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"Rebuilding America-The Time is Now!" - Remarks by Thomas J. Donohue, President and CEO, U.S. Chamber of Commerce

Thursday, August 9, 2007 - 8:00pm


Irving, Texas
August 10, 2007

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Thank you very much, and good afternoon ladies and gentlemen.

Today, we meet at a time when--at long last--the nation's attention is focused squarely on infrastructure, but under the worst possible circumstances. The tragic deaths of those swept away in the Minneapolis bridge collapse are a potent reminder of something we know all too well--America's infrastructure is showing its age and increasingly, with deadly consequences.

Our hearts go out to those who lost loved ones. Hopefully, something positive can emerge from this tragedy--a new national resolve with committed citizens and accountable leaders--all working together to prevent such tragedies in the future.

Now is the time to move on a robust, thoughtful, and comprehensive plan to build, maintain, and fund a world-class 21st century infrastructure. That is why you are here and have been engaged in lively discussions over the past three days. I applaud your commitment. But now it's time for us all to roll up our sleeves and go to work.

There can be no more delay. Politicians cannot kick the can down the road any longer. We must hold our elected leaders accountable--at all levels of government, regardless of party. There must be a political price to be paid for neglecting America's most fundamental needs. If we can't make our leaders see the light, then we must make them feel the heat.

The business community must lead this effort--but to do that we must be united. We must put an end to the intramural squabbles that have divided stakeholders--mode versus mode, shipper versus carrier, urban versus rural, and region versus region. We will all lose unless we rally and unite around an urgent and compelling mission--to rebuild America.


What's at stake is simple and stark. If we fail, we will lose jobs and industries to other nations. If we fail, we will pollute our air and destroy the free, mobile way of life we cherish. If we fail, we will see more senseless deaths across our bridges, on our roads, and, yes, in the skies above our cities.

And so, we must not fail. We must embrace a bold vision for the future and start building on it today.

We cannot treat infrastructure like other problems or programs where you can wait until the very last minute and then write a big check. Infrastructure projects require foresight and years of careful planning.

As you well know, we have a system that is overworked, underfunded, increasingly unsafe, and without a strategic vision. How did this happen?

Decades ago we built the best infrastructure system the world has ever known and then proceeded to take it for granted. As a nation, we've allowed governments at all levels to pile on complex and overlapping regulations. It takes years, even decades, to bring projects on line. Red tape and lawsuits can bring the most commonsense improvements to a
grinding halt.

We've refused to make tough choices or set commonsense priorities. We have failed to plan, failed to innovate, and failed to invest. We've allowed money to be wasted and have permitted federal and state lawmakers to divert infrastructure dollars to other purposes. We've seen construction and land costs go up while letting revenue sources stagnate and decline.

It shouldn't take a disaster like the bridge collapse to focus the nation's attention on our vast infrastructure challenges. But now that we have that focus, we must not lose it.

Our global competitors are building and rebuilding while America is standing still. China, India, and the developing world are building at a staggering pace. China spends 9% of its GDP on infrastructure; India, 5% and rising. While they start well behind us, they are catching up fast!

How much is the United States spending as a percentage of GDP? Less than 2%, on average, since 1980. How can we expect to remain competitive with that level of investment?

We must address the infrastructure crisis now, head-on, before it is too late.
Where We Are Today

We need to start by telling a compelling story to the American people. We must educate our citizenry and those they send to office.

Roads and Bridges

Americans need to know that 33% of our major roads are in poor or mediocre condition. Thirty-six percent of America's major urban highways are congested. Congestion costs drivers $63 billion a year in wasted time and fuel costs. Americans spend 3.7 billion hours a year stuck in traffic. And while their car engines are idling, they are pumping thousands of tons of pollution into the air every day.

Shoddy road conditions result in $67 billion in extra vehicle repairs and operating costs per year. More important, poorly maintained roads contribute to a third of all highway fatalities. That's more than 13,000 deaths every year--a national scandal of shocking proportions.

