Lankford Warns Biden Infrastructure Plan Will Add to Trillion-dollar Debt

CLICK HERE to watch Lankford’s Q&A on YouTube.

WASHINGTON, DC – Senator James Lankford (R-OK) today participated in a Senate Finance Committee hearing entitled, “Funding and Financing Options to Bolster American Infrastructure.” Lankford’s questions to the panel of witnesses focused on areas Oklahomans agree are actual infrastructure including transportation needs and how to pay for  them, federal regulations impacting states and local governments and how they increase construction costs and complexity, and the most cost-effective deployment options for rural broadband.

President Biden and congressional Democrats continue to insist that almost anything is classified as federal infrastructure, but Lankford continues to warn Oklahomans about the massive debt that will be needed to pay for President Biden’s progressive agenda where it seems the sky’s the limit on what may be included.

Today’s panel included Dr. Joseph Kile, Director Of Microeconomic Analysis at the Congressional Budget Office (CBO); Ms. Victoria Sheehan, President of the American Association of State Highway and Transportation Officials (AASHTO); Ms. Heather Buch, a Subcommittee Chair at the Transportation Steering Committee under the National Association of Counties; and Ms. Shirley Bloomfield, the Chief Executive Officer at the NTCA – The Rural Broadband Association.

Excerpts

On the dangers of debt spending on infrastructure

Lankford: You had mentioned that with general transfers into infrastructure spending or from things that have a fake pay-for from general transfer, that that has the potential to actually slow our economy when typically infrastructure construction increases our economy. Adding additional debt, adding just the transfers without pay-fors has the potential to slow that. Can you go into greater detail?

Kile: So any investment in infrastructure is likely to build the capital stock, and if those are well selected projects, they would tend to grow the economy as well. As the government takes on more debt to general revenue or general applications, that is debt that needs to be serviced in the future. So far, interest rates have been low, and the question is whether and how long that will be the case.

Lankford: Because that could have the potential then, once interest rates continue to climb, and the debt continues to climb, so you seem to be affirming having something that’s paid for is very important rather than just a general transfer and something that is not paid for, or having a pay-for that is not legitimate.

Kile: Well, so the general transfers obviously re partly funded by debt, and increases in debt need to be serviced, so yes.

On electric vehicles and ensuring they support road maintenance costs

Lankford: There’s been some conversation about electric vehicles. Currently electric vehicles get a tax credit for the purchase of those vehicles, and then they also drive on the roads for free.  Now they’re lighter weight vehicles typically, and so they’re like other passenger cars as far as the damage they do to the roads. But the passenger cars do pay a fee to be able to be on the road. Electric vehicles, I think you’ve quoted about $200 million in income, which is no small amount, if they were just to be able to pay their fair share. Electric vehicles are predominantly owned by the one percent, wealthiest Americans because they’re incredibly expensive vehicles. One of the perks for being one of those wealthy Americans is also you get to drive the road and not pay a user fee, if you buy an electric vehicle. Do you anticipate over the next several years that user fee would grow with the use of electric vehicles, or do you anticipate that $200 million a year that would come in, if electric vehicles paid the same as gas vehicles to be able to be on the road, do you think there’s an increasing amount of electric vehicles coming and so that amount of $200 million would increase?

Kile: So I think over time that probably would increase.  Right now, electric vehicles account for about one percent of the vehicle fleet, and about two percent of sales.  And as they grow as a share of the vehicle fleet, any tax or fee applied to them would grow…

On the effect of federal regulations on construction costs

Lankford: Are there regulatory issues that also increase the cost of construction as you’re tracking that as well,  that we should also address? While we’re dealing with additional ways to pay for things, are there ways to also decrease the cost that would have an effect on you?

Sheehan: For many years, Senator, AASHTO has been advocating for further streamlining of the project development process. It is challenging to navigate all of the federal regulations and to deliver projects in a timely fashion, and so we would welcome any opportunities to continue looking at ways to shorten the design phase of projects so that we can get them into construction and make those improvements that communities and stakeholders are eagerly awaiting.

Lankford: The categorical exclusion issue of giving states more flexibility with those dollars, is that something helpful to you in the past or is that something that would be helpful to you in the future?

Sheehan: It’s very helpful to have some flexibility and to allow state DOTs, where it’s appropriate, to take on more direct responsibility so that we have that ownership over the environmental process.

On the best, most cost-effective approach for rural broadband expansion

Lankford: We have some areas that are very remote, that it’s exceptionally expensive to be able to reach some of those areas. Would you encourage the prioritization of some of the highest-cost areas that they would get satellite connection in those areas and that we would get fiber and do priority for where we have more folks in a rural area? For instance, we may have a rural community with 50 people in it that we could get fiber to, but then there’s the last three or four people ten miles out of town that may cost $10 million to get fiber to those. Would you encourage a blending of those to get coverage?

Bloomfield: I will be very frank with you. I do think that every tool in the tool box has to be put on the table when we talk about connecting all Americans. I do think it’s really important to think about making the wisest use of federal dollars. I would also say that people jump to the fact that fiber and its cost factor, but actually using fiber is actually cheaper in the long run over many technologies, including those that are going to fuel 5G. I also think with satellite, we’ve got to really be clear about the capacity satellite will be able to offer, the upfront costs, and even line of sight…

###