Traffic control system. This is held at the heritage foundation, its an hour and 10 minutes. We ask that courtesy that our other mobile d devices have been silenced or turned off as we begin. For those watching online and here in the house, we remind that questions and comments can sent at any time to speaker at heritage. Org and we will post on the heritage home page for your future reference as well. Eading our discussion today is michael sergeant, Research Associate in our thomas a. Roe for Economic Policy studies. He leads our efforts to free ate and implement market transportation and infrastructure policies. Oversees and watches and examines our surface ransportation, of aiation, waterways and other policy issues related to infrastructure around the country. Contributor to the daily signal and his commentary has also been featured in the washington boston herald, houston chronicle, thehill and fox news. We welcome michael sergeant. Mike. [applause] mike thanks, john. Good afternoon, thanks for oining us at the heritage foundation. At least in terms of sheer lip one ce, infrastructure was of the most promise nentishes during the 2016 campaign. Candidates embraced major infrastructure proposals as a way to address our roads and drijz and dilapidated airports in the president. E new both candidates also propose job ing as a panacea for creation. In addition, now the new resident is poised to offer a 1 trillion infrastructure plan and has the democrats also suit with their own trillion dollar proposal. We have very few specifics, issues will come to the forefront as Campaign Promises run up against reality. Now the questions we must haphazardlyhat will throwing taxpayer money at pork barrel project really help an mired in debt with relatively low unemployment or s it possible to generate Effective Investments in truly worthwhile projects in a fiscally responsible matter. Today to discuss these very important issues is a distinguished panel of analysts. Tion policy first we welcome chris edwards, the director of Tax Policy Institute the cato and editor of downsizing government. Com. E is a top expert in federal and state tax and budget issues and before joining cato, he was economist on the congressional joint economic committee. He has testified to congress on times and hismany articles on tax and budget policies have appeared in the and many othert major newspapers. Us is robert of a s, a president nonprofit think tank with the mission of improving transportation policy and leadership. He was the senior fellow at the metropolitantitute policy program. Robert has worked extensively on a variety of transportation issues, infrastructure funding and finance and city and urban planning. Speaker to a nt variety of groups, a regular contributor to newspapers and has testified before congressional committees. Finally, mark describener is a fellow at the Competitive Enterprise Institute where he focuses on transportation, land urban growth policy issues. These include infrastructure operations, nd Transportation Safety and Security Risk and regulation, privatization and Public Finance well as emerging transportation technologies. Advised urrently policimakers on these matters at the federal, state, and local levels. Well start off just with a conversation style panel, so to lists should feel free chime in, but please avoid another as we e have gotten a bit tired of that years. E last two i think weve heard enough to get started just based on some proposals weve heard from the incoming president as well as congress. Into it with a question from mark. You have written a good bit nations state of the infrastructure assets and do you hink that its a fair characterization to say theyre really crumbling and if we dont a trillion dollars, will the bridges all collapse . In other words, do you think spending plan is kind of the best way to go a better is there option . Mark i think the problem is or but that ourroblem nfrastructure is not uniformly crumbling. You have problems in many local and thats true. Highways, we have seen the number of structurally bridges steadily decline, pavement smoothness has increased. When it comes to the federal side of things, things arent arent necessarily looking that bad. Now were going to have reconstruction needs for the a lottate highway system, of money over the next two decades decades. Really where our biggest problems lie are in the realm. Al you have transit systems with tens of billions of dollars in backlogs. E you got crumbling municipal streets. Is, especially when youre talking about federal policy is, our federal programs very well not equipped to deal with these local issues. At the g that folks federal level, members of congress and the administration is perhaps at federal g how we do aid, that means allowing more of these funds to be used for routine maintenance. Might be a good idea. Resident trump the other idea emphasized a fix it first strategy, that brookings has talked about when rob was still over there. Yeah, we do have problems, but its important not to lose sight of these t that many problems are local and the feds re not necessarily the best folks to address them. If i could chime in here, if bridges, for example, there is 600,000 bridges in the United States and the federal Highway Administration says that about structurely are deficit. Politicians often mention that it was a 000 as if huge catastrophe. Share of ted, the deficit has fallen over the years. S an economist, the number of bridges is not zero. To eliminate all of the structurally it deficit bridges, enormously expensive, hundreds of billions of dollars. You want to get to a point where investment more than pays for itself in terms of creating additional benefits. Highway al Administration Says that those structurally deficit bridges, theyre not at risk of falling down. Theyre not unsafe. Updated. Uld be there is an optimal rate that we should be updating them. Is. Ont know what that you have to think about this in terms of optimal. I thinkexample of this, the Texas Transportation Institute says that traffic costs americans about 150 billion a year in lost time and productivity. Like a lot of money. But again the optimal amount of highways is the not zero. It would be enormously expensive. Have to spend trillions of dollars to get the amount of nations n on the highways down to zero. Maybe we should reduce it, maybe at the optimal now, i dont know. Its a complicated question that at both