Alex Goldmark is a senior producer in the newsroom for New Tech City and Transportation Nation.
Norm Mineta, Former Sec. of Transportation, "Roads and Highways" top Transpo Priority, Defends Earmarks, Questions Some Defense Spending
Friday, November 26, 2010 - 05:26 AM
Norm Mineta served as Secretary of the Department of Transportation in both the Clinton and George W. Bush Administrations. Lately Mineta's been teaming up with Republicans and Democratic DOT secretaries in the hopes of convincing Congress to make major new transportation investments, including a $50 billion infrastructure bill championed by President Obama.
The trouble is that in these days of giant debt and political polarization, Congress is in little mood to listen. Transportation Nation's Todd Zwillich recently sat down with Mineta at his current office in at the Washington lobbying firm of Hill & Knowlton to ask about Washington's attitude toward roads and highways, high speed rail, and the prospects for bipartisan agreement in an era of political warfare.
"I was hoping that we'd be able to see something around the infrastructure bank being considered in the past during the lame duck session....I haven't seen anything to confirm any kind of activity that would connote action during the lame duck."
TZ: You joined the president and bi-partisan past transportation secretaries in the WH rose garden a few weeks ago pushing for the president's proposal for an immediate 50 billion investment in infrastructure and transportation. What are you hearing around Washington about the prospects of that money being approved in the near term...?
Norm Minetta: I was hoping that we'd be able to see something around the infrastructure bank being considered in the past during the lame duck session. In fact that's what we were hoping would be the result of former Secretary Sam Skinner and I meeting with Pres Obama and Secretary Geithner and Secretary LaHood, but I haven't seen anything to confirm any kind of activity that would connote action during the lame duck. And I did see secretary LaHood maybe about a week, ten days or a week after that session and it didn't seem like anything was happening. So I guess we'll have to wait until after the start of the new 112th congress.
TZ: ...You've called for a transformational investment in infrastructure. Can we get it in this 112th congress? Where do you think we're heading given this political environment?
NM: Well, I think those of us who are proponents of transportation spending, really haven't done a good job of justifying what that spending is all about. When we think about everything we eat, wear, consume, whether as individuals or a business, it just seems to me what we're not seeing is that everything we have in terms of food, clothing, whatever you want to talk about, got to a store, got to a distribution center got to our house by something on wheels, and we really haven't done a very good job of relating that spending. When I hear these folks talk about look at that pork. Well that pork is really economic activity and it just seems to me then we just haven't done a good job at explaining. The mere fact that spending money, is not pork. That there is substance to that spending. And the other thing to is besides spending from tax revenues, there's also a great deal that is accumulating in the private sector that's available for expenditures in infrastructure, what I call pipeline -- private investment in public enterprises. So it seems to me what we ought to be doing is utilizing this whole public/private partnership in order to advance spending and not just tax revenue.
"When I hear these folks talk about look at that pork. Well that pork is really economic activity and it just seems to me then we just haven't done a good job at explaining. The mere fact that spending money, is not pork. That there is substance to that spending."
TZ: As you know the reality of our political environment right now suggests that any increased spending ... might be pretty unlikely and a lot of people in Washington are limping along with what are called continuing resolutions--staying with current funding levels. ...Now if that happens, and we just go along with any continuing resolutions for the next 2 or 3 year, what are the consequences of that in practical terms?
NM: Well, just in the transportation field, in the past we've has T-21: the transportation efficiency act for the 21st century. That was a $230 billion expenditure over a six year period. SAFETEA-LU was a successor and that was $270 billion over a 6 year period. Chairman Oberstar put in the surface transportation assistance act and he called for $450 billion, but to the extent that the surface transportation assistance act never got enacted, we're now working on the $270 billion that's now been replaced since 2003. So here we are in 2010, and we're still working on a $270 billion authorized level. Now in the meantime, there's been a tremendous increase in the cost of doing business. And when you think about the highway trust fund, 87% of that highway trust fund, is going to maintaining what we have already built. So that means that 14% is available for new but again with the cost increases, we're really getting 20% less for what we have to spend. So it is costing us all very dearly. And the problem is that today, given that we're working on a global economic marketplace, we're going to be impacting on our own productivity, impacting on our own congestion and have a economic disadvantage competing against Germany, China, India, Japan, all the other countries in the economy who are making tremendous investments in their own transportation infrastructure.
TZ: In the short term, over the next year, the new chair Mr. Mica from Florida, starts to work on a transportation bill, do you see any prospects of the kind of bipartisan agreements that can make the kind of investments you're talking about?
NM: I think given the fact that that gasoline tax generates about 300 billion, instead of a $450 billion bill, maybe we should just stay with a $300 billion bill and work on that for the time being.
TZ: That's a lot of maintenance then and not much new. You gave a matrix before of maintenance versus new. Scaling back to $300 billion sounds like a lot of maintenance for the next few years.
NM: But it's still an increase from the present $270 billion, so to that extent, it is an increase, but it's not ... you figure it's a 20% increase in cost, that means we should probably be at minimum $330 billion, and that is to an extent, a reduction if we stay with $300 billion. But it seems to me, $300 billion is a better place to me to be working on these extensions, that we have right now. I think we're working on our 11th extension right now. and that ends on Dec. 31. So during the lame duck session, we're going to have to extend that Dec. 31st date to June, sometime in that time period.
