Chairman DeFazio Statement from Hearing on, “The Cost of Doing Nothing: Why Investing in Our Nation’s Infrastructure Cannot Wait”
Remarks as delivered can be found here.
The Honorable Peter A. DeFazio
Committee on Transportation and Infrastructure
Hearing on “The Cost of Doing Nothing:
Why Investing in our Nation’s Infrastructure Cannot Wait”
February 7, 2019
(Remarks as prepared for delivery.)
Today, we hold the Transportation and Infrastructure Committee’s first hearing of the 116th Congress. We are starting off by sounding the alarm bells – investing in America’s infrastructure cannot wait.
For years, we have held hearings on why infrastructure investment is important. We have rationally made the case about why roads, bridges, public transportation, airports, water and sewer systems cannot be left to crumble. We have shown how infrastructure keeps the economy humming, creates jobs, connects communities, moves people and goods, and ensures reliable access to clean water.
We know that our infrastructure investment needs are massive: according to the American Society of Civil Engineers (ASCE), we have an investment gap of $2 trillion over 10 years to fix what we have, meet future needs, and restore our global competitiveness. The investment gap in surface transportation alone is over $1 trillion. The gap for water, port, and related infrastructure is $249 billion. Further, the latest capital needs survey by the Airports Council International (ACI) estimates that, over the next five years, airports will require total investment of $100 billion -- more than $20 billion a year.
Unfortunately, highlighting needs has not spurred Congress to action. So let me be clear that the question is not whether we will need to invest, but when we will invest. Inaction has serious consequences and the cost of delay is high.
Every day that we ignore our ballooning infrastructure deficit, the problem becomes more expensive to fix and more pronounced; our constituents lose time and money; and we increase the risk of failure of these increasingly fragile systems. We must also act now to mitigate the effects of climate change, and build stronger, more resilient infrastructure that will withstand extreme weather events.
Deferring projects increases costs:
- Maintaining infrastructure now saves money down the line. According to a Cornell University study, every $1 of deferred maintenance on roads and bridges costs an additional $4 -$5 in future repair needs. Not keeping our assets in good repair in all modes of infrastructure increases the total cost to taxpayers down the line.
- Delaying the known replacement of an asset adds further cost. As an example, for the $2.6 billion Brent-Spence bridge project, every year the start of construction is delayed means $75 to $85 million per year in additional costs due to inflation alone.
The economic effects of infrastructure failure are significant:
- When infrastructure assets fail, the impacts to the economy and mobility can be staggering. The Northeast Corridor Commission estimates that a shutdown of the Northeast Corridor would paralyze the region and have an economic impact of $100 million per day. If either the Hudson River tunnels or the Portal Bridge failed, it would shut down the Northeast Corridor. These two critical assets as part of the Gateway project cost $14.6 billion to replace; but doing nothing would result in $36.5 billion per year in economic losses if these assets fail.
Poor infrastructure is costing our citizens and businesses money:
- According to the Business Roundtable, inadequate infrastructure costs U.S. businesses $27 billion per year in extra transportation costs.
- Between 2016-2025, the economy will lose almost $4 trillion in GDP if we do not upgrade our infrastructure, resulting in a loss of 2.5 million jobs, according to ASCE. American families will lose $3,400 each year in disposable income due to the infrastructure deficit if we do nothing.
- According to INRIX, in 2017, congestion cost drivers $305 billion, or an average of $1,445 per driver. Motorists spent an average of 41 hours a year in traffic during peak hours.
- The Texas Transportation Institute’s 2015 Urban Mobility Scorecard found that congestion caused urban Americans to travel an extra 6.9 billion hours and purchase an extra 3.1 billion gallons of fuel in 2014. The same study found that wasted fuel will increase to 3.8 billion gallons in 2020.
Crippling congestion is becoming the norm and affecting travel:
- According to the U.S. Travel Association, traffic volumes seen on Labor Day will become the norm on the average day on certain corridors, and nearly 60 percent of Americans say they would significantly alter their travel habits if that were the case. If travelers eliminate an average of one automobile trip per year, the U.S. economy would lose $23 billion.