of the engineering and the economics to get to the right answer. I think part of the solution here is the more we move of the ucture out government to the marketplace we can get marketplace feedbacks and response to find out which are in the most need of fixup and expansion and which arent. The problem when youre in the government realm, the money isnt allocated efficient the government doesnt work based on marketbased indicators. On other factors such as formulas and pork barrel politics. As mark mentioned and chris alluded to, a lot of these problems are more local in and while i know your organization has done a lot of looking at what is going level, a the federal quarter of expenditures, can you give us an overview of what is down at the ground level, the local level of government . Here nks for having me today. I think that part of the comments ise of the we dont define infrastructure very well. E think of infrastructure, we think of roads and bridges and transit. Thats what most americans think about. Infrastructure, there isnt an infrastructure right, there is ransportation, energy, telecommunications, water structure are in the news and ach are designed, governed, financed very differently. The federal role in each of those sectors is actually very things like freight rail. The federal government has a but regulatory part doesnt fund. Telecommunications is a lot of private sector, energy is private. It is really different. There is a definitional problem e have to get sorted in this country. Its added to a lot of confusion and misunderstanding of what the should be ernment doing. In the realm of that, a lot of the interest, a lot of the have ment and things we seen around the country, particularly over the last 10 years or so is what is happening beltway from city, metropolitan areas that arent waiting for the federal government to pass their theyre doing their own things. Theyre doing gasoline taxes in their own states. To 10 states passed their own gas states, red states, blue inbetween. Ything theyre going directly to the voters having them approve ballot measures. Consistently year after year we ee 70 of the ballot measures pass, some is for routine stuff investments. Or a lot of money by any major. You need 2 3 of the vote in l. A. Sales tax. Sales tax increase. Thats a very popular method for raising transportation revenues. Lots of other places. The point is as we have this conversation on the national and these big proposals, very ambitious, very far infrastructure on the national level, city, states not etropolitan areas are waiting around, theyre doing things. Wn. Absolutely chris, you walked about the markets and when you have these decided kind of by the arent alwayshere the right incentives in place. Proposal alked about would use tax credits to provide an incentive to invest in infrastructure. Do you think are most right for privatization. He trump plan with tax incentives is kind of a good Way Investment in those areas . Belt on what robert said, over the years, i have learned issues, of them on the im appreciative of that. To build on what robert said, ou can see with trump the confusion of what is infrastructure, what is properly and al, state, local, private. The plan put together by two of fall that would rovide tax credits for i guess private investment reflect the sort of confusion that were not specific in their plan. Were they talking about the local infrastructure or private federal. We need to start at the find out what is federal responsibility and what is properly state, local, and private. On, we have seen a revolution around the world in countries, dozens and dozens of our trading partners oving more and more to private sector involvement on infrastructure. You can see this in airports, in highways, in sea ports. In the r countries 1980s figured you could get better allocation of capitol if moved infrastructure to the private sector. Efficient et more construction, fewer cost verruns and management in construction by moving to the private sector and more management in the private sector. Government infrastructure is mispriced. For example, we tend not to use congestion pricing on our highways. Federal water instraw structure, water, we price it too low, environmental problems caused by that. Sector,g to the private ou get more efficient allocation of the investment dollars, the allocation determined more by market demand. You get more efficient onstruction and you get more efficient management in operations over time. I think all of the people on you panel have generally, know, talked in favor of moving oward private sector involvement and the new Trump Administration is moving in that direction as well. Dont like his tax credit plan. Urrently municipal and government infrastructure is already tax favored on the debt and local tate overnments finance debt for infrastructure, its tax exempt. That. Is a problem with all of the airports in this country are governmentowned and reason why theyre governmentowned, when governments issue debt to expansion, they can issue taxexempt debt. Would have to rt issue taxable debt. We have a government bias in infrastructure. The trump plan would move more n that direction and even distort the tax code even more by favoring equity as well as debt. Thats the way to go. The way to go is reduce the bias favor oflready have in government infrastructure and create more of a level Playing Field with the private sector. Building on what chris said, biased in favor of overnment infrastructure, exemptions with bonds. Eliminating that tax do ption, one thing we can is build on a tool that already exists, bonds capped at 15 obama , the administration to their credit roposed qualified Public Infrastructure bonds that would pabs the eligibility of to cover different Asset Classes covered. t currently thats one way short of eliminating the tax exempt bonds to municipal s. Vel the Playing Field its more realistic to build on acronym we can come up, then at least in the short than to eliminate that tax bias. I agree, too. Its interesting that even hough we had this period where borrowing even for local, if the you didnt o low, see that much borrowing from the as much asocal level you would think that borrowing is so cheap. Something else is going on here. Part of the problem is a lot of places dont really know what do. Y want to there is an inconsistency between this big message that apart. Ructure is falling we need to do a reinvestment, very