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WASHINGTON, DC - House Democratic Whip Steny H. Hoyer (MD) delivered the following keynote remarks this morning at the Hamilton Project's event "Identifying a Fiscally Responsible Approach to Funding Infrastructure:"
“Thank you, Secretary Rubin. Thank you to everyone at the Hamilton Project and the Brookings Institution. And thanks to former Director Orszag and the distinguished panelists who are here today as well.
“‘Good roads, canals, and navigable rivers,’ Alexander Hamilton wrote, ‘by diminishing the expense of carriage put the remote parts of a country more nearly upon a level with those in the neighborhood of the town. They are, upon that account, the greatest of all improvements.’
“Much has changed since Hamilton’s Report on Manufactures in 1791, but the premise of his statement remains true. Infrastructure is one of the best investments any nation can make. To facilitate economic growth by ‘diminishing the expense of carriage,’ but also to stitch the people of our large and diverse country closer together and closer to markets abroad, making access to opportunity more equally available. To invest in infrastructure and reap its benefits requires consensus. It demands a Congress and administration committed to long-term planning, which often requires making difficult fiscal choices.
“The question isn’t whether we should invest, but how can we do so most efficiently and productively, so as to save taxpayer dollars over the long term and within a fiscally responsible context. Any discussion about our ability to do so must now acknowledge the proverbial elephant in the room. That, of course, is the unprecedented administration of Donald Trump and the uncertainty it has unleashed across our country and our economy.
“We simply cannot talk about infrastructure investment, or any policy issue, in the same way we did a year or two ago. Certainly not the same way we were forced to eight years ago. When the previous administration came into office, we were talking a lot about infrastructure but for very different reasons.
“In the opening days of the Obama presidency, the national conversation about infrastructure concerned how to support aggregate demand, in the context of economic stimulus to stem the bleeding and lay the foundation for a strong jobs recovery. I believe we missed an opportunity to do more, and our focus should have been on further investment in infrastructure. In my view, including only $69 billion in the Recovery Act in 2009 for infrastructure was a mistake. Instead, we included tax cuts in the hopes of getting Republicans on board and ended up with none voting for it. I continue to question whether some of those tax cuts would have been better spent as direct infrastructure investment instead.
“Now, after eight years of steady growth and an unprecedented recovery – with our unemployment rate at just 4.8% and more than 16 million net private sector jobs created – the focus of infrastructure needs to be on building a sustainable economic model that can enhance our long-term competitiveness, which will be key to making opportunity more broadly accessible. Historically, we have relied on a gasoline tax at the pump largely to fund highways and transportation improvements, generally. Unfortunately, we did not set up the gas tax like a sales tax, reflecting increased costs of funding our infrastructure needs.
“Transportation and Infrastructure Committee Ranking Member Peter DeFazio has been saying that the gas tax needs to be on the table in discussions about infrastructure financing. And if you have one takeaway from my remarks this morning, it is that we must pay for the investments we make. We must ensure a sustainable funding method over the long-term.
“Most of the conversations over the past few years with regard to funding have been about leveraging repatriation. As everyone in this room well knows, the idea is that a levy on repatriated corporate earnings held overseas could fund a one-time infrastructure boost, and we’ve seen proposals on both sides of the aisle along those lines.
“Today, however, the comprehensive tax reform proposal that House Republicans are working on – their so-called ‘blueprint’ – includes such a deemed repatriation, but employs it solely as an offset for a reduction in tax rates, not infrastructure investments.
“Ways and Means Committee Ranking Member Richie Neal has been working on the tax reform issue and had this to say last week on the current state of play: ‘We are now seeing three competing proposals… one from the White House, one from Republicans in the House, and a bit of a stand-offish approach in the United States Senate.…You’re not going to do tax policy with one party and leave the other side out, because in the end, if that happens, all that means is the side that doesn’t prevail, they simply do a reset and prepare for the next round.’ [CNBC News, 2/2/17]
“House Democrats believe that sustainable investments in infrastructure continue to be among the most productive activities when it comes to supporting long-term economic growth – more so, I would argue, than many of the so-called ‘pro-growth’ tax policies in the Republican blueprint. But no matter how much will exists on Capitol Hill and in the White House to make infrastructure a priority, the reality is a difficult political hurdle must first be cleared.
“Divisions within the Republican House Majority remain, with a significant number of Members unwilling to support any investments that increase spending, even those designed to achieve growth over the long term. Among those willing, the idea that they ought to be financed with anything other than reductions elsewhere in the budget is a tough sell. That leaves Congressional leadership and the President in a bind.
“One need look no further to find evidence of these divisions than President Trump’s proposed border wall, which will not make us safer, grow our economy, or put us on any more sound fiscal footing. There is no consensus among Republicans on how to pay for it. The only thing certain is that Mexico will not.
“I’ve been speaking a lot about infrastructure investments and their benefits over the past several years, as I’ve traveled around the country talking about House Democrats’ Make It In America plan. From the public hearings we’ve held and from the discussions within our Caucus, several proposals for how to improve our infrastructure networks have been introduced. So we’re ready to come to the table with ideas as well as with votes.
“As we move forward with discussions about infrastructure investments, it’s critical that we focus on how we do so in a fiscally sustainable way, while prioritizing investments that will connect people and markets rather than build barriers between them. I know that the panelists assembled here today will go into more detail about the different options before us. Whether it’s leveraging repatriated earnings, offering tax credits, expanding user fees, bringing in private capital, or any number of other ideas, including as what my Maryland colleague Rep. John Delaney has proposed, we need to find a way to get this done.
“The time is ripe to do it now, given the low-interest rate environment as well as a recognition among Members in both parties that infrastructure is an area where consensus is possible. With deficient bridges, with ports and airports straining at capacity, our power grid requiring upgrades, water and sewer pipes in need of replacement, and with many areas of rural America still unconnected to broadband, the need for robust infrastructure investment is clear. The tragedy that occurred in Flint, Michigan, is a lesson in the importance of preventive action.
“I look forward to hearing about the ideas that come out of today’s conversation, and I thank this very distinguished group of experts for sharing their insights and contributing to this critical national discussion.”