TZ: What do you think is the future of high speed rail? Will it survive this political environment? And if a couple of states stick with their high speed rail, but most don't, will it take the wind out of the sails for high speed rail and this push that the stimulus act tried to make for it.
NM: I think high speed rail was always considered to be a regional kind of a program: There was Portland-Seattle-Vancouver. California had LA to San Francisco, Texas, Florida, the Northeast corridor and the Midwest. So there's been really, regional high speed rail. The $8 billion that was in the stimulus program went to something like 120 areas. I think Chairman-designate Mica coming in the 112th congress is supportive of high speed rail, but thinks that there ought to be criteria by which we measure projects that are going to be funded, so that we are speaking on the high speed rail and not higher speed rail. I think congressmen Mica is supportive of high speed rail, but doesn't like the sort of the spreading out of the money to 120 or so projects and would rather have had that money concentrated in ...
TZ: let's say - Florida.
NM: Florida has an Atlanta to Tampa route. That's a 110-mile-route. California is probably the longest at 150 miles. Portland, Seattle, Vancouver is probably 100, maybe 200 miles. Of course Texas is such a big state, it has a potentially big one.
TZ: This method of 120 locations, regions that you describe, is the classic formula that congress uses to get by in from as many members as possible, we have something to gain or nothing to lose if it's not funded. Mr. Mica is talking about something much more streamlined. Do you agree with that approach or would it jeopardize the support you can get with that kind of funding if the benefit only goes to a couple of places, instead of being spread around?
We "ought to really be getting to an effective high speed rail... greater than 200 mph... Even if we have only five places in the country that have real high speed rail that we would be better off than having short segments of 90 mph trains."
NM: Well when the Europeans and Asians talk about high speed rail, they're talking about 220 miles per hour. Japan is going to a maglev that goes to 300 miles per hour. When we talk about high speed rail, we're talking about 120, 150 to 220 mph. Right now a lot of these projects, trains are going 85 mph and we're going to go to maybe 97 mph. Well, I think if I read Congressman Mica correctly what he's saying, we ought not to be doing this kind of high speed rail. But ought to really be getting to an effective high speed rail based on what others think of, and that is at least 220 mph- 200 mph, greater than 200 mph... Even if we have only five places in the country that have real high speed rail that we would be better off than having short segments of 90 mph trains.
TZ: You've dealt with Congress. You've had experience in both Democratic and Republican administrations. High speed rail in five regions. Is that something you can get the rank and file go along with? And is that something in the Midwest or people in places that don't get the direct benefit, don't necessarily want to sign up for if it's just Florida, California and New York that benefits?
NM: Well, I think it has to be done, in conjunction with something else the Miller Report talks about and that is a budget reform. And you have actually two budgets: a capital budget and an operating budget. And the train systems under a bifurcated budget system like this will get no operating subsidies, in that they will have to be cost recovery based on the fare box.
TZ: In other words, the federal government can invest in building, but operating costs will be in fares, with no transfer of funds, let's say from tax payers in Kansas to commuters in New York City.
NM: Europeans and Asians, you look at those high speed rail systems--TGV in France, Shinkansen in Japan--get no operating subsidies from the government. They are totally dependent on their efficiency of operation, their fares, and their fare box, for the operation of the system. Yet the Japanese Federal Government helps in the construction of the capital arena.
"I can cite examples of Halliburton or KBR or Blackwater spending billions and what we have nothing really to show for it. So it seems to me, again, that if they are going to say spending needs to be looked at then, it seems to me we have to look at spending all across the board."
TZ: In the environment that we have ... can Washington produce any kind of transformational transportation and infrastructure policy over the next two years or, honestly, are we going to have to just limp along until 2012 in terms of transportation?
NM: If the conservative groups are willing to say all defense spending is good and we ought to keep spending there and we don't apply and standards of efficiency or lets say an internal rate of return or return on investment. Then that seems to be to be foolish. I can cite examples of Halliburton or KBR or Blackwater spending billions and what we have nothing really to show for it. So it seems to me, again, that if they are going to say spending needs to be looked at then, it seems to me we have to look at spending all across the board.
Why is the Chamber of Commerce promoting their ATM, their Americans for Transportation Mobility? Because it is important in terms of economic engine, as job builder. So to me this is not just a business issue, its also personal in terms of quality of life. Am I going to be caught up in congestion and not able to get home to have dinner with my family, or can I be home in time to be with Johnny for his soccer match. To me congestion is part of that economic equation of what happens in life. And we ought to be working on relieving congestion, and this is going to require spending. so we have to make sure that the money we spend is being spent efficiently, and there is a return on that dollar. So we can make a differentiation on the types of spending that goes on.
TZ: What is the single greatest area of transportation infrastructure?
NM: Roads and highway conditions, is to me critical. The interstate highway system after WWII created the largest increase in economic development in the country. That was not just by accident. That great growth of our economy is directly attributable to the interstate highway system and its expansion. And at the same time it gave mobility to people to move about as freely as they want. So to me the roads and highways still need a great deal of improvement and what we have already built requires maintenance, and it would be foolish not to do the maintenance given all of the money that has been used on constructing the highway system.
TZ: Former Transportation Secretary Norm Mineta, thanks for joining us.
NM: Thanks for having me on board Todd.