States may not receive any
additional Federal highway and transit funding in Fiscal Year
2015. If new Federal highway funding is not available or
Federal funding is not available in 2015, much-needed highway
and transit projects in virtually every community and every
congressional district will either be delayed or canceled
outright. These are projects that underpin economic development
and improve the quality of life. Cutbacks on contract lettings
will mean missed opportunities to pare down the backlog of
investment needs, causing a negative domino effect on the
construction industry employment, exactly at a time when the
industry is beginning to rebound after being one of the hardest
hit segments in the recent recession.
There is ample evidence, including what you have heard
today, that shows that infrastructure investment is critical
for long-term economic growth, increased productivity,
employment, household income, exports and overall quality of
life. Congress can address the long-term solvency of the
Highway Trust Fund by substantially reducing spending for
surface transportation or by boosting revenues or by some
combination of the two. We and others have developed a long
list of potential revenue options.
We believe that at a minimum, we need an approach that will
allow us to sustain MAP-21 investments levels as adjusted for
inflation. We believe it is possible to reach this level
without placing an unreasonable financial burden on the
traveling public. Without action, there will be devastating
economic impacts from the virtual elimination of the Federal
surface transportation funding in 2015, and there will be
further funding reductions in the years beyond. Therefore, we
believe that the only solution is to find and implement a
viable set of revenue solutions that will prevent this summer's
highway account cash shortfall and ensure the long-term
solvency of the Highway Trust Fund.
AASHTO looks forward to working with you to address this
critical situation and we very much appreciate the opportunity
to testify before you today and look forward to your questions.
Thank you.
[The prepared statement of Mr. Hancock follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Boxer. Thank you so much.
Now it is my pleasure to introduce Dr. T. Peter Ruane,
President and CEO, American Road and Transportation Builders
Association and a key ally of ours as we worked through the
last highway bill.
STATEMENT OF T. PETER RUANE, PH.D., PRESIDENT AND CEO, AMERICAN
ROAD AND TRANSPORTATION BUILDERS ASSOCIATION
Mr. Ruane. Thank you, Madam Chairman. Chairman Boxer,
Senator Vitter, thank you for inviting the ARTBA again to
participate in this hearing. I want to also thank you at this
point for our leadership on MAP-21 as well as the current WRDA
legislation.
One number alone provides ample evidence of the value of
the Federal Surface Transportation Program. Today trucks carry
freight worth more than $11 trillion over the Nation's roads
every year. And more than three quarters of that truck travel
occurs on the roads that comprise the Federal aid system.
Without the Federal investment in these roads, we put trucking
mobility and productivity and that $11 trillion in annual
economic activity at risk.
We believe one of the Federal program's biggest problems is
that government at all levels, all levels, does a poor job of
telling the American public how their Federal gas and diesel
tax dollars are invested each year. We believe the public would
be impressed and widely support this Federal program if they
knew the full story.
I asked our economic team to find out how the public's
Federal gas tax dollars were put to use in 2012, a year that
did not include any stimulus money. Unfortunately, it took a
Freedom of Information request and sophisticated computer
analysis of literally millions of data points to provide the
project information detailed in our written testimony. Here are
the highlights, and it is high time the public starts hearing
about them.
In 2012, the Federal program helped fund 12,546 capital
improvement projects, 7,000, and some road, 2,400 bridges,
2,800 road safety, all focused on the system that moves most of
that $11 trillion in economic activity just mentioned. And the
12,000 does not include right-of-way or engineering projects.
These are projects in every State that can be identified by
name, location, and how much was invested.
But all the public knows is that the system is not nearly
as safe as it could be, they waste precious time in traffic
congestion and car and truck damages are caused every day due
to unacceptably high percentage of poor road conditions. And
the major reason for the system's problems is that we have a
2014 program that is operating on 1993 value dollars. As you
have already heard, in roughly months, according to the CBO,
the Highway Trust Fund will be unable to support any investment
in new projects. And 2012 is a guide. That means that more than
12,000 highway, bridge and safety capital projects across the
Nation on the routes most important to our economy could be
lost. ARTBA continues to advocate generating new recurring user
fee revenue to support highway trust fund investments as the
most straightforward solution or Congress could find additional
resources elsewhere in the Federal budget to stabilize this
trust fund as was done to support MAP-21.
CBO data shows that will require, by the way, on average,
$16.3 billion annually just to preserve existing levels of
highway and transit investment. By comparison, over a 2-year
period, the recent bipartisan Budget Act of 2013, the Murray-
Ryan budget deal, reallocates resources to increase the non-
defense discretionary spending cap by an average, ironically,
of some $16 billion a year. Here is where the announcer would
say, spoiler alert.