cheap debt for places to advantage of and then a lack of investment. Something is not right there. It is. Exactly sure what part of the problem is well really havent embraced, what about,. Real ing need is for rehab and maintenance of the existing system. Its not engineering to last in perpetuity. It has to be fixed at some point. Did a lot of the building in 1970s, s, 1960s and its reaching the end of its useful life. Attractive to as issue debt to rehab, even though thats the thing we need to do the most. Do like chris point, too, figure out how to make the level. Field more i dont know if its going to take any wholesale changes that do. Re able to what we need is like what virginia is starting to do, figure out, what do we want to project. This particular here is what we want to accomplish and do a really assessment, here is how much it will cost us to do it the traditional way. Can beat , if someone that, beat it and do it better. Project it for a big inside the beltway, either inside or outside, two different projects. The state knew what it wanted to get, knew how much was going to cost and opened it up and in and is doing it better. Thats a great model to take advantage of. Absolutely, i think this whole discussion has kind of entered around more on the financing side of things, at least from what weve seen. Think there is general confusion about the difference between funding infrastructure and financing it. Can talk about some of the different kind of financing models that we have a bit and how that diverdz from funding the infrastructure. Some en maybe recommendations you have in addressing both of those things the new administration. We get it confused in this country. Were trying to engage in the private sector. Theyre looking for different return, looking for Something Different than the traditional Public Sector is looking for. I think for advice and for recommendations, we got to get sorted out and stop talking about infrastructure in the abstract. Very specific about it. Infrastructure is such a tangible team. It has this he t esoteric type of terms. A major conversation now about spinning off the air a ffic control system to nonprofit or some other corporate entity. Thats something we should be quicklymove on and very in the new year, a bunch of ndustrialized countries have already done. The proposal is on the table and we should be able to address it probably the biggest change we have seen in aviation in a generation. That is something we can soon. To work on very i think making these connections better between the different departments, the different something in the last administration, we saw that there was some, a lot more you joining up things. They focused on h. U. D. And e. P. A. And transportation trying to working together to get more bang for their buck. Experience on the labor side, there is a Big Conversation about labor and transportation, a big theme in about using infrastructure as a way to stimulate job creation, things like that. It may, 11 of american jobs are directly to infrastructure. Not the guy cutting the hair or pothole, but directly working in infrastructure. If were thinking about that as source of american jobs, lets figure out how to capitalize on that. Transportation is going through a technological change with new players, public private, providing services that were heretofore provided by sector agencies. This whole shared economy revolution, how is that playing labor and american jobs. H iven her perception and expertise, they trend closely. Im excited about the new of transportation, ellen ciao, watching her hearing, she was open to the idea about major restructuring of the air Traffic Control system which robert touched on. The biggest opportunity this infrastructure is not he trillion dollar spending plan that trump alluded to which is not going to happen. Congress passed a bill a year lasts through 2020. I dont think were going to see highway bill. The f. A. A. s funding runs out by september. Congress needs to do something. The house has a plan to do a reform to move the air Traffic Control system off to a Nonprofit Corporation sector. Rivate the canadian system works extremely well. Entity. Elffunded it doesnt get taxpayer subsidies. In at the leading edge technology. It really is a great model. There are special interest to that, to ill that air Traffic Control restructuring. Can be overcome. Im hopeful the new secretary of transportation is going to look at that opportunity. Written a lot about this as well. Ne thing to mention on the funding that really strikes me ften, i watched the confirmation hearing. A number of the senators who got subsidiesansportation hounding states kept her to say she supports the go to their t states. That really struck me. The senators from hawaii and alaska, they favor the essential air service which is a fairly that funds air service at smaller airports and strikes me that a city that wants air service in their they dont have currently, they can fund it themselves anytime. Governments have all the financing tools that the federal government has. The state and local governments in both gas, income and sales can issue debt as robert mentioned. Most debt issue is up for ballot go up for ballot are passed by the public. The public is very supportive of infrastructure, financing and spending at the local level. Mindset with some people in washington that all of these problems need to be solved here in washington. The case. Y isnt state and local governments have all of the tools they need to lot of these problems. On the federal role of infrastructure and the nexus with that and creating jobs, we saw ut the campaign, Infrastructure Investment was a panacea for jobs. A look at the democratic plan which they unveiled last week or earlier this week. Said they would create 15 million jobs through spending a trillion dollars. Also with a very broad definition of infrastructure, hospitals, involved. Uld be can you just talk about, is that really the best way to go about creating jobs, but also kind of expanding now the those types ofto projects that we havent traditionally associated with infrastructure . Yeah, ill just say that i think that if you start with the oal of creating jobs through Infrastructure Investment, i think youre going about it the personally and i think most transportation economists would agree with me that you start, this is how you prioritize the projects as well, look at each project and do