The House Committee on Transportation and Infrastructure today held its latest oversight hearing on the application of the American Recovery and Reinvestment Act. Now 225 days after the bill was signed into law, data show that the Act is having a positive impact on the American economy.
Following is the prepared opening statement of Committee Chairman James L. Oberstar (Minn.):
STATEMENT OF THE HONORABLE JAMES L. OBERSTAR
OCTOBER 1, 2009
The transportation and infrastructure investments of the American Recovery and Reinvestment Act of 2009 (P.L. 111-5) (Recovery Act), have already played a key role in putting Americans back to work. Federal agencies, States, and their local partners have demonstrated they can deliver transportation and infrastructure projects and create urgently needed employment in the tight timeframes set forth in the Recovery Act. These projects have already resulted in over one-hundred thousand workers getting off the bench and back on the job.
As of August 31, 2009, 64 percent of the total available formula funds for highway and transit projects have been put out to bid,. Almost 50 percent of these formula funds are under contract, and 42 percent are associated with projects underway.
Monitoring the percentage of allocated funds associated with projects out to bid, under contract, and underway helps us measure the Recovery Act’s progress. Critics of the Recovery Act focus exclusively on the amount of outlays of Federal transportation funds. This approach does not provide a good sense of Recovery Act progress because transportation projects primarily operate on a reimbursement mode. For example, States seek reimbursement for highway projects after construction is underway. Federal outlays, therefore, come months after jobs are created and necessary infrastructure projects have begun. Knowing how many funds are associated with projects out to bid, under contract, and underway better captures the extent to which Recovery Act funds have arrived on Main Street.
Critics of the Recovery Act also cite “red tape” as obstructing the quick and efficient use of funds. These assertions could not be further from the truth. The Recovery Act provides funding to States and local governments through the existing Federal-aid highway program. Further, States, months before the Recovery Act was even signed into law, geared up and worked with local officials to prepare to implement these funds.
After a State selects a Recovery Act project, the Federal Highway Administration (FHWA) approves the project within a day or two. Once FHWA approves a project, federal action is complete. It is then in the hands of States and their local partners to put these funds to work. As the recent reports we received from States demonstrate, most States moved aggressively to advertise projects, sign contracts, and begin construction. In fact, today we will hear from one State that has already put to work nearly all of its Recovery Act highway funds.
Against this backdrop, I scheduled this oversight hearing to hear from Federal, State, and local transportation officials who are implementing programs receiving funding under the Recovery Act. We will also hear from supply chain industry leaders whose companies have been able to keep workers employed because of the Recovery Act.
To provide additional insight into what progress has been made to date, I would like to share the results of the vigorous oversight that the Committee has already conducted. Just ten days after the Recovery Act was signed into law, the Committee requested transparency and accountability information directly from States, metropolitan planning organizations (MPOs), and public transit agencies. Those recipients have reported regularly to the Committee.
According to the most recent submissions received by the Committee, as of August 31, 2009, a total of 8,062 highway and transit projects in all 50 States, five Territories, and the District of Columbia have been put out to bid, totaling $22 billion. That’s 64 percent of the total available formula funds for highway and transit projects.
Of these 8,062 projects that have been put out to bid, 6,472 highway and transit projects in 50 States, two Territories, and the District of Columbia are already under contract. These projects under contract total $16.8 billion.
Work has begun on 5,279 projects in 50 States, two Territories, and the District of Columbia totaling $14.4 billion.
These 5,279 highway and transit projects underway have resulted in over 122,000 direct, on-project jobs. Direct, on-project jobs include workers employed to repair or build a new facility or maintain on-site equipment.
Just as important as direct, on-project jobs, are indirect and induced jobs (which others call supply chain jobs) that have resulted from Recovery Act investments. Indirect jobs include jobs at companies that produce construction materials such as steel, sand, gravel, cement, and asphalt. Indirect jobs also include jobs at companies that manufacture equipment such as new transit buses. Induced jobs include employees at restaurants who serve lunch to employees working on job sites.
