Testimony before the House Committee on the Budget by Thomas J. Donohue

Testimony of Thomas J. Donohue, President & CEO, U.S. Chamber of Commerce, before the House Committee on the Budget

April 25, 2002

• Good morning, Mr. Chairman, members of the committee. Thank you for the opportunity to be here today. I'm Tom Donohue, president and CEO of the United States Chamber of Commerce, the world's largest business federation.
  
• I'm also here as chairman of Americans for Transportation Mobility, a coalition of business groups and organized labor in support of continued investment in the nation's transportation infrastructure using dollars paid for by our citizens just for that purpose.
  
• This morning, I'd like to stress the importance of fiscal responsibility, and offer ideas on how we can achieve it. The U.S. Chamber has long supported controls on government spending.
  
• But unforeseen events have made that challenge more difficult than ever. Our nation must spend valuable resources to fight global terrorism and bolster homeland security so that our borders, public buildings and transportation infrastructure are safe and sound.
  
• No one would argue against increased government spending for these purposes. Not our citizens, and certainly not the Chamber of Commerce.
  
• But that means it's absolutely essential to keep discretionary spending in check. The current growth in this type of spending simply cannot be sustained without running up deficits and damaging our nation's future.
  
• In this environment, it's increasingly important for government to enact policies that will spur long-term, sustainable economic growth, which in turn will significantly boost government revenues and put us back on the path toward a balanced budget.
  
• The Chamber believes that several pieces of legislation pending before Congress are critical to long-term growth and fiscal responsibility. I'd like to name just a few.
  
• A comprehensive energy policy that will ensure a reliable and affordable supply of energy, create thousands of new jobs, and make us less dependent on unstable or unfriendly countries for our oil.
  
• Trade Promotion Authority for the president so that he is able to make deals with our trading partners, creating untold number of new jobs and opportunities for America's workers.
  
• Making last year's tax cut permanent, which will encourage continued savings, investment and consumption.
  
• And finally, we need continuous, predictable investment in our transportation infrastructure so that it is safer, more efficient and reliable.
  
• I would like to focus on transportation because it relates to the budget issues that this committee handles.
  
• It might be worthwhile to spend just a minute describing our transportation needs.
  
• Right now, our transportation system is ill-prepared to handle higher and higher volumes of freight and people.
  
• Air cargo volume is expected to triple by 2015, and passenger traffic is expected to increase by 50% over the same period.
  
• Yet new airport and runway projects never get off the ground for a lack of funds or because they are buried under an avalanche of bureaucratic red tape.
  
• Our nation's highway system is facing a similar capacity crisis. In just a twenty-five year span—1970 to 1995—highway passenger travel in the U.S. nearly doubled.
  But improvements and expansion of the highway system are not keeping up.
  
• Since 1970, vehicle miles traveled have soared 123% while road capacity has increased just 5%.
  
• Our system of channels, ports and marine terminals is no better off. Every major U.S. container port will experience a doubling or tripling of container volume by 2020, but as of right now, many aren't even equipped to handle these new mega containerships.
  
• Modernizing our transportation infrastructure meets several needs, chief among them economic growth.
  
• Each $1 billion spent on the construction and maintenance of the nation's transportation infrastructure creates approximately 42,000 jobs.
  
• In addition, every $1 billion invested in transportation infrastructure generates more than $2 billion in economic activity.
  
• Improvements to the system also improve the nation's air quality by cutting down on highway congestion that causes millions of gallons of unnecessary gasoline consumption every year.
  
• And finally, the importance of a robust transportation system to national security cannot be emphasized enough.
  
• Outfitting the nation's border crossing points, airports, railways, and seaports with top-of-the line technology is absolutely critical to our nation's safety and well-being.
  
• Given the tremendous long-term economic, environmental and security benefits of a modernized transportation system, the Chamber strongly believes that the government should invest the maximum sustainable amount into the transportation trust funds.
  
• We also need to look at creative ways to grow transportation infrastructure investment. I understand there may be valid political and environmental reasons to substitute ethanol for gasoline.
  
• But doing so without taxing ethanol at the same rate as gasoline and without transferring those revenues to the Highway Trust Fund will make it impossible to maintain, let along modernize, our infrastructure in the years ahead.
  
• Some may continue to say that the Chamber's support for continued transportation investment contradicts its desire for fiscal responsibility. But the two are not mutually exclusive.
  
• As I hope I've made clear today, the additional revenues and savings reaped from transportation investment will help us regain fiscal discipline and lead us back to a balanced budget.
  
• So we ask the Committee to reauthorize the Budget Enforcement Act and TEA-21, and to protect the important transportation funding mechanisms contained within them.
  
• These mechanisms will maintain minimum funding levels in the surface transportation trust fund while guaranteeing that all of those revenues are spent for their intended purpose of highway and transit investment.
  
• We also ask the committee to continue to work with the House Transportation & Infrastructure Committee to restore a portion of the $8.6 billion reduction in the highway funding program for Fiscal Year 2003.
  
• This shortfall clearly was not envisioned by anyone— and certainly was not the intent of Congress upon enacting the funding formula for Fiscal Year 1998.
  
• If this reduction is allowed to stand, 350,000 Americans will lose their jobs, and dozens of states will freeze or cancel road construction projects.
  
• Mr. Chairman, we appreciate your leadership on this issue, and we look forward to working with both the House and Senate leadership to restore highway funding to the maximum sustainable amount.
  
• In conclusion, Mr. Chairman, the U.S. Chamber of Commerce and the ATM coalition strongly believe in fiscal responsibility.
  
• We also believe that long-term, sustainable economic growth is the best and surest way to get there.
  
• To trigger that kind of growth, government has to make wise investment choices. As the old saying goes, "you have to spend money to make money."
  
• Investment in the nation's highways, airports, seaports and waterways is one of wisest investments we can make.
  
• Thank you. I'd be glad to take your questions.