U.S. Transit Spending Key to Boosting Manufacturing Economy

by Amanda Peterka, for E&E News (10/20/2010)

Increased investment in public transit and intercity and high-speed rail would boost a lagging U.S. manufacturing sector and reduce greenhouse gas emissions and air pollution, according to a report released today by a group of labor, business, environmental and community leaders.

The Apollo Alliance is urging the federal government to invest $30 billion a year in public transit and $10 billion a year in high-speed rail to create 3.7 million jobs within six years, the group estimates in its Transportation Manufacturing Action Plan. More than 600,000 jobs would be in the manufacturing sector, the report says, as more investment in transit would create the need for more homegrown transit vehicles, track and supporting equipment.

“Investments in public transit done correctly are a critical piece of much-needed comprehensive national strategy to rebuild America’s manufacturing sector and middle class,” the alliance’s executive director, Cathy Calfo, told reporters in a conference call. The report is based on research conducted by the Economic Policy Institute, Duke University, Northeastern University, the Worldwatch Institute, and business and labor leaders. The Apollo Alliance also found that since the last reauthorization of the U.S. transportation-funding law in 2003, more than $10 billion have gone overseas toward purchasing those vehicles, tracks and equipment.

“Because we’ve had a deindustrialization over the last 25 years, a lot of the parts that we used to make in America are no longer made in America,” said Leo Gerard, president of United Steelworkers International.

The alliance recommends creating more incentives for public transit by creating a fund for infrastructure projects and expanding the Transportation Infrastructure Finance and Innovation Act of 1998, which provides federal credit assistance to surface transportation projects of national and regional significance.

Federal competitive grants must also be expanded, the report says. The stimulus law, the American Recovery and Reinvestment Act of 2009, created two grant programs for transportation projects, but demand for those grants was significantly higher than the amount allotted. The report says the Department of Transportation received 1,500 proposals requesting $58 billion but awarded just over $1.5 billion.

The stimulus also spent $8 billion for planning and development of a high-speed rail system, but according to Apollo, more than that is needed annually. Also needed, the alliance said, is a longterm plan for a high-speed rail system to give U.S. manufacturers a reason to make steel for such a system.

“We hear a lot of rhetoric about deficits and whatnot,” Gerard said. “The best way to eliminate the deficit is to put people back to work.”

Sen. Sherrod Brown (D-Ohio) said the United States was at a “critical moment in the public policy debate” to boost manufacturing, adding that Obama administration’s efforts in that realm have been stymied by Republican filibusters.

“It’s clear that we need to move faster than we have,” Brown said on the conference call from Ohio.

Brown promises legislation

The administration is expected to introduce its proposal for the next six-year transportation-bill reauthorization in February and has expressed an interest in promoting public transportation.

The U.S. challenge, Brown said, is to create domestic supply chains to serve transit and infrastructure. He said the country is “clearly at risk” if it fails to develop a strong manufacturing strategy.

Brown said that he would introduce legislation next month that would provide incentives for purchasing transit vehicles with domestic-materials content of more than 60 percent. The bill would also include the creation of a website that lists “Buy American” procedures and would create partnerships that would conduct scouting to see where there are gaps in U.S. manufacturing.

The Apollo report highlights the U.S. streetcar industry as an example of what needs to happen in other transportation sectors.

Last year, United Streetcar LLC of Portland, Ore., unveiled the first streetcar built in the country in almost 60 years. The car was approximately 70 percent U.S.-made, the report says, and with a $2.4 million grant from the Federal Transit Administration for research and development, it will soon be 90 percent U.S.-made, according to Chandra Brown, president of United Streetcar.

“We have the workers; we have the skill force,” Brown said. “We’ve done it with the streetcar, and we can do it with any other product, as well.”

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