Transcripts For CSPAN3 Discussion Focuses On President Trumps Infrastructure Agenda 20170127

Could be sent to speaker heritaheritage speakerheritage. Org. Leading our discussion today is Michael Sergeant Research Associate in thomas a. Rowe institute. He over sesees and examines our surface transportation aviation water ways and other policy issues related to infrastructure around the country, a regular contributor to the daily signal, please join me in welcoming Michael Sergeant. Mike. [ applause ] thanks, good afternoon and thanks for joining us at the heritage foundation. In terms of sheer lip service, infrastructure was one of the most prompt issues in the 2016 campaign. Both candidates addressed it as a way to deal with our crumbling roads and bridges and delap p e dilapidated airports. Now the new president is poised to offer a 1 trillion infrastructure plan and has the democrats following suit with our own 1 trillion proposal although still very few specifics these issues will come to the forefront as Campaign Promises run up against reality. The questions we must address is that will haphazardly throwing money at projects help an economy mired in debt with a relatively low unemployment and worth investing in projects in a fiscally important we welcome Chris Edwards the director of tax policy studies at the Cato Institute and downsizing. Org, a expert in tax and budget issues, and he was a Senior Analyst and testified on tax and budget policies have appeared in the Washington Post and many other major newspapers. Also joining us is robert fuent fuentes, a nonprofit think tank, prior to joining, he was the senior fellow at the met po metropolitan program. Hes worked on infrastructure city finance and speak toer of variety of groups, Mark Scribner is a senior fellow at the competitive land wise group. Including infrastructure invests, transportation safety, security, risk and regulation, Public Finance as well as emerging transportation policies. He freakily advices on these matters at the federal, state and local levels. Well start off with a conversation style panel. Panelis panelists, can speak with each other but theres avoid talking over one another. We have heard enough to get started based on the proposals we have just heard from the incoming president as well as congress. Ill jump right into it with a question from mark. You have written a good bit about the state of the nations structure and assets do you think its a fair characterization that they really are crumbling, do you think that a mor spending plan is a best way to go forward or is there a better option . Well, the problem is maybe not a problem, but that our unfromu unfrom a infrastructure is not uniformly crumbling, you have problems in local areas and thats true for federal aid highways weve seen bridges steadily decline, pavement smoothness increase, and so when it comes to the federal side of things things really arent necessarily looking that bad. Were going to have reconstruction needs for the interstate highway system, a lot of money over the next two decades but the biggest problems lie in the municipal realm. You have transit systems with tens of billions of dollars in maintenance backlogs, an crumbling streets, federal programs really are not well equipped to deal with these local issues so i think one thing that folks at the federal level members of congress and the administration should look at is perhaps revisiting how we do federal aid, would that mean allowing more of these funds to be used for routine main . That might be a good idea. President trump introduced a fix it first strategy, it was talked while rob was still over there, we do have problems but its important not to lose sight many of these problems are local and the feds are not necessarily the best folks to address them. If i could chime in here, if you look at bridges for example ths abo 600,000 bridges in the United States and federal Highway Administration says about 10 is deficient. As mark noted the share of structurally deficient bridges has fallen over the year so as an economist the way you want to look at this is is what is the optimal number, it is not zero, to eliminate all of them it cost hundreds of billions of dollars, what you want is to get to the point where additional investment more than pays for itself. The federal Highway Administration say that is the 60,000 structurally deficient bridges at are not at risk offalioffa of falling down, but should be updated but you have to think about these in terms of optimals. The Texas Transportation Institute says that Traffic Congestion costs americans about 150 billion in lost time and productability. Thats a lot of money, but the amountf constion on the highwayss not zero. We would have to spend trillions dollars to get the amount of congestion on the nations highways down to zero. Maybe we should reduce it maybe were at the optimal now i dont know, its a complicated question that i think you have to look at both the engineering and the economics to get to the right answer and i think part of the solution here is the more we move infrastructure out of the government to the marketplace we can get actual marketplace feedback and responses to judge which highways are the most in need of fixup and expansion and which arent. The problem when the spending is in the government realm the money isnt allocated officially because the government doesnt work based on market based indicators it works on other factors such as formulas and pork barrel politics. And as mark mentioned a lot of these and chris alluded to a lot of these problems are more local in nature and rob i know your organization has done a lot of work looking at whats going on at the federal level which only invests about a quarter in intrastructure expenditure, when you give us an idea of whats gog on at the ground level . Yeah, i think some of the won wonky comment is we think about roads and bridges but infrastructure, theres transportation, theres energy, tell le communications, water very much in the news and each governed and financed very difficultly and the role in each of the sectors is very different, freight rail the government has a heavy regulatory rail but doesnt provide funding, communications, energy very proviivate, so thers a definitional problem we need to get sorted because i think its adding to a lot of confusion of what the