That means that as illustrated in Figure 4 in our
testimony, that fixing the Highway Trust Fund without
generating new revenues would require the equivalent of
Congress passing and the President signing a 2013 level Murray-
Ryan budget deal every year, every year, just to keep the
highway and transit program where it is no. That is one painful
alternative scenario.
Thank you very much.
[The prepared statement of Mr. Ruane follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Boxer. Thank you so much.
And it is my pleasure to welcome Jay Timmons, President and
CEO of the National Association of Manufacturers. Welcome.
STATEMENT OF JAY TIMMONS, PRESIDENT AND CEO, NATIONAL
ASSOCIATION OF MANUFACTURERS
Mr. Timmons. Thank you, Chairman Boxer, Senator Vitter,
other members of the committee.
Infrastructure matters greatly to manufacturers. It matters
during every step of the production process, from receiving
inputs to shipping our products to markets at home and to our
customers abroad. In addition, manufacturers are vital
suppliers to the transit and road-building industry, providing
rolling stock, engines, concrete, machinery, aggregates,
barriers, signs, safety equipment and other materials. Every
dollar spent, and I know there have been a lot of statistics
here today, but they all do matter, every dollar spent in
construction generates 39.5 cents in manufacturing. For
manufacturers, infrastructure is indeed a competitiveness
issue.
But unfortunately, our Nation's 20th century
infrastructure, and some of it is in fact even older, is not
meeting the needs of our 21st century economy. I hear concerns
about the State of our infrastructure from NAM members
constantly and consistently, from the world's largest multi-
nationals to family businesses up and down main streets all
across our Country. They all recognize that our aging
infrastructure is a significant impediment to our Nation's
competitiveness and our ability to maintain our mantle of
economic leadership.
Last year, the NAM partnered, as the Chair noted, with
Building America's Future to survey manufacturers about their
perspectives on the State of infrastructure in the United
States. As the Chairman referenced in her opening statement,
some 70 percent told us that America's infrastructure is in
fair or poor shape and needs a great deal or quite a bit of
improvement. And manufacturers recognize the Federal
Government's critical role in funding the Nation's
infrastructure as well, 67 percent say that infrastructure is
so important that all options to fund it must be on the table.
Two thirds doubt that it is positioned to respond to the
competitive demands of a growing economy. That is important,
because manufacturers rely on a reliable and efficient
infrastructure to reach growing markets abroad. But as our
survey demonstrates, reaching these new markets is not easy for
manufacturers in the United States. Roads, bridges, ports and
more are in dire need of repair and modernization.
On behalf of our more than 12,000 members, the NAM urges
lawmakers to address these challenges and adopt a multi-year
fully funded surface transportation bill that offers certainty
and support for infrastructure projects, that improves safety,
facilitates trade and creates jobs. Equally as important, we
believe Congress must bring the Federal Highway Trust Fund to
an improved condition of solvency and long term sustainability.
The need to keep the Highway Trust Fund solvent extends far
beyond State departments of transportation and road builders.
Funding for roads, bridges and transit systems provides great
value and represents an investment in our economy and our
global competitiveness. Manufacturers have frankly been
frustrated of late by policymakers who meet our calls for
increased investment with growing skepticism.
As we have seen with previous infrastructure bills, delays
and multiple extensions are commonplace and send a message that
the United States is simply not serious about growth and
competitiveness. I know it is a tall order in our political
environment that is so highly charged today, but America's
manufacturers need bipartisan leadership to help fix the
problem. Frankly, we are very encouraged by the signals that we
are getting from this committee.
We need to move past the debates about the Federal
Government's role in infrastructure investment. The States
alone cannot address the deteriorating condition of our roads
and our bridges or remedy the $101 billion cost associated with
traffic congestion. Manufacturers are counting on Congress to
fulfill its well-established responsibility of facilitating
commerce in the United States.
Chairman Boxer, no pun intended, but we have a long road
ahead of us. We really appreciate the committee's attention to
these important issues.
[The prepared statement of Mr. Timmons follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Boxer. Thank you. I cannot thank each of you
enough.
I am going to ask unanimous consent to place in the record
letters, one from the Associated Equipment Distributors. They
urge immediate action to ensure the Highway Trust Fund's long-
term solvency. And the second is the Economic Importance of
Maintaining Federal Investment in our Transportation
Infrastructure from the International Bridge, Tunnel and
Turnpike Association. Without objection, I will put those in
the record.
[The referenced material was not received at time of
print.]
Senator Boxer. And we can each have 6 minutes to ask you
some questions. My first question is really an unusual one,
because it is just a yes or a no from each of you. But it is
not a trick question.
