I thank the gentleman. I thank Congressman Blumenauer for his leadership, a former member of the Transportation and Infrastructure Committee. We have sent him over to the Ways and Means Committee because we can put forward the need, we can…
I thank the gentleman. I thank Congressman Blumenauer for his leadership, a former member of the Transportation and Infrastructure Committee.
We have sent him over to the Ways and Means Committee because we can put forward the need, we can document what we need to build and rebuild; but, in the end, someone has got to be responsible for raising the money, and, ultimately, it is going to be Ways and Means, and Earl has certainly taken a point position there.
We are at an unprecedented point. We haven't been here before since the creation of the national highway program under President Dwight David Eisenhower.
On October 1--or before then even, the trust funds established by Eisenhower, financed by user fees, gas tax, diesel tax, and some other fees on excise taxes, et cetera--but, principally, the fuel tax--is going to be depleted to the point where, if we don't act before October 1, according to the Congressional Budget Office, the obligation authority, that is, the amount of money the Federal Government could invest, beginning next October 1, in any and all transportation projects across the United States of America--roads, bridges, highways, transit--will drop to zero--zero.
Now, this is not one of these other phony cliffs around here that have been created by an intransigent majority and a bunch of grandstanders. This is real. This is real.
Think of what that means to the States. To my State, it means a loss of about $450 million of Federal aid to fund our Federal highway system in the State of Oregon.
It means that all across America, you are talking about millions of jobs and incredible lost opportunities in terms of creating new jobs and dealing with a crumbling infrastructure, which has already been discussed a little bit before me.
So Congress has to get serious about this. You can't whistle by the graveyard on this one. You can't pretend it is not a fake crisis. It is a real crisis.
Congressman Blumenauer explained how it has happened over the years. We haven't raised the gas tax since 1993.
Now, a lot of people look at 4 bucks a gallon at the pump come Memorial Day, and they say: that damn government taking all that money.
No. 18.4 cents went to the Federal Government in 1993 when gas was about a buck a gallon, and in 2014, when ExxonMobil jacks it up over $4 for the Memorial Day holiday, 18.4 cents will go to the Federal Government.
I would be a lot happier at those higher prices if I knew some of it was going to rebuild our crumbling bridges, some of it was going to fill in the potholes and deal with the failing pavement, some of it was going to the deficit in our transit infrastructure, which is about $70 billion. The nice thing, if we make those investments which have already been mentioned, it creates about 20,000 jobs for every $1 billion dollars we spend--and not just construction jobs. You have engineering jobs. You have technical support jobs. You have small business suppliers. In transit, you have manufacturing jobs. You have even high-tech jobs, computer-driven transit vehicles, and et cetera. All across the economy, it would create jobs, 20,000 jobs per $1 billion dollars.
And we have the strongest Buy America requirements of any part of the Federal Government, way stronger than the Pentagon. So when we invest those dollars, Americans go to work or go back to work.
But guess what, the other side works. If we stop spending that money on October 1, hundreds of thousands, millions of people will lose their jobs across many sectors in this country, and we will become the laughingstock of the world. The greatest nation on Earth can't afford to invest in its future, in its competitiveness, in rebuilding the Eisenhower-era infrastructure and building an infrastructure suitable for the 21st century to make us more competitive? It is not too hard. One simple way to do it would be to take the existing gas tax and index it.
What does that mean? Well, part of the reason that we are in this pickle is because the gas tax has remained 18.4 cents a gallon since 1993. That means, with inflation, it has been eroded. And as cars and fleets become more efficient, people are driving more miles with fewer gallons of gas, which is a good thing. So if you indexed it and said, okay, we will index the gas tax for construction cost, inflation, and fleet fuel economy, you would see a big increase in gas, about 1.4 to 1.7 cents a gallon next year. Wow.
Well, guess what. Just when I was home recently, I drove to work; and when I came home, gas was up a nickel a gallon because of the crisis in Ukraine. Where did that go? That went into the pockets of ExxonMobil.
I thank the gentleman. I think it is an excellent point.
If we fully implemented Dodd-Frank and reined in some of the commodities speculators, it wouldn't be quite so volatile. But the point is, if we took a tiny fraction of the way they jack it up when you are driving to work every week and invested it, your friends, your neighbors would go to work, your commutes would be better, there would be less damage to your car, the country would be more efficient, and we would lose less jobs overseas.
So, if we indexed it and we paid it back over 15 years, we could put somewhere between $120 and $150 billion into the trust fund that would be paid for and paid back over a 15-year period.
Another alternative would be to put $1 on a barrel of crude oil. For every $1 you tax a barrel of crude oil today--Texas is at $101.70, I think, when I last checked--that would be less than 1 percent. That raises $4 billion a year to invest in the future of America, its infrastructure, and putting people back to work in this country. It would also help to rein in some of the speculation on the price of crude oil. And it would also help because OPEC and other suppliers would have to be paying a part of rebuilding our infrastructure.
The proposal I put forward exempts all manufacturing; it exempts all heating oil; it exempts all agricultural uses; it exempts school buses and other things that are currently exempt. So it would only be the fraction of the barrel that goes to current taxable transportation use as $1 dollar a barrel, which is $4 billion a year. Again, we could use that future cash flow to bond and fill in the giant pothole in the trust fund.
Let me just give one example. I have a company in my district called Johnson Rock Crushers. They produce a wide range of rock crushers. They are a major exporter from the U.S., and they are competitive in the world market. They are employing skilled labor and also engineers and others to design these materials. They are sourcing virtually all of their components in the United States for these very large pieces of equipment.
