One on One with the ChairmanBy Christian Klein, AED vice president of Government Affairs and Washington counsel, and Virginia Scattergood, AED director of Government Affairs and associate Washington counsel
Article Date: 04-01-2008
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.
House Transportation and Infrastructure Chairman James Oberstar (D-MN) speaks about the nation's infrastructure crisis - and how to solve it.
AED: Chairman Oberstar, the Minnesota bridge collapse last summer focused public attention on America's crumbling infrastructure. You've been leading the crusade to increase federal investment in roads and bridges. How do you define the challenge we're facing in this area?Oberstar: The tragic collapse of the I-35W bridge in Minneapolis demonstrated the need to make a commitment to invest in the maintenance and major reconstruction of our nation's infrastructure. Many facilities are being stretched to the limit of their design life and beyond. Of the 594,101 bridges in the National Bridge Inventory, 26.2 percent are structurally deficient or functionally obsolete. According to the Department of Transportation (DOT), over $65 billion could be invested immediately in a cost-beneficial way to replace or otherwise address existing bridge deficiencies. While bridges are a specific problem, they are representative of the situation facing all aspects of our surface transportation infrastructure. Public investment by all levels of government is not keeping up with growing demands. The DOT's 2006 Conditions & Performance report estimates that the average annual capital investment just to maintain our highways and bridges at their current condition for the next 20 years is $78.8 billion, 12.2 percent higher than the capital investment by all levels of government in 2004. The report, however, underestimates the true extent of the gap by failing to adequately account for the inflationary pressures on available resources, as well as the increasing costs of construction materials. This gap demonstrates the magnitude of our challenge. We need to find ways to improve the long-term financial viability of the Highway Trust Fund to support the investments needed to keep our economy competitive in global markets, and maintain the quality of life in our communities. Many of us have recognized the importance of making critical infrastructure investments, but far too many of the nation's leaders have taken the path of least resistance, thus ignoring this looming crisis. The tragedy of the I-35W bridge collapse highlighted the need to make transportation infrastructure investment a national priority. While the terrible events of August 1, 2007, served as a rallying call for many policy makers around the country, others failed to understand the lessons to be learned from this tragedy. We have an opportunity to make a commitment to upgrading our infrastructure so that events like this will not occur again. I am committed to leading this effort. AED: Looking toward the 2009 reauthorization of the federal highway program, what goals have you set? Oberstar: Our primary goal is to build the case about the structural and programmatic needs of the system, as well as the overall investment level necessary to ensure that these needs are being met. As we start this process, a couple of things are very clear. First, the nation is significantly underinvesting in infrastructure. The data in the DOT's Condition and Performance Report confirms this. Second, the result of this underinvestment leads to growing congestion, which is undermining our economic competitiveness and quality of life. The 2007 Urban Mobility Report by the Texas Transportation Institute provided a grim illustration of the impact of this failure to invest in our surface transportation network. The wasted fuel and time translated into a total congestion cost of $78.2 billion in 2005-$5.1 billion higher than a year earlier. Overall, congestion in 2005 caused 4.2 billion hours of travel delay that resulted in an additional 2.9 billion gallons of fuel being used while shippers, travelers and commuters are stranded in traffic. This congestion is also increasing logistics costs. According to the Council of Supply Chain Management Professionals, between 2004 and 2005, after 17 years of decline, total logistics costs for U.S. companies increased by $156 billion. Total logistics costs accounted for 9.5 percent of the Gross Domestic Product in 2005, up from 8.8 percent in 2004. These increased costs significantly undermine our nation's economic competitiveness. There is no "silver bullet" to solving this crisis. Addressing these challenges and developing our multimodal transportation network will require a significant increase in investment by all levels of government. It will also require maintaining and upgrading current facilities, as well as identifying and prioritizing new projects to improve performance. We must also develop programs and policies that ensure public resources improve the overall performance of the entire surface transportation network, and enhance freight and passenger access and mobility. Achieving this will require accountability among all stakeholders, and the development of an outcome-based program. This will also restore credibility to the surface transportation programs, and aid our efforts to secure additional revenues to meet the needs of the system. Such a system can only emerge with strong federal leadership.AED: Our association and our construction industry allies have long advocated a user fee increase as the most fiscally-responsible way to pay for additional surface transportation infrastructure investment. Is this goal politically attainable in the current environment?Oberstar: One of the key issues before my Committee is to evaluate the long-term adequacy of the existing funding mechanisms for highway and transit programs. The purchasing power of gas tax revenues has been eroded by inflation. Over the last decade, the gas tax has lost over one-quarter of its purchasing power. Today, one dollar in the Highway Trust Fund is equivalent to about 46 cents in 1980, and about 21 cents in 1970. Restoring the purchasing power of the gas tax to the level it equaled in 1993 - the last time it was increased - requires an increase of about 6.5 cents a gallon. During the last surface transportation reauthorization, then-Chairman Don Young and I offered a bipartisan $375 billion proposal to provide the programmatic structure and resources to begin the improvement of our nation's surface transportation network. I appreciate the support we received from AED and others as we worked to advance that legislation. Unfortunately, the Bush administration and the congressional Republican leadership blocked our proposal because it called for an increase in the surface transportation user fee. There's no doubt that achieving a user fee increase will be a challenge in the current legislative and political environment. To succeed, we need to make the case and build the record for the need to increase investment. If we learned anything from the last reauthorization, it is that just talking about needs will not be enough to secure increased investments. We must look at