to the following rule to facilitate this hearing first of all for the purpose of quitting witnesses we alternate between the two committees beginning with the budget committee democrats followed by the budget committee republicans then proceed to the members will have five minutes to ask questions to make segments after all members members had a chance to address the witnesses members might follow up with additional five minutes if time permits all members will be allowed to submit an opening state those members who do not have the opportunity to ask questions will be given fourteen days to submit questions for the record and the written testimony of all witnesses what we made part of the record so they may summarize that testimony to allow time for questions and answers despite their vital importance infrastructure investments have not kept pace with for param maintenance and the need for expansion and replacement as a result there's a growing interest now we can maintain the appropriate level in the proper kind of infrastructure investment investments we want to know what scenarios is appropriate to consider investment mechanisms of of then direct federal financing any policy tradeoffs with one mechanism over the other we need to understand the new proposals for financing infrastructure improvements keeping in mind there's never any such a thing as a pre launch we hope this hearing will be a starting point for a longer and larger conversation about how to fund the finance effort drug for investment and ocean wisconsin and as i said to him we could be having this meeting at the new to delhi wonderful welcoming place but i want to welcome everyone back to the subject of capital budgeting just read a few brief highlights thirteen percent of the nation's aging dams are classified as high hazard miscible water systems need a hundred billion dollars to keep up with demand nearly one of every two miles of paid highways needs resurfacing or reconstruction half of america's bridges are too old too weak to adequately and safely handled today's traffic fifty six of one hundred eighty four principal locks on the nation's inland waterways will require major repairs over the next twenty years deep water ports have insufficient capacity and are stifling trade that from a report by the subcommittee on pennsylvania spent enormous amount of time working on developing the hearings spent months crafting this report we concluded in our recommendations to the committee and to the house the adoption of a capital investment budget is a move toward a perspective of public policy rather than retrospective action too often indicative of public works decisions a capital budget would provide important information not available to the congress and the executive branch so that they can then make capital decisions weighing the evidence relating resources and projecting future needs that is what we need in the course of that hearing there was an extraordinary moment when david stockman turned around and said yes i think a capital budget would be a good thing but as an an excess federal budget not as an integral part of it now those figures i read off from one thousand nine hundred four you can say that today two hundred sixty of the nation's inland waterway locks are inadequate to handle the capacity today it takes eight hundred twenty hours round trip from clinton iowa to new orleans to export grain from america's heartland that's three weeks travel one way we have to do better than that because the locks are six hundred feet long the barge toes are twelve hundred feet long and you have to split them and have sent six hundred feet through the next six hundred feet through tie them together and then go on to the next of the of those five adequate locks and on the illinois ohio river system hope twelve each a twelve hundred foot long we passed that legislation through this committee through the house overwhelming vote overrode a presidential veto not a dime not a single project entered into the president's budget for the coming  functionally deficient today there are seventy six thousand structurally deficient bridges that are on the verge of collapse we need to invest in america monday i participated as a team speaker for the european transport ministers meeting in slovenia land of my half of my ancestors to talk about our investment needs in infrastructure  water ways highways airways railways and ports and to exchange with the european ministers on their plan this is their plan can't get this not an eye test but this  plan was formally presented to the council of ministers all twenty seven of them yesterday by jacques battle who is the president of and the presiding officer of the council of ministers of the european union three hundred fifty billion dollars over ten years in highway railway high speed passenger high speed rail ports and and walk in systems that will link the atlantic ocean through the three hundred fifty billion dollars they have every one of of their priority projects listed page by page process by process funding source by funding source we don't have that kind of a capital budgeting we need to do that some say it'll be too much money be too big a challenge but if we don't know what the picture is then how can you prioritize how can you make choices we have to make those choices there are tough choices to make of course but that's our responsibility as members of congress so i plead to develop a capital budgeting process i think we need to have a road map a water map and airways map railways map as europe is doing or we will fall behind just one final observation in one teen eighty nine china had one hundred sixty eight miles of interstate quality highway today the f twenty two thousand five hundred miles in ten years they will have fifty five thousand miles with their investment they reduce the travel time by truck from beijing to hong kong from fifty five hours to twenty five hours nowhere in america with all of our investments have we reduced travel time by thirty hours on any stretch of roadway we've increased that by that amount of time they've reduced the travel time by truck from beijing to shanghai from thirty five hours to fourteen hours we have not made those kinds of investments and improvements if we're going to compete in this world economy that we have to make those investments thank you very much want think our witnesses for joining us