government should be doing but a lot of the excitement we have seen around the country particularly over the last ten years or so is whats happening outside the beltway from city states and metropolitan areas that arent waiting around for the federal government to pass a trillion dollar or whatever bill theyre doing their own things passing their own gasoline taxes, eight to ten, red states blue states going directly to the voters, consistently we see 70 of these ballots pass, los angeles passed 120 billion, awful a lot of money by any measure. And that was a sales tax . Sales tax increase and thats very popular but the point is as we have this on the National Level and big proposals very ambitious far reaching for infrastructure on the National Level city states and nonprofit sectors their working with arent waiting around and going out an doing it themselves. Chris, you talked a bit about the market and how when you have these things decided kind of by the governments they arent always the right incentives in place and one of the trump plans we have seen among many different proposals at least the most talked about one would use tracks credits to provide private companities to invest in infrastructure, what areas do you think are most ripe for privatization and do you think the is a good way to help invest in those. Ive learned a lot from robert and mark, over the years so build on that, you can see in trump this confruusion of what infrastructu infrastructure, private and public and last fall that would provide tax credits for i guess private investment reflects that sort of confusion, they were not specific in their plan were they talking about local infrastructure, private or federal . So we need to start at the beginning to figure out what is federal, what is the proper federal responsibility an what is federally proper state local and private . We have seen a revolution around the world in many countries, dozens an dozens of all of our trading partners moving more and more to private seconder infrastructure, you can see this in highways in airports, sea ports. Britain started figuring out you can get better allocation of capitol to move it to the private sector. You would get more efishficient management to move it to the private sector, it is often mispriced so we tend not to use congestion pricing on our highways, federal water infrastructure, subsidize the delivery of water, theres environmental problems caused by that so by moving it to the private sector you get more efficient allocation of the investment dollars the allocations determined more by market demand, more efficient construction and management and operation overtime, so i think all the people on this panel have generally you know talked in favor of moving forward more private sector involvement and the new Trump Administration is moving in that direction as well. I dont like his tax credit plan. Currently municipal and government infrastructure is on the side. Its tax exempt and theres a problem that it favors government infrastructure over private infrastructure, all the airports in the country are government owned and part of the reason is when governments issue debt to support airport expansion they can issue tax exempt debt a private airport would have to issue taxable debt. So we already have a bias in favor of infrastructure. The Trump Administration will move more in that direction or distort the tax code by favoring equity as well as debt. I think we need to reduce the bias, in favor of government and play more of a role in the private sector. Building on what chris said it is biased in favor of government infrastructure, government financing, though short of eliminating that tax exemption, one thing we could do is build on a tool that already exists private activity bonds currently capped at 15 billion, the Obama Administration to their credit proposed qualified Public Infrastructure bonds that would expand the eligibility of pabs to cover different Asset Classes that arent currently covered and thats one way of eliminating the status and level the Playing Field and i think its more realistic to expand on pabs, or qqbibs, whatever the acronym is, to eliminate that tax bias. I agree with that, too. Its interesting even though we had this period where borrowing even from local and the media market was free for the most part. We didnt have that much borrowing when you would think that borrowing was so cheap, so Something Else is going on, a lot of places dont really know exactly what they wa to do, so theres an inconsistency between this big message that infrastructure is falling apart. Very cheap debt for places to take advantage of and then a lack of investment and something is not right im not exactly sure what it is, i think part of the problem we havent embraced the real need in this country is for the rehab, its not made to last in perpetuity, so since we did a will the of the billing in the 50s, 60s and 70s, thats got to be an emphasis and maybe thats not the best thing do. But how do we make the Playing Field more level an i dont know its going to take any wholesale changes, but like what virginia is starting to do is figure out what we want to do with this particular project. Here is what we want to accomplish and here is how much it is going to cost us and open it up and say someone is going to beat that and go ahead and they did it for this big project inside the beltway, either inside or outside the beltway, the state knew what i wanted to get, knew how much it was going to cost an somebody came in and is doing it better. So thats a great model. Absolutely. I think this whole discussion has kind of centered around more on the financing side of things at least from what we have seen and i think theres general confusion about the difference between funding infrastructure and financing it. If you can talk about some of the different financing models we have discussed a bit an how that differs from actually funding the infrastructure and maybe some recommendations you have in addressing both of those things for the new administration . The difference between funding and financing. Yeah, we get that very confused especially trying to engage in the private sector looking for different rates of return, i think for advice and recommendations weve got to get this definition sorted out and stop talking about infrastructure in