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Q&A: Ten Minutes With Pennsylvania Governor Rendell

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As President Obama prepares to unveil a proposed jobs bill, a follow-up to the American Recovery and Reinvestment Act, Pennsylvania Gov. Edward Rendell (D), who, with California Gov. Arnold Schwarzenegger [R] and New York City Mayor Michael Bloomberg(I), co-chairs the pro-infrastructure group Building America's Future, is seeking to see the White House boost the proposal's public works funding to $100 billion.

Pennsylvania Gov. Edward Rendell
AP Photo/Mel Evans
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In a Dec. 7 interview with ENR in Bloomberg's Washington office, Rendell proposed to obtain the additional infrastructure money through a transfer to the Highway Trust Fund from the general fund. It would in effect be an early installment of the eventual multi-year successor to the current highway-transit authorization measure, SAFETEA-LU. The general fund payment would be reimbursed when the reauthorization is enacted. Rendell also is pushing hard to see the jobs bill include an infrastructure bank plan.

An edited version of the interview follows:

What brings you to Washington, Governor?

[BAF] thought it was very very important to try to influence the jobs bill....Really what BAF's main thrust is, we think that there needs to be a long-term significant infrastructure revitalization and build-out bill for the country. And I think that's, in my judgment, a decade-long project....

[Besides reauthorizing SAFETEA-LU ] it includes much more than just transportation. It includes water and wastewater, it includes school construction, it includes dams and levees, it includes smart grid and energy projects.

We want to be heard and we want the [policy] reform agenda to be encompassed in that long-term bill. But the short-term bill has a great capacity to create jobs and we believe infrastructure is the best way to create jobs in the sectors that have been most hard hit during the recession--construction and manufacturing.....And we believe that infrastructure can help bolster those sectors dramatically."

Our message to both the Congress and the White House has been: Make sure that there's substantial infrastructure spending in there.

The first question that everyone asks is: Well, if we do it, can the infrastructure dollars be spent quickly enough to have an impact?

[He cites the recent AASHTO/APTA report that nearly $70 billion in projects are ready to go.] But that was just transportation. If you include water and wastewater and school construction, then we're easily at the $100-billion mark.

So that's number one. Number two: Is infrastructure spending really that impactful to the economy? And I think the answer to that is: absolutely, yes.

[Rendell says that of Pennsylvania's slightly more than $1 billion in ARRA transportation funding, $850 million is under contract and $650 million under construction. That has produced 6,400 direct, on-jobsite jobs, plus 2,200 from materials producers, in industries such as steel, concrete and asphalt, he says.]

So does it have an impact? You bet it does. It has the direct impact on the construction site and the indirect impact back in the factories.

On the [President's] announcement tomorrow [Dec. 8], any insight on how much money they're thinking about? There's a report of $70 billion.

The reason we're here is to try to drive that number up...As I've said I think my preference would be $100 billion. I think we could do that, although $70 billion would not be anything we'd sneer at.

Obviously most of the reform agenda...has to wait for the reauthorization of SAFETEA-LU. But the one reform item that we're pushing hard with the President and the Congress to adopt is the infrastructure bank. One, because it is a reform and the public wants reform. Two, because it'll allow us to leverage private-sector investment and turn that $70 or 100 billion into much more.

Isn't the private sector kind of still sitting on the sidelines in general?

I think the private sector is waiting for appropriate vehicles to invest in. ...That's the feedback we're getting from Wall Street. Infrastructure is a pretty safe investment as long as there's a guaranteed return. And toll roads have a guaranteed return. State availability payments are guaranteed return...So we think that the private sector is absolutely waiting and ready to go.

So are you meeting today, or have you met today with White House people?

We met with White House people all last week. As I said, I met with the President on Friday [Dec. 4]. And I'm talking to Senator [Richard] Durbin [D-Ill.] in a few minutes.

And remember, the biggest hangup to all this is: How are you going to fund it, right? How do you fund the $70 billion or $100 billion for infrastructure? What we're suggesting is that we have an inter-fund loan from the general fund to the [Highway] Trust Fund with the explicit language that that loan gets repaid when SAFETEA-LU gets authorized.

So let's say for the sake of argument...it's $100 billion for infrastructure. What we're saying is that: Assume SAFETEA-LU is reauthorized at $450 [billion], that $100 [billion] of that will already have been subsumed by this [jobs bill] so there will really be $350 [billion] left.

The front-loading concept.

BAF is endorsing that. We believe Sen. Durbin has it exactly right. [ENR note: Durbin has floated a front-loading concept for the SAFETEA-LU successor.] And politically that's a good solution because it will be paid for eventually. So it won't add to the federal deficit, on the one hand. On the other hand, no one has to cast a revenue vote.

On raising the gas tax. And it's similar to the short-term bailouts that they've done [for the Highway Trust Fund], though those didn't have to be repaid.

Absolutely.

Just to be clear about what you're saying--trying to bump the number up to $100 billion--all for infrastructure? Is that what you're saying?

Yes. All for infrastructure, because remember if you take the AASHTO report, it's $47 billion for roads and highways, $70 [for transportation] altogether. But there's no money for water and wastewater. And water and wastewater is important both substantively and politically because states like North Dakota don't have a lot of transportation projects, let's say, but they have a lot of water and wastewater projects. And [White House Chief of Staff] Rahm [Emanuel] stressed that to us when we talked and I think that's going to be a huge...part of what they do."

But you can't overemphasize the importance of the [infrastructure] bank, too, because there's got to be some tip of the hat to reformers.

The House is talking about paying for [the new jobs bill] with [TARP] Troubled Asset Relief Program money, though. That's what the Speaker said last week.

There are a lot of demands for the TARP money.

Any views on a six-month highway extension? They have to do something by [Dec. 18], a week from Friday.

I think a year makes more sense, simply because a year gets us beyond the 2010 elections and it's more likely at that point we'll be ready to do something significant. And I also think we need time. As I said to some of the reformers, look...let's say this jobs bill gets done in January. That will give us February through October to work on a really comprehensive reform highway bill. That can't be done in just a few months.

 

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