today director or zag and patricia dalton managing director of g a o as physical infrastructure team welcome and i look forward to your testimony before i share my statement on the subject of this hearing i'm going to take just a brief moment to talk about the transportation issue first on the minds of the american people and i hear the bells so i realize we have some time constraints here and the issue that is first on the minds the american people is clearly the skyrocketing price of gasoline one of the things almost certain to come up today as we look at alternative financing mechanisms for public infrastructure is the possibility of increasing the gas tax i think that's the last thing we want to do at this time we need to be looking at ways of reducing the gas price burden on the american people and that's why today i will introduce legislation that will suspend the eighteen point four cent tax on gasoline for the summer and give american families at least a little relief i know there's a concern probably a lot in this room about the impact this proposal will have on the highway trust fund so my bill holds the highway trust on a farm less and it goes a step further it will actually shore up the trust fund by eliminating its two thousand and four fall this may sound impossible but it's not we can address both these high priority issues relief from high gas prices and needed infrastructure improvements and we can do it without costing the taxpayers a single dime we'll do it by addressing a third issue that's also on the list of the american people's concerns and that is congress's pork barrel spending if congress will to give up earmarks for just one year as laid out in the kingston will proposal we could save fourteen point eight billion dollars this is a proposal that proposes a bipartisan commission to make sure that we have a system that is transparent and accountable to the american people who have lost faith in the way we spend their dollars we could use that money to give taxpayers a little relief at the pump for the summer and still have more than enough money left over to shore up the trust fund in two thousand and nine something that i know i major priority for the transportation infrastructure committee now while my bill takes care of the highway trust fund short term financing problem there is no there is a longer term issue on highway financing and that's what we're here to talk about today clearly public infrastructure from roads and bridges to dams and sewers is vitally important to the growth and productivity of our economy and to our way of life there are two issues before us first how do we ensure federal funding is allocated to high priority infrastructure that has a high benefit cost ratio and second what's the best means of financing this activity today we're here to discuss the second issue what role if any alternative financing mechanisms can or should play in the funding of federal investment in public infrastructure in the past the budget committees have concluded as have c b l and g a o that these alternative financing mechanisms from sale leaseback some third party financing to tax credit bonds to be more expensive less transparent way to acquire and use capital assets when compared to conventional appropriations in treasury borrowing and as dr or zach notes in his testimony there is no free money here it's pay me now or pay me later regardless of what kind of mechanisms we use alternative or otherwise the bills still have to be paid and while we have many worthy demands of federal spending the american taxpayers and us congress don't have a limitless supply of money to fund them so congress has got to set priorities so we can ensure that our most critical public infrastructure projects get every bit of funding they need in the most cost effective way finally as dr or zach knows and as testified before the budget committee the question of how we might finance extra spending on infrastructure or anything else will soon be moot if we don't get to the business of reforming our entitlement programs if we continue to push off in title and reform these programs will make most of our funding decisions for us because after paying for them there simply won't be enough money left in the budget to even finance our highest domestic priorities this will take place regardless of what financing methods we use for these other programs federal infrastructure makes an important contribution to our economy the chairman is right to point out the needs for america in the future and i hope we can find the best way to address these key priorities in a transparent in a responsible way and once again i think everyone for being transmitting electricity inadequate school facilities all suggest that some targeted additional infrastructure spending would be economically justifiable first some facts as the first slide shows we're going to have the first slide come up in a second so we go to the first line the nation spends about four hundred billion dollars a year on infrastructure and i tried to give you a breakout i don't know if you can see that of that four hundred billion dollars of that the federal government provides about sixty billion dollars this is from two thousand and four and federal government spending is very concentrated particularly in highways so thirty billion of the sixty billion or so in federal spending on infrastructure is dedicated towards highway spending state and local governments spend a disproportionate share of their money in other areas you see that on utilities and other and similarly the private sector spending on infrastructure is disproportionately concentrated in things like electricity generation and transmission the second five that i have may be of more interest to people for the first time the congressional budget office has gone through the various studies that exist on what would be needed to maintain current service levels from our infrastructure and what could be economically justifiable that is what projects could generate larger benefits than costs and let me focus for example on highways we currently spend about sixty seven billion dollars a year on highway spending the federal highway administration has estimated that it would cost about seventy nine billion dollars a year to maintain current levels of service and so an additional let's say ten to twelve twelve billion dollars a year would be required