tv Transportation Secretary Chao Discusses Others Infrastructure CSPAN July 8, 2019 9:35pm-11:45pm EDT
13th to 18th place. dwight eisenhower rises from the ninth to the fifth spot. word is your favorite president rank? and that and more about the lives and leadership skills of 44 chief executives in c- span's the presidents. what is available wherever books are sold or at c- span.org/ the presidents. >> transportation secretary elaine chao and others discussed infrastructure at an event hosted by the heritage foundation and the washington examiner. the secretary responded to questions about transportation grants to kentucky, the home state of her husband, tenant majority leader mitch mcconnell.
thank you all for coming. welcome to infrastructure week. we have been looking forward to this for a while. infrastructure was a thing that all pundits after the election when we are in the fractured state after the 2016 election, democrats and republicans, will they be able to work on anything? people said infrastructure. why? democrats like spending money and donald trump likes having things build. he sees himself as a builder. so, we were supposed to get something. we have not gotten something yet. policy proves more complicated in practice than in promise. that is the complexity of this. that is why we assembled the excellent panel we have today. anybody who follows staff about transportation infrastructure, the way cities work follows nicole. she is a senior fellow at the manhattan -- then we have nick
of the heritage foundation. he is an economist. he is a deputy director of the thomas road to toot for economic policy studies. and finally we have heritage action tim chapman. he is the director at heritage action and they have been pulling on this issue about infrastructure and transportation. so, thank you panelists. i want to start off and say, ask in general, do we need a $2 trillion infrastructure bill and if so, what specifically should be in it? thank you, i want to thank you for having us here today. the answer to do we need $1 trillion infrastructure bill or a $2 trillion infrastructure bill is no. do we need an infrastructure bill, that is yes. the problem is, when we focus on these big numbers come a we do not get to the goal. we saw this with the obama error, era stimulus where this
was billed as a nearly trillion dollar infrastructure bill. obama used the bill transformative when he rolled this out in early 2009. many of the projects in the bill never came to fruition. if you think about a high-speed rail network were president obama said at the time, we are going to build the backbone of a new transportation network across the country, but the marquee project of this high- speed rail network say it has high-speed rails up and down california. they have built barely anything in more than a decade since this was announced. to get to real infrastructure emma the last thing we need is to put the number first. the first thing we should be doing is having all 50 states in the major regional areas in each state put together a realistic list of what are their immediate infrastructure needs that are
actually achievable within the next decade. then, how much do those infrastructure needs cost. then we arrive at a number that is more realistic than $1 trillion or $2 trillion. then we get to the hard part which is actually executing these projects. we are very good about announcing projects and making his releases and press conferences, but we are not very good at getting them done you remember the old seinfeld joke, it is easy to make the car reservation and take the car reservation, it is much harder to have the car there waiting for you once you go to retrieve your reservation . we are the same way with our infrastructure projects. it is the execution that will matter in the end. >> and to build off nicole's last point, when you think about what resident obama says when he passed the stimulus project, he says those shovel ready jobs were not as shovel ready as they initially
anticipated. a big part of that was the regulatory obstacles that we face when building infrastructure. think of just one single project like the pipeline. if you look back to when transcanada announced they were going to expand their keystone system with xl down to the gulf coast, barack obama had not even announced that joe biden was his running mate yet. if you had a child on the day that transcanada submitted its application to the state department, that child would be entering middle school this september. that is just one pipeline project. if you expand that to all of the infrastructure projects that we have whether it is traditional infrastructure projects in highways and bridges, energy infrastructure projects like pipelines even renewable energy infrastructure projects are all facing these systemic regulatory problems whether it is labor regulations, environmental regulation, just outright nimby-
ism, sporadic changes in zoning laws, all of these things adversely impact the ability to get these projects done. >> i agree but let me try to answer the question from a different perspective. the question is whether we need $1 trillion or a $2 trillion infrastructure package has been asked. we have done a significant amount of polling here. the back drop to what we are trying to do, we are looking at the political coalition that brought trump into power in 2016. that coalition we see is suburban republicans, grassroots conservatives and working-class americans. working-class americans were new to the coalition and came in because they liked a lot of things that trump was saying, specifically on issues like infrastructure. so, we have done almost
$500,000 in pulling to look at these different areas. we have pulled nationally, in battleground states, we have pulled in blue-collar district, suburban districts and what you see is that overwhelmingly, there is an appetite for an infrastructure program. when the program is described as roads and bridges, we are not talking about mass transit or that kind of thing. but roads and bridges are overwhelmingly popular. that probably does not surprise a lot of people. if you look at just within the republican base, registered republicans, you asked them very simple questions. do you support $1 trillion federal spending program for roads and bridges, the answer is 78% support that within the republican party. the point here, then the numbers go up when you start looking into those districts and they competitive districts. you understand why members of congress on the republican
side, we wonder why conservatives are so excited to sign onto an infrastructure bill it is because their constituents are. numbers go down when you talk about do you support this bill if it gives sweetheart deals to labor unions or if there are contracts where there are is corruption, numbers fall to the bottom. there is a way to fight back against some of these massive, bloated enteral bills. my point is that this is a politically salient issue that will probably come if trump is reelected and will be one of the first things they try to do. so, conservatives have to figure out how to be part of shaping this. if we do not shape it, if you just let the administration shape it and you let them work with democrats to cut the deal, it is going to end up looking a lot different than we would like it to look. is the importance i think of this panel and what we are talking about today. what actually is that? speak when people say they support a bill, they have
different things in mind. when nancy pelosi was asked about it, she says it is about jobs. she said something about economic efficiency and then throws in saving the planet. donald trump when he talked about it in the state of the union, he said, we will build gleaming new roads across bridges and roadways and waterways across this land. that is very trump ian. it shines like gold. but, when you are pulling people, if you're asking me about infrastructure i am thinking maybe you are going to fill some potholes. maybe you will add one more lane or a sidewalk. don't we mean 13 different things? should congress pick something and focus on it, what would you do if somebody said, where should the infrastructure money go? >> that is the first question. what is infrastructure. the reason we see some of these big numbers, engineers come out every three years with their
big report that we have a $3 trillion infrastructure deficit. that is based on an overly broad definition of infrastructure. the first thing we need to do in coming up with a number, do we need $1 trillion, $2 trillion, pulling these numbers out of the air, is what is the role of the federal government in paying for infrastructure. that is the number we should be thinking about. most infrastructure is private sector infrastructure or it is local and state infrastructure. if we think about pipelines, if we think about electricity, if we think about water, these are all things that are paid for through people's utility bills. whether private sector, if you have a private sector electric companies or through your municipal water bills, except for in extraordinary circumstances, it is a very board, a very poor town for example, they pay for themselves. that many covers the cost of
paying for the electricity's capital plant as well as all the employees. there is really no need for government involvement except with some of the regulatory issues. same thing with an oil pipeline, gas pipeline, if it does not pay for itself, there is probably something wrong with it. we should listen to that market signal that there is not enough demand for the project. that the cost of building the project is too high and so forth. much of the rest of our infrastructure, local potholes, local road and bridge maintenance, these are state and local issues. three out of every four infrastructure dollars are spent at the state and local level. there are some ideas out there about making more of our highways into -- highways. we can talk about that a little bit later and some of the positives and negatives of that. but the infrastructure that does not pay for itself is in general your larger network
road projects where there is a federal role. your larger mass transit projects, the gateway tunnel for example. dam projects to protect against flood control because there is no efficient mechanism to get everyone to pay for their share of the dam. these are the things we are talking about. it is a much smaller universe than the broad utilities part of it. >> i think a big problem is that four of the dollars are not going to the projects. generally, right now we have an infrastructure spending system that incentivizes the siphoning of federal resources to go to projects that are state and local in nature. it is kind of like when you go out to eat with a group of your friends. if you go out to eat with a group of your friends can spit the bill, split the bill among 10 people. one but he gets a cup of side salad and soup when he is
footing the bill, his suddenly getting the stake. that is what you get with these massive infrastructure spending practice, packages. your spreading the cost. and then you get wasteful projects or projects that are simply local or state in nature. you have things like spending on bike paths and recreational trails. that is not to denigrate the value of those project players, i love biking and recreational trails, but i think the people who derive the most value from using them are the ones that should be paying for them. >> so, let me ask you. does your polling go granular as to what the priorities are whether it is new versus maintaining, roads versus bike trails, etc.? >> we listed, i'm not going to remember the exact numbers, but we listed different categories of infrastructure spending. roads and bridges, bike trails, those kinds of things. it was overwhelmingly that
roads and bridges are what people thought infrastructure spending was. if republicans are going to do this right, they need to begin talking now about what they are going to do in 2020 if the president is reelected. i think to do it right, they actually have to shift the ground that they are debating the democrats on. nancy pelosi talks about this as a jobs bill. that is a popular political message. that is how i would be talking about it if i were her. republicans need to take a step outside of this traditional debate which is been about what is the federal government going to do and how much is the federal government going to spend on a big infrastructure program and say this is bigger than infrastructure. i would talk about this as a jobs and work program. i would recommend that the president say look, here's what we are going to do. we are not going to play on the democrats' turf. we are going to do an infrastructure project in states and localities. we are going to have private partnerships, this is not just infrastructure. this is just more than roads and bridges. this is putting this country
back to work. there are a host of other areas that he can dovetail into this when it comes to work and the dignity of work. this is important especially for that part of his coalition that think of you probably saw axios piece yesterday morning that showed the flip districts that went for obama before they flipped and went for trump are doing less well in terms of the economic recovery than other districts across the country. he still needs to be making the case that he is helping the working class american. so we have all sorts of policies here at heritage we have been championing. things like higher education reform where you put on par the federal subsidy that he gave it people who go to four-year liberal arts school and say if somebody is going to vocational or apprenticeship training, you should get that training. why should working class americans be subsidizing upper class americans? put that in an infrastructure
bill. put welfare reform in an infrastructure bill. skills-based immigration in an infrastructure bill and change the debate. make the debate actually something that is a broader and captures the public's imagination in a way that i think the democrats cannot compete with. when they are trying to fight on higher education, they are going to get beat. you see what elizabeth warren is doing on her bailout for higher ed. you see what bernie sanders is doing. i would like to attack it in that way. that allows you to actually push a lot of spending down to the state and local level and -- but the bigness of the bill allows you to still be broad and aspirational. >> it seems that -- i have never seen republicans win a fight of who will spend more money, including too crea including to create jobs. it could or should be a jobs bill? >> it should only be a jobs bill in the sense that better
infrastructure makes the private sector more productive. we think about infrastructure the wrong way when we think it should create public sector jobs or heavily subsidized construction industry jobs. of course, it's wonderful that jobs are a byproduct of building infrastructure and people who work building infrastructure, engineering infrastructure, these are important jobs, but that is not the point of the infrastructure. the point of the infrastructure is to support the private sector. now, of course these jobs should pay whatever is necessary to attract qualified workers, but one of the issues with infrastructure bills is the state issue of prevailing wages. in new york, for example, state law says that if you are working on a public works project, the wage for a basic laborer is close to $50 an hour, but the health care and pension benefits above that that go into the
hourly wage bring the cost closer to $100 an hour. and as you go up the scale of the -- the scale of the work, your operating engineers, carpenters, electricians, plumbers, the wages are higher. there is nothing wrong with that. the other side of the prevailing wage laws is the inefficient work rules that are embedded in these contracts between the construction contractors and the construction unions. for example, if i've got a job that requires plumbing, electricity and painting, i need three separate people to do these three separate jobs even if the work is incidental in any one of these areas, that you just need someone to hook up the plumbing. you just need someone to hook up the electricity. it's not complex skilled work. you still need three separate people on the job site.