the abstract. Its such a tangible thing that it has this esoteric type of term. Lets think about the federal role and different types of infrastructure. Aviation is a major conversation about spinning off the air Traffic Control system to a nonprofit or some other kind of corporate entity. Thats something we should be able to move on quickly in the new year, something a bunch of industrialized countries have done. Thats something we could be able to address havvery, very quickly, thats something advice to the administration something we can start to work on very soon and then i think making these connections better between the different departments the different agencies something they did in the last administration i think we saw there was a lot more efficncy you can gain they focus on hud, epa, the interesting thing given secretary chao, on the labor side that was a big theme the campaign about using infrastructure to stimulate jobs, but 11 of american jobs are directly related to infrastructure, but the people directly working in infrastructure so if were thinking about that as a source of american jobs lets figure out how to cap tap lize on that, also going through a technological change they were provided by public sector. How is that playing out with labor and american jobs so given her perspective and broad expertise in both transport and labor this would be an area to drill into very closely. Im excited by it looks like the new secretary of transportation ellen chao was open to idea of restructuring of the air Traffic Control system. The biggest opportunity this year is frankly not the trillion dollars spending plan which trump alluded to which is not going to happen, Congress Passed a bill that would last through 2020, but for the air Traffic Control its a big thing, runs out by september for the funding, the house has a plan to do a canadian style control to move it off to a Nonprofit Corporation in the private sector. Its a selffunded entity, doesnt get tax pair bsidies at the leading edge in technology it is really a great model. Theres still some opposition to that air Traffic Control restructuring. Im hopeful the new secretary of transportation is going to look at that opportunity. I know mark has written a lot on this as well. One thing to mention, watching elaine chaos confirmation hearing, a lot of these states kept hounding miss chao favored the Central Air Service which is a fairly Small Program that funds air service at smaller airports and really strikes me that a state or a city that wants air service in their air that they dont have currently they can fund it at any time, they have all the financing tools that the federal government has, they im proes gas taxes, sales taxes issue debt as robert mentions most debt issues up for ballot when they go up for ballot are passed by the public so the public is very supportive of infrastructure and spending at the local level so theres a mindset with some people in washington that all these problems need to be solved here in washington and that really isnt the case state and local governments have all the toolless they need to solve a lot of these problems. The federal role and infrastructure and the nexus and creating jobs, we saw infrastructure as kind of a panacea of jobs, they unveiled last week or this week said they would create 15 million jobs through spending a trilln dollars, that comes through a very broad system, hospitals and schools would be involved is that really the best way to go about not only creating jobs but also kind of expanding now the federal role into those types of projects that we havent traditionally associated with infrastructure. I think say if you start with the goal of creating jobs through Infrastructure Investment i think youre going and it the wrong way and i think most economist transportation economists would agree with me as well, look at the cost analysis, what the democratic proposal did, they emphasized the job figures as you said michael they expanded the definition of infrastructure to such a broad degree that its basically everything now. Schools and Health Care Facilities are now lumped into that. But on the specific jobs figure the 15 million jobs over ten years how they got that was there was a 2011 council of economic advisors estimate that said for every billion dollars of highway and mass tran sit investment you would get 13,000 job years, one job for one year, they took that figure, applied it across all these different types of projects that were not included in the ceas i think overly optimistic view, and for every million jobs they rounded up 200,000 and ended up with this figure that basically Means Nothing but makes for good social media means and posters at press conferences so what the democrats did and what i fear the Administration May do is just basically try to theyre foc focus on this 1 trillion figure and theyre going to try to stuff as many things as possible under thisuberrik, whatever we end up with i do agree with chris i think its going to be a heavy lift in congress to go back an revisit surface transportation and things like that, things they would like to think of as being done with for several years, so yeah, i think it remains to be seen, but what we have seen so far none of the proposals are really serious. Just about the jobs infrastructure jobs have always been in an touted all the time, 70 are actually in i said to myself 70 are all in operation people driving the bus or driving the truck or working logistics flying the airplane, theres a difference between the spending that we need an really where the jobs are on the ground. Im going to chime in on the jobs issue to, whenever anyone invests the number of workers ed is the cost of the project, not the benefit. The benefit is the long term reductionin reduction, the increased mobile that americans enjoy and the cost is all the worker es they have the hire, if you want to maximize the cost of it you should try to minimize the number of skbrjobs and minimize long it takes, it is investment we want to a higher return off of it and minimize the cost. What kind of under gerdgerun, is what should be the role with infrastructure, one of the recommendations i would make to the new administration is put a definition out there of what they see as the actual federal role in a lot of these things when i look at it especially the Highway