to maintain current levels of service and that as much as one hundred thirty two billion dollars a year could be justified in terms of benefits exceeding cough so that would be an extra roughly sixty billion or so in aggregate for transportation infrastructure additional spending to maintain current levels of spending current levels of service would amount to perhaps twenty billion dollars a year and perhaps as much as eighty billion dollars a year could could pass economically justifiable to us now it is important to remember that although the economic rationale for some additional infrastructure spending is strong it depends very precise very specifically on the individual projects generate large additional benefits others not so much so to say that these levels of spending may be economically justifiable is not to say that just pumping that amount of money into infrastructure would generate benefit would generate benefits it depends very sensitively which specific projects are chosen or where the money is directed it is also the case that these estimates are depended on and sensitive to what else is happening and in particular if we priced and use the existing infrastructure that we have more efficiently these numbers would go down so for example the federal highway administration has suggested that widespread implementation of congestion pricing would reduce the investment needed to maintain the current highway system by twenty billion dollars significantly reducing the necessary investments that were showing their fourth i want to note that the existence of  additional economically justifiable and justifiable investments does not determine who should pay for it and in general the benefits principle suggests that federal taxpayers are often the least efficient source of financial support for an infrastructure investment after the direct beneficiaries of the investment and local and state tax payers even when federal support for a given type of infrastructure is justified in principle implementation practical problems may make it undesirable in practice for example found that states offset roughly half of the increase in federal highway grants between one thousand nine hundred two and two thousand and two by reducing their own spending and that the rate of substitution increased during the one nine hundred eighty s let me just finally say in my final thirty seconds that i think there's a lot of the federal government could be doing to better utilize and make more efficient the support that we already provide for infrastructure my testimony goes through the inefficiencies in the current tax subsidies for tax exempt status local bonds and ways that that could be made more efficient and i would also note that we own a significant amount of property and other other forms of into infrastructure that could be much more efficiently managed and that could provide offsets or sources of funding for testify on infrastructure financing issues today these are important issues because the nation's physical infrastructure is under strain raising a host just safety security and economic concerns my remarks today are going to focus on the challenges associated with our infrastructure principles that we have identified to help guide efforts to address these challenges and existing and proposed options to fund investments in the nation's infrastructure the challenge of our numerous for example despite increases in transportation spending at all levels of government and improvements to the sissoko condition of highways and transit facilities over the past ten years congestion has worth and safety gains have leveled off in addition  demand has outpaced the capacity of our nation's surface transportation and aviation systems resulting in decreased performance and reliability water utilities nationwide are under increased pressure to make significant invest money news across the country are estimated to range between four hundred and eighty five million dollars billion dollars excuse me and one point two trillion dollars over the next twenty years for example about a third of our water utilities report that twenty percent of their pipes are at the end of their useful life clearly these and other challenges need to be addressed additional investment is clearly warranted however calls for increased investment in infrastructure come at a time when traditional funding is increasingly strained and the federal government's fiscal outlook is worse than many may understand addressing these challenges complicated by the breadth of the nation's fiscal infrastructure which is funded and operated by all levels of government in the private sector moreover infrastructure policy decisions are inextricably linked with economic environmental and energy policy concerns given these types of challenges and the federal government book is clear that the federal government cannot continue with business as usual rather a fundamental reexamination of government programs policies and activities is needed including in the infrastructure area questions to be asked include what are our goals and are they tied to the national interest what is the federal role our performance and accountability built into the funding decisions are we using the right tools the best tools is the approach physically sustainable funding for the nation's infrastructure comes from a variety of federal state local and private sources as primary owners of the infrastructure state and local governments in the private sector generally account for a larger share of infrastructure funding than the federal government however the federal government has played and continues to play an important role in funding and the structure various existing funding approaches could be altered or new funding approaches could be developed to help fund investments and in our infrastructure these various approaches can be grouped into two infrastructure financing for example the tip your program provides loans for transportation projects national significance the government also with authorized number of revolving funds to dedicate capital to be loans for qualified infrastructure project water revolving fund the drinking water with the state state revolving several proposed additional financing mechanisms available for infrastructure for example the proposed bills america bond fund would provide fifty billion dollars in new infrastructure