Will each of you be willing to speak directly with Senators
Wyden and Hatch, whether it is on the phone or in person, as
soon as possible?
Mr. Donohue. Yes.
Mr. Trumka. Yes.
Mr. Hancock. Yes.
Mr. Ruane. Yes, already have.
Mr. Timmons. Yes.
Senator Boxer. Pete, second round, we get to do it again. I
can't tell you how important that is, because they have so much
on their plate and they want to be helpful. But I am not so
sure that they have scheduled a hearing, because we have the
change in the leadership there. So that would be fantastic.
And would each of you agree that what Mr. Timmons said is
right, that we need certainty with a multi-year bill? Would
each of you agree that we need certainty with a multi-year
bill?
Mr. Donohue. Yes.
Mr. Trumka. Absolutely.
Mr. Hancock. Yes.
Mr. Ruane. Unquestionably.
Mr. Timmons. I agree with myself, yes.
[Laughter.]
Senator Boxer. Well, around here, sometimes folks don't. So
it gets really great.
So Mr. Trumka, we are all aware that the recent global
recession ravaged many sectors of the Nation's economy. I
remember being with you at a rally in Los Angeles where
construction industry workers were, I mean, just so hard hit
and worried about a future for their families. Could you
describe for us the economic environment your members currently
face to help put in context the consequences of failing to
address the Highway Trust Fund's pending insolvency?
Mr. Trumka. Let me start on the macro sense and say, 6
years into this so-called recovery, we are still at an
unemployment rate that is higher than the highest point of the
2001 recession. So 6 years in, we are still higher than it was
in that recession. We have 1.6 million construction jobs, as
noted in my testimony, that are gone from pre-recession levels,
we haven't filled them yet. In some areas, unemployment still
hovers in the 20 percent area. We still have people working
reduced hours. The rest of that reduced hours is a strain on
retirement plans and health and safety plans and health care
plans.
Our members are struggling and we are losing skilled
workers because they can't make a living, there is no planning,
no ability to plan ahead and have a future. They are still
hurting plenty and that is why we need this bill, not just to
be a patchwork or a short-term solution, but a long-term
solution so that employers can plan, so that States can plan,
so that we can do long-term projects that the Country really
absolutely needs and have the assurance that the money is going
to be there to be able to complete them.
Senator Boxer. Thank you. Thank you for painting us that
picture.
I am going to ask Dr. Ruane here, because from the business
side, and you represent the builders, could you discuss how the
transportation industry would be affected if no new projects,
over 12,000 projects, using 2012 as an example, that is how
many new projects we funded in 2012, if we didn't have that in
Fiscal Year 2015, put a human face on the businesses that you
speak for.
Mr. Ruane. The impact of that kind of scenario would be
devastating. We are already at over 10 percent unemployment in
that sector right now as we sit here today, down from where it
was five or 6 years ago, but still double digit unemployment.
The metric that is used often is 35,000 jobs per billion. We
lose that program in Fiscal Year 2015, you will literally see
hundreds of thousands of workers lose their jobs, they will not
invest. And by the way, that is already happening in the
marketplace, where a number of States have announced their
intention, it was cited in Mike's testimony, where a couple of
States have already publicly said that. And so people are not
hiring now. They are already pulling back, even though the
height of the construction season is coming up and most of the
Country, they are holding back because of the uncertainty of
the marketplace right now with what the Congress is going to do
with reauthorization. And most importantly, the current Highway
Trust Fund situation.
Senator Boxer. That is extremely alarming that already we
are seeing this. That is why Senator Vitter and I are really
working hard to move quickly to restore some faith out there,
and why it is so important for us to work together with the
Finance Committee over here. I note, Congressman Shuster wants
to move as well.
So I would turn to Mr. Hancock, from Kentucky's
perspective, as well as all of the States that you represent in
your new position. How important is it for State departments of
transportation to have stable, reliable and predictable funding
levels for 5 years or more?
Mr. Hancock. Madam Chairman, it is incredibly important to
the States. The States simply cannot functionally plan in an
environment where the target changes day by day in terms of
funding. As you probably know, I am quite certain you do, it
takes years to get a project off the ground and actually to
construction and being built. If funding is a question every
step of the way, it takes even longer.
So the States really are having difficulty with adequately
planning, knowing when the money is coming, knowing when we
will have the ability to put the money to work and tracking
that.
Senator Boxer. Thank you. So my time has run out, but I
have to finish with Mr. Donohue. Why is this issue so important
to the business community that the Chamber would take the
position of supporting raising user fees for transportation?
That is unusual. Could you explain why you are driven to do
this?