Trust Fund we see the constant expansion of that funding mechanism which was originally supposed to be a walled off funding mechanism to build the interstate highway system so we can go down if you could just say briefly what would your advice be to the new administration . Should they hammer down on a few thing that is the federal government should be especially involved in . Should they expand the role of the government in infrastruct e infrastructure, what would your advice be briefly to the new administration . The federal Government Funds it two ways, directly through the entities that are the owners, the army corps of engineers, the air Traffic Control systems, the direct spending on infrastructure, i think the new administration should come in and look at those that can be privatized and given back, the second thing the federal government does is fund state and local infrastructure highways transit are the main ones again i think the new administration ought to look at ways of reducing the federal role an aid, aid has as a lot of negative effects one of them is that all that aid that come with top down federal regulations whether labor regulations or environmental regulations which increases the costs unnecessarily, i think they should be looking to free the states to solve their own problems to give them more flexibility. I think there are certainly some area whereas the federal government should lead where they have been absent or not focused or things that matter to the national economy, things like aviation, and freight, clearly the size and scope global areas of them really needs to be present. We need a Stable Funding program for things like freight. There are a lot of things for user fees and ways we can capitalize that, air Traffic Control, i think we are losing our place in aviation right now. Theres a lot of discussion about Public Transit not being a federal role, i think it clearly is, a lot of cities and metropolitan areas rely on that to move people around. These are the economic engines, i dont think we should be wasting money on projects that dont make sense but i think they should have a federal role. But empower places to innovate. Theres a lot of places where the government needs to get out of the way like tolling the interstates, its a no brainer, they were built for no reason and now cutting right through the middle of metros and maine streets, if places want to put tolls on those, all kinds of experiments they should let them do that stuff, so a lot of places to allow them to be creative and i think theres a big federal role when it come data and information and theres a lot of discussion about data and facts and especially the things we talked about here today we all agree we need more rigorous benefit cost analysana federal government does have a role, amount of money they do to do Data Collection but we can do that throughout the country, spur these new reforms and start to do things mark was talking about, make the right decisions and based on true facts and rather than partisan politics. I think prior to number one for congress and administration should be air Traffic Control reform bringing in Unmanned Aircraft systems into the system, aviation, all these things on the table right now very important for the reasons robin chris laid out. Broadly something that doesnt require ton of extra money is the federal administration getting the house in order an this administration has expressed interest in fundamental Regulatory Reform and i think that should be true at the department of transportation as well. One thing i saw pretty troubling to come out late in the last administration was change in rule called reciprocal switching were freight rail, one of our great economic Success Stories is you had an industry at the end of the 1970s at deaths door, bournced back and is now booming, for all this talk of infrastructure and investment for both parties what this rule change has the potential to reduce incentive for private railroads to invest back into the network, so if we are looking to spur investment first do no harm where the tax payer is on the hook, we absolutely should not be putting up regulatory barriers to that. One of the things you mentioned earlier was drones, one of the Biggest Challenges and most likely the next is the huge technological advance in transportation, unmanned systems, unmanned vehicles i think we are on the cusp of transformtive shifts, mark what do you think this administration can do to help bring along that technology and also do so safely . So, one problem that we have over at the department of transportation and this goes back to the george w. Bush administration, is the obsession with communications called short range communications, its wifi for cars, it would allow cars to send messages back and forth in some guy runs a red light you would get feedback to take action and maybe it just scares the hell out of you and you plow right into him, but what i think is an Obsolete Technology and they are really ignoring selfdriving cars or drones too, particularly selfdriving cars you have the potential to save thousands and thousands of lives per year. This connected Vehicle Technology even rolled out a as the doesnt administration envisions it theres a proposed rule sitting at the highway Traffic Safety right now. But even if you assume the predictions are true, were not going to see any of the benefits for a decade and a half by then were likely to see private innovation in this selfdriving car space already releasing this technology to consumers. You can combine these to have cooperative automated vehicles, youre basically having the federal government right now trying to mandate this obsolete and inferior technology. I think first do no harm the federal government should get out of the way and know its limitations and when it sees something the private sector is doing well it should at the very least not stand in its way but perhaps encourage that rather than distort the marketplace. Yeah, and rob has done a lot of work on autonomous vehicles, what do you think the change is going to result in . How do you think thats going to f affect our transportation when it comes to the highways, roads are laid out and also with mass transit too . I think a lot of people think they know, but its really new. We know its happening, happening slowly happening in