funding through the national infrastructure development bill introduced by mr de lauro with establish a loan program administered by the government a government sponsored to fund a variety of infrastructure projects national infrastructure bank would provide an infrastructure bank at the national level as a revolving fund financing mechanism has different merit each mechanism in the final analysis is a form of debt that ultimately must be paid with interest furthermore since the federal government the cost of capital is generally lower than that of the private sector financing mechanism such as bonding it should be recognized may be more expensive than full  funding to help policy makers make explicit decisions about how much of all federal spending should be devoted to investment proposed establishing an investment component within the unified budget by recognizing the different effects of various types of federal spending and investment focus within the budget provide a valuable supplement to the unified consideration of macro economic issues moreover with direct attention to the consequent choices within the budget under existing budget limitations a level which is now not determined explicitly by policy makers but is simply the result of numerous individual decisions in conclusion various investment options have been like will likely will continue to be identified to repair upgrade and better use our nation's infrastructure ultimately congress and other federal policymakers will have to determine which option or more likely which combination of options best meets the needs of the nation there's no silver bullet suitability of any of these options will depend on the level of federal involvement the policy makers just side in a given area guess i'll start on that mr chairman as you know we released the study this morning on capital budget and let's separate how you would do it from whether you would want to with regard to whether you would want to there are tradeoffs but i would note it's awkward to move to accrual accounting which is what a capital budget is just for part of the budget most of the budget is cash base and moving to accrual accounting for capital spending but not for entitlement spending or lots of other parts of the budget is an awkwardness and it raises the question of whether one should move to follow accrual accounting and on that i would just note that there are lots of countries that have evaluated that question decided not to do it and that also there are many countries that have not moved to a capital budget for precisely that reason that it's awkward to do it just for this part of the budget secondly that if you were going to do it just for part of the budget there's a lot of pressure that would come to bear on the definition of what capital is so if you have one system for capital and another system for non capital it becomes very attractive to start labeling everything as capital and one would have to pay particular attention to the definition of capital spending with regard to how you could do it that's frankly not as complicated as as the normative question of whether you should it would involve simply taking out moving away from a cash  accounting for apple investments however defined instead of when you buy something for a dollar of capital that currently is scored as a dollar instead what would happen is that you would not score that dollar but instead as the capital depreciated there would be an allocation each year a charge each year for the depreciat be the one additional point i would make is one thing to consider where i don't think it'll work very well the federal level is that we don't own a lot of the infrastructure we do fund a lot of it but it is at the state and local level so therefore when you're looking at capital budgeting it fundamentally it assumes that you're owning the infrastructure and for macro basis you're going to be depressed you're using that asset over time and appreciating that when the federal government doesn't the answer structure you don't have that opportunity from an accounting standpoint what human investment today that have long term economic benefits it's traditionally interpreted as physical capital but many of the same arguments would apply to research and development spending to education spending some people would even argue things like screens or several discre regard to other financing mechanisms that have been under discussion but with regard to capital budget by itself conceptually at least you could just say that amount of capital or that definition of capitalism is not counted when it is purchased but rather as a depreciate and that can be independent of whether their user fees or specific tax revenues that are tied to that capital and how would you treat the funding for projects differently from say of a project which divergence than currently exists between the reported deficit and then mount a financing that the federal government would require so if we went out and we purchased a dollar worth of investment goods or of capital goods and that was excluded from the budget only the depreciation would be counted in future years we would still need to finance that dollar in terms of borrowing or some other financing mechanism and that would be another source of divergence between the reported deficit and treasuries borrowing  i'll take a crack at that congestion pricing has to it's almost a two fer it has two potential benefits i know there are concerns about that we could talk about also but as to potential it has two significant benefits first it could raise revenue that could be used to finance new investment and secondly it reduces the amount of investment that's necessary to undertake or maintain current services or to exhaust the economically beneficial projects that are out there it allows us to use the infrastructure that we have or that we would build much more efficiently and the evidence on this is very clear when you price something by by time of day or by congestion you do get the results that you're looking for in terms taxes have been imposed at the local level or the state level reflecting the demand on the as a structure and trying to spread that demand over time usually for example  and i agree that this is traditionally not a federal role but for example one could construct scenarios or policy options i'll just give you one possibility that you