"The Voice of Business Tour" - Infrastructure - Remarks by David Chavern

Remarks by David Chavern
Chief Operating Office, U.S. Chamber of Commerce

Pittsburgh, PA
May 8, 2008

As Prepared for Delivery

Thank you very much, Gene (Barr). It's great to be back home in Pittsburgh and to participate in the Pennsylvania Chamber's Voice of Business Tour.

I didn't want to miss this opportunity to get away from Redskins fans for a day to be among my fellow Steelers faithful.

Let me start with a word about the U.S. Chamber of Commerce. The largest lobbying organization in the world, the U.S. Chamber is the premiere voice of the business both in the United States and, increasingly, overseas.

The Chamber maintains a professional staff of more than 300 of the nation's top policy experts, lobbyists, lawyers, and communicators at its Washington, D.C. headquarters. Their work is supported by additional staff in eight regional offices around the country.

The Chamber's International division, working with in conjunction with more than 100 American Chambers of Commerce in 91 countries, fights to build bridges for global commerce and to tear down the walls that keep our companies out of lucrative international markets.

The Chamber has its own public policy law firm, which achieved 54 court victories on behalf of business last year.

It has a public policy think tank that identifies emerging issues affecting business, researches them, and forms the business argument for or against them.

The Institute for Legal Reform and the Institute for 21st Century Energy are also part of the Chamber, working for a more favorable legal climate and a commonsense national energy strategy, respectively.

We also have major initiatives on intellectual property protection, education reform, and the U.S. capital markets.
The Chamber's overarching mission is to strengthen the competitiveness of the U.S. economy. All of the issues I just mentioned are planks of our competitiveness agenda, but the one plank I want to focus on today is infrastructure.

There's really not a better city in which to talk about infrastructure challenges than in Pittsburgh.

This is the city of bridges. There are more here than in any other city in the United States, and, arguably, any city in the world.
Pittsburgh is also home to the second busiest inland port in the nation and the 18th busiest port of any kind, with nearly $8 billion of goods moving along the waterways through the Port of Pittsburgh District.

The infrastructure here is woven into the city's history, its economy, and its culture.

Yet its condition threatens the region's economic vitality, the safety of its people, and the quality of their lives.

Governor Rendell gave a speech in Washington last week in which he spent almost an hour talking just about Pennsylvania's crumbling transportation infrastructure.

He reported that five years ago, Pennsylvania had more structurally deficient bridges than any other state in the nation - 5,500 total.

Even after tripling state funds for bridge repair, Pennsylvania has more structurally deficient bridges today, according to the governor.

The deficient bridges just can't be repaired fast enough. By the time one is fixed, another one or two have fallen into disrepair. That's a strong indicator of just how far we've fallen behind.

From time to time, we are reminded in tragic-or near tragic-terms that our outdated infrastructure is in dire need of investment.

We all remember a few months ago when the Birmingham Bridge right here in town dropped several inches, coming dangerously close to the point of collapse.

Just weeks later, a crack in a bridge on 1-95 in Philadelphia caused a portion of that highway to be shut down for days. And, of course, there was the deadly bridge collapse in Minneapolis last year.

These are real and immediate life and death concerns.

When these things happen, we talk about them, we wring our hands, and we all agree that something needs to be done.

But then the story fades and it's back to business as usual. We are so overwhelmed by the enormity of the infrastructure challenge that we put it on the backburner to deal with later - but we never do.

Pennsylvanians should know that they are not alone. The entire nation faces urgent infrastructure challenges.

From coast to coast, our roads, highways, bridges, airports, rails, inland waterways, and ports lack the capacity to handle the growing volume of people and goods moving every day.
Why should infrastructure be a national priority? Because, first, it is a competitiveness issue-China spends 9% of its GDP on infrastructure; India, 5% and rising.

The United States has spent less than 2% on average as a percentage of GDP since 1980. We cannot expect to remain competitive with that level of investment.

Second, infrastructure is a quality of life issue-Thirty-six percent of America's major urban highways are congested, costing drivers $78 billion a year in wasted time and fuel costs.
And while their car engines are idling, they are pumping thousands of tons of pollution into the air.

And, finally, it's a safety issue-Poorly maintained roads contribute to one-third of all highway fatalities. That's more than 14,000 deaths every year.

Unlike with other challenges, we can't wait until the very last minute and then write a big check to immediately fix our infrastructure.

Projects require foresight and years of careful planning, and that is why time is of the essence. We need to act, and we need to act now to create an infrastructure that's geared for the 21st century global economy.

As we work toward that goal, we need to keep three things in mind:

First, more resources are required-plain and simple. There is no free lunch.

The National Surface Transportation Policy and Revenue Study Commission estimates that the United States must invest $225 billion per year from all sources over the next 50 years to maintain and adequately enhance our surface transportation systems.

We are spending less than 40% of this amount.
The funding deficit is so severe that we cannot afford to leave any option off the table.

Everything should be considered: additional public funding, public-private partnerships, innovative approaches to stretching resources such as a federal infrastructure bank, and, yes, even an increase in the federal gasoline user tax, which has not been raised in 14 years.

I know you might think it's a crazy time to even suggest this with gasoline approaching-and in some communities, passing-$4 per gallon.

But I'm not running for office, so I actually get to tell you the truth. And the truth is that sooner or later, we're going to have to face up to the resources question-if we want a superior and safe infrastructure and a competitive American economy.

Every mode of transportation is starving for investment. Costs attributed to airline delays-due in large part to congestion and an antiquated air traffic control system-are expected to triple to $30 billion annually from the year 2000 to 2015.