Mr. Donohue. I don't think it is unusual for the members to
the Chamber of Commerce to support these user fees. The people
who run the trucking industry understand, they run 400 billion
miles or something like that with 3 million big trucks every
night. They understand if they don't have the facilities to do
that in a safe and effective and product way, they are behind.
The AAA has taken I think a very enlightened position,
recognizing that people are driving all over the place. So as
we have heard today from the panel, the business community
provides the resources to build the facilities, the roads, the
bridges, the ports. The business community builds them, the
business community lives on them. And if you want to look for
the single biggest improvement, in my opinion, in U.S.
efficiency in recent time, it has been what we have been able
to do in the supply chain, from raw materials to finished
products and everywhere in between, not only capital goods but
also information, energy resources. This is for the business
community, whether you are in the tech end, you are in the
service end or you are in the capital goods and manufacturing
end, if you can move it, you can do it.
Senator Boxer. Thank you. It is the goods movement that is
so critical, because we all know what happens when it takes a
long time. Thank you.
Senator Vitter.
Senator Vitter. Thank you, Madam Chair, and thank you all
again. As I suggested in my opening statement, we have been
hard at work for some time discussing a bill to try to move out
of this committee as soon as possible. The idea would be to
deal with those issues under our jurisdiction in an aggressive
way, in a way that helps rebuild trust in the trust fund and
then to really help incentivize the Finance Committee to do the
tougher work on the finance side and be our full partner in
completing that bill.
So with that process in mind, let me ask a few questions.
Dr. Ruane, first of all, thank you and your organization, as
opposed to FHWA, for producing very good data which you have
appended to your testimony, about projects in each State
impacted by the trust fund and Federal aid. One problem is, you
all have to spend hours and hours and hours producing that
data. It seems to me that data should be readily available
through the program and to make it transparent and clear what
the trust fund does or doesn't do.
Would you agree with that, there are reforms you think can
be made to make the activity under the trust fund far more
transparent?
Mr. Ruane. I absolutely agree. It is really tragic that one
would have to use the Freedom of Information Act to get such
information. They have that information going back, and I am
not here to unfairly criticize any government agency. But you
would think that they would want to get that information out
there aggressively and tell the story. We make a recommendation
in our testimony specifically, you recall the effort that was
made by the Administration and various agencies in telling the
story under the stimulus program. There was routine and regular
commentary on what was being done, the various projects around
the Country. We say that should be pro forma, that should be
routine. They should be celebrating these investments, these
20,000 plus projects every year and telling the public where
these resources are going and what they are achieving. Most
importantly, what they are achieving.
So one should not have to use a FOIA request to get that
information. It ought to be out there. Because it is an
incredible story of what this is accomplishing in our economy
and in our Nation.
Senator Vitter. I certainly agree and will continue to push
that. By the way, there is a specific provision in MAP-21,
unfortunately FHWA hasn't responded to that, hasn't done the
report yet. So we need that greater transparency.
Mr. Hancock, I am real concerned, as are many of my
Republican colleagues about the EPA and a new proposed rule
about Federal jurisdiction under the Clean Water Act. I think
this poses a threat of dramatically increased permitting
requirements and decreased flexibility on transportation
projects. I am also concerned that the rulemaking may even
proceed before peer reviewers even review it. That is supposed
to be a key part of the process.
Are your members concerned about this? Do you have any
thoughts about this?
Mr. Hancock. We have not actually seen that 404 permitting
rulemaking yet. But we are very much concerned about it,
because we have been told that it affects roadside ditches as
sources of runoff area to be controlled or whatever. Most of
those ditches were built as we built our road system. They are
not intermittent streams, per se. So yes, we are very, very
interested in that and looking forward to hearing from Federal
Highways.
Senator Vitter. Mr. Timmons, thank you for your testimony.
Can you expand on just a bit, and does NAM have an estimate of
the cost advantage or disadvantage vis-a-vis other nations
related to infrastructure? What path are we on regarding that?
I presume it is going to be a cost disadvantage in terms of
global competitiveness.
Mr. Timmons. I don't have a specific number for your,
Senator, but I can tell you anecdotally that there is certainly
a disadvantage when some of the other folks here have been
talking about what our major competitors are doing with regard
to infrastructure projects. Those projects do allow more goods
to make it to market much more efficiently.
There is a general, however, a 20 percent cost disadvantage
for manufacturers in this Country versus our major trading
partners around the Country. It is because of several factors,
infrastructure is not one of them, but that 20 percent
disadvantage is after you take out the cost of labor, so we are
talking taxes and regulation, going back to your question on
the proposed rule from EPA on waterways, as well as other
factors.
So anything that detracts or adds to that disadvantage
obviously hurts manufacturing in this Country.
Senator Vitter. Thank you. A final question for Mr.