- This congestion is affecting the air travel experience as well. ACI reports that U.S. airports now have more than $10 billion each year in unmet infrastructure needs. Passenger terminals across the United States, many of which were constructed in the 1960s or 1970s, are outdated and cannot accommodate expected passenger growth; and airports do not have the gates necessary to accommodate current airline departures and arrivals, let alone for welcoming new service for communities. This often means passengers go outside onto the tarmac to board their aircraft, or sit on the tarmac upon landing until a gate is available. U.S. airports are doing the best they can to find ways to meet their ballooning infrastructure needs, but this leads to local communities paying twice as much and waiting twice as long for upgrades.
How did we get to this point? Federal investment in infrastructure, as a share of total investment, has steadily declined in the last 15 years. In some cases, we have not adjusted user fees for far too long. Gas and diesel taxes that fuel the Highway Trust Fund have been stagnant for 25 years, causing purchasing power for road, bridge, and transit projects to fall by over 40 percent. The Passenger Facility Charge – a local fee assessed on passengers for airport projects has been capped for 20 years. In other cases, we have let user fees we have collected be directed away from their intended uses, as with the Harbor Maintenance Trust Fund.
Declining Federal funding has forced States and localities to raise more revenue locally in an attempt to meet their growing infrastructure needs. In the last two election cycles, localities passed ballot measures to raise more than $240 billion in transportation funds with a passage rate above 70 percent. Despite their efforts, the U.S. continues to experience a degradation of infrastructure.
Congress must act to provide significant Federal dollars to invest in U.S. infrastructure. Raising revenues is the only sustainable way to increase infrastructure investment. We must answer the tough question of how to sustain investments for future generations and to dig out from the effects of this chronic underinvestment.
America’s infrastructure is at a crossroads. We need a reinvigorated Federal role and a commitment to public infrastructure, and a 21st century vision for transportation policy that will meet the needs of the next generation of Americans and vehicles. We can’t just maintain what we have, we also need to modernize how we plan and build transportation projects. We have a tremendous opportunity to complete critical projects, create family wage jobs here in the U.S., and support U.S. industry.
We are in a time of unprecedented acceleration in innovation, and we must harness the power of technology to reduce congestion and emissions, and increase safety. Infrastructure we build today must be able to integrate technological advances, such as autonomous vehicles, as they become a reality. We must also take steps to increase the use of electric vehicles, build an electric backbone for our highway system to move people and goods, and invest in resilient infrastructure, to respond to climate change.
But all of this will only become a reality if we get serious about finding the money. I am open to any sustainable revenue solution, and will work closely with our colleagues on the Committee on Ways and Means, as well as the President. However, I have proposed three bills that provide real investment as a starting point in the discussion:
- “A Penny for Progress” provides approximately $500 billion for infrastructure investment to put our Nation’s highways, bridges, and public transit systems on a path to good repair. We can achieve this level of investment by indexing the gas and diesel tax and bonding off the indexation revenues and bringing those revenues forward. We are also exploring ways to take into account growing electric vehicle use in the future.
- “Unlocking the Harbor Maintenance Trust Fund” by amending current budgetary controls to allow the Army Corps of Engineers to spend the funds collected in the Trust Fund each year, thereby providing more than $18 billion for our Nation’s coastal and inland harbors over the next decade without raising taxes or increasing the deficit.
- “Rebuilding America’s Airport Infrastructure” will generate billions of dollars each year to help our airports rebuild and rehabilitate aging terminals, runways, and taxiways and keep pace with increasing demand in the 21st century – without raising taxes – by eliminating or raising the cap on the passenger facility charge (PFC).
As you will hear from today’s witnesses, the costs of doing nothing are far too great. It is long past time for Congress to step up to the plate and make significant investment in our nation’s infrastructure.
I thank the witnesses for being here today. I note that Secretary LaHood has a hard stop at 11:30 am and will have to leave us at that time.
More information from today’s hearing can be found here.
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