REMARKS PREPARED FOR
DELIVERY
DEPUTY SECRETARY OF TRANSPORTATION MORTIMER DOWNEY
BEFORE THE
AMERICAN IRON AND STEEL INSTITUTE’S ANNUAL MEETING
NEW YORK, NEW YORK
MAY 27, 1999
Thank you, Paul, for that kind introduction. It is a pleasure to be here for your 106th annual meeting, and always a pleasure to be in New York. The institute’s role as an important player in the issues and policies that have built this nation for more than a century, is a tribute not only to the institutes’ strength but to the strength of the steel industry.
Perhaps as important as your industry’s role in shaping our transportation and infrastructure, trade and other policies is your continuing role in making life better for all Americans.
Few people stop to think about how important steel is to our economy and to their everyday lives. From the cars and trucks we drive to the infrastructure that supports them -- steel is a material we cannot live without, in wartime or peacetime.
As you know, the Clinton Administration is committed to improving the environment for current and future generations. I want to commend you for your work in making our environment cleaner. Since the early 1970s, your industry has reduced the air and water pollution you emit by well over 90 percent. I also know that steel is the most recycled material in the world at a rate of over 65 percent for the past 7 years. These are impressive accomplishments and are important contributors to meeting our responsibility to future generations.
Like steel, transportation is a vital component of our national and the global economy. Transportation-related demand contributed $905 billion to an $8.1 trillion GDP in 1997, according to our Bureau of Transportation Statistics. You know as well as any other industry -- if you cannot deliver the product to your customer when they expect and need it as you heard from Tom Stallkamp, you will not be competitive.
The point I would like to make today is that the outlook for our economy and, therefore, our ability to maintain investment in transportation infrastructure and research --f rom highways and bridges to autos, trains and ships -- is excellent. And, of course, this means that steel will continue playing a major role in building the transportation infrastructure and machinery our nation will require in the new century.
Six years ago, President Clinton and Vice President Gore put into action a bold new three-part economic strategy of cutting the deficit to help reduce interest rates and spur business investment. Today, we are reaping the benefits of that strategy:
The Transportation Equity Act for the 21st Century
Our economic strength is having a positive impact on our ability to rejuvenate and upgrade our nation’s transportation infrastructure. Achieving our goal of improving our nation’s surface transportation -- our roads, transit systems, highways and terminals -- is being done under the Transportation Equity Act for the 21st Century.
President Clinton signed this historic law about one year ago. It guarantees a record $198 billion of surface transportation investment over 6 years while protecting our commitment to an overall balanced budget. TEA-21, as it is known, expands core highway programs, includes a vast array of highway and transit programs and provides unprecedented flexibility for local and state officials to use funds for their most pressing priorities. It not only helps us rebuild the nation's infrastructure, but it also contributes to improving safety, protecting and enhancing the environment and creating new opportunities for all Americans.
While this level of federal funding is substantial, it is what we need to prepare now for a population that is growing and more mobile than ever.
TEA-21 will expand highway programs, including billions of dollars for the National Highway System (NHS), the Surface Transportation Program, and the bridge program.
For the Year 2000 alone, President Clinton has proposed a record $36 billion under TEA-21 for infrastructure investment to improve mobility. The Fiscal Year 2000 funding request includes a record $28.4 billion to maintain highways and build new roads and bridges, including $126 million to improve border crossings and trade corridors to accommodate the expanding commerce in North America today.
The states are working together with us to improve borders and transportation routes that are strategic to trade with Canada and Mexico. So, far, we have received 150 applications for more than $2.1 billion in funding.
TEA-21's predecessor, the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA), marked a turning point in surface transportation policy. With the Interstate System completed, Congress demanded that we move to a new era -- one that focuses on making our overall transportation system work effectively and intermodally. This improved system will position the United States to compete even more effectively in the global marketplace.
TEA-21 created a new program to leverage federal funds -- the Transportation Finance and Innovation (TIFIA) program -- which will provide $530 million in available funds for credit support to assist up to $10 billion in projects of national significance. TIFIA authorizes the Department to provide direct loans, lines of credit, and loan guarantees to public and private sponsors of major surface transportation projects of national significance. The program is designed to fill market gaps and leverage substantial private co-investment by providing supplemental capital.
TEA-21 and Bridges to the 21st Century
Several years ago in a State-of-the-Union address, President Clinton talked about building a bridge to the 21st Century. The ears of some in the steel industry perked up over this theme as they wondered if it meant work for them.
Whatever the President’s message meant to you or to others, the reality is that we need to build some new bridges and upgrade others if we want to enjoy continued economic growth and mobility. And, not surprisingly, the steel industry has a major interest in the bridge market.
Nearly 578,000 bridges -- or 31 percent -- of America’s bridges are structurally deficient or obsolete for today’s increased traffic congestion, according to our Federal Highway Administration (FWHA). With dedicated funding of $20.4 billion over the next six years, TEA-21 will help us build new bridges and renovate others.
High Performance Steel (HPS) -- in which DOT has invested millions of research dollars in recent years -- will make our bridges stronger and more corrosion-resistant than ever. This product, developed under a cooperative research program with the FWHA, the U.S. Navy and AISI, is now commercially available for highway bridge construction. We are proud of this success and will continue to partner with industry in transportation R&D that is in the national interest.