By 2020, every major U.S. container port is projected to be handling at least double the volume it was designed to handle.

And what about railroads? Throughout the United States, they are projected to need nearly $200 billion over the next 20 years to accommodate freight increases.

Here's the second point we need to remember: It's not just the amount of money we spend on infrastructure; but how we spend it.

We need to support a comprehensive multi-modal and intermodal transportation infrastructure vision. This means prioritizing and making tough spending decisions based on actual need instead of politics.

The last surface transportation reauthorization bill contained earmarks totaling nearly $15 billion for some 5,000 projects. Now, earmarking in and of itself is not necessarily a bad thing, but we need to make sure that federal earmarks serve the national good.

There is something terribly wrong with the system when hundreds of millions of dollars are earmarked for the construction of a bridge to nowhere in Alaska while critical projects in major metropolitan areas are neglected.

Even worse is when federal transportation funds are diverted to rain forests in Iowa, theater restorations in New York, and interpretive signage and trails in Pittsburgh urban parkland while projects to alleviate traffic congestion or to connect rural communities to urban areas struggle to identify resources.

Even federal funds narrowly targeted for improving a critical part of our surface transportation system - bridges - end up being used for other transportation projects.

The 2005 highway reauthorization bill made it possible for states to spend up to 100% of their federal bridge dollars on non-federal bridges.

That's partly explains why so many of the bridges and overpasses on the Interstate Highway System remain in poor condition.

States can also transfer up to 50% of federal bridge money to other surface transportation programs, and Pennsylvania has transferred an average of $130 million per year out of its bridge program for the past 15 years.

We also have to move quicker. Bureaucratic red tape is a major problem.

We've allowed governments to pile on complex and overlapping regulations that stretch project delivery times to 13 years on average.

Finally, here is my third point: all of us here must be active participants in the infrastructure debate. If business isn't at the table, then it's going to be on the menu.

One group working for change is Americans for Transportation Mobility, a U.S. Chamber-led national coalition of business, labor, and transportation industry interests with a focused mission of increasing highway and transit funding.

Around the country, more than 400 groups including local chambers of commerce, transit authorities, and road builders are members of ATM.

In a few weeks the Coalition will formally launch its Faster, Better, Safer campaign - a full court press for the maximum level of public highway and transit investment in the next federal authorization bill.

This legislation will significantly impact Pennsylvania, and so I encourage you all to consider becoming an active participant in our coalition.

Because roads and public transportation are just part of our much larger critical infrastructure system, the U.S. Chamber is putting money, people, research, programs, and strong political action around a broader campaign called "Let's Rebuild America."

This effort is focused on identifying and driving solutions to modernize, expand, and rebuild the entire physical platform of our nation's economy, including not just transportation infrastructure, but also on our water, energy, and broadband networks.

The American Society of Engineers pegs the nation's total infrastructure gap at $1.6 trillion dollars - that's the level of investment needed to bring existing system up to par.

That figure doesn't even take into account additional infrastructure that is needed to support a growing economy. Here in Pennsylvania, the infrastructure gap is nearly $10 billion.

While I've focused my remarks today on transportation, I assure you the Chamber's commitment to building up the nation's energy and telecommunications capacity is equally strong.

Phone companies, cable operators, wireless carriers, and others are in the process of investing hundreds of billions of dollars in broadband infrastructure. Yet, there are still parts of our country where people and businesses do not have broadband.

That's why the Chamber has partnered with Connected Nation, a nonprofit organization focused on fostering the deployment of high-speed Internet to all communities while increasing user demand through state and local grassroots awareness/adoption campaigns.

The partnership's first activity has been the launch of the Connect! campaign. This is a national tour-started in Columbus, Ohio, a couple of weeks ago-to promote the benefits of broadband connectivity to education, healthcare, agriculture, business, and the overall economy.

With regards to energy, the construction of much needed refineries, pipelines, coal and nuclear power plants, and electricity grids is continually hamstrung by regulatory restrictions.

We haven't built a new nuclear power plant or refinery in thirty years. And now, there is a concerted legal, regulatory, and financial attack underway against the expansion of coal-fired plants. It's a prescription for national economic decline.

In fact, when it comes to the construction of energy facilities, we've gone from NIMBY (Not In My Backyard) …to BANANA (Build Absolutely Nothing Anywhere Near Anything) …to NOPE (Nothing On Planet Earth).

The Chamber's Institute for 21st Century Energy is committed to moving the country closer to implementation of a comprehensive national energy strategy that is based on three principles:

" Greater efficiency
" Investment in new technologies that expand alternative energy and allow us to use traditional sources more cleanly; and
" Global action in which both developed and developing nations commit to achieving common environmental goals but are given the flexibility to find their own best path to meeting CO2 reduction targets.

Keep an eye out for the release of the Energy Institute's report with recommendations in late June.

Ladies and gentlemen, our nation's infrastructure … from interstate highways to the Information Superhighway … from airports to water ports to wastewater systems … from rail lines to transmission lines to power plants … is the central nervous system of our $13 trillion economy.

And let's just say that if things continue as they are, that central nervous system is going to fail, leaving the nation paralyzed.

The U.S. Chamber is ramping up its efforts to educate and rally the business community around infrastructure challenges and opportunities and to reach out to like-minded groups - including the Pennsylvania Chamber, local chambers, and Building America's Future, the group led by Governors Rendell and Schwarzenegger and New York Mayor Michael Bloomberg.

The time to get serious about this is now. Thank you for this opportunity, and thank you for your commitment to this important issue.