some cities and metropolitan areas, i can tell you theres an insatiable demand for this, but they dont know what to do quite frankly, but im not exactly sure what the right anxious is but im sure we dont want 50 different rules and regulations around the country inconsistent with one another or dont support the growth of the industry or private invesent in this case. So theres a disconnect betwe avs and whats happening with augmented freight level one and two they call it trying to test out things like tuning and stuff like that so you have one conversation around avs which is mostly positive and affirmative and you have states competing, to be the home for these and then others banning it. So we have to get consistenciec, so the federal roles need to be refigur refigured. It may be that were trying reduce at tomiztomized regulati around the country. As a broader point here, the government does two things, it funds and it regulates and when the government often will try to do everything and tries to do too much and doesnt do anything well i think the Trump Administration and congress should focus more on getting out of the funding side and focus on creating a broad based Regulatory Regime that can allow the state and local governments to flourish. Thats a problem. I think it would be much more efficient to take the operation of the air Traffic Control system out of the faa and other countries like britain an canada have done and leave the faa with the oversight an regulatory role. Thats a general pattern starting in the 80s that britain used including air Traffic Control, electric utilities, water sewer yutilities, passengr rail. And create a National Regulatory agency that does broad overview so that the public second around private sector can each perform what theyre best at. I can i think on the funding issue a huge problem coming down the pipe both with selfdriving cars as well as increased fuel efficiency seeing with automobiles is that the gas tax is starting to lose some of its viability. And mostly in regards to these new kind of 1 trillion ideas but also they have been more prompt in other areas, but ideas of funding and some ideas tossed around include using proceeds from opening up federal lands to Energy Exploration to use to fund infrastructure, repatriation overseas income. User fee model of the gas tax, but chris and mark and rob you can all chime in here but where do you kind of see the funding side for all of these proposals coming down the pipe . But then also more fundamentally how are we going to keep on funding our infrastructure with the gas tax on the way out . One issue on the table a number of years is we need a Major Corporate tax reform and looks like republicans and the Trump Administration are going to go ahead and do that and theres been talk using the 2 trillion used offshore we want that money to come back and be repratriaiate i think the committees in charge of tax reform an house an senate, generally if theres money that can be raised from Corporate Tax reform, repatriating, i think thats a dead end thinking about that, i dont think its a good idea that Corporate Tax reform ought to be Corporate Tax reform and i dont like the link of the Corporate Tax reform with infrastructure reform. I think chris is right that you can really do this the wrong way, you can use some of this repate repatery rated money, if there was some kind of economic objective and you nested infrastructure under that, the last administration came out right away and said were going to double exports in five years to take control of rising in asia, its a great to lay out then they should have nested that under that and to achieve this economic objective, it could be ports and freights and stuff like that but if you have that rationale and whatever things y are trying to achieve people can see it better, more than build it and they will come, a National Infrastructure agenda should come, i think its going to be a challenge to see it any time soon, but youre right the gas tax is losing its efficacy, there are a lot of other things propose ds but in the meantime weve been supplementing it with 100s of billions of dollars of ref knew for a long long time not through the stimulus but through gaps coming in and supplemented that basically with overseas debt so we have to stop pretending that the program is a user fee based program. Part of it is, but a awful lot is coming from general funds, we may be shifting not entirely from general fund, just fund it like other areas of policy. Maybe not popular or the right way to do that but thats the shift happening already, lets see what it is going to look like in the long term. The user fee model of the Highway Trust Fund is broken down as rob said but i think we should go back to basics and try totrengthen the user fee model particularly for transportation infrastructure the 2015 highway bill fast act authorized funds for states to look at alternative revenue connections for mileage based user fees i think theres a number of state d. O. T. S right now working on these pilot projects and should continue for the reasons you laid out, were going to need to find a replacement for the gas tax as it eventually gets at a based user fee is a great place to go. And in the interim, i think we should start lifting the restrictions on states tolling their own interstate segments. Particularly that goes very nicely with trying to figure out where were going to raise the funds to do major interstate reconstruction over the next 20 years. So before we get to i think were probably a couple of decades off before we see mileage based user fees spread across the nation, as i would like to see it. But in the meantime, we should i think work to strengthen the user pay, user benefits relationship and one way to do that would be to lift some of the federal restrictions on states tolling. Great. And so just one more question before we move on to open up to the audience. What do you all see as one really bright area for opportunity for the new administration to really make some strides in the right direction . I know it is a broad question, but like i said, with all these technologies and advancement that were seeing, i think there can be some really good room to make some inroads in that area. So if you have any more thoughts. Well, we mentioned we talked about air Traffic Control a little