could you could require a higher state and local match on federal  grants for projects that do not have congestion pricing relative to those that do there are lots of different ways that you can have the federal government encourage this and try to recapture some of the potential benefit  in the world you come back with a conclusion that one of the reasons that we have become the strong economy of the world is because of our infrastructure and the investment that we've made in it over the years that our forefathers made and in fact it's kind interesting i would have liked to have heard the debate when eisenhower administration proposed an interstate highway system i'm sure that the debate was are you kidding me we're not going to do the interstates in idaho and montana and wyoming in fact when they built them there i can remember driving fifty miles down the road never pass another car and when it was real nice now those areas actually some of them have some pretty good congestion in those were forward looking individuals that did that and i'm afraid i'm afraid that we haven't done the same or aren't doing the same and future generations are going to pay for that if we don't invest in the infrastructure this country not only roads and bridges railways waterways as you said our water systems and and so forth let me ask you  sometimes accused of doing congressional directed spending otherwise known as earmarking things which i'm not opposed to the problem is i never know where that stands in terms of a national need when you start looking at what projects are and my assumption is that a local person that represents a district knows a district better than i do and so forth and so i have a tendency to listen to them but i don't know how the national lead and another example is that i sit on the energy and water subcommittee the army corps of engineers comes in wants to dredge harbors to make deep water harbors and so forth there are harbors all over this country and i don't know that well i know there's not a plan to say how is how are the ones that we are going to actually make deepwater harbors going to fit into the overall transportation system we need a plan somehow we've got to sit down and say how we're going to pay for that plan and it obviously can't be just a gas tax and the local units are about property tax out registration fees in most places are getting high we've got to find some alternative ways of doing it and as i have as we were mentioning before this hearing started i think people are willing to pay when they see improvement in the system it's one of the reason we believe that having an investment component is part of that unified budget would be helpful and that it would at least as a start start bringing together all of the investment projects and efforts that we have with the trust funds and studying the trust funds and how they're used because sometimes i think they used improperly or not used as they should be some of them they're actually growing in amount when we have a need out there and i'll be talking to you i'm sure in the in the near future if we do that to see how we can work on that so that we use in the the resources appropriately and then look at as as i said earlier how we're going to pay for this we've got to find some innovative ways to pay for it some that we probably don't employ right now that congestion being addressed using the trust fund dollars in urban areas i would challenge whether or not that the forward thinking by merely adding lanes the actual way miles whereas in rural nebraska we can leverage more economic growth i think looking to the future just as the interstate system did many years ago do you have some suggestions of spread the demand out over time so that if you're going to travel from four to six o'clock in the evening it may cost you more than if you're traveling at six thirty or three thirty and that just the flow of traffic and those are certainly tools that should be in conjunction with overall infrastructure construction and development and trying to look at what are the build another lane are there alternative transportation systems available such as bus transit and i guess also proactively developing things rather than just waiting for the ahead of time and accommodate it you're in a much stronger position than when we're putting oftentimes local governments there's a housing development going and they work with the developer to build in the infrastructure as part of my written testimony and most of you know not to not not surprisingly given my background and our our outlook is based on cost benefit analysis and similar things there obviously are other considerations that policymakers  want and do take into account but it is the case under most cost benefit analyses that role projects often don't look as good as projects in more concentrated areas and how far into the future with that gauge depends on the look of the underlying study and so i can't give you a generic answer to that question and then as well do you ever look at perhaps a multi state effort i mean the heartland expressway is an example and in middle america where it's several states actually ports the planes corridor or is a multi state effort rather than just one state at a time does that get much credit in the big picture those well let me let me sort of broaden the question it is clear that as we try to lay out infrastructure investments generate additional act economic activity and obviously the more that the different components of the system fit together so that you don't have in consistency across the nation's infrastructure the better in terms of generating economic activity all right thank not having an overall vision or plan about how the pieces fit together because there are some areas frankly that may not pencil out in the short term but they're part of a network and if we don't have a network rural america and small town america too often we see investments in some rural areas that are just like darts thrown at a mass they have political cash but they are part of the overall needs of agriculture of electrical infrastructure and i am hopeful and i know i've been in consultation with my friend greatest with climate change with depletion of water supplies with an aging infrastructure these are things that i am i am hopeful that we as a congress can be able justifiable investment we don't have an element there