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Urgency Stressed in First Highway-Bill Hearing

February 12, 2015

By David Cullen

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Photo via Transportation and Infrastructure Committee
Photo via Transportation and Infrastructure Committee

Right from the start, “urgent need” was the phrase most emphasized during the first hearing of the U.S. House Committee on Transportation & Infrastructure on reauthorizing the surface-transportation bill, which was held Wednesday on Capitol Hill.

A spirit of bipartisanship was also in the air, as evidenced by the opening remarks of Chairman Bill Shuster (R-PA). “This is our first hearing of the year on surface transportation reauthorization —one of our top priorities.  We are actively working together with Ranking Member DeFazio and our colleagues on the other side of the aisle to write a bill that’s good for America,” he said. “I’m confident that, working with leaders in House and Senate, the Ways and Means Committee, and others, we can figure out the funding issues [for infrastructure as well].”

In his prepared remarks, Shuster emphasized the need for “a long-term bill to provide certainty for states and other non-federal partners to accomplish large projects.” He also said this year’s reauthorization needs “to get Washington out of the way of innovation– both in terms of innovative financing and new transportation technologies.  We need to reform federal government, accelerate project delivery, and focus funding where it’s needed the most.  We need to empower states and local governments with more authority– to make the best decisions for our communities. 

“And we need to be fiscally responsible,” he added. “A bill that is not fiscally responsible simply will not pass this Congress.”

In his opening remarks, Ranking Member Rep. Peter DeFazio (D-OR) got straight to the point: “I feel a tremendous sense of urgency. We can work for a long-term reauthorization. But the May 31st deadline [when current funding runs out] is of concern for me.

“Already, there are states—Tennessee and Arkansas—that say they will postpone or cancel projects or this construction season,” he continued. DeFazio then pointed out that “52% of the total [infrastructure] outlays in States are due to Federal contributions. And in 11 States, it’s 70% or more.

“So, we are looking at grinding to a halt pretty quickly,” he added. “it’s coming on construction season very soon.”

Near the start of his testimony before the committee, Secretary of Transportation Anthony Foxx stressed that the “surface transportation enterprise – and the millions of jobs that come with it – has been thrown into a continuing period of uncertainty due to the numerous short-term spending ‘patches’” used to fund it in recent years.

Echoing the opening remarks of Rep. DeFazio, Foxx stated that, “The inability to pass long term surface transportation funding bill creates uncertainty for local project sponsors and inhibits their ability to plan effectively.

“Increasingly, we are seeing State and local officials abandon planning on the more ambitious and expensive projects that will move our economy forward,” Foxx continued. “Instead, these officials are targeting available dollars on smaller preventative maintenance and repaving projects that while important for maintaining infrastructure availability in the near term, cannot address the longer term needs for additional investment in transportation infrastructure capacity and quality.”

He further remarked that both state and local officials are “rightly concerned about whether Congress will allow spending authority from the Highway Trust Fund to expire four months from now– precisely when the construction season should be heading into full swing.

Foxx noted that the Commissioner of Tennessee’s DOT has delayed $400 million in highway projects “because of the funding uncertainty in Washington” and that the Director of the Arkansas State Highway and Transportation Department delayed $100 million in highway construction projects for the same reason. “We may not see it directly, but failure to act on a long-term bill is actually making investments in critical infrastructure more expensive– and more difficult, for all of our State DOTs,” he observed.

However, the DOT Secretary also testified that “inadequate and inconsistent funding is not our only problem. The Federal programs that govern how we deliver projects must be modernized. Too often, projects undergo unnecessarily lengthy reviews, and we need to be able to make the types of reforms that will expedite high priority projects and identify best practices to guide future efforts without undermining bedrock environmental and labor laws or public engagement. We also need to reward States and local communities that coordinate their decision making with their neighbors and prioritize funding for freight projects that will benefit the Nation’s economy.”

Foxx said that for those reasons, he hoped that “the Administration, this Committee, and the many other Committees in Congress who must be heard from, will agree that we must bring this period of short-term patches to a close. We must give the American people and the American economy a well-funded, multi-year authorization bill with new programs and reforms that are focused on the Nation’s future needs.”