bit. I think that is the biggest opportunity in front of the Trump Administration this year. And i sure hope as the new secretary of transportation embraces the sort of major reforms we have seen in other countries. A related area, i think that is really interesting is airports. All airports in the United States are owned by state and local governments. But there is a revolution going on around the world and privatizing airports. Half of all airports in europe now are private. And many of the others have been corporatized. So in places like london, Heathrow Airport fully private, a publicly traded corporation, but even the major airport in paris, it is owned by the government, but it has been corporatized, moved off, it has been moved off the governments balance sheet, it is selffunded, charges fees,t is not subsidized and operates as a for profit corporation. Thats the type of reform we should look to in this country there has been both trump and a lot of other politicians like former Vice President biden complained about laguardia airport, saying it is a third world kind of airport. I dont know whether thats true. But some of the best airports in the world today are indeed private and they fund themselves, they operate efficiently, so that is, i think, the way ahead for u. S. Airports and big opportunity and so the for the Trump Administration there is a bunch of regulations that stand in the way of state and local governments to move ahead with privatization and those need to be looked at. I agree with both of those things. I think atc, air Traffic Control reform should be at the top of the list. I would like to see the larger shift continue, moving from the way we talked about transportation around mobility to thinking about actually as accessibility. Sounds like a dorky thing. Were measuring things, the multibillion dollar congestion assessments, because were measuring how fast were moving vehicles around. And i dont think thats the role of the transportation. Were really trying to connect people to jobs and Economic Opportunity or things like that. If you start thinking about transportation as a method of accessibility, you change everything about the projects we choose. So were not just focused on simplistic notions of things like level of service. We tried to change Traffic Congestion leaf as the major policy goal for a generation for the country and it hasnt worked. Lets figure out ways were not going to just continue to throw money at congestion relief, kind of fills up, we dont seem to make much of a dent on that, lets do some of the things mark was talking about and price the system correctly, figure out what were trying to do. How do you make it working for people, work for taxpayers and i think well waste less money, give more bang for the buck for the whole system. I agree with rob and chris. Yeah. Top of my list is air Traffic Control reform. Ideally following the canadian style corporate model. But other things that they could be doing sort of just to recap of what i said earlier, i think leveling the financing Playing Field is crucial for things like airports that would be critical to open up or to at least not tax disadvantaged private investment. But even if were not going to fully privatize airports, moving towards a more corporate airport model, things like lifting the cap on passenger facility charge, ideally eliminating the antihead tax act and letting the airports make their own user fee decisions without federal oversight i think those are things that should be considered in the faa reauthorization and in addition to in addition to air Traffic Control reform. Totally agree there. So thanks so much for a great conversation. And lets open it up to the audience. Please state your name and affiliation and well have a microphone going around. Well start over here. First, thanks for a great panel. My question is there has been a lot of proposals from trump or people close to trump about this 1 trillion infrastructure whatever. And the question is, if this was a discretionary program, along the lines of with actual metrics, instead of a formula program, which is how we fund most of our transportation, would that be acceptable . Would that be something you would support . I say this in the context of we had some issues at reason with the Tiger Program because we thought it was way overly politicized. That being said, during the previous administration, we did support grants from managed lanes and transit in those managed lanes when there was appropriate metrics. So are those type of programs appropriate . I think the devil is in the details. For the reasons you laid ou yeah, i mean, discretiory programs work great when you have the proper criteria for selecting good projects. You know, im not particularly optimistic about discretionary programs generally. I think dumb formula programs that block grant to the states generally work better because then, you know, the feds dont take the blame. It is the states making bad decisions if they make bad decisions with those funds. So and the voters can go to their state officials then and make their voices heard. But, yeah, as a general i would be open to it. But, yeah, like i said, the devil is in the details. Couldnt agree more. It matters what you measure and how you measure it and how you score it and all that stuff. I cant imagine as you were talking, i cant imagine a trillion Dollar Program being managed by the federal government. And even if you take 20 of that and say thats for the department of transportation, still such an awfully big program. I dont imagine he would have the ability to do that. I wonder if there is a way they can set something up where as mark was saying, use that money and make sure that it is framed around the right metrics and that states are actually doing the things we talked about here and applying some other kind of difference. Right now it is a blank check to the states. And that might be fine. We think the money is being spent well. If the federal government wants to gear it towards Something Else, you can lay out maybe some broad direction and then make sure were measuring out how that money is spent. Right now, we dont it is a block grant, we dont know how the states are spending that federal money. We know more about how banks and private entities lend than we know about how public entities like states or spending or transportation dollars. So i dont know. I think that maybe lets figure out, maybe a high grade between that and send the money out, but make sure that it is being spent in the way that is transparent and rigorous. Im not in favor of any further federal spending. I think federal spending is a negative on american infrastructure. I would reduce it. So the only way i think trump can get to a trillion dollar Infrastructure Investment goal is to think about private Sector Investment. If you look at National Income account data, private Sector Investment in the u. S. Economy is vastly greater than government Infrastructure Investment f yif you add up the value of investment, it adds up to around 2. 