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

Statement

Hearing Of The House Committee On Transportation And Infrastructure - "Recovery Act: 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. This
Act has already resulted in almost 7,900 highway and transit projects breaking ground as
well as hundreds of thousands of workers getting off the bench and back on the job all
across the nation.

Beyond the funds provided by the Recovery Act, additional highway and transit
projects totaling more than $62 billion are ready to go to construction in the next few
months. To offset the continued rise in construction unemployment, the collapse of the
private construction market, and State budget crises that limit States' ability to finance
highway and transit projects, we must act now to provide additional investments for
ready-to-go highway and transit projects.

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 a supply chain industry leader
whose company has been able to keep workers employed because of the Recovery Act.
In addition, Government Accountability Office (GAO) will testify about its extensive
oversight of the Recovery Act.

The successful implementation of the Recovery Act highway and transit
investments adds force to the calls for additional infrastructure investment. As of
October 31, 2009:

- 10,329 highway and transit projects in all 50 States, five Territories, and the
District of Columbia have been put out to bid, totaling $24.5 billion, representing
71 percent of the total available formula funds for highway and transit projects;
- 50 States, three Territories, and the District of Columbia have signed contracts for
8,871 highway and transit projects totaling $20.2 billion, representing 59 percent
of the total available formula funds; and
- Work has begun on 7,886 projects in 50 States, three Territories, and the District
of Columbia, totaling $18.6 billion, representing 54 percent of the total available
formula funds.

These 7,886 highway and transit projects that are underway have created or
sustained more than 210,000 direct, on-project jobs. Direct job creation from highway
and transit projects has resulted in payroll expenditures exceeding $1.1 billion. Using
this data, the Committee calculates that $179 million in unemployment checks have been
avoided as a result of this direct job creation. Furthermore, these direct jobs have caused
nearly $230 million to be paid in Federal taxes.

Just as important as direct, on-project jobs, are indirect and induced jobs in the
supply chain 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, or manufacture equipment such as new transit buses. Total employment
from these 7,886 highway and transit projects, which includes direct, indirect, and
induced jobs, reaches nearly 630,000.

The Recovery Act investments are also bringing our nation's highway, bridge,
and public transit systems to a state of good repair. The Federal Highway Administration
(FHWA) reports that these highway and bridge investments will result in nearly 28,000
miles of road improvement and almost 1,300 bridge improvements.

In addition to these investments, the Recovery Act also included funding for
many other infrastructure investments within the Committee's jurisdiction, including
Clean Water, Federal building, and U.S. Army Corps of Engineers investments. Of the
$64.1 billion provided for transportation and infrastructure programs under the Recovery
Act, Federal, State, and local agencies have announced 14,654 transportation and other
infrastructure projects totaling $44.7 billion, representing 70 percent of the total available
funds, as of November 20, 2009. Within this total, States and agencies have obligated
$37.8 billion for 13,882 projects, representing 59 percent of the available funds. More
specifically:

- Work is underway on 745 aviation projects totaling $1.2 billion (92 percent of the
total available Recovery Act funds for the Federal Aviation Administration
(FAA));
- Amtrak has awarded $623 million in contracts for 350 projects (48 percent);
- 1,269 Clean Water State Revolving Fund projects are out to bid totaling $2.6
billion (66 percent), 723 projects are under contract totaling $1.5 billion (39
percent), and work has begun on 588 projects totaling $1.2 billion (32 percent), as
of October 31, 2009;
- The Environmental Protection Agency (EPA) has provided $576 million to
existing contracts for 57 Superfund projects (nearly 100 percent);
- EPA has awarded grants or provided funds for existing grants or contracts worth
$79 million for 176 Brownfields projects (79 percent);
- The U.S. Army Corps of Engineers has committed $2.5 billion for 758 projects
(54 percent);
- The General Services Administration (GSA) has awarded contracts worth $1.4
billion in Federal Buildings funds for 314 projects (26 percent);
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- The Economic Development Administration (EDA) has awarded 68 grants
totaling $147 million (nearly 100 percent); and
- Under the Coast Guard's Alteration of Bridges program, contracts have been
awarded and construction has started on three of the four planned bridge projects
totaling $81 million (57 percent).

In addition to the 630,000 direct, indirect, and induced jobs that have been created
or sustained by the highway and transit formula programs, these additional programs,
along with a few others, have created or sustained an estimated 227,000 direct, indirect,
and induced jobs. When combined, these investments have already created or sustained
approximately 857,000 jobs.

We have also seen bids for infrastructure projects coming in much lower than
expected. For example, California, Georgia, and Texas awarded more than 90 percent of
their highway contracts for less than their cost estimates. 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.

Although the Recovery Act has counteracted the increase in construction
unemployment, Congress must act now to pass job creation legislation. In November, the
national unemployment rate in construction was 19.4 percent. At the Committee's
October hearing on Recovery Act implementation, Mr. Charles Gallagher, President of
Gallagher Asphalt Corporation, testified that, although historically his company has
received one-half of its work from the private sector and one-half of its work from the
public sector, 98.5 percent of his current business is public sector work.

State reports on planned spending for transportation projects also reveal the real
danger that many States will be unable to move forward with their own infrastructure
programs or find matching funds for Federal transportation programs.

Additional funding for highway and transit projects will immediately create and
sustain needed employment. According to a December 2009 American Association of
State Highway and Transportation Officials (AASHTO) survey of State Departments of
Transportation, there are 7,497 ready-to-go highway and bridge projects, totaling $47.3
billion. Furthermore, according to a December 2009 American Public Transportation
Association (APTA) survey, there are more than $15 billion of ready-to-go transit
projects.

I am pleased with the progress that has been made in the first nine months 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, and learning how we
can build upon these efforts to ensure that we continue to put Americans back to work.

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