House Committee Highway & Transit Investment Plan Offers Prescription to Help Cure Ailing American Economy, New Analysis Finds
Study Released at National Transportation Week News Conference on Capitol Hill
FOR IMMEDIATE RELEASE
May 13, 2003
Contacts:
Matt Jeanneret, ARTBA
202-289-4434
Dennis Day, AGC
703-837-5310
Rose Sheridan, APTA
202-496-4826
Click here to read the full study
May 13, 2003
(Washington, D.C.)—A proposal in the U.S. House of Representatives to increase federal highway and public transportation investment would provide a major boost to the American economy by adding $290 billion to the Gross Domestic Product (GDP) over the next six years, according to an analysis released May 13 by the world's leading econometric forecasting firm.
The bipartisan leadership of the House Transportation and Infrastructure (T&I) Committee has proposed a $375 billion highway and transit investment plan for fiscal years 2004-09 as part of the reauthorization of the Transportation Equity Act for the 21st Century (TEA-21). The $375 billion is the funding level derived from the U.S. Department of Transportation 2002 "Conditions & Performance Report" as necessary to maintain and begin to improve the nation’s surface transportation network.
Global Insight, Inc., formerly DRI-WEFA, the leading economic forecasting company used by over 3,000 industry, finance and government clients, ran the T&I plan through its national model. The findings of this first-ever analysis of a public infrastructure investment plan found the combined effect of the spending and user fee increases would generate over the next six years:
A $290 billion increase in GDP—about $48 billion annually. This means every federal dollar invested in highway and transit capital outlays would generate over $2.50 in additional U.S. economic activity.
A $129 billion increase in consumer disposable income. To the average American household that means an average $45 annual increase in federal gas tax payments will generate an additional $150 in annual disposal household income—a net $3 to $1 return on investment.
It would spur a $98 billion increase in consumer spending which would benefit small American businesses.
It would add $21 billion to equipment investment by the nation’s businesses, thus generating higher productivity and making the U.S. more competitive.
Federal tax receipts—from the gas tax and additional income, Social Security and Medicare revenues generated by increased economic activity—would increase $102 billion—helping reduce the federal deficit.
"This analysis clearly demonstrates that the Transportation and Infrastructure Committee’s needs-based transportation investment plan is critical to improving business productivity and strengthening the American economy," Transportation Construction Coalition (TCC) co-chairman Pete Ruane said. "It’s also important to recognize the plan provides the investment levels necessary to start reducing the 42,000 deaths that occur annually on the nation’s highways each year and begin unraveling the traffic congestion that is costing every American motorist an average $1,160 per year in lost time and excess fuel consumption."
"Our transportation system is the lifeblood on which this nation's economic past and future is built. This study makes it clear that the Transportation and Infrastructure Committee's bold proposal to invest in the transportation system will have long term significant positive benefits on the health our National economy," added Stephen Sandherr, Transportation Construction Coalition (TCC) co-chairman.
"There is no question that investment in our nation's transportation infrastructure pays enormous dividends," American Public Transportation Association (APTA) President William W. Millar said. "The investment levels recommended by the T and I Committee are critical to get our economy moving again and providing the quality of life Americans want and deserve."
The analysis, commissioned by the TCC and APTA, was released at a Capitol Hill news conference as part of National Transportation Week (NTW), celebrated May 11-17. The first NTW was observed in March 1953 to draw public attention to the importance and benefits of transportation.
Global Insight was formed in May 2001, through the union of the two largest and oldest economic forecasting companies: Data Resources Inc., founded in 1968, and Wharton Econometric Forecasting Associates, founded in 1963.
The TCC, which includes 28 national associations and construction unions committed to increased federal transportation investment, will distribute the analysis to all members of Congress.
TCC members include the:
American Road & Transportation Builders Association (co-chair)
Associated General Contractors of America (co-chair)
American Coal Ash Association
American Concrete Pavement Association
American Concrete Pipe Association
American Council of Engineering Companies
American Society of Civil Engineers
American Subcontractors Association
American Traffic Safety Services Association
Asphalt Emulsion Manufacturers Association
Asphalt Recycling & Reclaiming Association
Associated Equipment Distributors
Association of Equipment Manufacturers
International Slurry Surfacing Association
International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers
International Union of Operating Engineers
Laborers-Employers Cooperation and Education Trust
Laborers’ International Union of North America
National Asphalt Pavement Association
National Association of Surety Bond Producers
National Lime Association
National Ready Mixed Concrete Association
National Stone, Sand and Gravel Association
National Utility Contractors Association
Portland Cement Association
Precast/Prestressed Concrete Institute
The Road Information Program
United Brotherhood of Carpenters and Joiners of America
APTA is a nonprofit international association of 1,500 public and private member organizations including transit systems and passenger rail operators; planning, design, construction and finance firms; product and service providers; academic institutions, transit associations and state departments of transportation. APTA members serve the public interest by providing safe, efficient and economical transit services and products. Over 90 percent of persons using public transportation in the United States and Canada are served by APTA members.
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