Hancock. AASHTO was one of the first organizations out with
your reauthorization priorities. I thank you for that. I assume
that means you think there is room for Improvement reform,
greater transparency to build, rebuild trust in the program.
Can you expand on that and mention a couple of your priorities?
Mr. Hancock. Sure. And we absolutely do believe there is
room to improve. But I will say to MAP-21, we felt it was a
major step forward. We were very pleased with the reforms that
we saw there. There are some tweaks that likely will need to be
made. But part of the issue right now is we haven't completely
seen the rulemakings from Federal Highways regarding those. So
we will be eagerly awaiting those and will have some comments,
I am quite sure, that will tweak, not significantly.
Senator Vitter. We will look forward to those. Thank you,
Madam Chair.
Senator Boxer. Thank you so much. I believe Senator
Barrasso is next, followed by Senator Boozman.
Senator Barrasso. Thank you, Madam Chairman.
Mr. Hancock, following up on your previous testimony, and I
talked a little bit in my opening statement about the
roadblocks that are out there on construction projects in terms
of red tape, which makes things more costly, doesn't really
create the kind of meaningful jobs that we are trying to
create. Could you talk a little bit about recommendations you
might have to kind of further accelerate project delivery?
Mr. Hancock. There are a number of activities that are
underway as we speak. We are working, Federal Highways has an
Every Day Counts program that we are working very diligently
with them to see brought forward. Also AASHTO itself, we have
SHRP2 programs, our Strategic Highway Research Programs that
involve projects that save time and get things done faster. So
many, many things on the horizon that we see the value in doing
this, and I promise you we will be sticking to our guns in that
regard.
Senator Barrasso. Anyone else on the panel want to respond
to that in terms of actually how we can get the money moving
more quickly?
Mr. Ruane. Full implementation of the reforms in MAP-21. I
think the committee, the Congress made some great changes to
the legislation as part of that bill. It is just a matter of
implementation. They have been underway, but they could be
accelerated.
Senator Barrasso. Anyone else?
Mr. Trumka, you talked about in your testimony and
highlighted a 20-mile, 6-lane bridge that I think in China took
only 2 years to build, kind of from pen to pavement. The Vice
President made a statement last week about going to LaGuardia
Airport and said, if you take somebody there blindfolded at 2
in the morning they are going to think they are in a Third
World country. I would just ask if you could talk a little bit
about, it would seem to me in the best case scenario to try to
a project like you had outlined that you saw in China so
successfully completed in a swift manner, it might take over 10
years to kind of get that whole process done here.
From your experience and travels, what can we do in the
United States to really accelerate project delivery?
Mr. Trumka. One thing I think is we can have some long-term
predictability and planning. So we need a long-term bill so
that people can actually plan, start the process, have some
confidence that it is going to follow through. If you are
talking about private-public partnerships that are out there
that offer some real potential, that is not going to happen
without the ability to plan and be predictable and go forward.
Also I think it is just us having the will to say that as a
Nation, we are going to do something. When we decided to go to
the moon, we got the Nation on a footing. Our infrastructure,
according to the World Economic Forum, has dropped from seventh
in the world to fifteenth in just 5 years. And it will continue
to drop. The American Society of Civil Engineers says we get a
D plus, we have a $3.6 trillion deficit to fill to get us back
to where we need. The DOT says that a third of our roads are
now in poor or mediocre condition. We need as a Nation to say,
we are going to be the most competitive when it comes to
infrastructure and understand that investment today is going to
reap tremendous benefits down the road.
I think us coming together, the Nation coming together like
everybody up here has come together to say we need it, and then
to have the political will to go forward I think is what we
need. It is just the determination to say we will do it and
then get together and do it. I applaud the members of this
committee, because you understand the importance to the Country
of infrastructure and us maintaining our infrastructure,
whether it is a bridge, whether it is a road. I urge you to go
further and think bolder and start talking about high-speed
rail and other things, a grid system that doesn't waste
electricity, a delivery system where you don't have leaks and
seeps that drain gas and water and oil into the environment.
All of those things could create jobs and make us competitive.
I think the most important thing is for us to just have a
vision and a will and make a decision to do it. When we decided
to go to the moon, nothing could stop us. Same thing here. If
we decide that we will have world class infrastructure to
compete in a global economy, I have no doubt, Senator, that we
can do it, and we can do it the best in the world.
Senator Barrasso. Mr. Donohue?
Mr. Donohue. When we decided to go to the moon, Senator, we
had a compelling national interest and we didn't have all the
regulators and lawyers and lawsuits that we have today. To go
out and build a major project is preceded by permitting and
zoning arguments and lawsuits. And by environmental lawsuits.