making the programmatic reforms that allow us to rebuild public trust, and ensure that the system meets the nation's needs. We must develop a structure that ensures accountability and that improves the condition and performance of the network. We will continue to make this case over the next year through hearings and public events "outside the Beltway." Collectively, we must make the case regarding the importance of the highway network to the nation, and the need to generate the user fee revenue necessary as support. We should have done this in SAFETEA-LU [the highway law enacted in 2005], and we will continue to look at this as we address funding challenges. AED: From your standpoint, what can or should a group of politically-engaged industry leaders like AED's members be doing to help you create the political will to make increased infrastructure investment a reality? Oberstar: As we move forward with legislation addressing the nation's surface transportation challenges, we need the help of groups like AED in making the case for additional investment. We need organizations like AED to educate their members and others in the business community about the impact of transportation and logistics on their bottom-line. It is intuitive that congestion delays and transportation inefficiencies increase business costs, but we need your community to help give us the specifics. We need surface transportation infrastructure investment to be a priority issue not just for your organization, but also for your members. We need individual companies speaking about the need to improve the nation's transportation network early and often. The next surface transportation reauthorization will require difficult decisions. We are facing an ever-tightening Highway Trust Fund, and a system that is falling further behind. I am prepared to lead the effort from Capitol Hill. We are going to need the business community and others to stand up with us when these decisions have to be made. I understand that AED has recently created a Highway Infrastructure Taskforce of leading equipment distributors around the country to support our reauthorization efforts. It's that type of involvement at the grassroots and grasstops level that's going to make a difference this time around.AED: Over the past several years, sewer and drinking water funding has been consistently lower than what is needed. What is the future of water infrastructure and how do we get to where we should be?Oberstar: One of the leading challenges is how to address the nation's aging water infrastructure, which is in dire need of repair, replacement, and upgrading. Several recent studies have shown the need to increase investment because infrastructure laid down over the years is approaching the end of its useful life. We have yet to reduce the existing "gap" between our nation's water infrastructure needs and the funds we have available to repair systems and fund future projects. Although much of our infrastructure is unnoticed and underappreciated by most Americans on a daily basis, this "out of sight, out of mind" attitude changes when problems arise. Polls have shown that, overwhelmingly, Americans believe clean, safe water is a priority issue that warrants federal investment. I am pleased that one of the first bills to be approved by the new Democratic House majority last year was to reauthorize appropriations for the Clean Water State Revolving Fund (SRF). The Clean Water SRF is the leading source of federal funding for the repair, replacement, and upgrading of our nation's wastewater infrastructure. The Water Quality Financing Act (H.R. 720), would reauthorize the Clean Water SRF at $16 billion over the next four years, and provide increased flexibility for states and local governments to tailor scarce resources to address local water quality needs. I am confident that before the end of the 110th Congress, the House and Senate will send a bill to the president that will reauthorize this important program.AED: A number of construction industry groups whom you count as close allies on infrastructure issues have raised significant concerns about your Clean Water Restoration Act. Specifically, they've said that it would dramatically expand the Clean Water Act, give sweeping new powers to the Army Corps of Engineers, and threaten construction, mining, quarrying, and other types of economic activity. How do you respond?Oberstar: For decades, the Clean Water Act has provided the bedrock for guarding the waters, including wetlands, that protect our lives and livelihoods, support our nation's economic well-being, and sustain our environment. Recently, two U.S. Supreme Court decisions, Solid Waste Agency of Northern Cook County v. Corps of Engineers ("SWANCC") and Rapanos et ux., et at. v. United States ("Rapanos"), have thrown the Federal Clean Water programs into turmoil. In the SWANCC decision, the Court limited the scope of federal protections under the Clean Water Act. The Court chose to create a new test for federal protection that is in direct contravention to the Clean Water Act.In 2006, the Court issued a second opinion on the scope of federal protection under the Clean Water Act - the Rapanos decision, which created confusion for regulated entities and individuals in navigating the Corps of Engineers and Environmental Protection Agency permitting process.As a result of the these decisions, individual communities, developers, and others face substantial confusion about whether they must apply for a federal permit to carry out activities on their land, increased paperwork requirements, increased time and delay in navigating the regulatory process, and increased costs. This confusion and delay has only been exacerbated by guidance issued by the Bush administration requiring a case-by-case determination for every potential impact to water - which in the St. Paul District of the Corps, alone, has resulted in over a 900 percent slowdown in completed permit reviews in only one year.My Clean Water Restoration Act is designed to address those problems. The purpose of this legislation is to reaffirm the purpose of the Clean Water Act - to restore and maintain the integrity of the nation's waters.This legislation has been narrowly drawn to restore only the authority that existed prior to the Court decisions and would reinstate the commonly understood, more simplified permitting process, reduce the paperwork requirements for individuals, reduce the time and delays required for processing permits, and reduce overall costs.Congress understood over three decades ago that restoring and maintaining the nation's waters would require two key factors - a national commitment to protect water quality, and a partnership between federal, state, and local governments, and the public. The Clean Water Restoration Act will restore these protections and ensure that we pass along a clean, safe, and sustainable water environment to future generations. AED: Mr. Chairman, thank you for sharing your views with us. We look forward to working with you and your staff for many years to come. Matt Hallett, AED's director of Government Affairs, contributed to this story.
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