5 trillion a year of private Sector Investment. All government Infrastructure Investment in the United States is about a fifth of that, 500 billion, very roughly. Trump has a major tax reform plan to reduce the Corporate Tax rate in particular, big corporations are the biggest Investment Investors in infrastructure in the nation. By lowering the Corporate Tax rate, youre directly increasing the return to, you know, utilities building new plans, to Oil Companies building new refineries, to verizon investing more in fiberoptic cable and et cetera. So thats the way to get it a trillion dollar new investment is to think about increasing the returns to corporations, invest in more. Just to put a plug in there, very interesting study out there by ppi, sort of a centrist think tank that focuses on tech issues. I think it is called Something Like investment heroes where they look every year, they look through corporate Financial Statements at who the biggest investors in infrastructure are in the United States and list the companies. And the numbers are kind of staggering. So i think the biggest investor in the United States is ttat t which spends 20 billion ay yea on capital investment. Thats where we need to look if we get more Infrastructure Investment. Ill agree with chris. I think that adding another program is going the exact wrong direction. I think we need to look and reform the existing programs that we have. Many of which including tiger are i view them as earmarks in disguise for the most part. Before we go, adding more spending, we need to reform the existing programs. Question over here. Thank you. My question basically is from [ inaudible ] we have a microphone for you. Sorry. On now . You hear . Yes, im with the arlington transportation commission. And my question really concerns something you said, reducing regulations at the federal level. I have concerns about that. In theory, it sounds good because there are some regulations, youre familiar with ft rules, the alternatives analysis, project proposal and so forth. Same thing with the federal Highway Administration. When you get projects, i cite an example im familiar with, arlington, a 550 million street carrogram where there really was verytle justifica for it. And fta in this case, the county applied to fta for many millions of dollars to help fund the program, but fta also, because of its expansive requirements, helps to eliminate very wasteful projects. And had the alternatives analysis process not been in place that this project probably would have been approved in my opinion because you can go directly from a very poor Quality Bus Service or no bus service to a street car or light rail project. So i wanted to ask you about that. How do we deal with the issue of cities and counties when they get money and substantial amounts of money from another source and federal government and fta and want these unnecessary projects in many cases, how do we control for that at the same time try to reduce regulations . I live in arlington. Im somewhat familiar with the street car project, which went down columbia pike. I drive columbia pike all the time. You dont need a street car line down there. I hear what youre saying. This case it sounds like fta helped block a bad project, but it was the reason why arlington county, you know, wanted to go ahead with the project is because they would have got some federal funding. You see that all the time. Another example, in arlington, they have a project to build a bunch of new bus shelters down columbia pike again and there is an infamous Million Dollar bus stop on columbia pike that they built which was a huge boondoggle. They wouldnt have built that if they hadnt got the federal money for it. I think in a lot of cases, federal money distorts state and local decisionmaking and makes them go for projects that really arent worth the, you know, the value if you look at a cost benefit analysis. I think by cutting the federal funding, you would get local governments making more sensible decisions on transit. As a general point, i dont know if robert disagrees with me on this one, federal funding has incentivized too many states and cities to go for a rail system when in fact bus systems would have been more efficient and more flexible and served the lower income population, particularly better than rail systems. So i think government funding or financing of state and local infrastructure is distortionary that way. I dont agree. I dont agree that i dont agree with that. That certainly there has been there was a street car enthusiasm for that over the last couple of years. Renaissance. Renaissance. We dont have to live very far to find a street car project that havent pannedout. But this isnt just around transit. As we said before, a lot of money that comes out of the federal government goes for all kinds of wasteful projects. Highways in particular. And on the roadside. So i think the theme that we keep hearing from this conversation is the right one, that we just got to get better at give than were facing fiscal and financial challenges when it comes to infrastructure. If we have these deeds, we have to make sure the money is being spent as best as we possibly can. Throughout all areas of transportation. I think it is going to get us better private investment, better projects, spur more innovation because there is a physicist that has a quote i love, we have run out of money, time to start thinking. Thats where we are right now. Got to make sure that the money were spending we spend as best as we possibly can. Yeah. And back to your point, yeah, so im for radically deregulating the transportation sector. But your point is well taken. I