there is a lot of inflexibility in these union contracts. >> i remember being at the democratic -- republican convention in '04 and getting yelled at by a union guy. he says you are not ibew, yet you are doing electricity distribution. i am a reporter much i was plugging in an extension cord. he showed me i was doing stuff that only union workers were allowed to do. >> that's not to say we want to to throw away unions. it's just to say any federal infrastructure bill has to nod to the reality that we need, first of all, these contracts need to be made public. right now the contracts between construction contractors and construction unions are considered private contracts that the rest of us can't see even though part of our money goes to pay for it. and once the contracts are public, we need to see a lot more efficiencies in terms of the work force productivity. so we are getting more infrastructure for every dollar
we spend. >> let me ask you, saying that the way infrastructure creates jobs is by supporting business, allowing more efficient shipping, commuting, that sort of thing. and that gets back to the question of, well then how should we fund it and who should be paying for it? if it's creating economic opportunity, then the people for whom it's creating economic opportunity ought to be paying for it, right? there are a million debates over how re fund roads. i'm from new york, and most highways are tolled. almost every bridge is tolled. you go down south and tolls are, you know, that's the least -- i think what's your least popular opinion? i think we should pay for highways with tolls. so is there any way to do that politically? do you think that's best? how would you guys pay for infrastructure? nick. >> well, yeah, i mean, i think part of it would be through the private sector to the extent that the private sector should be investing in these projects
like energy infrastructure. it makes sense to remove the burdensome regulations to allowed the private sector to invest and create the value that is necessary to meet america's energy demands for when we spend public dollars, we can do a lot to stretch those public dollars further by reforming things like dav bac davis bacon to actually stretch the public dollars even further. i think the biggest fundamental shift we should have is to shift the decisions to the states and significantly reduce the federal government's role to those projects that are federal and national in scope. then if states want to tinker with raising their own gas taxes, if they want to introduce tolls, if they want to introduce their state-based dmt, if there is some local or regional resistance totology, i think that's the most economically --
>> you said vmt? >> vehicle miles traveled tax. instead of a gas tax to compensate for more electric vehicles that are on the road, it would be based on vehicle miles traveled rather than -- >> and then the state looks at euro dom terat the end of the year? >> yeah, there are different ways to do it. yeah, essentially, that's one way to d. some concern about privacy issues. i think it can be worked out. oregon is a state that has introduced that and i think with a lot of success. that's where you see the laboratories of democracy creating different ideas, some are popular, some are not. the more those decisions are made at the state and local level, the more we take away those decisions that should be made at the state level. >> i imagine you have opinions on this? >> yeah, an example of one success story that has very little to do with the federal government before i get to some
of the political issues with the vehicle miles traveled toll. for you remember a few years ago joe biden came to new york and he stood with our governor cuomo and he said that laguardia airport is like a third world airport, that laguardia is an embarrassment to the country and this points up why we needed the obama-era infrastructure bill. lo and behold, half a decade or so later, we are building a new laguardia airport and we are also building a new jfk airport. so to the casual observer, this would appear that federal spending resulted this these new airport projects. about you if you look at the details of the projects, there is really no federal involvement here. the new york airports, they throw off a half a billion dollars a year profit. and those profits are what is
rebuilding the airports. this is essentially a real estate deal. the airlines have decided passenger traffic, passenger revenues are high enough that they can support a complete rebuild of these airports, and so the airline money is going to build new terminals, better infrastructure around the airports. this is essentially a coalition of airlines that have agreed to pay for this, spending the money through the bi-state port authority. there is really no taxpayer money involved in this. it could have been done ten years ago. it could be done today. it really just depends on the airlines' outlook for does the traffic and revenue support this. now, that's a success story, but it doesn't involve a massive federal infrastructure bill. we're doing this without and before the federal infrastructure bill. and i'll just make one point about some of the political issues about the vehicle miles traveled way of paying for highways.
this is something that sounds very economically sound because it is. why should people who choose to live far away from their jobs because they can get a bigger house if they go out a few more miles and so forth, why should everyone else subsidize these people? but the problem -- or the practical problem is this is also how you get like a yellow vest movement in france where the practicalities of who lives far away. a lot of people live far away because they can't afford to live closer to work. so you get into the issue of are you suddenly changing the rules of the game after people have made their decisions on where to live, where to work, and so forth, and when you are looking at a vehicle miles traveled toll suddenly slapping a two, $3,000 a year tax in the eyes of who is paying for it, a tax on the
middle class that people feel like they have no way of escaping. they can't immediately change their behavior in response to this market signal. i am not saying this is good, this is bad, this is neutral. i'm just saying that this is no doubt something that is going to come up in any bigger discussion of vmt. >> do we have polling on gas tax, tolls, the popularity of those things? >> people are willing to pay a higher tax for infrastructure. yeah, we have seen that consistently in the polling. i completely agree with my colleagues about how to pay for it. i want to back up just a second and make sure i'm clear on what i was proposing earlier. i am not trying to outbid the democrats on this. i think we have a couple challenges as conservatives. one is that the administration themselves are not high on any kind of public/private partnership approach to this and they are not high on a federalist approach to this. i think we have work to do there and we need to convince them.
we know that the democratic party is just try to spend a 2 to $3 trillion infrastructure bill and they are going to market it as a jobs bill. i think we can beat them politically if we are saying, yes, jobs is a very important part of this. work is a very important part of this. the dignity is something that we as conservatives believe in. but you do not give people dignity in their work if you create a, quote, shovel-ready job. here is the way you create dignity in work. we have the policies whether you are talking about welfare, higher ed, vocational training. it's okay to reinvigorate the idea that not everybody needs to have a four-year college degree, right, or you can have a trade and you can provide the american dream for your family. i like fighting on those terms when we talk about infrastructure. i think it may not be the right way to go, but we need to be creative or else we are going to just get -- if we are not creative, then we will get into the bidding war with the left.
if it's just about how much is the federal government going to pay on this, we will end up losing it. >> and that presents a great alternative to the jobs training programs that have been tried and fail in other stimulus style packages. if you look at the green jobs program part of the stimulus bill that were supposed to get people back to work and train people for the next generation of work, i mean, they overwhelmingly failed. the retention rates were dismal. you were training people who already had the training. so this presents a very productive counter-narrative to jobs training programs that we are likely to see in some of these bills. >> so i guess when i -- you always get the question of sort of why can europe have high-speed rail and why can these places do things? "the l.a. times" had an answer. the problem is they rely on contractors who are greedy and
rip them off. when you look at new york city's inability to build that second avenue subway in any reasonable time, conservatives say the problem is regulations, union laws, environmental regulations, that sort of thing. >> this is the sort of thing you have looked at sort of on a granular level. so walk us through sort of why we can't have nice things infrastructure wise. >> yeah. i like rail. but we have a very difficult time building rail in this country. even if you look at what is considered our high-speed rail success story, the train from washington up to boston, it costs $600 a lot of the times for me to go round trip from washington to new york. i can fly across the ocean sometimes for cheaper than it takes to take that. why does it cost $600? because the customers taking it are heavily subsidized. they work for the federal
government, so they are paying for this train ride out of their fedex pence check, or or they are doing some kind of lobbying, some business in washington where they don't really see the cost of the train ride. if you -- and i'm not saying it's not successful, but if you were to say should i take my family of five for a trip down to washington to see the sights and go home, it's very convenient. you can get there quickly. it's a nice trip. but if you are thinking of spending $3,000 to take five people back and forth to washington, it just doesn't work economically. that's a very big difference from paris or france or germany or even britain where a high-speed rail trip, four hour, five hour trip could be $50 one way. it's a much more casual unsubsidiz unsubsidized trip. what are some of the reasons for th that? european construction contractors are far more efficient than the american market. and so part of what we need to
do in rebuilding new york's rail system, building a new tunnel under the hudson river, is we need a much bigger, more competitive bidding pool. one of the problems is that on our projects in new york we often have only one bidder, maybe two bidders. the same old bidders who have done a bad job on previous projects. >> why is that? when i hear that that i think the mafia, are they knocking off competitors? >> part of the problems is that global contractors are put off by these byzantine regulatory issues, work rule issues, prevailing wage issues, hiring through the union halls because they just can't manage the project. on the rare times that they have bid on projects, they've actually lost money on some of these projects. >> again if we are comparing to europe this is confusing. when i think of europe i don't think of the land of liberalized labor force and low government footprint.
