Transportation:

U.S. Chamber's Kavinoky discusses job, infrastructure prospects of new law

With President Obama signing the transportation bill last week, what will the new law mean for job creation and infrastructure improvements in the United States? During today's OnPoint, Janet Kavinoky, executive director of transportation and infrastructure at the U.S. Chamber of Commerce, discusses the challenging road the legislation took to final passage. She also addresses controversy over how the law handles environmental reviews of projects.

Transcript

Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Janet Kavinoky, executive director of transportation and infrastructure at the U.S. Chamber of Commerce. Janet, thanks for coming on the show.

Janet Kavinoky: You're welcome, thanks for having me.

Monica Trauzzi: Janet, ahead of the Independence Day recess Congress passed a transportation reauthorization bill. It was down to the wire, but they did manage to get it done. From a job standpoint, what are we looking at?

Janet Kavinoky: You know, you've heard Senator Boxer actually say this time and time again, the levels of funding that are in the federal programs support about 3 million jobs and that's direct jobs in construction, that's indirect jobs in related industries and those are the jobs that spring up where the infrastructure works really well and it's strong.

Monica Trauzzi: So, are we talking about any new jobs being created or just is continuing with projects that were sort of already mapped out?

Janet Kavinoky: We should actually see some net new job creation. It's not due to significant increases in funding. We're basically barely holding the line through 2014, but because of the reforms that are baked into the bill, things like expansion of opportunities for public/private partnerships through the TIFIA program and substantial speeding up of project delivery, we might actually see a little bit of net new job creation. The other element that contributes to that is the certainty that is provided now to the states and the locals. They know how much federal funding they're going to have through 2014 and they can start programming for that and planning for the match. That should help bring back the construction industry at least a little bit, but we're not going to get back really I think to pre-recession levels until we deal with the longer-term transportation funding issues.

Monica Trauzzi: There was sort of this overarching theme after the legislation passed from several members of Congress that they weren't totally satisfied, that there were pieces of the legislation that just didn't make them happy. What do you see as kind of the main sticking points that folks weren't happy with?

Janet Kavinoky: You know, in a large, controversial bill no one is going to be happy, which means it's probably a pretty decent piece of legislation. In the core transportation bill there were some fundamental fights over things like project delivery and streamlining. You saw people on one side of the aisle saying it doesn't go far enough. We needed the House approach in its entirety. You saw people on the other side of the aisle saying this goes far too far. I think that the House and the Senate struck a good compromise and adopted some pretty significant reforms there that are going to move the ball along. There are a couple of other pieces that people seem to be either unhappy or happy about. There is a group of the policy community that's very, very focused on performance measurement and saying that the states really need to set performance targets and then deliver on those or else have some sort of-well, either have some sort of incentive or have some sort of sanction against them. It doesn't go as far in performance management as people in that area would want. At the same time, it sets some national goals, it requires states and locals to plan for those goals and report on them. The other element is, of course, in the consolidation of federal programs. We've gone from 108 different programs in the highway program to less than-or about a third of that in total. In doing that, some sources of dedicated formula funding went away for certain programs and that creates concern in different communities that they're not sure that the states are going to deliver on projects in certain areas.

Monica Trauzzi: And there is concern over how the legislation handles environmental reviews. You mentioned streamlining. There's a streamlining approach that cuts reviews of projects that cost less than $5 million. Do you think that that sort of undercuts environmental policy?

Janet Kavinoky: Absolutely not, because you're talking about creating categorical exclusions. So on a small project, as you said, under $5 million, which is really a minor infrastructure project, it just means you're not applying NEPA in its entirety, a really big, long complicated process. It doesn't mean that you're not doing any sort of environmental review. That also applies on projects that are going to happen within the existing right of way. You're not expanding right-of-way, you're not taking any land, you're not taking any property, there's a categorical exclusion for projects in that right-of-way. There's also one when the federal government is just not a major partner in the project, so if a project is $30 million or more and the federal government is providing less than 15 percent of that money, there's also a CE for that.

Monica Trauzzi: The coal ash and Keystone provisions were removed from the final bill. What's the chamber's view on the other vehicles through which we may see these items handled?

Janet Kavinoky: Well, you know, we were very supportive of both Keystone and coal ash and I think those were traded off in order to get the fundamental reforms in the transportation bill. I think you'll see Keystone continue to come back in any moving legislative vehicle. There was a strong vote in the House, obviously, for moving that along and even in the Senate a majority of the Senate seemed to say that we need to do something about Keystone. In terms of coal ash, same thing, something very, very important to the industry not to have that counted as a household hazardous waste essentially. The challenge through the rest of this year is there's just not a whole lot in terms of legislative vehicle that's moving. We'll have some appropriations bills. They typically wouldn't put something like Keystone and coal ash on there. Really, it's going to come down to the lame-duck session and this big fiscal cliff and the question of whether you want to put things like Keystone and coal ash in when you're trying to do tax extenders and stave off a major financial disaster.

Monica Trauzzi: Did removing those controversial measures though really salvage the bill, get it across the finish line?

Janet Kavinoky: You know, I think that there were probably many things that came into play. First and foremost though was a meeting between Speaker Boehner and Leader Reid where they made a real commitment to moving that bill forward and they instructed the conferees to go out and get the thing across the finish line. I'm sure that there was some role in trading off Keystone and coal ash in particular for the streamlining and reforms, but, you know, we'd have to talk to the conferees about what happened inside baseball for that.

Monica Trauzzi: So, from a political standpoint, how significant do you consider it that Congress was able to pass a bill like this in an election year with the stakes so high?

Janet Kavinoky: I will tell you, two weeks before this bill passed I was pretty confident we weren't going to have legislation. Things weren't looking good. Compromise wasn't happening. The two parties weren't talking to each other. The fact that you saw the bipartisan, bicameral leadership in Congress get together and say, you know what, this is something we've got to do for Americans and they did it along with, obviously, student loans and flood protection insurance. I actually feel very positive that there was a place to compromise and I hope Congress can build on that compromise while they tackle some of those bigger picture issues later in the year.

Monica Trauzzi: All right, we'll end it right there. Thank you for coming on the show.

Janet Kavinoky: Thank you.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

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