State and local governments, which already face competing demands for funding to meet such vital needs as education, law enforcement, and health care, are likely to be under even more pressure as responsibility for public services devolves to them. The answer, the only remaining answer, is to look to the private sector. Greater private investment in our transportation systems is necessary if we're going to avoid gridlock on our roads, our rails, and our runways. At the same time, we need to consider appropriate means of assuring that the network operates effectively. We took the first big step towards involving the private sector this past January, when President Clinton and the Secretary announced the Partnership for Transportation Investment, better known as innovative financing.
Innovative financing is our umbrella term to cover a wide range of financial strategies.
It stems from provisions in the Intermodal Surface Transportation Efficiency Act that allow us to experiment with different ways of financing capital projects. That's critical to success, because our current system of paying for projects through grant reimbursements is outdated. A process that worked adequately in the 1950s and '60s when the federal government had enormous amounts of money for infrastructure is simply too rigid and inflexible for the cash-short 1990s. In addition to adding red tape that slows projects and increases costs, our grant system makes it incredibly difficult for states and localities to involve private investors. The innovative financing program allows us to waive those existing restrictions or requirements in many cases, and give local decision-makers greater flexibility and authority, principles that we in fact expect to bring to all of our funding programs.