but we have aviation with one third of the trips in this country now three hundred fifty miles or investment in rail passenger service to eliminate some of the pressures for aviation for instance for airport expansion we actually get capacity and we'd be able to have something that would be more pleasurable for the writing public we have talked in the past about present value accounting that currently in a capital budget may help move us in this direction but there are so many elements here in the transportation system that don't take into account the dollars we know we're going to spend or the cost that we're going to boy have you had any further thought about what we could do with the budget committee to look at this long term picture of infrastructure investment and ways that we'll be able to coach more value out of this system to deal with to deal with water to deal with transportation with surface transportation motorway that would reflect boyd costs that would reflect investments that will make money over time that would have a fairer application of our budget rules well let me answer that in two ways first we did come out this morning with a report on capital budgeting in particular and i could talk more about that but secondly there and  part of your question is what is the long term benefit or return to these various different investments and we did try in this document in the testimony that we prepared the written testimony which is longer than normal for us to go through the evidence on the returns to infrastructure spending and while they are positive on average they vary a lot by specific projects and they're also lower than some early estimates from the early one nine hundred eighty suggested so  there is a long benefit to additional infrastructure investment it obviously depends very sensitively on the specific projects and the specific types of infrastructure i'd also just note quickly you would match mentioned waste water and  drinking water we do have estimates in the document that's based on previous testimony previous work by c b s suggesting that nations spending about twenty six billion dollars a year currently on those and that investments would need to average between thirty and forty seven billion a year to basically maintain to maintain current services and do a little more thank you i'll look forward to further examination i'm sure chopped up a bit mr chairman i appreciate your  indulgence and having this hearing i'm the point of that i warn you next to your doctor is that when we are sure as across is the notion of if we're able to actually have a i thank the chair of distinguished witnesses this may have been addressed already for you males at another meeting i've certainly felt that the most recent stimulus package amount is basically the drop in money out of helicopters and it was not our best investment there are some business provisions of the stimulus package that make sense rebates i did not think we did some surveys in my own state and district about projects which were ready to go in the sense that they were permitted designed could be actually putting people to work in the same timeframe it has taken us to get the stimulus package out and that would produce jobs with paychecks and lasting infrastructure to the good of people for many years to come it's been quite frustrating because there seems to be this sense that shibboleth but i don't think the fact that the infrastructure investment doesn't stimulate the economy and i wonder if you could talk a little about that a what  seems to be received wisdom by the economists but in direct conflict with the evidence i get on the ground when i talk to school boards or local communities is that frankly walk around these capital grounds and you see needed infrastructure repairs there educate us on this if you would think that one maybe for me let me say two things first as i tried to indicate earlier there is a long term return or long term benefit to start spending where we're now just talking about the degree to which money can flow out the door quickly in a period of economic weakness which is a different question there i have pushed my folks hard and i would just again say with outside of road resurfacing where it looks like money can flow more rapidly that i have been eager to receive the list of specific projects that people believe can can move fast because it's often the case that when you start to actually go down those less and i don't want to just take it on faith i to be looking at the specifics involved that you get responses like oh no we met we could get it permitted rapidly not actually have money out the door or i may say we had a question of how quickly can money actually go out the door but per many isn't free it doesn't you don't magically get a permit i mean someone has to be employed to do the paperwork for the permit and so my belief is there's a there's a continuum of projects in the pipeline some of which are at the permitting stage some of which are  at the design stage people actually get paid money and let me pay because on that money yeah and then the question is just what share of the cost of the project is occurring rapidly and the cost of the permanent process is often only a very small share of the overall cost of the project itself so the question is really what is the spend out rate how quickly if you're going to spend a hundred dollars on this project what share of that one hundred dollars you get out the door rapidly let me ask this if  i if i pump twenty billion dollars into the economy and it's going to transportation infrastructure whether the whether the money's going to employ a geologist or hydrologist to work on a permit even a lawyer for heaven forbid or whether some of those projects which i'm convinced they are because my school districts are show me the plans actually get some people nailing boards and pull in the wire that's money that's going to a domestic work force in all of those cases and whether or not that permit is done now or five years from now is it is a bit chronologically fungible i mean but doing it now sets up later projects so you've got to invest it at some point so the point is there are many stages on infrastructure projects that we could invest money right now in the second point is this relative to a flat screen plasma t v made in korea that except for the exchange of you know the import and export