think procurement regulations that ensure things like Competitive Bidding, things like that, are completely appropriate and should be strengthened. One example i can think of is with water and Waste Water Networks we have a really, really bad procurement policy in this country. And through the epas Revolving Fund were shoveling money down to these really crony local level local officials who have sweetheart longterm contracts with say the ductal iron industry. There are competitors out there that you can save perhaps up to on procurement up to 25 . But because they have these no accountability in this federal money keeps flowing and you frankly had congress intentionally weaken some of the existing standards through i think what do they call it back in like state autonomy, in culvert selection, really just a sock to the cement industry down in louisiana. And that gutted Competitive Bidding procurement regulations. So i think your point is well taken. When im all for deregulation, but as long as were spending this money, we should be we should make sure it is being spent as wisely as possible. Question over here. Rob whitfield, Fairfax County taxpayers alliance. We here in the Washington Area have something called ramada, the metro system. Metro rail is losing money hand over fist, safety problems, lack of proper maintenance. Ramada never established a reserve fund for replacement of capital items like trains, electrical systems. So now were facing billions just to rehab the present system. Ramada estimates it needs between 18 and 25 billion over the next ten years. And of course they have wishes to expand the system. What role, i believe mr. Edwards had an article suggesting privatization. Comparing washington to hong kong. I believe that was your article. And so the question is what role should the federal government take with respect to metro. The Board Meeting yesterday, they explained they were hugely successful in ridership on the inauguration and with the womens rally, they lose money on such events. And so what role do you 40 of the ridership on metro is federal workers. So what role do they need to see with federal support on the operation side and what potential for privatization do you see . An article a couple of weeks ago, pretty dramatic, look at the hong kong subway system. It is a different city than washington, d. C. It has a highly dense population, makes heavy rail, heavy rail makes a lot of sense there. But 16 years ago, hong kong privatized its subway system and has been successful. The hong kong system generates from fairly low passenger charges, all the money they need for operation and most of the money they need for capital investment. And in addition hong kong the hong kong private subway system, they get a lot of money from real estate deals near their metro stations, something that washington, d. C. Metro could do as well. They do to some extent already. I dont know whether you could run the d. C. Metro system on subsidized, probably not. But i do think a lot of metro systems around the world do continue to subsidize them, but they brought in private management. So the hong kong the company that manages the hong kong system has been so successful that they now manage subway systems and cities around the world because people want to, you know, learn the lessons about running a metro system efficiently. So 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 the goal standard system, seemed to work well, and it is remarkable how poorly it works these days. And, you know, the unfunded costs, the fact they havent done the maintenance, they should have been doing, all these years, is remarkable. So i think that i think we should look in the private management for the metro. One of the problems with metro is the complex government structure of it. Three local government jurisdictions, it is kind of crazy, it is going to make any kind of 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, there is also a huge burden on metro which we hold many responsive in power Transit Services they have to provide. Which are big burdens for any transit agency. It is not it is a big problem theyre trying to deal with. As we get as the aging population gets more severe, we continue to spread out, they continue to have to provide the services. And the private Technology Firms can come intoes they Transportation Network companies, uber and lyft and there are a couple of experiments happening around country where theyre the Public Transit agencies are contracting out with these private firms to see if they can run these demand Responsive Services much better. The price of an uber ride is subsidized using the Public Entity to provide services. There have been some tests. I think theyre going pretty well. It is not without its contention. You can imagine, but that might be something we can experiment here in this region which despite the problems we have with metro, the Traffic Congestion, were doing an awful lot in this region when it comes to technology, innovation, working with public and private sectors. This might be an area where he can save some of the burden off metro by working with a private firm. We are running out of time. One more question, please. Over here. Thank you for an excellent presentation. My name is mike sar, a private citizen and investor in some of these technologies. The fragility of the electric grid is often talked about in this situation. Both as possibly an end of civilization implication, and at least interoperability standards from the government and funding might be in order to make it happen. Any reflections on that subject . From my distinguished panel. I know our Energy Experts have written a lot about this. And i think there is tremendous opportunity with the new administration to look at some more free market 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 terms of private investment in the Energy Sector under this incoming administration. All right, thank you so much for joining us. If youll join me in giving my panel a hand here, i think we had an excellent conversation. Unless im mistaken, i think there will somebody sandwiches outside. So please feel free to go grab some lunch and stick around and ask any questions that you might have left over. Thank you. This heritage event will be available to view online shortly. Just type heritage trump infrastructure