Furthermore, a quarter of our bridges are structurally deficient or functionally obsolete. Since 1966, 1,500 bridges have actually collapsed.

The condition of our roads and bridges is likely to get much worse. Traffic is expected to skyrocket in coming years. It has already shot up 40% between 1990 and 2005 while capacity has increased just 2%.

The cost of materials used to fix pavements has increased 33% in the past three years. Steel, oil, and concrete are all more expensive. Yet despite these growing needs and costs, the Highway Trust Fund will be $4 billion in the hole in just two years.

Aviation

Things aren't much better up in the skies. Many Americans are learning this the hard way this summer. But do they understand the full picture?

The aviation system is facing a "perfect storm"--extreme market competition, high fuel costs, growing taxes and user fees, excessive security burdens, severe congestion, an aging workforce of pilots and air traffic controllers, and an antiquated air traffic control system incapable of handling increasing volume.

U.S. airlines could have 1 billion customers--that's billion with a "b"--by 2015. More passengers mean more planes. The use of smaller regional jets and the growth in business and general aviation will make the congestion even worse.

Just this week, we learned that U.S. airline delays are at their highest level in at least 13 years. For those of you flying home this afternoon, about a third of you will suffer a delayed or cancelled flight. An antiquated air traffic control system is at the heart of many of these problems and must be addressed.

The costs of inaction are steep--aviation delays cost $9 billion in 2000 and are on target to hit more than $30 billion by 2015. And then there is the cost no one really likes to talk about--the potential for significant loss of life in midair or on overcrowded runways.

Funding for the FAA must be reauthorized this year. But lawmakers have yet to reach an agreement on funding levels and funding mechanisms.

Railroads, Ports, Inland Waterways, and Transit Systems

There are also significant deficiencies in our railroads, ports, inland waterways, and transit systems.

By 2020, every major U.S. container port is projected to at least double the volume of cargo it was designed to handle. Select East Coast ports will triple in volume, and some West Coast ports will quadruple.

To maintain existing infrastructure and to accommodate freight growth, the railroads will need nearly $200 billion over the next 20 years, primarily from private investment and with some tax incentives to help pay for new capacity. Intercity passenger rail upgrades will require
$60 billion.

Our transit systems get a D+ rating from the American Society of Civil Engineers. Transit investment is falling even as transit use increased faster than any other mode of transportation--up 21%--between 1993 and 2002.

Our inland waterways also need serious attention--removing obstructions, widening channels, and replacing locks. And the number of dams deemed unsafe by our civil engineers has risen 33% to more than 3,500 since 1998.


Energy, Water, and Broadband

Let's not overlook infrastructure beyond transportation--in energy, water, and communications. How many of our fellow citizens simply take this infrastructure for granted?

Our energy needs are going to increase by a third between now and 2030. Yet we haven't built a new refinery in this country since the 1970s. We have locked away many of our domestic energy resources. We allow not-in-my-backyard protests to stand in the way of liquefied natural gas facilities, power plants, pipelines, and other facilities.

While electricity demand has increased by about 25% since 1990, construction of transmission facilities has decreased about 30%. The nuclear power industry--which could put hundreds of thousands of Americans to work building new plants--has been stymied because of slow permitting and Congress' refusal to open the Yucca Mountain waste facility.

Our drinking and wastewater systems are also in poor condition. According to the Environmental Protection Agency, we will need hundreds of billions of dollars over the next two decades to repair them.

And let's not forget about information--it relies on good infrastructure just as much as people, freight, and energy. The Information Superhighway is as clogged and congested as many of our interstates.

Global traffic could exceed the Internet's capacity this year due, in large part, to the lack of investment in new capacity. Our nation is falling behind in broadband deployment. We're supposed to be the world's technology leader, yet we rank just 15th in broadband penetration.

So from interstate highways to the Information Superhighway from airports to water ports to wastewater systems from rail lines to transmission lines to power plants our infrastructure is in crisis.