By the way, I have no problem with looking critically at
the environment. But repetitive lawsuits after lawsuits have
been resolved. The reason we can't do things as quickly as
others, one of the reasons, is because it takes so long to get
a conclusion of all the permits, all the zoning, all the
lawsuits. And we are talking years and years and years. And we
all went to school, we studied, we had three parts to our
Government, the executive, the legislative, the judicial. We
never knew that we would live in a time that there was one part
than all the others put together we never talked about, and
that is the regulatory and litigation part that is absolutely
strapping this Nation's ability to compete.
Senator Barrasso. Thank you. Thank you, Madam Chairman.
Senator Boxer. Thank you, Senator. And we turn to Senator
Boozman.
Senator Boozman. Thank you, Madam Chair. I do appreciated
you and Senator Vitter having this hearing. I think it is
really very, very important. We hear a lot about the
partisanship that goes on in Congress, and yet in this
particular area of this committee, when it gets into the
environmental issues, there is differences of opinion. But
there is no difference, very little difference of opinion in
regard to our infrastructure, not only here but in the House
also.
It is interesting, I look at the panel and it is the same
deal. We have the Chamber here, we have labor here, we have NAM
and the road builders. All of you are strange bedfellows coming
together as we all are, talking about the interests. I have
real concern about the harsh winter, the fact that jobs are
being affected right now because you simply can't get work done
with these very cold sustained temperatures. Pretty soon, it
sounds like already, the contracting is an issue. I know that
we have had, this is not hypothetical in a sense, we have had
this same situation occur in the past, and very definitely
people quit letting contracts. So again, I am really concerned
about that.
The thing about infrastructure is that you create jobs when
you do it. But the real economic thing comes about after they
are built, with the increase in land values, all of the
economic activity that comes about. I would argue that, and it
is sad to hear the statistics now, but I think one of the
reasons that we became the economic powerhouse that we have was
the vision of the Eisenhower Administration and Congress
getting the interState system put into place. So I am committed
to doing anything I can to get this thing done.
One thing I would like to ask Mr. Hancock, one of the
frustrations we have, not only with this but with other things,
our States are struggling right now. In an effort to try and
push more money for infrastructure, there is a tendency at the
State level then, and this is not true of Arkansas, we actually
passed a half cent sales tax which again is something that
other States need to look at doing and actually have defined
projects and things and get those kinds of things done.
But there is a real frustration, it seems like as you push
more money out then the State backs up and they get this money,
so then they can divert to prisons and schools and things that
are very, very necessary. But the reality is you don't go
forward. You just have more of the Federal Government
shouldering the burden.
Can you comment on that?
Mr. Hancock. I would be more than happy to. It has been our
experience in Kentucky that whatever Federal money has come,
the State has stepped up with bond issues and other things and
made additional moneys available as well. In Kentucky, we have
actually been able to do a lot of major projects through that
whole mechanism.
But the one thing I would say, about 45 percent on average
of the money that the states have to work with to build
projects is Federal funding. That 45 percent constitutes more
of the larger projects that we actually build. And so it is a
critical piece of where we are. The States are doing a lot, and
you have seen that in recent days with a number of States
enacting new funding mechanisms and so forth. We applaud the
States that have done that. We are certainly encouraging
everyone to do what they must to find the money that is
necessary to invest in transportation. But you are right, it is
a difficult dance with State budgets and so forth.
We find a lot for our colleagues that are very interested
in spending more on transportation.
Mr. Donohue. Senator, you made a great point about the
harsh winter. When it is over and people can go back to work,
it will lead to an infrastructure that is more seriously
affected and more work to do.
Senator Boozman. You make a great point in the sense that
not only can they not do the work now, but with this freezing
and thawing, it is going to be very, very difficult and there
is going to be a tremendous amount of damage.
How long doe it take for an average significant road
project to get done now? Is it nine, 10 years?
Mr. Hancock. We did a recent average of 7 years for a
significant project.
Senator Boozman. You mentioned, Mr. Trumka, the bridge in
China. The thing that impressed me was the situation that we
had in Minnesota when the bridge collapsed. That thing was
rebuilt in a year. And that would have taken easily, in today's
climate, 10 years or whatever.
But instead of the agencies having an adversarial,
``gotcha'` attitude, people worked together. Labor worked
together, it was just the attitude of, we can get this done and
get reopened. We essentially were able to do something that
really was quite extraordinary.
But I do think, and you all can be a tremendous help in
this area, we do have to, with the limited resources that we
have, not to skirt rules, not to get around them, to do it, but
just have the agencies do things. We have put stuff in bills
before and this and that, but really just to make the agencies,
where they are talking together, they are doing it together. We
need to have a goal as a Nation to cut that time in half or
whatever goal we make.