>> the labor environment there is not as adversarial unions versus everyone else as we tend to think of it. it is a much more collaborative environment where, in return for social safety net and so forth, the work force is far more productive on some of these infrastructure projects. and so that is something to think about. it is not considered a massive jobs program because people feel comfortable that this is infrastructure and that this supports private sector activity. >> if you were to do one or two reforms, nick, to get infrastructure projects going better, what would they be? >> i think the biggest would be to just outright repeal the national environmental policy act, or menepa. this has been the growth of the regulatory estate in such a way. it used to take, you know, a
little over two years to go through an environmental impact analysis, has almost quadrupled. i don't think anything sucks away consumer confidence like being in this excessive regulatory burden of a state as well as an excessive culture of litigation as well. >> so explain what nepa does to the whole process. >> yeah. for any project that involves federal funding, you know, it needs to go through a permitting and environmental impact analysis, which is done through multiple agencies. and so you have a lot of activity that's done by multiple federal agencies that have crossover roles and responsibilities. it's supposed to be delineated, but that's often not the case. there is a lot of confusion as to who is doing what at one time. it's duplicative of what state
regulators could do. you see an increased amount of paperwork for not much more environmental benefit. i think decreasing marginal returns when it comes to environmental benefit. this has been one of the holdups of infrastructure for a long time now. it's over 50 years old. when the obama administration had all of their projects, they gave categorical exclusions to 179,000 different projects, which demonstrates that we can build these projects in a way that's environmentally safe and without this cumbersome environmental review process that's not to say that we shouldn't have any environmental review process, but it's been used as a tool to block and delay infrastructure projects that people may not want. the trump administration is making some important regulatory reforms on nepa, and that's productive. i think codefying those things would be great. essentially repealing nepa would be better. if we could cod fy some reforms that the trump administration is
pushing that is a very big win. >> i wanted to talk about the political possibility of doing something. that doesn't sound like something a democratic house would go along with. in general, tim, what are the political odds of passing something through democratic house and a republican senate? should we wait to 2020? what's your thoughts on this? >> i do think that this should be something that republicans present early before the election and then try to do after. you have got to win the man date. i actually think that there are -- i was having dinner with a couple congressmen last night and they were talking about their more moderate democratic colleagues who were willing to bend a little bit on some of the labor regulations and local regulations because they have seen the on-the-ground impact of it. you mentioned, i think you mentioned "the new yorker" piece that was on the transit issue in new york city and how it was way
worse than what's happening in europe. that piece went all over new york. new yorkers of all stripes are frustrated with the fact they can't get their transit system up to snuff and you can't get a trin on time and if you live in a certain borough you are in trouble. and they are -- people are starting to understand what the issue is. so i think we have some illustrations that will be helpful to us. at end of the day we can't sugarcoat t you have to win the conversation. so i don't think you can win the conversation without actually starting the conversation, and that's where republicans need to be right now. they need to be thinking about what kind of infrastructure package are we proposing first. and it should not be one that -- you know, i don't think they should be proposing an infrastructure package that makes concessions early on. you want the concessions to be completely left out of this package. >> you are saying making a bid now. >> yeah. >> push it with the hope that with electoral victories in 2020
you pass it afterwards? >> yeah. i was mentioning to you i have a piece in the examiner this morning which is making -- which is trying to make the argument that the administration has to be thinking right now about what the argument for 2020 is. and one of the pieces of that argument really should be infrastructure. they run the risk in this election of kind of trying to just revert back to 2016 and rerun the greatest hits of 2016. they'll probably lose if they do that. he still has a reservoir of strength within his base but he has to give them something that they are looking forward to in 2021. this is a huge issue for the base. >> if you look back at march or april or may, there was happy talk of, you know, trump and pelosi working something out. was there ever something that was going to work out? i mean, politically who could happen? what advice would you give lawmakers, et cetera? nicole. >> i think the practically speaking, the bad news is that the only way that this is going to work out is through a lot of
pork barrel tradeoffs. >> buy off enough lawmakers? >> yes. if you look at a place like what new york wants, new york politicians do not want to touch any of the union rules. the construction contractor, the construction unions, they don't want these construction contracts public and being looked at by the public, obviously, and so we can see all of the inefficiencies that are embedded in some of these agreements. but, on the other hand, you have florida, you have texas, you have south carolina, you have places where the real estate industry is basically dependent on nationally subsidized flood control infrastructure. so everybody has their own not very pure free market interests that they want protected. and so the infrastructure bill that we get may just be more of
the same. >> yeah, that's my fear, too. if you look at some of these antiquated laws and policies, even things that affect our ports like the jones act that prohibits any foreign built ship or operated ship from delivering goods from u.s. port to u.s. port, the foreign dredge act, that doesn't allow foreign dredgers to come in, that would allow our ports to be bigger, more economically robust. >> are we afraid they are going to plant like little mines in the harbor? >> unfortunately, yes, that's the fear mongering you get for protecting a lot to of these policies. but to nicole's point, there is a lot of concentrated benefits of these policies. and then the costs are disbursed mojs the rest of us as taxpayers and consumers. it makes it difficult, politically speaking, to make my movement on some of these policies that are outdated and antiquated. >> all right. so wrap it up with one round of questions for you guys, or one
question for all of you. again, donald trump in the state of the union talked about gleaming new infrastructure. i remember newt gingrich running for president, talking about his various moon shots and, you know, obama was going to -- his precise words was remake america. not rebuild. remake america in his inauguration. so i'm a conservative guy. i don't really get excited about big bold new government projects, but politically maybe we need them. so do you guys have moon shots in mind? do you share my suspicious of moon shots? if you were to do something big and bold, what would it be? or would you not do something big and bold? >> i think, unfortunately, we live in a world where you have to do something big and bold. and especially with this president. he is not going to settle for, you know, a very modest, you know, small infrastructure bill.
which is why i'm suggesting we change the terrain and think about this debate a little bit differently. he also said in his inaugural address that i'm here to take power from washington, d.c., the swamp, and give it back to the american people. that was one of the best rifts he had in the address. that was a nod towards federalism. they have not followed up on that as much as they should. that is big and bold, especially in today's day and age. as we have discussed many times, you have so much political tension and so much political fighting at the federal level and somebody, a lot of people are looking for ways to turn the temperature down. you know, do that in the context of an infrastructure bill. it's a good first step. it's big and bold. say we are going to fulfill that promise that we did and we are going to empower local governments and state governments to do what they need to do for the american people, but we are also making this about work and about the dignity of being an american, being able to raise yokids, get a vocationr apprenticeship that actually provides for that.
i like that approach. >> nick? >> yeah, about two years ago a former colleague of mine who worked on transportation policy and i put out a paper that said how do you get to over $1 trillion private infrastructure and stretching those public dollars further? i think if you want to go big and bold, that's where you need to go, look at fundamental reforms from a regulatory standpoint on environmental regs, telecom regs. to get to that $1 trillion number, if you want a bright shiny number on it, focus less on the federal taxpayers spending that money and more on the private sector spending that money and then having a serious conversation, if we are spending federal dollars, how do we pay for it, make sure that there is offsets or if there is the right type of reforms that actually stretch those public dollars further. >> i was hoping somebody would have a bridge across lake michigan or high-speed rail
underground from a tube from l.a. to san francisco. or at least a gleaming wall for 1970 miles from the u.s./mexico border. do you have any of those for me? >> yeah, i do. my big bold project is build our tunnel under the hudson river. it's an interstate project. this is how hundreds of thousands of new jersey commuters get to work. these can be swing voters. they are desperate pfor competet government. how do we do this? do it in a different way with the environmental regulations, with the labor contracts being made public. do it through public/private partnership where there is a fixed date for it to to be completed. there is a fixed budget. the federal government rewards the project for meeting or exceeding budget and transparency standards. if we do this right as a demonstration project it could be a model for other big bold projects. >> join me in thanking this panel. [ applause ]
i am going to make a quick note about the idea of big and bold. i encourage you to check out the -- the washington examiner's editor a couple months back where we noted that infrastructure weeks, they occur a lot, but they have a tendency to be very dramatic. like fbi directors get fired and michael avenatti brings charges. we said americans deserve a boring, uneventful infrastructure week. we also deserve maybe a modest infrastructure bill. and that was a lot of what was talking about here federalism. let the states make the decision rather than congress. that was our editorial position there. so i encourage you gaze to check out our last infrastructure week editorial. so that panel there -- so i invite the panelists for panel two to come on out here in one second. so that panel was think tank
people who really dive into the policies. you were lucky to hear from them. nicole is one of the people, if i have curiosity on an infrastructure issue or a transportation issue, i turn to her. and nick has been working on this hard in the heritage foundation. in our second panel we have people who are more engaged in the practice of this. so first we have brigham mccown, who is a former senior executive at the department of transportation and currently is in business and philanthropy, ceo of a d.c. firm here and chairman of a non-profit focused on innovative solutions for issues involving infrastructure. and we have marty noe, a supervisor on the prince william county board there and he is a chairman of the northern
virginia transportation authority. so thank you guys and let's welcome our two new panelists. [ applause ] >> there is a ton of things to talk about. thank you both for coming. you guys awith the same questio i started the last panel with. do we need a trillion or $2 trillion federal infrastructure bill? and if so, what would you want to see in it? >> thank you. and thank you for inviting me today. great first panel. i was thinking about that as i was sitting down here for the first panel. we have a significant infrastructure issue. i mean, i think everybody agrees that our infrastructure is showing a lot of wear and tear. the issue, and the issue has always been, how are we going to pay for it and what is the federal role versus what's the state or local role. do we need a substantial amount of monetary infusion into our infrastructure? i may be off.