There are different estimates of the total price tag. The American Society of Civil Engineers says that it will take $1.6 trillion over the next five years. This includes some of the systems I mentioned--but not all of them. It includes a few I didn't mention, such as parks and schools.

However you add it up, it's huge!


Where We Go From Here--Let's Rebuild America

What must the nation do to meet the enormous and urgent challenge I have just outlined? Permit me to briefly address that question and tell you what the U.S. Chamber of Commerce intends to do.

Those of us who have worked on infrastructure for many years have learned, that on this issue, public attention spans are short. Government decision making is slow and diffuse. Politicians rarely look beyond the needs of their own states and districts. And the news media mostly yawn unless there is a tragedy.

If we really want to move this country off the dime and build a modern and safe infrastructure, then the business community must step up to the plate and lead. No one else is warming up in the on-deck circle.

And so today, I'm here to tell you that the Chamber of Commerce of the United States will organize, fund, and lead this critical effort. We are launching a major, multimillion-dollar initiative called Let's Rebuild America.

We will put money, people, research, programs, and strong political action around a sustained, long-term campaign to rebuild the economic platform of our nation. We will employ every resource at our disposal--our policy expertise, our lobbying clout, our grassroots capabilities, and our communications channels.

To succeed, we need all transportation and infrastructure stakeholders at the table--all modes, all industries, builders, carriers, users, and shippers alike.

We will appeal to every American who is sick of pollution, tired of congestion, fed up with rising costs, and concerned about their safety.

Four key goals will define the mission and underpin the work of our Let's Rebuild America initiative.

Documenting the Problem With Solid, Indisputable Research

First, we will document in a factual and comprehensive way the totality of America's infrastructure needs--not just what is required to patch things up, but what we must do to move our country and economy forward in a competitive world.

Our experience tells us that when you put a credible body of facts on the table and gain widespread agreement on those facts, that's a critical first step to forging consensus and forcing action.

We have joined with others in asking the Rand Corporation to prepare a definitive report that documents the current state of our infrastructure and outlines the future needs of a $13 trillion economy that will grow to $20 trillion by 2020, given a 3% growth rate. Researchers will also break out their findings state-by-state so that we can put an infrastructure report card in front of every governor and state legislature in the country. Perhaps, then, they will see the light--and feel the heat!

Educating Americans About the Benefits of Infrastructure and the Cost of Failure

Our second goal is to educate the public, the business community, policymakers, and government at all levels about the benefits of investing in infrastructure and the cost of failure.

Using the Rand study and other research--and backed by an aggressive communications program--we will widely disseminate a series of compelling messages to build grassroots support for infrastructure.

The people of our country must know, and be reminded again and again, that we can create good American jobs, clean the air, succeed in a global economy, preserve a good quality of life, and save innocent lives by investing in our infrastructure.

Spurring Private Investment in Infrastructure

Our third goal is to unleash and unlock the potentially hundreds of billions of dollars in private investment just waiting to be spent on critically needed power plants, pipelines, refineries, transmission lines, broadband lines, port facilities, railroads, airports, and privately constructed roadways.

The money is there--ready, willing, and able--if government and regulators would just get out of the way.

No one objects to timely environmental reviews, and we all support strong health and safety protections. But the red tape, lawsuits, and mind-numbing regulations we have imposed on our infrastructure systems and transportation modes defy common sense.

The Chamber's Let's Rebuild America initiative will identify and seek to reform those rules and policies that threaten the efficiency of our logistics system and obstruct positive investments in our nation's future.

Fostering an Honest Dialogue on Public Financing

Our fourth goal is to foster an honest national dialogue on how and where we are going to find the public money to meet critical infrastructure needs. There is no single answer to that question--and that's good! It means we have options, but all the options must be on the table.

I have just spoken about the great potential for private financing of many infrastructure projects. We must also do more to ensure that public dollars are spent wisely. That means ending waste and targeting the highest priority projects. It means a sensible mix of projects based on actual needs and not on politics or ideologies--for example, more road construction in some communities, more investment in mass transit in others.