Today we will hear from people who have seen first hand how the Recovery Act has sent positive ripples down the supply chain. In many cases, the Recovery Act has allowed companies that had planned lay offs, to keep their workforce intact. Many companies have even been able to bring back workers because of Recovery Act orders rolling in. Therefore, when you combine the direct, on-project jobs with all the jobs that the Recovery Act creates and sustains down the supply chain, the tally of jobs rises even higher.
The Committee also requested that all Federal agencies implementing programs that receive Recovery Act funds under the Committee’s jurisdiction provide a table of specific Recovery Act projects. As of September 18, 2009, Federal agencies under the Committee’s jurisdiction have announced 12,352 transportation and non-transportation projects totaling $40.6 billion, representing 63 percent of the total available funds. Funds have been committed for 11,624 projects totaling $33.7 billion, representing 53 percent of the total available funds.
Of the $48.1 billion in funding provided under the Recovery Act, the U.S. Department of Transportation (DOT) has obligated $28.8 billion for 9,640 projects, as of September 18, 2009. This represents 60 percent of the total available funds.
Within this total, State Departments of Transportation have submitted and received approval for 7,558 projects totaling $18.8 billion, approximately 70 percent of the Recovery Act highway formula funds.
This transparency and accountability information speaks for itself: Federal agencies, States, and their local partners are putting Americans back to work in family-wage, construction jobs all across the nation.
The Act further requires that at least one-half of all highway funds apportioned to States be obligated within 120 days (June 30, 2009) after the date of apportionment. I am pleased to report that all States met this requirement.
The Act additionally requires that at least one-half of all transit formula funds be obligated within 180 days (September 1, 2009) after the date of apportionment. I am also pleased to report that all States and local communities met this requirement.
The success of meeting these “use it or lose it” provisions should send a clear message to all Federal, State, and local governments implementing Recovery Act projects: you can quickly deliver transportation projects, put shovels into the ground, and in doing so improve our nation’s infrastructure and lift our economy out of recession.
We have also seen bids for transportation projects coming in much lower than expected. In their most recent report, GAO cites multiple examples of States pursuing additional projects because of these bid savings. For example, the Colorado Department of Transportation reported that 32 highway projects had come in lower than the original estimates, resulting in a bid savings of over $39 million. Across the nation, this bid savings has allowed Federal agencies, States, and their local partners to stretch Recovery Act funds even further, resulting in more projects, and in turn putting even more Americans to work.
Throughout development of the Recovery Act, I emphasized the importance of transparency and accountability and ensured that the transportation and infrastructure provisions would be subject to the most rigorous transparency and accountability requirements of the Act. I am pleased that the Obama Administration adopted many of these ideas, not just for transportation, but for all programs funded under the Act.
I also promised that the Committee would vigorously oversee implementation of the Recovery Act. The Committee will continue to require periodic direct reporting to the Committee by recipients of transportation and infrastructure funds under the Recovery Act as well as Federal agencies implementing Recovery Act programs under the Committee’s jurisdiction, to ensure that the funds are invested quickly, efficiently, and in harmony with the job-creating purposes of the Act. In addition, the Committee will continue to hold public hearings to examine the successes and challenges under the Act.
While much work remains, I am pleased with the progress that has been made in the first 225 days since enactment of the Recovery Act. I look forward to hearing the testimony of today’s witnesses and discussing what is being done to ensure that Recovery Act funds will continue to create good, family-wage jobs as quickly as possible, while at the same time improving our deteriorating infrastructure and laying the foundation for future economic growth.
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For more information on this hearing go to:transportation.house.gov/hearings/hearingDetail.aspx
For more information about the Committee's ARRA Transparency and Accountability Information, including the latest reports and supporting material, go to: transportation.house.gov/singlepages/singlepages.aspx
View T&I Committee members' statements on YouTube: www.youtube.com/user/HouseTransInf