>> you're fine. >> that answer is yes. does the federal government and does the taxpayer need to pay for it? largely, that answer is no. and we can get more into that. >> we will. go ahead. >> yes. i would say that, obviously, the challenge is the same. how do you pay for what you say you need? there is no question that the investment needs to be made though. as a local government side that deals directly with transportation, this concept of crumbling bridges and insufficient capacity on highways and transit systems that don't work the way they are supposed to work is a serious and real problem and it is hindering economic growth. you know, in places like northern virginia, but also any place where you have got a lot of economic activity going on. the number one impediment to business growth is the lack of good investment in transportation and other infrastructure that makes it possible for people to get to work and go make money. >> and so then, yeah, we'll move
to the paying forward question. how should it be paid for? and i know that there are 100 answers. give as many as you can. >> number one, the previous panel mentioned this, we need to subdivide infrastructure into different categories. energy infrastructure, transportation infrastructure, social infrastructure, but if we're talking about transportation infrastructure, i furmly believe and the department has been working very hard to actually push a lot of those decisions with federal oversight, but push those decisions down to the state and local area. and if you think about it, when we have gotten rid of earmarks, we didn't really get rid of earmarks. we got rid of the congressional mandated earmarks. now we have bureaucratic earmarks, administrative earmarks. the secretary has a lot of discretion where that money goes. we have been working very hard at the department. she has been working very hard at the department to make sure that those decisions are based on needs and based on
qualifiers. but quite frankly my concern is i don't know what's going to happen when the next people come in and there is just as much room, if not more, for diversion to projects that don't make any sense. how are we going to pay for it? i think there is a federal rule. i would like to see a limited federal oversight rule, actually. you have seen states increase their own gas taxes. the big issue is going to be, and this is something i just don't think house leadership and even the hill leadership is really going to want to get into this cycle is the highway trust fund is not sustainable. right now we've talked about the guy that orders the last -- the last panel talked about the guy that orders the big steak. the hybrids and electric cars are free ride to go some extent -- >> they are not buying gasoline, so they are not paying the gas tax. >> they are not paying. and now we've gone from a user fee to just throwing general fund money at the issue. and that is not, again, a long-term sustainable.
we have the diversions, almost 20% out of the highway trust fund for transit and other issues. these are the big topics that we really need to be getting in. i frankly don't see the political will this time around to do it. but that disruption is coming. more and more as cars become more efficient, you know, at sop point there will abtiping point, whether it's vmt or something else. >> they are political arguments for both of the things you talked about saying, well, the electric cars don't have the pollution, for instance. that is one of the reasons that maybe they shouldn't pay as much. and then as far as the diversions, people say, well, if you are building public transit, well, that for one thing is alleviating traffic. these are defenses of what you see as flaws in the program. do you think those are flaws? >> i think they are huge flaws. you may not agree with me, but let's keep in mind until the
'70s, transit op operators, that was private ops and the government was forced to take it over. to the point, if it's not sustainable, it's costing us money. what we have right now is a huge divide between urban and suburban and rural. and that is only going to continue. and i think, quite frankly, you know, we do need to move towards a user fee-based system instead of a subsidized system because we are losing a lot of efficiency in the way we are currently doing things. >> i think when you talk about it, you talk about transit, he is right. there has been -- i mean, the shift is complete. we are not undergoing a shift. transit agencies, private companies or at least sort of free standing agencies that were created by the government but then pushed aside to do their own thing, doesn't function like that anymore. the urban jurisdictions are dealing with sort of this
bottomless pit of how do you put enough money into transit? i think one of the challenges that we deal with is that there is this tension when it comes to any kind of transportation, but particularly public transit, between whether or not it's a mobility service is this a way to get people to jobs or home from work at the end of the day, get people to the shopping centers, et cetera, or is it a social safety net program, right. and as sort of the local public official, well, the answer is yes, it's both. there is no question that if that, you know, working class lower income family doesn't have reliable transportation of some form, they are not getting to work, pick up the kid from daycare and then there is a spiral that comes with that. you make the problem worse. then the question becomes, so how do we prioritize it? are we prioritizing it as a mobility service? and is it competing, therefore, against road investment? or are we prioritizing it as a social safety net service, in
which case it's competing against, knoyou know, the food assistance programs programs for example. depending where you are from and what your political ideology is depends how you think about that. when we are talking about a federal infrastructure bill, if it's a federal infrastructure bill then it has to be about mobility. if what we're doing is trying to move people around, then you have to prioritize those investments that move the most people. now, is that transit investment. >> is that road investment? depends who you are trying to move and where you are trying to move them. the needs of the national capital area very different than the needs in houston and in tack do tacoma, washington. pick your cities. you have to be looking at prioritization a says what has the best return on investment for the state or the locality where that investment is going made. >> so if it's a good investment,
shouldn't it pay for itself and i guess that's an argument for sort of a user fee. there is always talk about widening the roads in northern virginia. i would say, well, if it's economically valuable, then it should be pay for itself and there should be no reason to tax other people to come in and pay for it. >> great question. and this gets into the question of, well, is it better to collect taxes from people today to pay for the future use, or is it better to find ways to make the people who are going to use it in the future pay for it? the answer is that the company that builds the road or builds the rails or builds the train car that sits on those rails, they want to be paid today. they are not interested in waiting for the tolls or user fees to come in. here in virginia, we are making major investments in h. orjts t. lanes.
i paid a big toll to make sure i got here on time. still got here a little bit too late, right? but that is one -- that is probably, from a -- from a perspective of linking who pays to who receives the best benefit, that is one effective way to do it. it gets a lot of pushback from people who say, well wait a unin, my taxes paid for this road 40 years ago. now you are adding an additional lane and you are going to toll me to be on a road that i already paid for. sometimes the answer ends up being it's either this or we do nothing at all and your situation continues to get worse. but i think finding ways to pay for improvements over the life of that improvement. whether it's a highway or a transit system is the better way to go. unfortunately, the business model out there for these things doesn't always lend itself to making that happen. >> yeah. i would like to say that i think
times we tend to think that we have a one-size-fits-all solution, and not just in transit, but with interstate highways or roads. what works if northern virginia might not work in dallas, work cincinnati. like we don't have a single tool in toolbox. if we try to apply a hammer to every single thing we use, it wouldn't work out very well. you need different tools. that's the complexity of the transportation policy that we need to get into. i, for one, typically like the idea that things inshould be self-funding, sustainable. you should let the market decide. and what the government has done through attempts at good policy to some extent has been to remove transparency, which then keeps money on the sideline, keeps investment because, you know, risk, risk is just so averse to those who want to intent. we tend to pick winners and
losers sometimes. we tax what we don't like and subsidize what we do like. the market then becomes skewed, i do think and something that the secretary has been working hard at is to try to level that playing field, let everybody know what the rules are and then get out of the way. and, for example, d.o.t. has -- president trump has a two tore foun regulatory reduction. d.o.t. is leading the way at 15 to one right now. nixon 15 for every one. what that is starting to let the gears turn again and we have seen a substantial amount of private investment leaping into these things as well as state and local money in order to build these projects. but that's a little more theoretical. >> i want to get to more of the nitty-gritty of how public/private partnerships work and ought to work. since you brought up regulations, what are the most important reforms, deregulations, et cetera, that can be done that would
stimulate, free up investment in particularly transportation infrastructure? >> i think a couple. one is on the financial side. picking how these investment projects work. d.o.t. is charged with not only doling out money, but making loans. so that process has been significantly streamlined and taken a much harder look. they need to take a harder look at the viability of the projects when they come in. i think we tend to say and think under federalism those decisions are best closest to where the decisions are being made, yet the federal government is seen as the piggy banks or the national's mayors, the secretaries call it, everyone comes in wanting a handout. her ponresponse is great, let's look at your plan. what kind of skin in the game are you bringing to the table? we can help use federal monies to get you over the hump to do the last mile.