by shipping and the the guy who works at best buy and gets a two percent commission the stimulus to me and the long term benefit for our society is vastly superior and i don't know the cost benefit ratio to the feds in the public of building a water treatment plan for fixing your school i would wager pencils out a good bit better the buy that plasma screen t v well a couple things first it's true that the larger the share of imported value added imported goods and whatever's purchased with the stimulus money the last impact there is on domestic production i would note that a lot of the rebate checks will probably go for things food restaurants and what have you and not just plasma television and that some component of infrastructure spending also involves imported inputs are importing goods again i think the real question is out of that twenty billion dollars and this to me it's a well chosen project there will be long term economic benefits if your objective as most of the policy debate earlier this year was framed was to get the economy jump start and now within the next three or four or five months what share of that twenty billion dollars can go out the door within the three or four months and that's a separate question from whether we should be spending twenty billion dollars over time or not or the returns to it and again i would just come back to i want to see the specific projects that can get a big share of their twenty billion dollars or their hundred dollars or whatever it is out the door really fast and by that i mean months one last quick comment on that i don't think it's necessary that the checks arrive in the building starts in order to get twenty billion dollars of economic stimulus if you promised me the four months from now there would be money made available to me to do something on my home i could start working on that home today with the people to economy which is one of the issues with an economic stimulus package there are ways if you can identify projects that are ready and the spending plans are they could influence the economy friends from washington that we could spent this a lot more wisely and i think what i had a better stimulus effect i will guarantee you that i can i can show you communities cities that have wastewater treatment facilities and water there waiting for their match from the federal government stop and within four weeks they could be spending money let's really because they've got things ready to go highways that are ready to be built and so forth that we just don't have the money for i think we could have had a much more effective stimulus plan quite frankly that's why i voted against it so anyway it's an interesting discussion we're going to have but it is it is one that is vital to the future of this country that we have because if we're going to if we're going to have the infrastructure for the next generation and if we're going to keep america on the leading edge of the economies of this world we had better start investing in our infrastructure and it's one we're going to have to sell the american public and we're going to have take some some political courage to do it so i appreciate it i'm sure that we will be calling you and talking to you substantially in the next in the near future about about this is congressman blumenauer and i were just talking about we plan on making this one of our highest priorities in the next congress so based on their highest needs scenario and we're really trying to work to get beneath those numbers at this point i do not usually go ahead and say that what we're looking for is what is the support for that two hundred twenty five billion and the reason the figures that i presented to you this morning differ from those include that it's not clear whether the investments proposed were economically justifiable or were sort of held to that standard and also it's not clear if the opportunity cost of capital that is when you put a dollar into this project it means that you either have to pay interest if you want to think about that way or you're foregoing opportunity to invest in something else was fully improve the allocated budget the budget system for allocating capital well again as was earlier discussed i do think that the there are things that can be done without moving to a full capital budget to better identify and classify capital investments and to give some structure and rigor to the process of deciding both on the aggregate amount and on the specific projects with regard to the aggregate amount as i've already said there does appear to be additional capital spending that would be required to maintain current services and that would be economically beneficial in the sense of under a larger benefits and costs to the extent and i'd also say i think that there are significant things that we can do to  offset those costs through some of the pricing mechanisms that we discussed and also through better management of the infrastructure that we already own including federal buildings and property and other other capital assets that we already currently own and i think arguably we're not doing a terrific job managing i would add that another benefit would be that it would bring together all of the various investment expenses and hopefully agreement on what we consider to be  investment we've talked a lot about transportation doctor or as i just mentioned federal building we've talked about human capital are those part of the investment component or not and i think it would be helpful as capital budgeting that we put out this morning do we do have a section on for example creating a new separate inforce macapp under a possible new statutory pay as you go rule for capital spending and other things that you can do along the lines that you seem to have been suggesting i would just conclude with that i think this is a good opening discussion of what we want from the terms of our goals what federal role should be what are we trying to achieve a lot of our programs have been they were developed in the mid one nine hundred do they fit with the twenty first century and i think this will start looking at investment in total it will help us in those decisions as to do these programs still work what do we need in the sure we definitely need more investment but how do we want to go about that and get the greatest return on that investment point where we will definitely continue