But that is a very doable thing. With inflation, the cost
increase and things like that, it is something that would save
us a tremendous amount of money.
So again, thank you all. We appreciate your being here and
certainly I am committed, the rest of the committee is
committed to doing anything we can to help. Thank you.
Senator Boxer. I just want to say to each and every one of
you how much I appreciate your testimony today. I know that we
are singing from the same book except when it comes to
environment, which is typical and I understand it. But I
honestly have to say that this transportation bill, in order to
get out of here, is not going to be one big environmental
rider. So let's be clear. Because we have to come together
where we agree.
And just ask the businesses and the citizens of West
Virginia if they wanted a little more regulation on that
chemical that spilled which is killing business, it is killing
economic development right now, according to my colleagues who
have talked to me about it.
So I think what we need to do is find a sweet spot. We need
to speed up for sure, and we have a lot of reforms, as I
understand, that Dr. Ruane pointed out, in the last bill. We
have to make sure they are working.
Also, we have to understand that a great deal of the
slowdown, Senator, is funding, too. Because sometimes the
funding doesn't come through. That is why TIFIA is so
important, and why I am so excited about TIFIA. Because the
idea of TIFIA came from really the Los Angeles mayor at the
time, Mayor Villaraigosa, who pointed out that they had this
sales tax, but it was going to take them 30 years to build all
the projects. But with TIFIA, we could change that to 10,
because there is really no risk. The money is coming, but the
Federal Government can step up front and move that money
forward.
I really appreciate all this. Do we have time to do another
round? Go right ahead, Senator, I will withhold and finish
later. Go ahead.
Senator Sessions. Thank you. I had a couple of conflicts,
everything happens at once.
Mr. Donohue, I notice you called for increasing gasoline
tax. Is it the position of the Chamber of Commerce that we need
to be raising taxes to increase spending today?
Mr. Donohue. We have not raised the Federal user fee fuel
tax in almost 20 years.
Senator Sessions. So you want to raise taxes on Alabamians
who have to commute to work, and probably you would like to
spend it----
Mr. Donohue. Senator, whether you raise the tax or you seek
the funds through some other means of Federal expenditure, the
citizens of Alabama are going to pay for it.
Senator Sessions. You proposed raising the tax.
Mr. Donohue. Yes, sir, I did.
Senator Sessions. Would it be acceptable to you if we found
wasteful spending in Washington and reduced that to pay for the
highways?
Mr. Donohue. If you actually got the money. The longest
sing-song in Washington in the history of my time here was
waste, fraud and abuse. And we are going to get rid of it and
use the money. But the money never shows up. But if you
actually got the money, took it out of other budgets and put it
there, I would applaud you.
Senator Sessions. So you would support that, but that is
not what you are testifying to in favor of today. Some of my
people would probably rather increase the corporate tax rather
than the gas tax. You wouldn't favor that, would you?
Mr. Donohue. The corporate tax in this Country is far more
than we pay anywhere else on a competitive basis. I think you
should ask Billy Canary that runs the expanded and combined
chambers of commerce in Alabama whether he could get his
members to support a user fee to move their goods and their
workers.
Senator Sessions. So I guess I understand what you want to
say. You want to raise, the Chamber of Commerce is testifying
that you don't believe it is possible to cut spending and save
the highway program without raising taxes. I want to get it
clear.
Mr. Donohue. Senator, I have played this game before. I
think it would be very, very hard to do that in the next 7
months, but if you can do it, I will vigorously support it.
Senator Sessions. Well, good. I think that is what we
should do. There are places that we can save money. I just want
to know that, we would like to reduce the corporate rate. It is
hurting America. It is hurting Mr. Trumka's employees. It is
hurting economic development and job creation to have virtually
the highest corporate tax rare in the world.
Mr. Donohue. We certainly agree on that.
Senator Sessions. We could totally support that. I was just
teasing you a little bit about your supporting somebody else
paying taxes, but not you.
Mr. Trumka, in 2000, when the employment rate was around 4
percent, the New York Times wrote an editorial opposing amnesty
for then 6 million illegal workers in the Country and said
``The AFL-CIO's proposal should be rejected. Amnesty would
undermine the integrity of the Country's immigration laws and
would depress the wages of its lowest paid, native born
workers.'` The New York Times.
Today the unemployment rate is 6.6 percent and the work
force participation rate is the lowest it has been in 40 years.
Wages are lower today than they were in 1999. Yet you have
endorsed a bill that not only grants amnesty to 12 million
illegal immigrants but also provides green cards to 20 million
new legal immigrants.