It also means ending the practice of diverting money intended for infrastructure to other programs. Politicians should start paying a price when they skim money from dedicated transportation funds to pay for projects of their own choosing. It breaks trust with the taxpayers who expect their user fees to go toward their intended purposes.

Both the federal and state governments are guilty of this practice. U.S. Secretary of Transportation Mary Peters says that only 60% of federal highway funds actually are spent on "core" needs--highways and bridges. Here in Texas, the Legislature's budget for the next two fiscal years will divert $1.6 billion in infrastructure funding to other needs. That amount is up 15% from the previous budget cycle and a major step in the wrong direction. And Texas is hardly alone among the states.

The Federal Aviation Administration is even poaching its capital budget to pay for operations. That's shortsighted, dangerous, and wrong.

In addition to cutting waste and ensuring that infrastructure dollars are spent as promised, we can also stretch public dollars by tapping the growing interest in public-private partnerships and other innovative financing arrangements.

In Chicago, Mayor Richard Daley leased the 7.8 mile Chicago Skyway for $1.8 billion in 2005 to a Spanish-Australian consortium. It quickly improved traffic flow by installing state-of-the-art electronic toll collection equipment. Indiana Gov. Mitch Daniels leased an Indiana toll road for $3.8 billion. Gov. Ed Rendell of Pennsylvania and New Jersey Gov. Jon Corzine may lease their state's respective turnpikes.

Some critics have attacked such projects when they involve foreign companies. My question to the critics is this: What are those companies going to do--roll up the turnpike and take it home?

Yet even with these approaches, there is no question that as a nation we are going to have to find and invest more public dollars in our infrastructure.

Congress can start by swiftly completing the important legislation before it right now. Lawmakers are near the finish line on a $21 billion measure to fund our inland waterways. We are pressing the Senate to pass the conference report to The Water Resources Development Act and urging the president to withdraw his unwise veto threat. Congress also needs to get its act together on reauthorizing funding for the Federal Aviation Administration, which expires this year. At this late date, Congress has yet to reach an agreement on funding levels and funding mechanisms.

Lawmakers should also complete work on the Transportation, Housing and Urban Development appropriations measure by September 30 and send it to the president for his signature. And Congress must take action to save the Highway Trust Fund from going broke.

We are going to have to face this fundamental fact--we are a growing people and a growing country. If we want a new road, a new runway, or a new transit system, we've got to buy it. No one is giving them away for free.

Therefore, along with other options, we are going to have to consider an increase in the federal gasoline user fee. This could take the form of a straightforward increase in a fee that hasn't been raised in 14 years or it may be in the form of a carbon tax designed to address global warming--as long as the proceeds are dedicated to transportation.


Conclusion

Ladies and gentlemen, I hope each of you will closely follow the announcements we will make in the coming weeks as we roll out our
Let's Rebuild America initiative. We welcome your ideas, your expertise, and your criticisms. We need your support and involvement.

With your help, we will accomplish our fundamental objectives

To do the critical research and build an irrefutable case

To educate and mobilize the American people by telling a compelling story

To spur private investment by removing regulatory roadblocks and embracing innovation and technology

And to increase public investment in infrastructure and ensure that the money is spent wisely and efficiently.

The question facing America is this: Are we still a nation of builders? Are we still a can-do society? Are we still the kind of people who can rally to a great cause with a shared sense of mission and national purpose?

It's worth recalling that after the great wars of the last century, the challenge facing America was to rebuild other countries, countries that were in ruins--even our former enemies. And we did it. Our challenge today is to rebuild our own country--a country that is hardly in ruins but which has serious unmet needs.

Surely we ought to be able to create the vision, forge the consensus, secure the resources, and find the political courage to make
this happen.

I believe that we can, and I believe that we will--but business must lead the way.

Thank you very much.

View The Competitiveness Agenda