when i first joined the department 20 years ago somebody said, sir, we have a problem. i said, great, what's the problem? they told me what the problem is. how are we going to fix it? well, i need $25 million. i said, to do what? he said to fix the problject. i said okay, let's stop and back up here. we have a tendency in d.c. to think if we throw money at something it will get fixed. and environmental permitting and streamlining, the previous panel mentioned it. i have work on keystone, some of these projects. crying outloud, we put a man on the moon faster than putting in a pipeline. nepa is to the point it's never enough. if you don't win, you sue, and a truckload of papers is not going to change a decision. so having a federal government that prioritizes a single-lead agency for the environmental reviews and gets them out. if germany can figure out
whether or not to build something in two years, it ought not take us ten or 12. >> i come from the perspective of a local government which mak makes very big investments in transportation which is unusual, in virginia it is, local government are looking to make decisions about land use and transportation and looking to the state or federal government for funding. we have our own local construction program that competes against the state program. but we have essentially this rule. this is exactly the point, one of the challenges that we have. there are important projects, projects that would get people to work faster, improve everyone's quality of life, cost effective, right investment, right place, right time, solve the problem. then we find out the only way to get it funded is through a federal program and we say, you know what? let's build a road someplace else. there was a discussion we had at my local board meeting last night about a project where
someone said could we bring the cost down by seeking state funding or federal fund ogen this? and i said no. i said this is a -- it's a big project. it's a $300 million project that turns into a $450 million project if we have to take federal money and take with it all of the strings that come attached to it. one of the things that has to happen is whatever happens with the next federal infrastructure around infrastructure investment, a piece of that absolutely has to be making it more feasible for states and localities to use those investments to actually solve the problem that needs to be solved. and that doesn't mean that we want to ignore the importance of protecting wetlands or protecting historical resources or protecting endangered species. we want to pay attention to those things. what we end up doing is spending the federal -- all of the federal money on a project on
complying with federal regulations in a way that doesn't actually improve the quality of the project. it's better off to use state and local funds for it. >> you are turning away free money because the money comes with too many strings. it's not free anymore? >> that's exactly right. and again we have had good projects go from should be a two-year project to a ten-year project. we have had roads that should become four-lane roads get built as two-lane roads because the compliance becomes too difficult. and again, if that compliance, if those regulations add value, if they improve the quality of life or improve the way in which we are taking care of our natural resources, that's something we need to do. it's something we would do -- in my case, it's something we would do whether those regulatory regimes were in place or not. how do we streamline that, simplify that, and get rid of
some of the thinking on this. >> speaking of thinking innovatively, sometimes when i think about a place like prince william county or loudoun or something. the thought is, well, we need to be able to get through -- to reduce the congestion of the people trying to get into d.c. or maybe arlington. but to some extent congestion is like a price signal. some people won't move to prince william pause there is so much congestion. if you add another lane, mueller report more people run to prince william. orchid t-- so aren't there 1,00 other answers? we sometimes say, you know, telecommuting or have more jobs in prince william rather than have the people -- so how do you think about that? because governments are so likely to think, well, we just need more plailanes. >> that's a great question. so just squicoincidentally, las night my board agreed to put on
the ballot for november a referendum for local investments and roads. the biggest piece is a road -- those who aren't familiar, route 28, which is the most congested corridor in northern virginia which is the most congested region in the country. this is the center of gravity for bad traffic in the mid-atlantic. by the way, it happens to run through the mid dle of the district that i represent. we are making big investment in that. it's frustrating, it's an investment we have to make, but it is an investment that is about moving people from my community into a different community to go to work where they will be creating jobs someplace else. the rest of that bond referendum and the rest of the requests that we are making from the state agencies and the regional transportation authority of which i'm chairman are more projects about moving people around the county better because i think that in highly -- again, prince william county, my home
county, loudon county to the north, fairfax county more pafrt core of northern virginia, the conversation really has shifted from how do we shorten people's commutes rather than ease be people's commutes. i think, you know, sort of national news surrounding the decision to locate amazon's hq2 in arlington. it's a big deal. 25,000 to 35,000 jobs over the next ten years. amazon made clear that they were only going to go to a place where their employees could get to work on transit. they recognize that dropping that many jobs in any place in the country all at once was not going to be solved with more lane miles and more exit ramps. so again the northern virginia transportation authority and the state are making big investments in transit because, going back to the previous point, those are the investments that have the biggest impact in this situation. and i think the notion of not
looking for a one size fits all, the notion that somehow every problem could be -- >> but in this situation because there is already so many lanes? why is this the situation that calls for -- >> well, well, so, so, amazon coming to arlington county, first of all, there is no place to put additional lanes there. you couldn't literally -- i mean, the existing right of way ends at edge of the buildings, right? i suppose you could add a little bit more space to 95 if the defense department doesn't mind the highway getting closer to the pentagon, which they mind, by the way. so there is no more opportunity to build more lanes there. the reality is, to your point, that wouldn't solve the problem, right. add more lanes, you put in more cars, but you are -- all you're doing is diverting people from one mode to a different mode. it's about looking at the situation and saying there is not a one size fits all, not a
single solution that solves anything. that's a frustration, by the way, coming from a more suburban jurisdiction. when i see a big chunk of money in the beltway, not a lot of money left to invest inroads outside the beltway. >> i think they should extend the yellow line to alexandria and the blue line to franconia. >> i get hit with that all the time. the orange line out to manassas. that kind of money doesn't exist. >> my answer is simpler. move to texas where i am. we have plenty of room for everybody. low cost of living. pro-economic growth policies. i think this goes back to sort of what i was talking about earlier, the 30,000 foot view, is that different jurisdictions have different requirements. however, you know, if i go to ohio where i'm from and i tell people as they're gassing up, hey, chicago metro transit
thanks you. ramada thanks you. what are you talking about? you are subsidizing people in the bay area taking bart down to silicon valley. you are subsidizing people that work on wall street. are you subsidizing folks that need to get to work with hourly jobs? absolutely. again, the funding system that we are using is inefficient. and from an innovative standpoint, the day of reckoning is coming. i don't think it's here yet and i don't think there is enough political courage or will in the congress to change the funding mechanism this time around. but whether it's the additional -- the highway trust fund falling off or other models, when disruption happens -- remember kodak? they were like this massive company. when i grew up it was worth a lot of money, right? and they did one thing and they did it very well. now they are egone because they didn't anticipate the disruption that was coming to their industry. transportation disruption is
coming. we're not there yet. autonomous vehicles. 90% of the time they make really good decisions. the 10% of the time they need to make an awesome decision, they are horrible at it. i, for one, don't think autonomous vehicles are coming as quickly than a lot of people do. all these changes are coming and they are going to disrupt how we get to work, 5g broadband will change the need to come into the cities. this is coming. it's something we need to be thinking about. i got back from the spacex launch. that's a trillion dollars industry where somebody figured out a way to boost twice the payload for a third of the cost that the government can do it. that's coming to transportation. i just don't think we are there yet. >> so as far as funding, so, yeah, we fund highways and other stuff through a gas tax. and a lot of -- and the industry lobby for the most part is calling for more gas tax.
the chamber of commerce, that's their most consistent position for the last decade, raising the gas tax. there seemed to be a lot of flaws with that. some people talk about the vehicle miles traveled. sometimes a gps. i don't want my state government tracking where i am going. i guess apple and google already are. you don't need to add a third on to that. then the subway systems here in d.c., you pay more if you live farther out, which makes sense expect if you look at the red line, you started tacoma, each top you go out, the median income falls. each stop you go out, the price of the commute goes up. and so there is no easy answer to this. but you are talking innovation. what would you guys see as far as specific ways to innovate? >> i think the notion -- i need to touch on this. the notion that, you know, rural broadband is going to change a lot, okay, because suddenly it will become possible to d do a lot of jobs that require driving
in an ufs in the middle of a farm field in nebraska. the day will come. we are not there yet. the day will come on that. i think the other thing that we have to think about is how do we use technology to use our existing infrastructure, specifically transportation infrastructure, more efficiently. i hear a lot about the notion of, well, driverless vehicles are going to make the need for roads object sew leemt. if all that happens is we get in our single occupant car and let the computer drive us to work rather than using the steering wheel, we are still one person in one car. >> we will be able to tweet more. >> or read a newspaper. >> i am very into reading newspapers and magazines. everyone in the room should do that. >> that's what i love to see. people who sit with their books on the subway. someday we will be able to read the book in the car. then the car will read the book
to you. autonomous vehicles could have a huge impact if -- and i don't -- if i knew how to make this happen, i would be making a lot more money than i am as a local elected official. but if autonomous vehicles create a new culture of ridesharing, right, there is this autonomous vehicle that serves as a micro bus and picks people up near each other and takes them where they nt a to go and how does to know it wants to get there? not there yet. it's actually in the trucking industry. i think, you know, i are hahave lots of people who have done long-haul trucking. they are not interested in driving from 8 at night to 5 in the morning and having an turnt from 10:30 to 11:30 to drive more. an autonomous tractor-trailer has no problem getting off of the road when traffic is heavy and then getting back on when traffic lightens up. that could be a big change,
right? also the ability -- again, technological solutions. the ability of people to share work without having to be in the same space. so that essentially the people who are physically proximate to each other don't have to necessarily be working on the same project pause that cbecause done virtually. despite all the great things that broadband can do for us, human beings still like to interact with human beings. i get told you went to such and such a meeting, why wasn't it done as a conference call? the answer is i would have put it on mute -- >> i mean, this is what we are told in 2000. a recent magazine, a competitor of ours, and i hold them in highahigh regard their crazy libertarian idea in 1999 was not to have a physical office. this was on the path -- the
libertopia where they become 1s and 0s or whatever. they decided you need to get up -- people together in a room to create a good work environment. i mean, high-speed rural broadband, to me sounds like the same problem made 20 years ago. yeah, some people will be free to telecommute. the idea that this will dramatically c dramatically do dramatically cut down on commuting is there any reasontot think this will change? >> no, i see it with my teenagers. the availability of 4g connectivity in our homes has created a generation of intraverts. there is a bigger percentage of the population under 35 who are more comfortable being physically by themselves or happier being physically by themselves than people of my generation, gen-x'ers were and are. a part of what makes us human is
the social interaction, right? i don't think that's ever going to fundamentally change. i think we may be evolve or some might call it devolving in terms of that interaction can take place fully.observation, it may have been anything from a movie where people were looking, two baby boomers were watching a gen xers sit in the coffee shop with his phone in front of them and one of them said, it is so terrible that these people look at their phones all day. don't they ever want to interact with other people? the second baby boomer said, what do you think they are doing on the phone? they are interacting with other people. maybe overtime our brains get rewired a little bit to mean human interaction does not have to mean physical proximity. right now and for the foreseeable future, teams are able to make, work more creative -- creatively when they are in the same space. on the flipside, there are sums, there are some people whose role is to be by themselves.