a cost analysis. Hat the democratic proposal did, they emphasized the job as they expandedael, the definition of infrastructure degree that its basically everything now, and Healthcare Facilities are now lumped into that. Jobs figure, the 15 million jobs over 10 years, was, there wasat 2011 council of economic advisors estimate that said for every billion dollars of highway and mass transit investment, you ould get 13,000 job years out of that. So one job for one year. Basically t is just took that figure, applied it across all of these different that were not ts included in the c. E. A. s overly in the firsttimate place and that was certainly at a different time, too, where the was at that point. And then for every million jobs hey added, they rounded up 200,000. They ended up with this figure that basically means nothing, for good social media memes and posters at press conferences. What the democrats did and what may dothe administration is just basically try theyre 1 trillion is figure, theyre both focused on that. Heyre going to stuff as many things as possible under this rubric and say thats infrastructure. Accounting t of the on this is going to be very suspect. Do ever we end up with, i agree with chris, i think its going to be a heavy lift in go back to basically and revisit surface transportation and things like things that they would like to think of as being done with for several years. Yeah, it remains to be seen, but i think what weve seen so proposals are e really serious. The job re just about piece. Infrastructure and jobs has always been connected. These figures are tied all the time. 70 of the jobs in infrastructure are actually in operation. Construction. We think about the shovelready jobs and fill the puddles, i say myself, 70 of the job are actually in operation of the people who are driving the bus truck or working in logistics or flying the airplanes. Between a disconnect the Infrastructure Spending what we need and the jobs on the ground. In on the g to chime jobs issue, too. When anyone invests, whether its the private sector or the government, the number of workers needed to do the actual construction is the cost of the project. That is not the benefit, when ou look at Infrastructure Investment, the benefit is the ongterm reduction, the congestion, the increase in mobility that americans enjoy and the cost is all of the money to put into t has it and all of the workers they have to hire. If you want to maximize the of any cost infrastructure project, you should try to minimize the number of jobs, the workers and time it takes to construct. There is a lot of isunderstanding in the city, but some of these basically economic questions about what is Infrastructure Investment. Investment. We want a return off of investment. We want high benefits and the cost. Undergirds this discussion, what should the real be in role infrastructure when it comes to funding and regulatory as well. Recommendations i would make to the new administration is to take a very hard look and actually put a there of what they see as the actual federal role in a lot of these things. I take a look at it, especially the highway trust a d, we have steven just constant kind of expansion of that funding mechanism which was kind ally supposed to be of a walled off funding mechanism to build the interstate highway system. Can go down, if you could just say briefly what would your to the new administration, should they kind things r down on a few that the federal government should be especially involved in . Role of ey expand the the government and infrastructure . Hat would your advice be briefly to the new administration . The Government Funds it two ways. It funds it directly through the that the owners of infrastructure, the army core of postoffice, the air Traffic Control system, the all ofof reclamation and the dams it owns, thats direct responding on infrastructure. The new administration should look at those activities that cant be privatized or being given back governments like the air Traffic Control system. The second thing the federal is fund a state aid program to fund local projects, highways are the main ones. The new administration ought to reducing the f federal role in aid. Aid has a lot of negative effects, i think. One of them is all of the aid come down with top down federal regulations, labor or environmental regulations which increase the cost of unnecessarily. So i think the Trump Administration should think infrastructure. They should be looking to free own tates to solve their problems to give them flexibility. Ways where several the federal government should lead. They have been asked to lead, but things that matter to the national government, to the national freight, viation and clearly just the size and scope of the issues, the areas where federal government needs to be present, we need a Stable Funding program for things like freight. A lot of proposals for user fees can capitalize that. Air Traffic Control is clearly an area where were lagging behind. As a country, were losing our competitiveness as a country. Aviation which is really under threat right now, we need to make that a priority. There is a role, a lot of cities and metropolitan areas rely on that moving people around. These are the economic engines. Should be nk we wasting money on projects that dont make sense and an area rule. Has a federal in addition to leading, there re areas to empower places to innervate. The federal government needs to lets of the way and places do things. The interstates were built along for a different reason. Theyre cutting through the cities, metros are main streets in some of these cities. Of experiments, they should let them do stuff like that. Places to be innovative and creative. There is a lot of discussion about data and its especially we have talked about here today. We all agree that we need more costs analyses when it comes to making these investments. More money on any projects that dont make sense. We absolutely have to start making better decisions. We cant do that without robust data. A federal government has role with an amount of country for collection. We can do it across the country. We can start to do the things talking about, make the right decisions and decisions untrue facts instead of politics. For iority number one congress and the administration should be f. A. A. Reauthorization, air traffic bringing in m, Unmanned Aircraft systems into system, onal air space aviation