Senator Boxer. May I ask that my friend, and he is my
friend, why are you talking about immigration? This is a
hearing about the Highway Trust Fund. I have never quite seen
this type of an attack on various members. I am confused about
it. It does not help us.
Senator Sessions. It is not an attack on a member. I am
raising a question. But I didn't know we were strictly----
Senator Boxer. Well, yes, we are. This is not the committee
that does immigration reform. I could haul out reports that
show that it is a great boon to our economy. I am not going to
get into that. I would please ask you, and I think your
question to Mr. Donohue was fair, it was tough, it was fair.
But this is getting off topic. If you could just keep your
questions to the topic at hand, it would mean a lot to this
chairman.
Senator Sessions. You are such a fair chairman that I will
acquiesce in that and maybe I would submit a letter and Mr.
Trumka could have a chance to respond. Because I know he has
given a lot of thought to all the issues.
Mr. Trumka. I would welcome that, Senator. I really would.
I can tell you how those 6 million people or 12 million people
with no rights, how it is driving down the wages of every other
American out there. Until we fix that system, everybody is
going to have less income. Less income, less taxes, less
economic growth. So I look forward to that letter.
Senator Boxer. I am glad we put this off to another day.
[Laughter.]
Senator Boxer. Go right ahead. And by the way, the votes
are starting.
Senator Sessions. Mr. Trumka, I will look at that. This
legislation that cleared the Senate that you supported would
dramatically increase the legal flow and not a significant
impact in reducing illegal flow. I think it is beyond what the
economy can absorb wisely but that is an issue for a different
day.
Thank you for your testimony. We just had the budget report
yesterday of Mr. Elmendorf. It was sobering. He suggests we
could have another fiscal crisis because our debt is reaching
almost 90 percent of GDP, gross debt could reach over 100
percent of GDP. We can't just tax our way out of this. We just
can't keep raising taxes. So that would knock off the growth
that we would like to have.
Madam Chairman, again, you have led effectively on this,
you and Senator Inhofe and Senator Vitter. I hope that we can
come up with something that strengthens our infrastructure
program in a fiscally responsible way.
Senator Boxer. Senator, I certainly do hope so. And I would
say this. This committee is going to deal with the
reauthorization. What we heard from every member, when you
aware at your other very important duties, is that we need
certainty here, because businesses are, they don't know what
the future holds.
What I hope for is we can give a five, 6 year bill out of
here. That is our intent. It will not deal with the funding,
because that is a matter for Senators Wyden and Hatch and their
committee.
But it will lay this out. That is why it is so important
that whenever ideas, and I have lots of ideas, one of them is
to go after $350 billion uncollected taxes every year. I am
sure others wouldn't agree with it. But there are many, many
ways that we can get this trust fund going.
Mr. Donohue makes an important point, it has to be real. It
has to be real and it has to be certain. That is why the user
fund, whatever it is, whether it is the gas tax, or vehicle
miles traveled, it is not intrusive or it is a user fee at the
refinery level, all of that will be a dedicated tax going into
the fund. And because of our economic situation, we need to
have this. Because if you are really worried about deficits and
debt, which every single one of us is, and as I said, I was so
happy that I was here when we actually voted to balance the
budget. I remember saying to my husband, we are not going to
have any more bounds because the debt is disappearing. I was
here, so I know we can handle that problem.
But the Highway Trust Fund is different. As it was
envisioned by Republican President, it has a separate fee, it
doesn't cause any problems to the deficit. That is very
important and I think we should keep the user fee concept,
because it does give that type of certainty. But that decision
is going to be made by another committee. And they are very
excited about us doing our part.
And can't speak for every member. I have sat down with most
of my colleagues. I have two more to sit down with on the
Republican side. I am hopeful we can unite and that we don't
get into arguments over environmental riders and all the other
things, that we can just focus on what has to be done here. And
I am excited about the challenge. No one thought we could do it
last time, we proved that wrong.
I want to say about Senator Sessions that he has been a
friend to me in this committee. We don't see eye to eye on a
lot of things, but we work well together. I respect his
knowledge of the deficit situation, the debt situation, as a
former member of the Budget Committee. I know that in that
committee, you do see that big picture going down the road.
There is nothing we will do in this bill that is going to
hurt the deficit, nothing. It will be a self-sustaining trust
fund, which is absolutely critical.
And with that, I want to thank all of you. Report back to
me about your conversations. I hope you will. And I will ask
Senators Hatch and Wyden today when I see them, I will tell
them that you said you were going to call them. I think we can
get this done, but only if we stick together. So let's just
find that common ground and not get into arguments about other
issues. I think that gets us off track.
Thank you very much. We stand adjourned.
[Whereupon, at 11:45 a.m., the committee was adjourned.]
[Additional material submitted for the record follows.]
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