Testimony on "Examining the Stimulative Effects of Infrastructure Investment on the U.S. Economy and the Need for Additional Investment"

On: "Examining the Stimulative Effects of Infrastructure Investment on the U.S. Economy and the Need for Additional Investment"
To: U.S. House Committee on Transportation & Infrastructure

By: Thomas J. Donohue President and CEO, U.S. Chamber of Commerce
Date: January 22, 2009

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As Prepared for Delivery

Introduction

Mr. Chairman, Mr. Ranking Member, and distinguished members of the Committee, my name is Tom Donohue and I am president and chief executive officer of the United States Chamber of Commerce.

The Chamber is the world's largest business federation, representing more than three million businesses and organizations of every size, sector, and region. We appreciate the opportunity to testify today.

You may have heard the phrase: "Never let a good crisis go to waste."

Today we are experiencing the worst economic crisis since the Great Depression. But with every crisis comes an opportunity.

Today we must seize the opportunity to provide both a short- and long-term boost to the economy through smart investments in infrastructure.

We should start by funding "ready-to-go projects" as part of the economic recovery package.

Experts have identified hundreds of such projects that could be under contract within 180 days of passage of the bill.

Congress should adjust current legislative language to ensure that the funds are obligated quickly.

This money would be an important down payment on meeting some of our most immediate infrastructure needs, put thousands of people back to work, and help jumpstart the economy.

But we must not stop there. We need a new long-term plan to rebuild America.

Such a plan will require a revolution in how we plan, fund, and build these systems. It cannot be business as usual.

Congress should use the full slate of expiring transportation legislation to advance these efforts this year, including the reauthorization of the aviation, water, and surface transportation bills.

Across all modes, it's crystal clear that we'll need additional revenue. Therefore, every option should be on the table.

Take our highway and public transportation programs, for example—they are running on fumes and facing imminent bankruptcy.

Congress will face a difficult choice this year: to cut federal highway investment by as much as 50% in 2010 followed by similar cuts in transit in 2011, or find more revenue to support these efforts.

Clearly, more public money will be needed, and we should seriously consider an increase in the federal gas tax, which hasn't been raised in 16 years.

But Congress needs to change the way it spends this money first.

Congress should adhere to the following principles:

• Earmarks must be eliminated.
• Projects should be subject to a rigorous cost-benefit analysis that puts the public good above political expediency.
• Money should go toward projects that advance national interests.
• Project delivery should be streamlined, eliminating red tape that leads to endless delays and adds unnecessary costs.
• And revenues must be dedicated to the Highway Trust Fund and not diverted to non-infrastructure projects.

If these conditions are met, the Chamber would support a sensible increase in the gas tax structured in a way that would not impose unfair burdens on motorists.

I believe you could also count on the support of a large and diverse coalition that I chair—Americans for Transportation Mobility—that includes businesses, labor groups, public transportation providers, and construction stakeholders throughout the country.

The coalition's FasterBetterSafer campaign is already generating public support for repairing, rebuilding, and revitalizing America's aging transportation system.

It's also vitally important that Congress remove regulations that limit the ability of private firms to inject billions of dollars into infrastructure projects.

Simple steps such as lifting or eliminating the caps on private activity bonds for airport, water, and highway projects—and exempting public purpose debt from the Alternative Minimum Tax—could help free up billions of dollars.

And for those concerned about private ownership of public assets, I have news for them—the private sector already owns most infrastructure, from 80% of energy infrastructure to all of broadband.

Mr. Chairman, if we are to rebuild America—and we must—it will cost hundreds of billions of dollars.

Americans have every right to ask what they will get in exchange for such a significant investment.

They will get cleaner air, safer roads, less time spent in traffic, goods and services delivered more quickly and cheaply, and a more competitive U.S. economy.

If Congress were to fix only the nation's 233 worst truck bottlenecks, we would see a huge return in increased efficiency and productivity and a significant reduction in mobile emissions and fuel use.

That sounds like a good deal to me.

In his Inaugural Address this week, President Obama spoke about Americans working together with a common purpose to achieve great things.

He spoke about confronting our big challenges, not evading them. He talked about making difficult choices, not taking the easy way out.

Rebuilding America's infrastructure is a challenge worthy of our greatest effort. It would be a tremendous accomplishment that would pay dividends to our children and grandchildren for generations to come.

If we make the tough decisions now and choose the right course, our transportation network will be the foundation of a 21st century economy that can move people quickly and safely, easily handle a growing volume of freight, and protect the environment.

We have a great opportunity before us—let's seize it, together!

Thank you very much.