The GROW America Act

Moving onto this year’s version of the GROW America Act— the Obama Administration’s current infrastructure reauthorization proposal— Foxx said the six-year, $478 billion multimodal measure would be “fully paid for through an important element of the President's plan for a reformed business tax system that will encourage firms to create U.S. jobs instead of shifting jobs and profits overseas” along with projected fuel tax receipts.

Getting specific, he said the proposal would impose a one-time 14% transition tax on the untaxed foreign earnings that U.S. companies have accumulated overseas…. “this transition tax would mean that companies have to pay U.S. tax right now on the $2 trillion they already have overseas, rather than being able to delay paying any U.S. tax indefinitely” and that it would be “coupled with reforms to eliminate the incentive to shift profits and jobs to tax havens in the future.

Foxx also stated that the proposed act would “address safety vulnerabilities on our transportation network, both through increased investment in safety programs, and through policy changes that strengthen oversight and increase accountability,” including:

  • Streamlining federal truck- and bus-safety grant programs “to provide States with greater flexibility to address regional and evolving truck- and bus-safety issues”
  • Increased funding to the Highway Safety Improvement Program “to help engineers identify hazards and… help implement lasting safety improvements”
  • “Authority to make greater progress on eliminating drunk and distracted driving and other key safety concerns by giving States additional funding and flexibility”

According to Foxx, the GROW AMERICA Act would provide

  • $317 billion to invest in the highway system
  • $18 billion over 6 years for a multi-modal freight program “that will relieve specific bottlenecks in the system… and give freight stakeholders a meaningful seat at the table in selecting funded projects.”
  • $6 billion over six years in expanded financing options under the Transportation Infrastructure Finance and Innovation Act (TIFIA)-- “which could result in $60 billion of direct loans” for public-private infrastructure projects

In addition, the act calls for:

  • Increasing the amount of highway funds by an average of nearly 29 percent above FY2015, “emphasizing ‘Fix-it-First’ policies and reforms that prioritize investments for much needed repairs and improvements”
  • Encouraging safety on high-risk rural corridors as well as making “badly needed freight investments” in such regions and improving the Federal Lands Transportation Program to provide “a strategic, high-use transportation system on roads that directly access federal lands”

Foxx also contended that the transportation system need to be modernized via “technology and process innovation.” In that regard, he said the Grow America would enact provisions that include:

  • “More than doubling” the size of the Transportation Investment Generating Economic Recovery (TIGER) competitive grant program and “cement it in authorizing statute, which will encourage States and localities to bring more innovative, cross-modal proposals to the table and give the Department more resources to see that the most meritorious projects ultimately are constructed”
  • Spend $6 billion over six years to set up the Fixing and Accelerating Surface Transportation (FAST) program, “designed to create incentives for State and local partners to adopt critical reforms in a variety of areas, including safety and peak traffic demand management”
  • Help projects “break ground faster” by such measures as “institutionalizing capacity” within DOT to improve interagency coordination and implementing best practices, including advancing concurrent, rather than sequential, project review and using an online permitting dashboard to improve transparency and coordination

Foxx also stated that the proposed act would “address safety vulnerabilities on our transportation network, both through increased investment in safety programs, and through policy changes that strengthen oversight and increase accountability,” including:

  • Streamlining federal truck- and bus-safety grant programs “to provide States with greater flexibility to address regional and evolving truck- and bus-safety issues”
  • Increased funding to the Highway Safety Improvement Program “to help engineers identify hazards and… help implement lasting safety improvements”
  • “Authority to make greater progress on eliminating drunk and distracted driving and other key safety concerns by giving States additional funding and flexibility”

Due to what he termed the “urgent need” to rebuild transportation infrastructure, the Secretary of Transportation concluded his written testimony by reiterating that the GROW AMERICA Act would “use Highway Trust Fund revenues anticipated under current law in combination with revenues generated from pro-growth, business tax reform to fully offset the cost” of the act.

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