(Archived Content)
As prepared for delivery
WASHINGTON - Let me thank all the hardworking men and women at Treasury and the Department of Transportation who made this event possible. We are here today because we share a commitment to propelling economic growth today and far into the future, and we recognize that upgrading our infrastructure is vital to America’s economic success.
It is a privilege for me to welcome all of you to this summit on an issue that is critical to our nation’s future. We meet today to redouble our efforts to rebuild our highways, railroads, and ports; modernize our water systems, power grids, and Internet connections; and decrease our commute times, shipping costs, and transportation expenses. We have brought together leading investors, project developers, labor leaders, and government officials from all over to explore new ways to increase investment in infrastructure. Thank you all for being here.
As we gather this morning, our economy continues to strengthen. Six years ago, a financial crisis on Wall Street helped plunge our economy deep into recession. But thanks to the resilience and determination of America’s people and businesses along with decisions made by the President, we have experienced a comeback.
Over the past 54 months, our private sector has created 10 million new jobs. That is the longest stretch of job growth in our nation’s history. GDP grew by a robust 4.2 percent annual rate in the second quarter of this year, and private sector economists forecast healthy growth in the second half of this year and through the end of next year.
On top of that, areas like the auto industry and technology are thriving. And our energy sector produces more oil at home than we import, making the United States the world’s leading producer of petroleum and natural gas. Household wealth is at an all-time high. Manufacturing is rebounding. Housing is gradually recovering. We sell more goods around the world than ever before. We have cut our budget deficit by more than half over the last four years. And today, business leaders around the world say that the number one place to invest is America.
We need to build on this momentum. We need to drive more investment across the United States. And we need to accelerate job creation, increase economic growth, and make sure that our prosperity is broadly shared.
To get this done, we must invest in our infrastructure. Historically, fixing our roads, bridges, and ports has been one of the most bipartisan ways to create jobs and lay a foundation for future economic expansion. In 1808, President Thomas Jefferson’s Secretary of the Treasury, Albert Gallatin, delivered a landmark report to Congress that detailed the country’s infrastructure needs and called for the development of a sophisticated transportation network to create a platform for a strong, modern economy. During the Civil War, President Abraham Lincoln steered the federal government to help build the Transcontinental Railroad and lay track from coast to coast. This 19th century technological feat led to a dramatic rise in commerce and trade, and made transportation faster, safer, and less expensive.
And after World War II, President Dwight D. Eisenhower set out to create a “mighty network” of roads that would span the entire country. The result was the Interstate Highway system, which is still the lifeblood of American industry, allowing manufacturers from Seattle, Detroit, and Atlanta to reach customers thousands of miles away. For generations, our investment in infrastructure has helped drive tremendous, broad-based growth and supported the rise of a thriving middle class.
But over the last decade, there has been a decline in infrastructure investment. And today, we face a funding gap of $1 trillion in transportation, water, and electricity needs between now and 2020. The statistics paint a clear picture. One out of nine bridges in the U.S. is structurally deficient. Roughly two-thirds of our roads are in less than good condition. And many of our ports are not deep enough to receive the next generation of supertankers.
Our infrastructure deficiencies hinder economic growth, undermine business productivity, and hurt family budgets. The electric grid’s low resilience leads to weather-related outages that cost the U.S. economy, on average, somewhere between $18 billion and $33 billion every year. Poor road conditions force American companies to pay an extra $27 billion a year in freight costs. And inadequate infrastructure costs Americans as much as $120 billion a year in extra fuel and lost time.
Unless we reverse this trend, the consequences of failing to provide and maintain our infrastructure will be severe. The price will be paid in fewer jobs created and some lost; a rise in prices for goods and services that will cut into worker paychecks; and longer commute times, higher greenhouse gas emissions, and a lower quality of life from traffic jams, airport delays, water main breaks, and potholes.
There is no question we need to make infrastructure investments a priority. Other nations understand this, and China and countries across Europe are making the kind of investments that we keep putting off. They recognize that CEOs want to locate their operations in places where workers can get to their jobs easily, where goods can be shipped efficiently, and where power is dependable.
Now, the reason many projects are stalled or are not happening is because a lot of states and local governments do not have the available funding they need to get projects going and to maintain them in the future. And while direct federal government spending on infrastructure is indispensable, we recognize the reality that budget limitations at every level of government make it all the more important to come up with fresh, innovative ways to unlock capital and get more projects underway. That means we have to work more closely with the private sector and channel more private investment into infrastructure projects.
Of course, private sector involvement in infrastructure is not new. States, cities, and counties have long used private debt financing through the municipal bond market to pay for projects like roads and schools. At the same time, the private sector already supplies electrical power, Internet access, and cell phone service to millions of Americans. And some state and local governments have contracted with private companies to design, finance, construct, and operate major transportation projects. Denver is now working with private firms to expand light rail service, and the Port Authority of New York and New Jersey has partnered with private companies to replace the Goethals Bridge. These partnerships give investors a steady, long-term return on their investments, they allow state and local governments to expand the roads, bridges, ports and airports we all depend on, and they often can help reduce total costs and increase quality of service.
Still, when it comes to working with the private sector, the United States lags behind other advanced economies like Canada, Australia, and the United Kingdom. Between 2007 and 2013 public-private partnerships accounted for only 2 percent of overall capital investment in our nation’s highways.
