Earlier this week, a coalition of business, labor, and transportation groups launched a new campaign challenging the presidential candidates and Congress to make transportation and infrastructure top-tier issues. During today's OnPoint, Pete Ruane, president of the American Road & Transportation Builders Association, discusses the campaign and legislative challenges facing the transportation sector this year. Ruane explains why he believes more money should be appropriated for infrastructure improvement, saying America's competitiveness is at stake if changes are not made.
Monica Trauzzi: Welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Pete Ruane, president of the American Road and Transportation Builders Association. Pete, thanks for coming on the show.
Pete Ruane: My pleasure.
Monica Trauzzi: Pete, ARTBA, along with a coalition of other businesses, labor groups, transportation groups, launched a new campaign this week challenging the next president and members of Congress to make transportation and infrastructure a high priority. Explain the timing of this and why this coalition was formed.
Pete Ruane: Well, the coalition was formed under the leadership of the U.S. Chamber of Commerce. Chairman Tom Donahue, the president of the chamber is leading the effort. The Americans for Transportation Mobility actually was formed back in 2001, but the launch of the new campaign yesterday wasn't coincident with the timing of the presidential campaign, the upcoming congressional elections and, frankly, there's a looming fiscal crisis with the Highway trust fund that the Congress is hopefully going to deal with this week. And so the timing had all those facts and items in consideration as we launched this new campaign.
Monica Trauzzi: So, how do you convince policymakers that this should be a top-tier issue? It's not a sexy issue like some of the other things we're hearing about. So, what's the pitch that you made to them to consider it?
Pete Ruane: Well, it starts with the issue of safety. Its priority concern is to have our nation's roads and transit and aviation and waterways all safe. It's costing us over 42,000 lives in the highway area alone. It's the issue of our quality of life. Our transportation system is the backbone of our economy. It under-girds everything we do economically in our national productivity. And we're dealing with major competitive issues as other nations are investing more in infrastructure. So, you add all that up in the context of a raging political campaign, it's time for the Congress, it's time for our candidates to start talking about transportation as a national priority.
Monica Trauzzi: We've heard a lot on the campaign trail a bout a gas tax holiday. How would a gas tax holiday impact the projects and the organizations that your group represents?
Pete Ruane: Well, the gas tax holiday, putting it in context, what we're talking about, for that three month period it's about $28 per car owner. The typical family would save maybe $56, which, frankly, for many of us is not even a full tank of gas. The impact of that, if that were to be to be implemented, and we think it's bad idea by the way and we're opposed to it and have lobbied against it, we believe that that will cost the trust fund billions of dollars. It will cost jobs. It will not have, in our opinion, the effect that it's intended. Recent attempts to do that, in fact, the states of Indiana and Illinois in the past have suspended their gas taxes and, the bottom line, it never got to the consumer. The price was not reduced to the consumer at the pump and there's no guarantee that would happen here. So we think it's a bad idea that will have very serious effects on jobs and on spending for infrastructure.
Monica Trauzzi: Well, do you think that there should actually be a federal tax hike down the line?
Pete Ruane: Yes, as part of the reauthorization next year, 2009. Yes, our organization and many others are advocating an increase in the federal user fee.
Monica Trauzzi: Do you think that's viable though, I mean considering how high gas prices are right now?
Pete Ruane: Yeah. In today's climate that's a very difficult assignment. We realize that, but I think things will change. I think you're going to see a drop and, frankly, it's the right thing to do. The impact of this on the average consumer is very modest. Again, when they suggested a five cent increase back in 2002, the price of gasoline was $1.50. Now, we're over four dollars. I think we've shown the economy to be resilient to absorb those changes. We're not saying it's the right thing, because it is harmful, no doubt about it. But a modest increase in the user fee will not have the drastic effect on our economy or on the driving public that I think some people think will happen.
Monica Trauzzi: This campaign comes at an interesting time for transportation and infrastructure issues. As you mentioned, Congress is looking to reauthorize SAFETEA-LU, which is the transportation law. Where do talks on SAFETEA-LU stand at this point and what are the most pressing issues that you think needs to be addressed in the reauthorization bill?
Pete Ruane: Well, both the House and the Senate have started oversight hearings. There have been a number of hearings developing a case and gathering the facts as to what the situation is with our nation's transportation system. There have been a number of reports, a number of organizations, including a commission that the Congress authorized, released a report in January of this year. Our organization has done studies, the U.S. Chamber. The ATM coalition has done a number of studies, the General Accounting Office. And, frankly, there's a host of empirical studies out there all arguing for greater investment in our nation's transportation system. So, the Congress now is going over those studies, evaluating the recommendations and they're going to have an accelerated schedule here in the coming months. There will be additional hearings this summer, in the fall, and hoping for a very timely action in the spring of 2009 because the bill runs out at the end of September 2009. So with a new administration, a new Congress, with lots of issues on their plate, it's going to be very difficult to get it done on time, but they can get it done on time and they've gotten a good early start. And they're very serious about this because of the size of the problem and the demand it's being made on business all of the country.