safety Regulatory Reform, all of the things that re on the table right now and very important for the reasons that rob and chris laid out. Something that doesnt require a ton of extra money, its the federal government, the administration sort of getting its house in order. Administration has expressed undamental Regulatory Reform and i think that should be true at the department of transportation as well. I saw that was pretty troubling to come out late in the last administration was si pro cal switching for freight rail, private, t one of our Great American economic Success Stories is deregulation. You had an industry at the end f the 1970s that was at the end of the deaths door, it bounced back and now its booming. What this for all of the talk bout additional Infrastructure Investments, for both parties has the rule change potential to do for the insensitive to invest back into their private networks. Were looking at trying to spur investment, first do no and particularly when the taxpayer isnt on the hook, a investing in ry its own infrastructure networks. We shouldnt be putting up to that. Y barriers 100 . One of the things you mentioned was drones. Biggest challenges for this administration and most likely the next one as well, the huge technological advances were seeing in transportation. Especially when it comes to Unmanned Aerial Systems and vehicles, were on the cusp of really transformative shifts. Mark, what do you think this administration can do to help technology and do so safely . Have one problem that we over the department of transportation and this goes ack to the George W Bush administration is this obsession with the technology, Communications Technology called dedicated short range communications. Its basically wifi for cars. Way its envisioned right now, it would allow cars ould send messages back and forth. Drivers could get hazzard warnings. Red light, you a would get some notice to take action or maybe it just scares out of you and you flaw right into them. This is fundamentally the way at it is what i think is an obsolete technology. Heyre really ignoring automated technology, selfdriving cars or drones, too, things that actually did, particularly for selfdriving potential of the saving thousands and thousands of lives per year. Is rolled logy that out as the Administration Currently envisions it, there is proposed rule for vehicle to Vehicle Communications sitting at the national Highway Traffic Administration right now. Even if you assume the proey federal of the government are true, were not going to see any of these decade and a half. Ikely were seeing this Technology Going to consumers and you can combine these Automated Vehicles and things like that, but fundamentally, youre having the on automatedr lead technology which is a superior basically and youre having the federal government right now trying to mandate this technology. Ferior again, going back to what i said arlier, i think first do no harm. The federal government should get out of the way and know its limitations. When it sees something that the private sector is doing well, it least not he very stand in its way but encourage distort the han marketplace. You have done a lot of work autonomous vehicles. How will it affect our system as highways and roads are laid out and mass transit, too . A lot of this is happening, its really new. Its w its happening, happening slowly. Its happening in some cities in areas. Ropolitan there is a demand from cities to learn from one another. For this. Earing up they dont exactly what to do frankly. Archg i dont know the right answers, regulations want 50 that are inconsistent with one another or dont support the or th of the Industry Private investment. There is a disconnect, too, etween these conversation around a. V. S and Passenger Vehicles and what is happening automated or and at least augmented freight ovement, level one and two, where theyre trying to test out tuning. Ike truck you have a conversation around to s and states are trying compete with one another to be the home for these. States banning tests for truck platooning. Inconsistency. Consisconsisten y ecause we have more rules doesnt mean its more burdensome. It might be that were trying to educe regulations all across the country. Just as a general sort of broader point here, the government does two general in a lot of these areas infrastructure. When the government, it will try everything and it tries to do too much and doesnt do anything well. And Rump Administration congress should focus more on getting the federal government ut of the funding side and focusing on creating sort of a broadbased, a liberal Regulatory Regime that can allow the private sector and state and flourish. Rnments to for example, with air Traffic Control, the federal government, operates the funds the system, but it also regulates aviation safety. Seems to roblem, it me. It would be much more efficient f we took the actually operation of the air Traffic Control system out of the f. A. A. And other countries like britain have done and leave the f. A. A. With the general oversight and regulatory role. Thats a general pattern that starting in the 1980s that privatize used to electric, ructure, water and suer, passenger rail, to move the dea is general idea of funding in the a vate sector and create National Regulatory agency that does brought overview so that and private sector theyre perform what best at. On the funding issue, another huge challenge i see coming down pipe, with all of these progress and selfdriving cars and increased fuel efficiency were seeing automobiles, the gas tax is its ing to lose some of viability. Ostly in regards to these new kind of one trillion dollar ideas, but also they have been more prominent in other areas as well. Alternative areas of funding and ome ideas have been tossed around include using proceeds tom opening up federal lands Energy Exploration to use the infrastructure, repatriation from overseas when it comes to corporations and a carbon tax. Expose e other ways to the user fee model of the gas taxa side from those things. Mark and rob, you can all chime in here, but where do kind of see the funding for all of these proposals coming then also justnd more fundamentally, how are we oing to keep on funding our infrastructure if we want to use fee model with the gas tax on the way out . One issue on the table for a of years, we need this ate tax reform in country. It looks like theyre going