To help drive more public-private partnerships and increase private financing here in the U.S, the President recently created the Build America Investment Initiative. This government-wide undertaking will help encourage collaboration between private investors and state and local governments, expand the market for public-private partnerships, and put federal credit programs to greater and more effective use.
As part of this effort, the President directed Secretary Foxx and me to create an infrastructure finance working group and come up with specific recommendations by November 14 on how to increase private sector investment and public-private collaborations. This summit—which is part of a months-long outreach effort with local government officials, investors, and business leaders—will help shape those recommendations. And today’s discussions will help us formulate ways we can increase investment by focusing on things like bringing innovative financing approaches to projects that cross state lines, attracting more private investment to smaller projects, and using federal credit programs to trigger greater private investment.
Along with this working group, the Department of Transportation has started a Build America Transportation Investment Center, a one-stop shop for state and local governments, developers, and investors who want to take part in transportation infrastructure projects. This center is designed to provide advice and expertise on things like creating partnerships, accessing federal credit programs, and speeding up the permitting process. And it will encourage more local governments to adopt innovative financing strategies by sharing information on how cities and states have successfully leveraged private investment to meet infrastructure needs.
One state that has collaborated effectively with the private sector to meet its infrastructure needs is Florida. Since 2007, Florida has seen more than $6 billion in infrastructure projects completed with the help of private investors. Just recently, with the help of a $340 million loan from the Department of Transportation, Florida raised enough private capital to break ground on a $1.1 billion tunnel that will link the Port of Miami with I-395. And later today, Secretary Foxx will announce a new agreement related to an important project in central Florida.
Still, even as we pioneer new ways to increase private sector investment in infrastructure projects, we are moving ahead with strategies to fix our nation’s ports, airports, bridges, roads, and dams that only the federal government can pursue. As we know, the President has made investing in our nation’s infrastructure a cornerstone of his economic policies from day one. And since 2009, we have improved more than 350,000 miles of roads, repaired or replaced 20,000 bridges, built or upgraded more than 90,000 miles of electric lines, and brought high-speed Internet access to more than 7 million Americans who did not have it.
We have made these improvements by using innovative approaches like the TIGER competitive grant program, which has funded 270 projects across the entire country. These grants amplify federal resources by only going to cities and states that have already lined up other sources of funding and have put together a plan that upgrades transportation while having a significant impact on local economic activity. Earlier this year, the President announced $600 million in new TIGER grants to fund innovative transportation projects throughout the United States.
The President has also made it a priority to cut down on the time it takes to get infrastructure improvements underway, from road and bridge upgrades to public transit and clean energy initiatives. When I was the director of the Office of Management and Budget earlier in this administration, we piloted a faster permitting process for a small group of major projects. Our job is now to take that to scale. By expediting federal review of these projects, we have shaved months—and in some cases, years—off the time it will take to complete work on projects like the new Tappan Zee Bridge in New York, the new Kennebec Bridge in rural Maine, and a new highway in Utah linking Provo Airport to Interstate 15. And we are doing even more to speed up the permitting processes so more projects can get done faster.
Nevertheless, important infrastructure projects can never be completed overnight. Even the smallest projects take years to complete and require a steady stream of funding. That is why we need a long-term infrastructure strategy that will provide certainty to states, cities, and private investors. As part of this, we should adopt a four-year Highway Trust Fund re-authorization bill, which the President put forward in his budget. Congress passed a bill that will keep the Highway Trust Fund solvent through next May, but this is only a short-term solution.
We need a comprehensive approach that rebuilds America, creates construction and manufacturing jobs, tackles our most urgent repairs as soon as possible, and gets transformative projects underway that will improve our global competiveness. To help pay for these investments, we are proposing to use temporary, one-time savings from pro-growth business tax reform. It is time to close wasteful tax loopholes, lower rates for businesses that create jobs here at home, and stop rewarding companies for relocating overseas.
Now, to better understand what is at stake and what we can do to promote a stronger economic future, we are announcing today that the Treasury Department will commission an independent report to identify the most significant transportation and water infrastructure projects that are under consideration across the country based on their potential economic impact. The list will include proposed projects that are not moving forward because of a lack of funding or political will.
By zeroing in on the projected economic benefits of specific projects not yet underway, policymakers, investors, and the American people will have a clear picture of how these projects will benefit local and regional economies. This should help federal, state, and local officials get needed projects off the ground.
Throughout the course of our nation’s history, leaders from both parties and from all parts of the country have recognized that investing in infrastructure for the next generation is a responsibility of leadership. And we know that this historical commitment to a strong infrastructure is one of the main reasons our economy is the largest in the world today.
Looking ahead, if we want to continue to lead the world, we are going to need modern highways and railroads, first-rate tunnels and bridges, and efficient power networks and water systems. That is why we are all here today, and that is what we can accomplish by working together. We have a tremendous group here—and I want to call on everyone at this summit to do their part. We need your skills, talents, energy, and ideas to solve our infrastructure challenges. And make no mistake, today’s conversations will be central to our work going forward. What happens here will lead to concrete action that will make a real difference for families, businesses, and our economy.
When we make investments in our infrastructure, we see multiple dividends. In the short-term, we help create good, middle-class jobs that cannot be outsourced, ignite business activity, and spur local economic development. And in the long-term, we help lay a foundation for a future that is brighter, stronger, and more prosperous.
Thank you very much. I look forward to working together.
###