July 16, 2019

Chair DeFazio Statement from Hearing on Capital Investment Grants

Washington, D.C. — The following are opening remarks, as prepared for delivery, from Chair of the House Committee on Transportation and Infrastructure Peter DeFazio (D-OR) during today’s hearing titled: “Oversight of the Federal Transit Administration’s Implementation of the Capital Investment Grant Program.”

Chair DeFazio:

Since the election in 2016, I have been cautiously optimistic that the President and Congress could really work together and invest in the rebuilding of America. President Trump was clear in his public statements that he wanted to be the “Infrastructure President.” I remain hopeful that this is still possible. I stand ready to work with anyone who is serious about investing in our infrastructure.

But my optimism took a blow with the President’s first budget request to Congress. The Administration’s FY 2018 request slashed infrastructure investment, most notably the effective elimination of new transit investments under the Capital Investment Grant (CIG) program. The President proposed to slash over a billion dollars from the program and fund only projects that were already under construction. Dozens of projects in the planning phase were on the chopping block.

Congress responded by appropriating a record amount of CIG funds, over $2.6 billion, and directing the Federal Transit Administration (FTA) to run the CIG program as current law requires. This was repeated in 2019 - another budget request slashing investment in transit projects by the administration and Congress responding by appropriating $2.5 billion to the CIG program.

Despite clear direction from Congress, FTA asserted that the President’s Budget Request was administration policy, and they refused to approve CIG projects that had been moving through the approval process for years. This unlawful action carried on for most of 2017, save for a few projects that were too far along to refuse.

A President’s annual budget request is nothing more than a request for Congress to consider. It cannot supersede the law or the congressional power of the purse. FTA began violating the law the first day they decided to ignore the CIG program.

I have read your testimony, Acting Administrator Williams. You are clearly trying to paint the picture that the administration’s refusal to initially run the CIG program had no impact. This testimony cherry picks a few project comparisons to argue everything is fine. Unfortunately, that is not true.

Earlier this year, Ranking Member Graves and I sent a bipartisan letter to the FTA and dozens of transit agencies seeking “data that will allow us to conduct a quantitative analysis of the CIG program and its operations under the FAST Act.”  I am releasing the results of that analysis today.

First, using data supplied by FTA, staff found that the number of days needed for project approval more than doubled under this administration. These delays affected projects regardless of their size, indicating that the delays had nothing to do with the complexity of projects.

As you can see on the screen, the average number of days to get a New Start project through the final phase grew to 391 days. Small Start projects averaged 243 days. This data covers the entire period of the FAST Act and represents a fair and accurate look at the impact the Trump Administration has had on transit projects.

Second, staff found that FTA actions since 2017 have resulted in at least $845 million in extra costs for transit agencies. FTA’s changes to the Risk Assessment process added $650 million to total project costs, and FTA’s delays inflicted on the approval process caused $195 million in additional project costs. These additional costs were generally covered by local governments, forcing them to scramble to pay for federal inaction. These unnecessary costs could have instead funded several more transit projects.

Third, staff found the CIG cost share for New Starts projects has shrunk dramatically. It is clear that transit agencies have felt pressured by FTA staff to seek lower CIG shares in order to be approved for a CIG grant, in contravention of the statute.

On the screen, you can see the data demonstrates the effect of this pressure; the CIG cost share for New Start projects has dropped over 10 percent in the last two years to below 40 percent. This is below the arbitrary 40 percent cost share cap that FTA has unofficially communicated to transit agencies. This unofficial policy is directly contrary to 49 U.S.C. Section 5309(l)(5) and the FY 2019 Omnibus Appropriations Act, which combined essentially say FTA is not authorized to require a local match for a project that is more than 49 percent of the project cost.

Fourth, staff found that FTA has delayed the use of streamlining tools for CIG transit projects. Approvals for a Letter of No Prejudice (LONP) took 44 percent longer than under the previous administration.

These letters allow work to begin before final approval on the most time sensitive components of the project. LONPs can lead to significant cost savings and may reduce the potential for schedule delays later in the project. In fact, the Committee has heard from multiple transit agencies desperate for a LONP because of the cost savings they afford. Given the importance this administration has placed on streamlining project approvals, expediting LONPs should have been a priority.

I hope these findings, and the discussion today, mark the beginning of a new page, where FTA, the Department of Transportation, and the White House drop their hostility towards transit and follow the law. We should be working together to improve transportation options for all Americans, not making it more difficult.

Chair DeFazio statement as delivered can be found here.