that is their job. their job requires being by themselves. those people don't have to sit in an office. >> so -- >> but i would like to see versus what i think is not going to happen, my line is, i don't think we are going to get a big infrastructure package this year. zoom back up to 30,000 feet. i just find it hard to believe that the congressional leadership is willing to hand president trump a significant victory moving into the 2020 election. no matter how they do it and they can try to claim equal credit, i frankly do not see that happening. what has happened is, congress has plus to the transportation budget the last couple years. that has given the secretary a lot more fuel to push out to the states and to try to do that and a lot of people have been coming to apply. other states like you have mentioned, during the obama years, ohio just quit applying
for grants. like, we are not going to get them so why apply? the funding mechanism needs to fundamentally change. when i was in the bush administration, we looked at a gas tax increase. we were told no, that is a tracks, by president bush. and we said, why don't we index it for inflation and he we were told, no, that is a tax. the realities are that concrete steel and all that costs a lot more. we really do need to bump up the gas tax at least for short- term. i would not be opposed to tying it to inflation. you can phase it in or faze it back down if things got tight and the economy went south. but, we are going to have to have some public spending whether we like it or not in the short term and then what we really need to be looking at are these long-term solutions. again, things are going to fundamentally shift and the
current mechanism we are using, it is not working. whether that is congestion pricing, value pricing or vmt, make sure all those on the roadway are paying their fair share. we need to look at that. >> i think that is exactly right. i don't know what it looks like, one thing we talked about housing policy. you can no longer look at median incomes versus median household prices and make a good decision about whether you have the right mix of housing in a community. that is looking at median transportation costs and housing income. essentially what happens is, we are being very careful about not making investments in transportation infrastructure but simply allow people to move further away from their jobs and purchase a cheaper house. those of us who chose to live kind of in the middle are subsidizing those who chose to
live out in the country. oh but that's okay because those who live in urban core are subsidizing me at that point. that is that policy, right? that we need to figure out how to look at the entire market structure around these things in making decisions. one of the challenges that i think secretary elaine chao is doing a better job of this, we like to talk about how we got rid of the earmarks because we want to take the politics out of the decision-making. we didn't really take the politics out of it, we just moved it from the legislative branch to the executive branch. i think we are seeing that problem get a little better. there needs to be more radical, fundamental change in the decision-making needs to be based on data and analysis for what is most cost-effective in achieving the goals rather than what makes sense because it feels right today. >> so, we have touched on the theme of federalism and local control here. but, i guess, how would you
describe the right mix of federal funding and what the federal role is if you got to reform, if you got to stick reforms into an infrastructure bill that ends up passing, what would they be? should anybody in virginia be paying for roads in mississippi? should the people in new york be paying for those in virginia? how would you describe the proper structure of this? >> i think there is a federal role in putting together the overarching rules of the game, if you will. there is also a need to spend federal money whether it is the state parks on federal lands if we want a valid national infrastructure transportation system, we are going to have to subsidize roads in certain states. >> why should a maryland or pay for roads outside of maryland?
do you rely on the supply chain network? we need those through roads. otherwise there's no incentive for north dakota to build an interstate highway connecting the east coast with dishes >> and couldn't those roads pay for themselves. speak in my dealer, ideally, every road you pay for it self. the question is, how would you quantify that. i said one day, what are the number sing and he looked at me and said, what do you want them to say? how we analyze the analytics is really important. yes things should pay for themselves but wish can all get lured into this, how does the keep, keystone pipeline helped me. i am not through there. it does because we live in a worldwide integrated system. we have to do a better job of explaining that to people and selling it just like transit removes people from the roads, it's better a. we have to look
at that. there is a federal role. i believe in partial devolution, pushing more stuff back to the states. i think it is strange that we take somebody else's money, hold onto it, lose some of it and then hand it back to them for our cut. but the federal government could do a much better job of helping people build a 100 year bridge. we can build asphalt right now with lien lines in it that will never need to be repainted. you know who is opposed to that? the people who paint the lien lines, right? but you can bake filling lines into the asphalt at multiple layers and never have to do this again. there are things we can do in the federal government can help the state and local governments do but as your previous panel said, most of the structure money, 75-78% is already raised and spent at the local level. i would like to push that up more toward about 85%. >> i think there is absolutely a role for the local government.
but, that said, i think one of the things that can happen is, recognition on the regulatory side that says very often, the agencies that are building the infrastructure using federal money are agencies whose primary function are things like elementary schools and police departments and fire stations. so, if you're a large urban jurisdiction, you may have a professional infrastructure department. i was just involved in a project that built a $12 million traffic circle to comment, accommodate --. it was on a two lane road. the mayor gets paid a dollar per year in this town. he does not have a public works director. and literally, the mayor himself attended all of the
scoping meetings and all the engineering meetings because there was no one else to represent the town's interest. but, he is going to transform this historic town in a very positive way. making it easier for transportation capital organizations to create transportation capital instead of focusing on complying with a big thick rulebook, that is the biggest change that has to happen. i think that what we will find is, the amount of dollars that the federal government has to put in actually will buy a lot more stuff and a lot more good stuff if you let the people who understand what the needs are and can actually demonstrate that the investment is going to provide what we are looking for actually do their jobs. >> do you think that, when could you possibly expect an infrastructure bill and what do you think, what shape do you
think it would take? is there any chance of them passing something? >> i agree it is difficult to imagine a big infrastructure bill before november. before november of next year. it is just hard to see it. but, what i will say is, maybe what is happening is, we have lived in a time it has been 20+ years that we have been living in this culture of the solution to everything is to get mad about it. asking my, ask me my opinion on any topic. may be the american people are on the precipice of getting tired of that way of governing. it doesn't matter if it is the white house or congress. it has been about conflicts and
solutions. maybe the american people are ready to say we actually want you to solve stuff. and, i would call on everybody watching. call your congressman and tell them you want them to solve stuff rather than fighting with people about things. that is a culture shift that seems nearly impossible. on the other hand, every big culture shift like this has happened very quickly. so maybe we will get a call tomorrow. >> april 2021. >> because republicans take over the house or >> i think regardless of what happens, and the house, i think president trump will get reelected. i think at that time people on both sides, whomever is in the house or the senate will be ready to go. that being said, in conclusion, we sometimes think that covers has to pass a law to fix something. sometimes they should not be doing anything, right? we should be undoing what it is
they have done in the past. we have had the plus ups in the spending. more is getting done with the roadways. this notion that we have to have a massive inch, infrastructure bill may not necessarily be accurate or could be broken down into smaller things. i would actually like to see a 10 euro bill. the first highway bill was a 13 year bill. think about that. again, you need stability and consistency over time for private investment. that is what we really did not get to talk about today. that is the other golden era that we have in the quiver is that private money to put in. >> and join me in thanking this panel. thank you, guys. >> is my final act today, i get the pleasure of introducing not only my boss, hugo gurdon, he will be coming out here but he is not why you came. not that there's anything wrong
with that, but what he will be doing a peer is interviewing secretary elaine chao. elaine chao came from a shipping and trance petition family and in washington, she served on the federal maritime commission and becoming its chairwoman. in the first george w. bush administration also served in the department of transportation under george w. bush, she was the secretary of labor. now, of course, she is the secretary of transportation. for a lot of people, i am head of the commentary page at the examiner, it is a conservative page a lot of conservatives were not in line with donald trump early in the primaries. there is a very mixed result of what they think about the work that he is doing. but where there is almost no mixture, almost no sort of debate is on the question of deregulation. there is broad praise from
conservatives that donald trump has been, that his administration has been doing an excellent job, not just of not increasing regulations, but of dismantling the most destructive, most harmful, most useless regulations on the federal books. one of the epicenters of this is the department of transportation. we talked a little bit about this. there are some rules that this is going to have to change. we talk about some of the labor rules, the environmental policy thing, but a lot of the rules that are there were built by -- at the department of transportation. they are the obstacles. then, that is why it is great to see the aggressive deregulation that is happening at the department of transportation under secretary elaine chao. that is not the only thing she's going to talk about. my editor-in-chief, hugo gurdon, he will be introducing her and bringing her out here.
i just want to again say, at the examiner on the opinion page, we carry all sorts of articles on this by op-ed contributors. if any of you are working in this industry, please contribute . read our editorials. for now, please welcome out here hugo gurdon, my editor-in-chief and elaine chao the secretary of transportation. >> madam secretary, please come in. [ applause ] have a seat.
so, first of all, thank you so much for joining us. >> it is my pleasure. >> we are delighted to have you. it is particularly pleasing to be able to speak with somebody on issues where there is at least theoretically some bipartisan agreements. >> we certainly hope so. before we start, can i just give a great shout out to brigham mccown. in the previous administration he worked on pipelines and he was very helpful to us during the transition. also for a number of months after. in front of all his peers, i want to give brigham mccown a great shout out. >> this was a great panel. we are going to cover a number
of different areas. i do want to turn a little bit later on to the innovation agenda at the transportation department. we focused squarely on infrastructure and an infrastructure bill. that is were i would like to start. both sides of the aisle seen to be keen on having an infrastructure built but there does not seem to be much life and the possibility of a bill right now in legislation. is it the case that as president trump suggested after the breakdown of talks a month or two ago, that it is rather difficult to have two tracks going on with infrastructure and critic investigations on capitol hill? can the two happen together and how optimistic are you about moving infrastructure forward?