to do and do that. Using the 2 trillion profits that sit offshore that multinationals own, we want that to come back and be ed to the United States. Using the fun to fund an infrastructure program. Of that and i r dont its going to happen. Generally if there is money that taxbe raised from corporate the foreigntrioting profit, they want it to be used not ax reform, infrastructure. I think its a dead end, not a good idea. Reform Corporate Tax ought to be Corporate Tax reform like the connection of tax reform, infrastructure reform. I think there is potential that idea. I think that chris is right, you this the wrong way. Ou can see some of the repatrioted money and standup program and you dont gain anything. If you can figure out exactly federal government should be doing, if there was some kind of economic object and nested infrastructure under that that, the administration said well double exports in five in asia rising demand and latin america, great objective for the government to lay out. Should have nested the infrastructure agenda under there. Going to do were with infrastructure. It could be ports and freight and stuff like that. Have that rationality between infrastructure and what ou want to achieve, people can see that other than we are going to build it and they will come type of thing. Objective have the agenda should be a derivative of that. Challenge anytime soon. We are shifting away, the gas losing its efficacy. A lot of other things have been proposed. Meantime, they have been supplementing the Transportation Tax Fund with hundreds of in general dollars fund revenue for a long, long time. Stimulus, we organize more money than is supplement that with just overseas debts. We got to stop pretending that a user ram right now is feebased program. Part of it is, an awful lot is from general funds. We may be shifting to that entirely. Federal gas tax and stick it in the general fund and Fund Transportation like we other areas of policy. Not going to be popular to say that and maybe not the right way it, but thats the ship that is happening already. Is going at what it to look like in the long term. The user fee model of the trust fund is broken down as rob said. Go back to hould basis and try to strengthen the particularly for transportation infrastructure. Bill, the fast y act, authorized funds for states alternative revenue collection mechanisms. For was their euphemism milebased user fees. A number of state d. O. T. S right working on these pilot projects, i think that should continue eventually for the michael, ou laid out, were going to need to find a for the gas tank as they are fuel efficient and electrified. Looking at a milebased user fee and in at place to go the interim, i think we should restrictions on segments. Th their own it goes nicely of where were going to raise the fund to do interstate reconstruction over years. Xt 20 before we get to, i think were probably a couple decades off going to see milebased user fees spread across the nation as i would it, but in the meantime, we should i think work user pay, userhe relationship and one way to do that would be to lift some of the federal restrictions on states tolling. One more question before we it up to the n audience, what do you all see as bright area eally for opportunity for the new administration to really make some strides in the right direction . I know its a broad question, but like i said, with all of technologies and advancement that were seeing, i some really an be good room to make some inroads in that area. You we talked about air Traffic Control a little bit. I think this is the biggest opportunity in front of the Trump Administration this year and i hope his new transportation secretary embraces this. Another area, airports. All airports in the United States are owned by state and local governments but theres a revolution going on around the world in privatizing airports. Half of the airports around europe now are private. London, Heathrow Airport is fully private. A publicly traded corporation. Even the major airport in paris is owned by the government but its been corporatized. Its been moved off the government balance sheet. It acts as a forprofit corporation. Thats the type of reform we should look to. In this country, both trump and other politicians, Vice President binden have complained about laguardia being kind of a thirdworld kind of airport. I dont know if thats true but some of the best airports in the world today are indeed private. They fund themselves and operate efficiently. So i think that is the way ahead for u. S. Airports and its a big opportunity. So for the trump persuasion, theres a bunch of regulations that stand in the way of state and local government to move ahead with privatization and those need to be looked at. I agree with both of those. Airplane traffic reform should be top of the list. Also, moving from the way we talked about transportation around mobility. The thing is accessibility. It sounds like a dorky thing but were measuring things, like the transportation institute, multimilliondollar assessment. Were measuring how fast were moving vehicles around and i dont think thats the role. Were trying to connect people to jobs and things like that. If we start thinking about it as a method of accessibility. It changes everything about the methods we choose. Try and change Traffic Congestion relief as a major policy goal for a generation of this country and it hasnt worked. Lets find ways not to throw money at Congestion Relief and do some of the things that mark was talking about. Figure out exactly what were trying to do it, how do you make it actually work for taxpayers and get more bang for the buck for the whole system. I agree with chris. The top of my list is air Traffic Control romplee. Ideally following the canadian corporate model. Other things they could be doing, a recap of what i said earlier. I think leveling the finance Playing Field is crucial for things like airports. That would be critical there to open up or at least not tax disadvantaged private investment but even if were not going to fully privatize airport, moving towards a more corporate airport model, things like live lifting the cap on passenger facility charge and lifting the head tax and letting local airports make anywhere own user fee decisions without federal oversights, i hink therked those should be considered in in addition to the airplane traffic report. I totally agree there. Thanks so much