Monica Trauzzi: Is there a concern that not enough money will appropriated for this?
Pete Ruane: Well, that is the basic issue, is the level of investment that is being focused on both transit, highways, all of our nation's transportation system. And so our organization, the various coalitions involved including ATM, the Transportation Construction Coalition are all arguing and recommending a very robust program. Some of the leaders of the committees have talked substantial increases. It was 286 for highways in the last bill. I think you're going to see, literally, a need for doubling of that kind of investment to have the kind of an impact just to maintain our system and, hopefully, improve the conditions that are out there.
Monica Trauzzi: Should more money be put into improving our rail system since that is going to produce less emissions than say transporting via truck?
Pete Ruane: Absolutely. There's a need to improve the capacity of our rail systems, particularly those junctures leading out of ports on both of the coastlines. There is a need to increase investment. There's a need to increase investment in high-speed passenger rail. I think we're long overdue for the country to have a more robust, high-speed passenger rail system. And I think the private sector, the owners of the railroads, they themselves are making substantial investments in various corridors around the country. And the main thing is what's driving all of this is the anticipated growth in freight movement that's going to come. It's inevitable, in the country, over the next 10 to 20 years, and the capacity right now, we're at capacity. We can't handle this demand. You're going to see 100 million increase in our nation's population over the next 30 years. And so we've come up with a very specific idea. We're calling it Critical Commerce Corridors, asking for a very targeted investment on corridors around the country that are already showing the patterns of freight movement, of passenger movement. This would include a dedicated new freight related user fee. We're also advocating an increase in the basic user fee to take care of the core programs to maintain the system that we already have and to expand that. But there's literally a tsunami of freight that's coming from the West Coast to the East Coast in the coming years. I have a major expansion of the Suez Canal, the Panama Canal. While this past year you've seen a diminishment in some freight traffic coming from the West Coast, the anticipated growth over the next few years is going to demand greater investments by both the private sector and the public sector. And our point here is this type of program transcends the ability of individual states. This is an interstate commerce issue. The federal government needs to play a lead role in this. Most shipments take place out of the existing states where they originate, going into other states. So it's a very strong argument for federal investment, federal oversight. There's a very specific process that we are advocating where the US DOT, working with state governments, working with the regional planning organizations, working with the private sector would come up with a very specific, strategic business plan identifying those corridors and funding those corridors over the course of this next reauthorization. There are also about 100 major bottlenecks in the country that have been identified, again, by previous research. And we're suggesting that those particular areas be the ones we focus on right away, because relief in those areas will have an instant impact on reducing congestion, making a more efficient flow of freight around the country.
Monica Trauzzi: All right, so how much money are we talking about?
Pete Ruane: Well, we're talking in the billions and depending on which, a fee or method they use, whether it's a customs fee, a bill of lading, a weight related fee. Literally, to do this right, to invest across the board in all 50 states we're talking a multibillion-dollar program phased in over the six-year period and, frankly, phased in over a 25 year period. To make the impact that's necessary here, it's going to require a generation of investment for us to maintain our competitive edge. And here's something that's gone under the radar screen, we are literally involved, right now, in a global arms race. Our competitors around the world are investing in their transportation infrastructure far, far beyond the United States. The programs underway in China, India, European Union, even Vietnam has plans for a high-speed passenger rail system. And just in the last few weeks, a leading politician made the following comment that lack of investment in the transportation infrastructure is a brake on their economy, their national economy. That was not Senator Obama. That was not Senator McCain. That was Russian Prime Minister Vladimir Putin announcing a $570 billion investment program in that nation's transportation infrastructure in just the next seven years. So all around us, all around the globe our competitors are making multibillion, long-term investments under-girded by a strategic plan, a national plan. And people are saying, well, gee, they're just catching up with us. No, they're already competitive with us. And when they're done with these projects they're literally going to eat our lunch, eat our breakfast, eat our dinner economically. So it's imperative, from a business development standpoint, just to remain competitive, we have to make these investments.
Monica Trauzzi: OK. This is going to be an interesting issue to watch in the coming months. Thanks for coming on the show.
Pete Ruane: Thank you very much.
Monica Trauzzi: This is OnPoint. I'm Monica Trauzzi. Thanks for watching.
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