>> the president has always said that he wanted a bipartisan effort in addressing the deteriorating infrastructure, the conditions of our country, this is an issue that should be done on a bipartisan basis. there were high hopes that this could be a bipartisan effort. that is clearly, it has been disappointing that the administration put forward its proposal last year and we want to work with congress. we hope to hear from them as to what their ideas are. >> it is so important. infrastructure impacts productivity. economic vibrancy, economic growth and the quality of life for our citizens and residents. >> think you, i guess this did
not work. >> i am sorry about that. >> chuck schumer said the president is looking for an excuse not to do infrastructure. is that the impression that people have in the administration? >> absolutely not. we mentioned the president is very focused on the need to address the deteriorating infrastructure in our country. that was something that he talked about way back in 2016. infrastructure really should be a topic that there is bipartisan support. so, we want to work with congress. the administration put forward a proposal last year. we want to engage in dialogue with congress and have them come back to us, as well. >> one of the big issues that has come up in discussion this morning is the headline figure of $2 trillion both sides of the aisle were talking about a couple months ago.
can you address from a conservative point of view, the merits of spending that kind of number and should we take that number seriously? when we have $20 trillion not deficit, but that now, is that the kind of number that we should be spending or will it be much smaller than that? >> that is the -- of the matter. we talk about trillions of dollars, there is a real divide between the administration and those who may not agree. because, we are not my we are talking basically about how to fund that large number. be at $1 trillion, $5 trillion, $2 trillion, the left, the democrats, they by and large want this funded fully by
federal spending. but, there are other ways to finance our public infrastructure. that is through allowing the private sector to come in, leverage private sector, local and state government, resources so that it is a partnership. then, the leveraging effect can actually help the federal government, our country to reach that larger number. if it is $2 trillion, it goes back to the president's original proposal which is $1 trillion. than it was 1.5 trillion. you can allow the private sector to come in and fill the gap. there could be a federal share there can be a state and local share, it does not have to be 100% federal funding. i think that is where some of the disagreement is. >> i think a lot of people
think of infrastructure, particularly when talking about a major bill as being primarily a federal spending issue and a federal responsibility. >> you would be amazed what the federal government funds now. we find bike trails, we fund local projects, the role of the federal government originally, in the interstate commerce, interstate highway days when president eisenhower first built the infrastructure, in a highway system for the country, number one you had national security interests. these were huge highways that technically an airplane and land. so it was a national security purpose. then secondly, interstate commerce. it connected the whole country in this wonderful network of beautifully built interstate highways. that now has changed a great
deal. to the extent where the budget of the department of transportation far exceeded what it was before and it now funds a lot of projects within one state. the interstate and the national security aspects of the federal infrastructure project has changed a great deal. >> can you talk a little bit more about the way in which the federal spending is used to help leverage state and local and private lending? as i understand it? >> we have a wonderful example out here. the purple line in maryland. governor hogan took a great deal of leadership and he worked with his state people local governments and the private sector. when i talk about the private sector, i am talking about pension funds. i am talking about endowment funds.
so, he had some of those in the private sector interests come in and they put together a package and then they came to the federal government and we funded something like 35%. so, it was an excellent example of a partnership between the public, the private and within the public sector, it included federal, state and local government. the purple line is now groundbreaking has occurred and the extension is now underway. then out on route 66, this is under governor mcauliffe. governor mcauliffe had also put together a partnership with the federal government, the local and state government and so extensions and widening of route 66 occurred. that was
just a year and a half ago. these project players, these are great projects. just in this washington, d.c. area and how a partnership can be done. it does not have to be fully funded by the federal government. the reason is not because the federal government is uncaring, it is that there is a proper role for the federal government a proper role for the state and a proper role for local government. when there is bi-in, which is what this participation, when there is buy-in, -- i do need to ask you a
couple questions. what do you say to those who say that kentucky got special treatment in the allocation of money? >> my husband has a wonderful sense of humor. is also an outstanding public servant. so he responded. i was not there. when asked about this, he said yes, i was just complaining to the secretary of transportation the day before. there are 169 projects and kentucky got five of them. he said i sure hope kentucky would do better in the future. and also from a nationwide point of view, kentucky ranked about 25 out of the 50 states in terms of total dollars. >> the house on monday very pointedly past, voted to for bid the department of transportation funding from being used for personal gain. how do you respond to that?
>> i agree. i think federal funds should not be used for personal gain. i certainly believe that and i have not done anything to the contrary. are has anybody within the department. >> i suspected that is what you would say. >> it is definitely a political partisan attack and with effort at it. >> on the question of making sure that monies, public monies are well spent, obviously one of the things that is often said to promote infrastructure spending, it is referred to often as an investment rather than spending. >> that actually changed during president clinton's era. he was the first one to use the word investment. it was an effort to sell government spending. >> the application is that it's, are there really solid ways in
which taxpayers can be reassured , in fact, that kind of thing can be want to fight? other good ways of measuring how effective infrastructure spending is? >> there are. we have productivity studies, there are congestion studies safety studies, of course. through these measurements, the monies that are spent for a safety, we have a safety task force, currently there are about 37, still a little bit less than 37,000 people who die in fatality, car fatalities. we have done studies and of course dissipated in efforts to reduce that in various ways. whatever we have reduces fatalities by about 500 lives
per year. in terms of congestion, we know that on average, passengers, ordinary folks spend about four hours on the road in congestion in congestive congestion. they lose about four hours per week. when we invest in infrastructure , we can actually try to reduce that number. so, there are various ways. >> i understand -- >> we are always looking, how can we spend the money wisely, ardently, in a fiscally responsible way. also, the department is huge. the annual budget is about $88 billion. of which about 70-75 billion are for infrastructure every year. even though we did not have the infrastructure bill, let me mention two things. one is that there was a down payment in the fiscal year 2018-
2019 appropriations in which $20 billion extra was given to the department. so, we have used that money and -- in competitively bid grants, in airport improvement grants and then also, even though the infrastructure proposal has not yet been successful and again, we always want to do this on a bipartisan basis, there is something called the surface reauthorization act which is coming up. the department works with congress on every reauthorization. that is going to expire on september 30 2020. that would be another vehicle. it is a more familiar vehicle, actually, to members of congress. >> i wanted to ask you about that. obviously about five weeks after that exploration, we will be having the presidential election. nevertheless, the act renewal
is talked about as the most likely vehicle for passing an infrastructure bill. on the other hand, it could just be a renewal of what there is. how confident are you, is there a real prospect of getting a substantial infrastructure bill using that vehicle this close to an election? >> i always have the politics will not get in the way. i think this is really important. it is for the american people. but, we also know that sometimes that happens. the act that was passed in december 2015, it was the first five-year reauthorization bill in a very, very long time. since the 1960s. there have been 16 reauthorization's in as many years. so the general pattern is in fact to just have extensions and not full reauthorization's. clearly, the certainty of
having a longer timeframe is very important to those who are involved in infrastructure. state and local governments, they know they are going to have this money for five years rather than six months. they can actually plan for the future. so, a longer-term horizon is better. >> assuming is i would think most people do assume, there is not going to be a major infrastructure bill. >> i have not given up hope yet. the president is optimistic. they are talking to congress about this. >> let's just say that hypothetically, if it does not get done, how much is being discussed in the run up to the 2020 elections about making infrastructure a central part of the president's reelection campaign? >> i have not been involved in those discussions. >> do think it would be a wise thing to do in that bipartisan agreement that was just referred to in an earlier panel today had spending on
infrastructure on highways on road improvements etc. is popular in states the president will want to win? >> i don't really get involved in discussions like that. it is really above my pay grade. but there is a new governor of michigan. and she had a slogan i am not going to repeat the whole, the whole thing because there is a curse word, but she said fix -- fix roads. i take care of the department of transportation. it is the department i love. i have been back in this department three times. i was first the deputy maritime administrator then i was deputy secretary. it has been wonderful coming back. what has been revealed to me, what i have learned since coming back is mission creep. every time i come back after
eight or some odd years, the department's mission expands. and, it changes. so the government is getting bigger. i think pretty much in all the departments. >> one of the things when one is talking about, when a huge amount of money, whether it is $1 trillion or some other number, when it is agreed to be spent, that there's always the possibility that the amount of spending and an enormous number of construction projects will push up the cost of labor, resources, in order to make sure that the tax dollars are spent in a judicious and cautious way, do you think that the infrastructure spending and constriction need to be phased in so that costs do not rise works is that one of the things you would consider? >> we like this phrase, the
president likes this phrase which is under budget, ahead of schedule. we actually look at the timeline and the budget of various projects that compete for the build plans and for the grants. we look at the track record of the community, we look at the project, with the timelines are, with the probability is that it will come in on time and on target in terms of the budget. that is a factor when we look at and give out these discretionary grants. >> -- who is on an earlier panel wrote an argument and one of the things she proposed was that the department of transportation was on a grading system so that there are rewards going to people who are getting things done on time and on budget. and that sort of productivity index is used to focus where
money is spent. is that something you might consider? >> we have something like that at the department. clearly with federal highways, federal transit, which gives out incredible numbers of grants, but now federal railways is giving out grants. this is an example of where previously, federal railroad was only involved in safety and not so much in grantmaking. now federal railroad is, as well. federal highways is used to making lots and lots giving out lots of money. they have, they keep track of how the money is spent. there are audits afterwards to make sure that things, that the money went where it is supposed to go. it is not precisely her idea, but there are checks and balances. we always are interested in
ensuring that we do a good job, that the the permit does a good job in giving out the money. on a formula basis, as dictated by congress, but that the money is used wisely. >> must turn our intention to the innovation department. there are an enormous number of things for the department of transportation access kind of a facilitator. it is not always just handing out grants, it has to regulate. >> man just interrupt? we have three priorities at the department. the first priority is safety. we are first and foremost a regulatory agency on ensuring safety and transportation except for maritime. the maritime administration is a promotional agency. and it is different from all the others. it is only u.s. flag. that is very distinct and unique . in other modes i always say
that a good day is when nothing bad happens. nothing falls out of the sky, nothing falls off the tracks. first and foremost, safety must be number one. number two, we want to address the deteriorating infrastructure. infrastructure has an impact on economic vitality. quality of life. the third thing is we have got to be preparing for the future. there are so many exciting transportation technologies emergency. our role is to engage with these new emerging technologies to address legitimate public concern about safety and security without hampering innovation. >> let's talk about one of those. i was astonished to read that there are no one half-million drone pilots in the country. presuming that number is growing every day.