for the conversation and lets open it up to the all of a sudden. Please state your name and afill equation are and well have a microphone going around. Lets start over here. Panel. Ks for a great my question is, theres been a lot of proposals from trump or people close to trump about this 1 trillion infrastructure whatever. If this was a Discretionary Program along the lines with actually metrics instead of a rmula program, would that be accept stble acceptable . We had some problems with the type of programs because we thought it was way overly politicized. During the Previous Administration we did support it when there was appropriate metrics. Are those type of programs appropriate . I think the devil is in the details for the reasons you laid out. Yes, the Discretionary Programs work great when you have the proper criteria for selecting good probblingts. Im not particularly optimistic about Discretionary Programs general limb. I think dumb programs that to the state generally are better and the voters can go to their state officials then and make their voices heard. Id be open to it but like i said, the devil is in the details. Couldnt agree more. It matters what you measure and how you measure and how you score it and all that stuff. I cant imagine, as you were talking about, a 1 trillion program being managed by the federal government and even if you take 20 of that and say thats the department of transportation, still, thats massive. I wonder if theres a way where they could use that money and make sure its framed around the right metrics and the states are actually doing the things we talked about here and applying some other right now its just about checking things and that might be fine if the money is being spent well. If the federal government wants to gear it towards something else, you could lay out maybe some broad direction and make sure were measuring how the money is spent. Right now we dont really know how the states are spending the federal money. Know more about how banks lend. I dont know, maybe figure out a hybrid between them. We can set the money out but make sure its been spent the way thats fair and rigorous. Im not in favor of any further federal spending. I think federal spending is a negative on american infrastructure. Id reduce it. The only way i think trump can get to a 1 trillion investment goal is to think about private Sector Investment. Private Sector Investment in the u. S. Economy is vastly greater than government Infrastructure Investment. If you add up the investment of power and cell tower investment and all that, it adds up to around 2. 5 trillion a year, private Sector Investment. Trump has a major tax reform plan to reduce the Corporate Tax rate in particular. Big corporations are the biggest investors in infrastructure in the nation. By lowering the Corporate Tax rate youre directly increasing the return to utilities building new plants to Oil Companies building new refineries. Investing more in fiberoptic cable, etc. , etc. Thats the way to get to a 1 trillion new investment is to think about increasing the returns to corporations, investing more. Theres a very interesting study by p. P. I. , sort after a centrist think tank that focus on issues. I think its called Something Like investment heroes where they look every year influence through corporate financial sfamentse at who the biggest investors are. I think the biggest is at t, which spend about 20 billion a year on capital investment. Its incredible. Thats where we need to look for more Infrastructure Investment. Real quickly, ill agree with chris. I think that adding another program is going the wrong direction doctor. We need to look and reform the existing programs we have. I view them as earmarks in the sky for the most part. Before we go, adding more spending, we need to reform the existing programs. Uestion over here. Do we have a microphone for you . Sorry. Now can you hear . Im with the Arlington Transportation Commission and my question really concerns something you said, mr. Edwards, about reducing regulations at federal level. I have concerns about that. In theory it sounds good because there are so many regulations. F. T. Rulings, internal analysis, project proposal and so forth. Same thing applies with the Highway Administration. A site, an example im very familiar with in arlington, a 550 million Streetcar Program where there was very little justification for it and f. T. A. In this case, applied for many millions of dollars to help fund the program but also because of it expanse of requirements helps to eliminate very wasteful projects and had this analysis not been in place then this project probably would have been approved in my opinion. You can go directly from a very poor Quality Bus Service or no bus service to a streetcar or light rail project. How do we deal with the issue of cities and counties when they get money and substantial amounts of money from another from government through f. T. A. , how do you control for that and at the same time try to reduce regulations . I live in arlington. Im somewhat familiar with the streetcar project. It was a boon dog. A silly project. I drive columbia by bike all the time. You dont need a streetcar. I hear what youre saying. In this case it sound like f. T. A. Helped block a bad project. The reason why Arlington County wanted to go ahead with the project is because they would have gotten some federal funding and you see that all the time. Another example in arlington, they have a project to build a bunch of new bus shelters down at columbia pike again and theres a milliondollar bus stop they built there which was a huge boondoggle. They wouldnt have built it if they hadnt gotten the federal funding for it. A lot of times the federal funding distorments the decision making. So i think by cutting out the federal funding you would get local governments making more sensible decisions on transit. Federal funding has incentivized too many states and cities to go for rail systems when bus systems would have been more efficient and flexible and served the lower income population particularly better than rail systems. So i think government funding or financing of state and local stra structures is distortionry that way. Certainly there was a streetcar enthusiasm for that over the last several years. We dont have to look very far to find a streetcar project. But i think this isnt just around transit. A lot of money comes out of the federal government