11th Annual Transportation Summit - Irving, TX
JAMES S. SIMPSON
FEDERAL TRANSIT ADMINISTRATION
AUGUST 13, 2008
On behalf of President Bush and Transportation Secretary Mary Peters, I want to thank the City of Irving for hosting this conference.
As always, this is an impressive audience – and an impressive and substantive program. Very timely, too. . . .
This is our moment to decide how we want to address the consequences of the sweeping challenges confronting the United States. . . .
Challenges that are forcing us to think differently about how the United States can ensure a bright future, and ample opportunities, for its citizens today and in the future, while maintaining its position as both a world leader and a market leader. . . .
Challenges that strike at the very core of who we are, as a nation, and what we’re all about.
Most of us did not predict, five years ago, that our domestic airline and auto industries would face extremely serious challenges to their core business models in 2008 -- triggering massive layoffs and cutbacks.
We did not expect that a nation of drivers would suddenly flock to public transit in record numbers, crowding bus and rail stations as never before. . .
And we were not prepared for the revenues we derive from the Highway Trust Fund -- a 50-year old tax on fuel that keeps money flowing for essential highway, bridge, tunnel, and transit projects -- to decline more steeply than expected, as Americans began driving less and conserving fuel.
Secretary Peters and the DOT leadership have come forward with a set of bold proposals to address these challenges -- and ensure that we begin doing things differently when it comes to funding and building the critical transportation systems we need.
If we have learned anything from the current fuel crisis, it is that transportation is indeed the circulatory system of our economy.
More than that, transportation means mobility -- and mobility keeps America’s workers and goods flowing swiftly and efficiently.
Mobility, in turn, means freedom -- and perhaps we have taken it too much for granted recently.
A few months ago, I met a golf caddy in a rural New Jersey suburb that routinely walks two miles to get to the nearest commuter rail station, where he is joined by a couple dozen other service workers, who commute more than 100 miles.
Access to transit is vital to the economic welfare of millions of Americans like this hard-working caddy. . . .
Mobility offers them the freedom to go out and earn a decent living for their families. . . and freedom to make choices about where to live and work.
Mobility also means freedom from chronic congestion when we drive or fly -- freedom from hours wasted sitting in traffic, in airports, or on runways. . . taking us away from our families, and costing companies billions in lost time and fuel.
Mobility is the currency of transportation -- and we are in danger of devaluing this currency.
A few months ago, a 90-year old drawbridge over a river in eastern Connecticut was slated for replacement by Amtrak. The work on this old bridge, which was carrying 36 trains a day, had been put off for years and years because Amtrak didn’t have the $83 million needed to replace it. . . I’m not criticizing Amtrak. . . The bridge has been safely rebuilt. . . But keeping up with needed repairs remains chronically difficult, and that’s simply a fact.
In New York City, a $500 million plan to remake the aging Penn Station is in disarray because public and private interests cannot resolve
their differences over money and control. This is one of the busiest surface transportation hubs in the United States – and we can’t figure out how to modernize it, on a par with St. Pancras Station in London, for example.
In Boston, Charlotte, Denver, Washington, D.C., and elsewhere, public transit agencies are scrambling to meet rising demand for bus and rail service – but many agencies lack the capital, the equipment and the staff to boost service at a time when it is critically needed.
In New York City -- the busiest transit market in the country – the MTA faces a $900 million shortfall due to the cost of fuel, falling tax revenues, and debt. . . . And nobody knows how they'll close the gap.
Is this the way we want to do business in this country?
I don't think so.
These trends are unacceptable in the wealthiest nation on earth. . . . A nation that built the world’s first and most extensive interstate highway system, and powerful commercial seaports . . . A nation that sent a man to the moon. . . and harnessed atomic energy.
We have always been a can-do nation, and we must remain so.
As Ralph Waldo Emerson said back in 1844:
“America is the country of the future. It is a country of beginnings, of projects, of vast designs and expectations.”
Our multi-modal transportation infrastructure is one of our most critical assets – today and for the future.
We have every reason in the world to want to protect it, invest in it, upgrade it, and pass it on to our children and grandchildren – and leave it in better shape than we found it.
This means we must be willing to do things differently – in some cases, much differently.
You know the definition of insanity, right?
It’s doing the same thing over and over again, but expecting a different result.
Secretary Peters has put forward a new, a different, and a better approach.
Much of what seemed to work for us in the 20th century, is not going to work in the 21st.