The City of New York alone has 2,025 bridges, and I know that a number of them -- including the Brooklyn Bridge -- are sorely in need of replacement or continuing repair. I am confident that the steel industry will be called on to supply the raw material that will be needed! And, I think you will be pleased to know that they Buy America steel provisions continue under TEA-21.
Other Modes of Transportation
In addition to bridges and highways, the steel industry is a major contributor to other modes of transportation, particularly autos, rail, and ships. DOT has been working with your industry, other Federal agencies and academia to build more efficient transportation achieving greater efficiency and minimizing congestion in our transportation network. And, we continue to consider how all of these forms of transport work together, or intermodally. Again, intermodalism is important to achieving the greatest efficiency and the least congestion in our transportation network.
As the world’s reliance on motor vehicles has grown, so have concerns about increased air pollution. With a growing number of drivers and vehicles on the road, the United States -- and the world -- will need extremely efficient automobiles to ensure future air quality.
In 1993, President Clinton signed the Partnership for a New Generation of Vehicles (PNGV), an agreement with the nation’s biggest automakers to develop a vehicle that is 3 times more fuel efficient -- at 80 mpg -- and emits almost no harmful pollutants. At the same time, the vehicles must meet both existing and anticipated safety standards.
DOT, the Department of Energy and a number of other agencies are working together with industry to develop and test these cleaner, more advanced vehicles. The steel industry is aiding this effort by investing in research to develop ultra-light steel as an option for advanced automotive use. While some jumped to the conclusion that the weight requirements of the program meant that other materials would dominate, the steel industry has been quick in responding to the need. And, we need to maintain this competition in the interest of consumers and U.S. global competitiveness.
The changes we see in our nation’s rail system should also interest the steel industry. For many years, DOT has been working with state governments, universities and industry to make high-speed rail -- with speeds that begin at 90 mph and increase up to 150 mph -- the reality it is today. High-speed rail will help to relieve congestion and protect the environment in many of our nation’s metropolitan areas.
Maglev -- or high-speed rail powered by magnetic levitation -- has the potential to provide American travelers with safe and efficient ground transportation at speeds of up to 300 mph or more. President Clinton believes that we should develop and deploy Maglev technology wherever it makes sense. Densely populated regions such as the Northeast and Southern California would be prime candidates for Maglev.
To support the President’s plan, our Secretary of Transportation Rodney Slater announced $12.2 million in grants to determine the feasibility of deploying Maglev in communities throughout the United States.
But, we are not waiting for Maglev to deploy high-speed rail. By the end of 1999, Amtrak will begin high-speed rail service between New York City and Boston and New York and Washington, DC. The new service will make it possible to travel between New York and Washington or New York and Boston in less than 3 hours.
Passenger comforts on these new trains will be unmatched. Unlike an airplane, you will be able to plug in your laptop, use your cell phone, and stroll the aisles or sit in comfort without someone virtually in your lap.
For New Yorkers and travelers all along the northeast corridor, high-speed rail will reduce trip times and increase access to all cities along the corridor. We believe it will be the mode of choice and the preferred way to travel in the near future in many parts of the United States. And, of course, the locomotives needed will be made primarily of steel.
Until now, hundreds of smaller U.S. railroads have had difficulty finding capital to fund equipment and infrastructure improvements to handle the new generation of freight cars. There is concern whether the new rail cars, which weigh 286,000 pounds and carry 11 percent more cargo, can move safely over aging tracks.
Earlier this month, DOT announced a new program -- the Railroad Rehabilitation and Improvement Financing Program (RRIF) -- that will make $1 billion in credit assistance available to public or private sponsors of intermodal and rail capital improvement projects. It is one more example of the broad and flexible funding opportunities available through TEA-21 and another potential source of demand for steel product.
Another area we are working to update for the 21st century is shipbuilding. Our National Shipbuilding Initiative (NSI) is focused on advanced ship designs and shipyard modernization to make our yards world-class competitors.
Our shipbuilding initiative will demonstrate a commitment to fuel efficiency and environmental protection. In addition to an aggressive program to develop maritime fuel cell technology with other agencies, we have financed numerous shipbuilding projects under Title XI of the Merchant Marine Act. Under this program, builders can secure loans in the private sector with repayment guaranteed by the federal government. This financing assistance is helping to strengthen our nation’s maritime industry.
The Future and Steel
With all of the transportation sectors affecting steel changing and growing, the outlook is certainly positive for your industry. My colleagues and I at the Department of Transportation look forward to working with you to make our transportation system as safe and efficient as possible for the new century.
I couldn’t help noticing on the agenda for this meeting that there is an entire session devoted to the question of whether steel manufacturing will thrive in an electronic economy.
Many people talk about the information age and how the Internet is changing our lives. This is certainly true, but two points I want to leave with you today are these: No matter how impressive and effective the Internet is, without a transportation system to support it, the digital economy cannot move goods around the nation or the world. And, without a steel industry, we could not build the transportation system we currently have or the one we will need in the new century!
While you might buy a car on-line, you cannot download it -- you still need roads and bridges to bring it home. The Internet may change the way we do business to an extent, but the United States and the world will still need steel and basic industries and roads and bridges to function. And I hope our partnership to produce them will remain strong.
Thank you.
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