that goes for all kinds of wasteful projects. For highways in particular. So i think the theme we keep hearing from this conversation is the right one. We have to get better at given that their were facing fiscal and financial challenges when it comes to infrastructure. We have to make sure the money is being spent as best as we can throughout all areas of transportation. Privatization is going to get better projects and spur more innovation. The quote i love, weve run out of money, its time to start thinking. Thats kind of where we are right now. We have to make sure the money we are spending we spend as best as we can. Im for radically deregulating the transportation sector but your point is well taken. I think procurement regulation that is ensure things like Competitive Bidding are completely prorpte and should be strengthened. With water and Wastewater Networks we have a really, really bad procurement policy in this country and through the e. P. A. s revolving fund, were basically shoveling money down to these really crony local officials who have sweetheart longterm contracts say with the ductal iron industry where there are competitors where you could perhaps save on procurement up to 25 but because theres no accountability and this federal money keeps flowing and frankly youve had congress intentionally weaken some of the existing stts through, i think, what do they call it . State autonomy in culvert selection. It is about the september industry in louisiana and that gutted Competitive Bidding procurement regulations. Your point is well taken. Im all for deregulation but as long as were spending this money we should make sure its spent as wisely as possible. Question over here. Fairfax county taxpayers alliance. We here in the Washington Area has a metro system. Metro rail is losing money hand overist. Safety problems, lack of proper maintenance. We never established a reserve fund for replacement of capital items such as trains, electrical systems. Now were facing billions just to rehab the present system. Its estimated it needs between 18 billion and 25 billion over the last 10 years and of course they have wishes to expand the system. I believe mr. Edwards had an article suggesting privatization. Comparing washington to hong kong. I think that was your article. The question is what role should the federal government take with respect to metro . The Board Meeting yesterday explained that theyd been hugely successful in ridership on the inauguration and with the womens rally. They actually lose money on such events so and 40 of the ridership on metro is federal workers so what role, if any, do you see with federal support on the oranges side and what potential for privatization do you see . I wrote an article a couple of weeks ago. You look at the subway hong kong system. Hong kong is a lot different city. Its got a heavy dense population and rail makes sense there. Hong kong private sized its subway system and its been highly successful. It generates all the money they immediate for operation and most of the money they need for capital investment. In addition, the hong kong private subway system gets a lot of money from doing real estate deals near their metro system, which is something washington, d. C. Metro could do as well and actually do you question . To me extent actually do suspects do to some extent already. A lot of systems around the world do continue to manage them but they bring in private management. The hong kong system has been so successful they now manage subway systems around the world because people want to learn the lessons about running a metro system efficiently. The disasters in the d. C. Subway system have been remarkable. When i first moved to town here a couple of decades ago, it was a goldstandard system, seemed to work remark whether i be well. Its remarkable how poorly its run these years. Theyve not done all these years is remarkable. Three local government jurisdictions. Its kind of crazy and is going to make any reform hard but i do think we should look to private management, even if we continue to subsidize. We think about metro, we certainly think about the subway system. Theres also a huge burden on metro, which we hold responsible for power Transit Services we have to provide. Typically big burdens for the transit agency. Its a big problem theyre trying to deal with and as the aging in the population gets more severe and they continue to spread out, theyre going to have to continue to provide these services. This is where the private Technology Firms can come into these transportation networks. Uber and others. There are a couple of experiments around the country where the public agencies are contracting out with these private firms so see if they can run these demand responseive Services Much better so the price of uber riled is subsidized. There have been some tests and i think theyre going pretty well. Its not without its contentions as you can imagine. That might be something we could experiment with here in this region. Despite the Traffic Congestion, were doing a lot in this region when it comes to technology and innovation, working with the private and Public Sector. And we are running out of time so one more question, please. Over here. Thank you for an excellent presentation. My name is mike sard. Im a privet citizen and an investor in some of these technologieses. The fragility of the electric grilled is often talked about as a situation, both as possibly an end of civilization implication and at least inoperateability standards from the government as well as funding might be in order to make it happen. Any reflections on that subject . To my distinguished panel. I know our Energy Experts have written a lot about this i think theres tremendous opportunity with a new administration to look at some more freemarket reforms to the Energy Sector. Were already seeing some pipelines that were needlessly hindered in the last administration starting to move forward. When it comes to the electric grid, thats not my area of expertise but i am optimistic in the private investor and Energy Sector under this incoming administration. All right and thank you so much for joining us. If youll join me in giving our panel a hand here, i think we had an excellent conversation today. [applause] and unless im mistaken, i think there will be some sandwiches outside so please feel free to go grab some lunch and stick around and ask any questions that you migav