For example, in our most congested urban corridors, driving now makes the least sense in terms of cost, efficiency, and energy conservation – yet driving in these areas is still our default mode of travel.
What’s more, from a wear-and-tear perspective, the cost of driving is higher than ever -- not just because of fuel prices, but because the price tag to maintain and repair our roadways, bridges, and tunnels has been rising as the cost of commodities like cement and aluminum soar.
Yet consumers, who generally perceive our highways as “free,” have traditionally not been asked to share in their true costs -- to pay for usage.
If Disneyworld were suddenly to offer free admission to everyone, it would become impossible to get in. The whole park would break down. . .
We may indeed equate mobility with freedom -- but we should stop equating access to the assets that keep us mobile, with a free ride.
In rural areas, where people tend to drive less fuel-efficient vehicles, and where transit alternatives are sometimes scarce or non-existent, people are at risk of losing access altogether to the jobs and services they need.
Where is Plan B for these folks?
My agency, the Federal Transit Administration, has worked hard to increase transit options in rural communities – and we've done a great job. But let's be honest: In light of what's going on today, new ideas and additional resources will be needed to ensure that folks who live in these areas can connect to the transportation services they need.
The point I'm making here is that, without a doubt, our federal approach to transportation is broken. And no amount of tweaking, adjusting or adding new layers on top will make things better.
We cannot stay the course.
We need to realize that the way to solve our transportation challenges is not to favor one mode over another. . .
Instead, we should think in terms of the most effective way to move people and goods -- and then allocate resources accordingly.
Let's build the infrastructure we need – and stop settling for the infrastructure we have.
Suppose Amtrak were to operate a few extra cars on its trains in the busy Northeast Corridor. . .
That extra capacity could potentially replace dozens of airline flights a day between Washington and Boston, which would go a long way to relieve the air traffic plaguing that corridor.
Robert Crandall, the former chairman of American Airlines, once suggested something along these lines. . . . Here you had an airline executive, telling people that we could relieve airport congestion by adding more rail capacity. . .
That's putting “people” ahead of “mode,” and it's the way we've all got to begin thinking – in government and the private sector.
We also need to think differently about how we finance our transportation infrastructure.
I believe if we can show commuters there's a better way to fund transportation projects ... then they'll believe again.
The Highway Trust Fund will run more than a $3 billion deficit by next year, and the mass transit portion of that account will also run out of money in the near future. Congress is working on a short-term fix -- but that's no substitute for a well reasoned policy.
Now, many people have made a case for raising fuel taxes to sweeten the pot for transportation projects. But raising the fuel tax is not an automatic fix. . .
Regardless of the level of the fuel tax, just because we have long relied on it as our primary federal funding mechanism for transportation, does not necessarily mean we ought to continue to do so.
First, it's not a guaranteed solution to our problems. Over the past 25 years, we’ve increased highway funding 100 percent -- thanks in large part to fuel tax increases -- yet congestion has increased 300 percent.
Second, the way this antiquated tax is structured no longer makes much sense. . .
These days, it's probably not a good idea to predicate a tax on people’s behavior – because behavior changes.
The less people smoke, the less excise revenue we collect on every pack of cigarettes.
Similarly, the less gasoline people consume, the less goes into the Highway Trust Fund. . . . In May alone, Americans drove 3.7 percent fewer miles than a year earlier: We cannot count on this methodology to fund future transportation growth.
Clearly, we need a better way. . . .
The federal government ought to be in the business of encouraging new investments in transportation – not replacing them.
Congressional earmarks undermine the effective and efficient use of federal funds…
And we cannot expect federal fuel taxes to keep up with the mounting costs of new transportation construction and the recapitalization of aging assets.
Nor is it realistic to ask the states to shoulder the burden, or the risk. As the Wall Street Journal reported a few weeks ago, the states are collectively facing a $40 billion shortfall in the coming fiscal year.
As the Brookings Institution recently noted – and we at DOT heartily agree – our federal surface transportation program, with roots in the 1950s, is woefully out of date.
That's why we need to embrace a new paradigm in transportation financing and construction, so that we can better manage our freeways, freight corridors, and transit systems – and build new, ambitious projects that will enhance our connectivity and our mobility.
We should empower states to partner productively with the private sector -- to leverage the resources, expertise, and efficiency of private contractors and operators, which in turn can benefit by working toward the public good.
Done right, we believe that public-private partnerships in transportation will help reduce project costs, improve efficiency and delivery, bring new technology to the table, and supplement our very limited public sources of funding with private equity and debt.
