Hearing Of The House Committee On Transportation And Infrastructure - "Recovery Act: 225-Day Progress Report For Transportation Infrastructure Investment"

The transportation and infrastructure investments of the American Recovery and
Reinvestment Act of 2009 (P.L. 111-5) (Recovery Act), have already played a key role in
putting Americans back to work. Federal agencies, States, and their local partners have
demonstrated they can deliver transportation and infrastructure projects and create
urgently needed employment in the tight timeframes set forth in the Recovery Act. These
projects have already resulted in over one-hundred thousand workers getting off the
bench and back on the job.
As of August 31, 2009, 64 percent of the total available formula funds for
highway and transit projects have been put out to bid,. Almost 50 percent of these
formula funds are under contract, and 42 percent are associated with projects underway.
Monitoring the percentage of allocated funds associated with projects out to bid,
under contract, and underway helps us measure the Recovery Act's progress. Critics of
the Recovery Act focus exclusively on the amount of outlays of Federal transportation
funds. This approach does not provide a good sense of Recovery Act progress because
transportation projects primarily operate on a reimbursement mode. For example, States
seek reimbursement for highway projects after construction is underway. Federal
outlays, therefore, come months after jobs are created and necessary infrastructure
projects have begun. Knowing how many funds are associated with projects out to bid,
under contract, and underway better captures the extent to which Recovery Act funds
have arrived on Main Street.
Critics of the Recovery Act also cite "red tape" as obstructing the quick and
efficient use of funds. These assertions could not be further from the truth. The
Recovery Act provides funding to States and local governments through the existing
Federal-aid highway program. Further, States, months before the Recovery Act was even
signed into law, geared up and worked with local officials to prepare to implement these
funds.
After a State selects a Recovery Act project, the Federal Highway Administration
(FHWA) approves the project within a day or two. Once FHWA approves a project,
federal action is complete. It is then in the hands of States and their local partners to put
these funds to work. As the recent reports we received from States demonstrate, most
States moved aggressively to advertise projects, sign contracts, and begin construction.
In fact, today we will hear from one State that has already put to work nearly all of its
Recovery Act highway funds.
Against this backdrop, I scheduled this oversight hearing to hear from Federal,
State, and local transportation officials who are implementing programs receiving
funding under the Recovery Act. We will also hear from supply chain industry leaders
whose companies have been able to keep workers employed because of the Recovery
Act.
To provide additional insight into what progress has been made to date, I would
like to share the results of the vigorous oversight that the Committee has already
conducted. Just ten days after the Recovery Act was signed into law, the Committee
requested transparency and accountability information directly from States, metropolitan
planning organizations (MPOs), and public transit agencies. Those recipients have
reported regularly to the Committee.
According to the most recent submissions received by the Committee, as of
August 31, 2009, a total of 8,062 highway and transit projects in all 50 States, five
Territories, and the District of Columbia have been put out to bid, totaling $22 billion.
That's 64 percent of the total available formula funds for highway and transit projects.
Of these 8,062 projects that have been put out to bid, 6,472 highway and transit
projects in 50 States, two Territories, and the District of Columbia are already under
contract. These projects under contract total $16.8 billion.
Work has begun on 5,279 projects in 50 States, two Territories, and the District of
Columbia totaling $14.4 billion.
These 5,279 highway and transit projects underway have resulted in over 122,000
direct, on-project jobs. Direct, on-project jobs include workers employed to repair or
build a new facility or maintain on-site equipment.
Just as important as direct, on-project jobs, are indirect and induced jobs (which
others call supply chain jobs) that have resulted from Recovery Act investments. Indirect
jobs include jobs at companies that produce construction materials such as steel, sand,
gravel, cement, and asphalt. Indirect jobs also include jobs at companies that
manufacture equipment such as new transit buses. Induced jobs include employees at
restaurants who serve lunch to employees working on job sites.
Today we will hear from people who have seen first hand how the Recovery Act
has sent positive ripples down the supply chain. In many cases, the Recovery Act has
allowed companies that had planned lay offs, to keep their workforce intact. Many
companies have even been able to bring back workers because of Recovery Act orders
rolling in. Therefore, when you combine the direct, on-project jobs with all the jobs that
the Recovery Act creates and sustains down the supply chain, the tally of jobs rises even
higher.
The Committee also requested that all Federal agencies implementing programs
that receive Recovery Act funds under the Committee's jurisdiction provide a table of
specific Recovery Act projects. As of September 18, 2009, Federal agencies under the
Committee's jurisdiction have announced 12,352 transportation and non-transportation
projects totaling $40.6 billion, representing 63 percent of the total available funds. Funds
have been committed for 11,624 projects totaling $33.7 billion, representing 53 percent
of the total available funds.
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Of the $48.1 billion in funding provided under the Recovery Act, the U.S.
Department of Transportation (DOT) has obligated $28.8 billion for 9,640 projects, as of
September 18, 2009. This represents 60 percent of the total available funds.
Within this total, State Departments of Transportation have submitted and
received approval for 7,558 projects totaling $18.8 billion, approximately 70 percent of
the Recovery Act highway formula funds.
This transparency and accountability information speaks for itself: Federal
agencies, States, and their local partners are putting Americans back to work in family-
wage, construction jobs all across the nation.
The Act further requires that at least one-half of all highway funds apportioned to
States be obligated within 120 days (June 30, 2009) after the date of apportionment. I am
pleased to report that all States met this requirement.
The Act additionally requires that at least one-half of all transit formula funds be
obligated within 180 days (September 1, 2009) after the date of apportionment. I am also
pleased to report that all States and local communities met this requirement.
The success of meeting these "use it or lose it" provisions should send a clear
message to all Federal, State, and local governments implementing Recovery Act
projects: you can quickly deliver transportation projects, put shovels into the ground, and
in doing so improve our nation's infrastructure and lift our economy out of recession.
We have also seen bids for transportation projects coming in much lower than
expected. In their most recent report, GAO cites multiple examples of States pursuing
additional projects because of these bid savings. For example, the Colorado Department
of Transportation reported that 32 highway projects had come in lower than the original
estimates, resulting in a bid savings of over $39 million. Across the nation, this bid
savings has allowed Federal agencies, States, and their local partners to stretch Recovery
Act funds even further, resulting in more projects, and in turn putting even more
Americans to work.
Throughout development of the Recovery Act, I emphasized the importance of
transparency and accountability and ensured that the transportation and infrastructure
provisions would be subject to the most rigorous transparency and accountability
requirements of the Act. I am pleased that the Obama Administration adopted many of
these ideas, not just for transportation, but for all programs funded under the Act.
I also promised that the Committee would vigorously oversee implementation of
the Recovery Act. The Committee will continue to require periodic direct reporting to
the Committee by recipients of transportation and infrastructure funds under the
Recovery Act as well as Federal agencies implementing Recovery Act programs under
the Committee's jurisdiction, to ensure that the funds are invested quickly, efficiently,
and in harmony with the job-creating purposes of the Act. In addition, the Committee
will continue to hold public hearings to examine the successes and challenges under the
Act.
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While much work remains, I am pleased with the progress that has been made in
the first 225 days since enactment of the Recovery Act. I look forward to hearing the
testimony of today's witnesses and discussing what is being done to ensure that Recovery
Act funds will continue to create good, family-wage jobs as quickly as possible, while at
the same time improving our deteriorating infrastructure and laying the foundation for
future economic growth.
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