So there is an incredible multiplier effect. They are employing people who are in niche manufacturing somewhere making one big gear or making parts for the conveyor or the giant tires that go on these things. They are employing engineers to make the future designs. They just have finished a major contract for the Seabees with affordable equipment for the Seabees. So they are just covering an extraordinary range of things.
They showed me a chart, and the chart is what happens to their business when the future funding for the highway trust fund comes into question. They can show me what happened back when we did the SAFETEA- LU bill, how much business fell off. They can show me recently a fall- off in domestic business. They are doing pretty well internationally because other countries--somehow other countries can figure out how to invest in their infrastructure. They are concerned about becoming more competitive in the world economy, and they are making massive investments in China, Brazil, and in many of our competitor nations.
In fact, I recall once when my colleague, Mr. Blumenauer, heard me giving a speech. I was saying how I kind of thought the U.S. was becoming a Third World nation because of the deterioration of our infrastructure, which we have already talked about tonight. He came up to me afterwards and he said: Hey, you know, that was kind of insulting. And I'm like: Earl, what do you mean? You know how bad it is. I mean, at that point we were at a D, and now we are up to a D-plus for our infrastructure. And he said: No. No. It was insulting to Third World countries, because they are investing a higher percentage of their gross domestic product in their infrastructure than the United States of America.
We can afford these investments. In fact, we cannot afford to forgo these investments because we will lose more ground internationally; we will waste more fuel; people will spend more time in congestion; and we will kill more people on obsolete mass transit units like they did right here in Washington, D.C. These are investments we must make.
We have, in the past, led the world. We have been number one, number two after World War II up through near the nineties sometime. We are now number 26 in the world in terms of the state of our infrastructure. We are duking it out with Romania these days, I think. This is embarrassing. It is embarrassing for us not to be pushing forward with solutions now and not creating another cliff and eking it out to the end.
As Representative Titus pointed out, some States are already cutting back their construction program for this construction year. Kansas is one I know of. They have said: Look, the way we run our State, we have got to be sure that the Federal reimbursement is going to be there when the project is done. We can't wait. Our constitution doesn't allow us to borrow money for these things. We can't go into deficit, unlike the Federal Government.
Therefore, just the prospect that the money might not be there is causing many States to say: Well, wait a minute. We are going to pull back here on these projects this coming year, and then if it actually happens on October 1, it will be a massive cutback next year.
I don't know what happens to transit. There is no transit system in the world, except maybe Hong Kong, that makes money. So to say we are going to withdraw all Federal support from transit would mean one heck of a loss of options for people in the United States.
The problem here in D.C. is that a lot of people, particularly the Congress, don't discriminate between investments, capital investments, and expenditures. You know, if
you buy fuel for the Federal fleet or a battleship or something, okay, that is an expenditure; it is consumed. But if you build a bridge that lasts 100 years, we count that the same as buying something that will be consumed in 1 day. That doesn't make any sense, but that is the way Congress works.
So they treat needed investments in the future mobility of the American people and saving fuel as being competitive, moving goods and people safely, they treat that exactly the same as a consumptive, 1-day expenditure for fuel for the Federal fleet or something else. That makes no sense. We need capital budgets. That is probably a longer term project around here. They need to at least recognize the need for these investments.
What I hear from a lot of naysayers is: Hey, you already did that. You did the stimulus, and that didn't work, did it?
Well, actually, if you look at the so-called stimulus, under the most generous interpretation of infrastructure, 4 percent went into traditional surface transportation infrastructure--4 percent, 4 percent of the $800 billion--and it created a heck of a lot more than 4 percent of the jobs that that bill created; a really generous infrastructure interpretation, you are up to 7 percent.
So I say, no, that was not a test. That money was well invested and spent, but it was totally insufficient for the job to repair and rebuild our infrastructure and bring it up to a good state of repair for the 20th century, let alone to begin to build out an efficient 21st century infrastructure. That is no test. That money was well spent and well invested.
There are some prominent commentators who say, oh, I don't know where that money went. I had a debate with one of them on television, actually. We can show exactly where that money went and exactly how many jobs were created, and it was certainly a net large return compared to many of the other things that were in that legislation. No, that wasn't a test.
A test would be if we made a commitment now to build a 21st century infrastructure and to rise from 26th in the world back to number one in the world within 10 years just like JFK said we will put us on the Moon in 10 years. Well, in 10 years, we could go back to having the number one infrastructure in the world, and in the meantime we would create a few million more jobs, and the long-term impact of that creates sustainable jobs of untold numbers over the years.
To just boil it down to something pretty simple, I would say let's think about the future. Let's think about today, and let's think about the future. And those who would disinvest or devolve our obligations to create a national transportation system that is world class, devolve that duty to the 50 States assembled, or just ignore altogether that obligation, they really are showing that they don't take a long-term view for America, they don't have much faith in our future.
I have a heck of a lot of faith in our future, and it is going to take some leadership to get to that future. Doing simple things like maintaining the existing purchasing power of the gas tax through indexation and then using the future income to bond, and make a heck of a lot of investments now, will return more in the long term than it will cost, and it won't add a penny to the deficit. Just like the Federal highway trust fund has not been a net contributor to the deficit over time; it has been funded through user fees. We need to continue that principle.
In the future, we can probably evolve to something more high tech, vehicle miles traveled or things like that. We are not ready today to get there, and we sure as heck can't get there by October 1, so we have to work off the basics that we already have, that we have had since Dwight David Eisenhower, a Republican President, and it was Ronald Reagan who added mass transit into the highway trust fund. This has been truly a bipartisan issue over the years. We lost our way for a bit here, and it should become bipartisan again. We should all join together, and we should show that we really believe in America's future and make the investments that are necessary to get us there on a better national transportation system.