We know this works, because we've seen the results.
In Denver, for example, a $1.7 billion multi-modal project added miles of new light rail service and improved highways, and was completed under budget and two years ahead of schedule.
How did that happen?
Colorado's state and regional transportation authorities engaged a private consortium to design and build almost every element in the project. . .
We have high hopes for dozens of such projects across the country – including one in Houston, where the public transit authority is negotiating with a large private firm to design, build, operate, maintain, and finance four light rail lines.
The Houston project is one of several pilot public-private partnerships involving federally funded transit projects, where FTA is backing this approach.
Public-private partnerships are a win-win for taxpayers, the private sector, and government -- and we believe they are the wave of the future.
If you're skeptical, hop over to Europe, where England, France, Italy, Belgium, Greece, and other countries have been doing procurements this way for years.
In fact, France is planning to build three new high-speed rail lines concurrently – linking Paris to two major cities plus the Charles de Gaulle Airport – using PPP models. . . . I don't believe there's any other way to realize such a complex, ambitious set of projects.
We also need to find the political courage to introduce direct pricing options -- like high-speed electronic tolling on our busiest roadways, and congestion pricing in dense urban corridors.
This idea remains controversial -- and yet the public increasingly agrees that they should pay to use local roads during peak periods. In fact, San Francisco recently approved a plan to toll commuters on the area's busiest highways, during the busiest hours of the day.
This is in fact a far more rational approach to building and maintaining a viable transportation infrastructure than the system we've got now. . .
It acknowledges the real costs of roadway usage. . . offers incentives to drivers to modify their behavior to reduce the burden on the system. . . and raises new revenues for transportation and transit projects.
A growing number of state leaders have already embraced innovative approaches to help them secure financing for transportation.
Pennsylvania and Florida, for example, are actively pursuing long-term private-sector leases on state highways and toll roads -- a move that could throw off hundreds of millions of dollars annually, for much-needed transportation projects.
These ideas, and more, are needed to help us move our national conversation about transportation forward. In the coming months, Congress will consider new legislation authorizing our federally funded surface transportation programs.
Under Secretary Peters’ leadership, the Department of Transportation is committed to giving Congress a plan that promises to refocus, reform, and renew our approach to the nation's highway and transit systems.
In this plan, we should begin to wean ourselves off of the gas tax -- and our nation's dependence on 700 billion dollars worth of imported oil each year . . . .
We should make it easier for state and local officials to make investments based on what works – and what gets people where they need to be. . .
We also should hold transit and highway investments to rigorous cost-benefit analysis
. . . make it easier and quicker to get transit projects off the drawing board. . . and encourage more options for financing transit projects.
Now after all I've said, I don't want to leave you with the impression that the federal government is abdicating its responsibility or its interest in our national transportation infrastructure.
Far from it.
Now more than ever, we need strong, innovative federal leadership.
We need leaders willing to make tough and courageous decisions about what it will really take to build and sustain a world-class transportation infrastructure, to keep our economy moving.
We need to restore faith in our government's ability to foster a vision for our future -- and to recognize that we are all going to sink or swim together.
Above all, our federal government ought to be an effective champion for a revitalized transportation infrastructure in this country.
You know, the European Economic Community does this very well. . . The 11 member countries recognize that they have a shared interest – a super-national interest, if you will -- in transportation systems that cross boundaries and borders. . . They fund transportation projects competitively.
Athens has a spectacular subway system that was built in this way -- it provides a rail link to the airport, and the stations are filled with stunning antiquities. . .
Neither the city, nor Greece, could have afforded this system alone, without access to the EEC's resources.
This is a case where the whole is greater than the sum of the parts.
And it's a symbol of what we must achieve here in the U.S.
We cannot compete globally without a world-class infrastructure. . . and we should never settle for transportation networks that are second-best behind other nations.
The Secretary’s proposal for re-inventing our federal surface transportation programs sets out to ensure that we develop and maintain world-class transportation networks.
So let us all pledge that we’re going to work together -- government, private partners, and public transportation providers -- to find ways to make our national transportation infrastructure better. . . make it sustainable. . . and keep America moving.
I want to leave you a wonderful and inspiring Greek proverb:
A society grows great when old men plant trees, whose shade they know they shall never sit in. Let us work together to leave a legacy for our children and grandchildren that will remind them of the founding principles of our nation -- life, liberty, the pursuit of happiness – and, I would add, access to the best transportation systems in the world.