what is the department of transportation doing to monitor and regulate drones at the same time as to encourage it? >> we are actually in the midst of laying the foundation into the framework for future technology advancement. while always remembering our responsibility in ensuring safety. there are a lot of concerns about security because, as we have seen recently, drones have appeared in places where they are not supposed to be. they can be weaponized as well. there is a security aspect. the military and the law enforcement officials and agencies are very concerned about this. so we work with them as to how we can regulate the drones and the faa reauthorization. it took a bit more time because
of the need for different stakeholders within the government, even, to come to a protocol about what to do on the security front with drones. and then third, i hear all the time from consumers, they do not like drones, the thought of drones peeking through their windows. so there are privacy concerns, as well. we are actually doing really revolutionary work in terms of asking for public input. we held a autonomous vehicles summit last year. it was headed up by the undersecretary of policy. and many other forms in which we are seeking input from the public. we have a number of rulemaking's ongoing that would allow eventually, depending on
input, drones flying over the heads of people outside the line of sight and at night. we also have an autonomous vehicles proving grounds. >> historically, technological innovations have always learned people. it is very easy to and in relation to drones. erin shutdown a drone. they are also is on tv, pizza being delivered by drones. there is an enormous range of uses for drones. people do not like the idea of snooping, in other words, have your inquiries already produced some answers? are we going to see as it were, flight paths as there are for airplanes? and how can the public be assured that with one and a half-million drone pilots in the country, presumably rising to 2 million very soon, what
actual practical steps are already in mind? >> these rule makings are enormously important in seeking public input and also stakeholder input. the government is not the fountain of all wisdom. so, we are not the ones to decide which technology. frankly, to rely upon the federal government in this field where technology is changing so rapidly, it is truly frightening. but what we can do, obviously, is to provide the form for which public input and relevant stakeholders can voice their opinion. that is the rulemaking process. we also have another two initiatives that also talk about remote identification. how do we identify remotely all these things that are flying about and then even a more essential question, as drones get bigger and more powerful,
we need to safely integrate them into the national airspace. that is run by the faa. so, all these very serious questions are being considered by the faa and by our policy shops as we go forward. >> to put that in real layman's terms, that is to make sure that the drone is not being flown by an enemy. >> absolutely, security issues. drones are used also for so many ways in which we had not expected. pipeline safety inspections, remote inspections of energy grids. in the recent california fires, drones flew into survey what is going on. in the aftermath of hurricanes harvey, irma and maria, drones were used in puerto rico to look at the aftermath devastation and what the state
of repairs were that were needed. there is another thing, there are now 435,000 drone operators. this is a category that did not exist five years ago. i was the secretary of labor. let me tell you, in 2008, there was not any mention of a drone operator. >> given that drones are very useful in inspecting infrastructure and where there has been damage, do we expect the department of transportation to have its own fleet of drones to inspect infrastructure? >> i had not thought about that. as you well know, the faa does have some airplanes for precisely this purpose. so we will have to see. that is very interesting. >> celeste turned to another
area which i understand the department of transportation has done a lot of work on and that is rocketry. until fairly recently, there united states was lagging in fourth place behind the eu, china and russia to promote rocket launches. as i understand it is now back to the number one position. what is the department of transportation done to streamline permitting for reusable rockets, tell us a little bit about that work? >> you're exactly right. now, commercial space, the united states is number one in crucial space once again. third two things happening. number one, when the president came in, he set up the space council and the vice president who has a real interest in passion for this is the chairman. the space council has done wonderful work in coordinating agencywide the work of the whole government. and permitting reform at the
department of transportation is certainly a major issue. there was a rulemaking that was initiated and we are decreasing the number of duplicative, overly burdensome regulations making it easier to have one stop shop. number two, america, it was americans who made the relaunch of all rocket a reality. so, with the advent of the relaunch of all, reusable rockets, that decreased the cost of using commercial space and really was a boon to the industry. that is helping to contribute to america's preeminence. >> just staying up in the air or i would assume still up in the air, you are also doing some work to encourage supersonic flight and making testing easier for new technology.
could you tell us in concrete terms what is being done there? that is also the faa. there are new starts that are thinking about restoring and bringing back supersonic flights. obviously, safety would be the huge concern. noise would be a second. so, the faa makes itself available to these new entrepreneurs and new technology , stakeholders to come and work early in the process with the faa so that the faa knows what's going on and then these new innovators would get a better idea as to what the regulators want. we encourage very early participation and collaboration. >> tell us a little bit about this collaboration may be a bad word but they need to let the
regulars know they are not going way off stream and the regulators can tell them very early, this is the right way and this is the wrong way. >> tell us a little bit about the technology that you sent up. it is not something that i think has got enormous amount of press. what is the mission, what does that do? >> we have been hearing a lot about hyperlink. in fact i spoke with the foreman there of chicago when he was in office about his plan to have a hyper loop built between city center chicago and o'hare. so as we began to talk about that, i realized that the department of transportation is structured in a very sideload way. you know, i don't think it would be a surprise to anyone. with the advent of new technology, we don't really have a place that can respond to informational requests from people who want to know what
the government's role is and what with the department of transportation do. so just to take hyper loop as an example, there are a number of competitors. is a brand name. goes underground. it is kind of like a transit system. the federal transit would be involved. it involves railcars so federal railways would be involved. it is in a vacuum tube so faa would be involved and then you also need, always, environmental impact statements which means that the highway systems, federal highways would be involved. so, given that all these groups would be involved, these departments within the department of transportation did not know what their responsibilities were. because it was new, it was kind of intimidating, too. we set up this new, emerging transportation technology council that would bring all
the heads of these various offices together and provide a one place shop for new and emerging technology innovators to come and ask, how do they proceed, what do they have to do? how do they fulfill all the regulatory requirements? that is very necessary. they just can't, we are all for innovations, but innovation within guidelines of safety, security and diversey. so, that is how this concept began. we have found it to be absolutely amazing in terms of the reception. i just saw someone from hyper loop yesterday. they were so enthusiastic and excited about they not having to figure out how we work but to be able to go to one place with people who know what they
are talking about and advise them responsibly on what the regulators require. >> madam secretary i know that the time is tight and so we are running out of time. i wanted to give you the opportunity to make some news -- >> i never try to make news. speak i am told that. but coming back to the question >> i am interested it in giving out information. and i am interested in empowering others so they have the information to act. we actually try to be very transparent and very responsive. >> should the gas tax be raised? >> that has certainly been a topic of discussion. the president has talked about it. certain republicans and democrats, it is a larger issue connected to, what are we going to do in our infrastructure bill
? let's decide on that first and then we will also come to how are we going to fund it and pay for it. how do we finance it? there are lots of different ways. one of the ways that has been suggested are tax cuts. is that also on the table? >> i think that is not on the table. but clearly, how to pay for, how to finance our infrastructure needs is a huge issue. we really want it to be on a bipartisan basis. this is something that every american cares about. >> i think we have come to the end of our time, i just wanted to thank you very much for joining us and also -- >> thank you. >> that is it for today. i hope you will all come back to our policy discussions. we have these events every so often. lookout for the next announcements on the next ones.
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