Middle Class Economics

Floor Speech

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Mr. GARAMENDI. Mr. Speaker, about a month and a half ago, we heard the President speak to us about the economy, about his goals for America. He labeled his speech ``middle class economics,'' and tonight, I want to pick this issue up once again.

We are here most every week discussing this issue, although last time we were up here, we took up another important issue, Alzheimer's. But I want to come back to middle class economics, why it is important. Well, basically, it is important because it drives our economy.

The great majority of Americans want to be in the middle class, and most of them are. Unfortunately, we have seen the decline of the middle class, their ability to own a home, a car, to provide for their family--but if the middle class is healthy, it will drive our economy, and it will create jobs, so the focus on the middle class becomes very, very important.

We can do this by strengthening their wages. If they are able to earn more money, then they will buy the home, the car, and the economy will grow, and other people will be able to enjoy the fruits of our economy.

I am going to focus on infrastructure in a moment, but I just want to skip that over and go down to the other things.

Health care--who among us doesn't want to have a good health care program, so that if we get sick or injured, we will be able to get to a doctor, get to a hospital, get the care we need to get back on our feet, and to once again be productive or, in our old age, be able to enjoy our retirement?

So the affordable health care becomes really important, and here, we have the Affordable Health Care Act as part of that.

Finally, we need to develop policies to grow the middle class, and one such policy is infrastructure, which is the focus of tonight's discussion. I want to just stay with this infrastructure issue for a few moments, and then I am going to invite my colleague from Minnesota, Rick Nolan, to join us here.

Let me talk about this also. The other theme, in addition to the middle class economics, is the Make It In America theme that we have been talking about for 4 years now. Trade, taxes, energy, labor, education, research, and infrastructure, these are the elements that we fold into our Make It In America agenda.

We talk about trade. There is going to be a lot of discussion about that here in Congress over the next several months as the Trans-Pacific Partnership comes up. Taxes, which we will pick up with the infrastructure issue in a few moments--energy is also part of the infrastructure issue.

Anyway, Make It In America means bringing the jobs back home, employing Americans, doing the things that we need to do in this country, whether it is the health care sector; the infrastructure; building the roads, the bridges, and the like; or education. That is the Make It In America agenda, and it is part of the middle class economics. In fact, it is the key to it.

Why is infrastructure important? Well, there are certain things like this, a collapsed bridge. This is on Interstate 5 in the State of Washington. This is a bridge near the Canadian border. About 3 years ago, it went into the river, collapsed--one of about 163,000 deficient bridges here in the United States.

So, yep, we have got a problem. Are we going to be able to address this problem? Well, we had better.

Actually, it is 156,000. I was a little bit overanxious there.

The American Society of Civil Engineers, who build these things, have graded the American infrastructure, and I just want to go through it: aviation, our airports, which I believe the Vice President, in referring to LaGuardia, said even the developing countries have a better airport than LaGuardia in New York City, aviation, a D; bridges, C-plus--as I said, 156,000 deficient; dams, D; running water, D; energy, D-plus; hazardous waste, D; inland waterways, D; levees, to protect us from floods, D; our ports, a C; public parks and recreation, C; our railroads, C-plus--whoa, a C-plus; our highways, a D; our schools, that is where our kids are, a D; solid waste, we are doing pretty well, that is a B; our transit systems, D; wastewater, a D.

Incidentally, in California, we are in the midst of a major drought, and it is perfectly clear that the wastewater systems are inadequate. If we were to also fund the recycling programs which could be connected to the wastewater, we could, in southern California, over the next half decade, create a million acre feet of new water as we recycle the water from the fifth biggest river on the west coast of the Western Hemisphere, the sanitation plants in southern California.

So we have got some work out ahead of us.

Let me bring this home before I invite my colleague from the great State of Minnesota to join us on this issue.

Earlier today, I was reading an article in The Sacramento Bee about the transportation systems in Sacramento. Let me just share some of these thoughts with you.

In Sacramento, the average commuter spends 32 hours each year stuck in traffic. This amounts to $669 of lost productivity. That is literally wages that could have been earned if they weren't stuck in traffic. For all of the commuters in the Sacramento area, which I represent, that is $834 million of commuting time. For the truckers in the area that are trying to pass through Sacramento on Interstate 5, on Interstate 80 or Highway 50, it is $199 million of lost productivity.

There is another alternative. Down in Riverside, a southern California city that I once represented when I was lieutenant governor, they want to build a 13-mile streetcar system in the city of Riverside. It would cost about $300 million. The economic analysis that was done on that indicates that if they were to do it, there would be a 4-to-1 return on investment. Now, you tell me which investment banker on Wall Street wouldn't want to have a 4-to-1 return on their investment. Well, the city of Riverside could have a 4-to-1 return on their investment of $300 million to build that 13-mile streetcar section. That is property values and economic development.

This morning, The Wall Street Journal published an article in which the American Society of Civil Engineers was quoted that between 2012 and 2022, in America, because of the insufficient infrastructure--and remember, I just read you their GPA, mostly Ds--lost sales, $1 trillion of lost sales. For the United States, the delays will cost $3.1 trillion. And to bring it home to a single company--a big company but, nonetheless, just one company--United Parcel Service, UPS, all of those big brown trucks that are out there, $105 million in lost revenue.

There is a solution. The President has put forward to us, the Members of Congress, a 6-year, $478 billion transportation plan that will be paid for--fully paid for with the current gasoline and diesel tax not increased, keep it the same--and going out to those American corporations that are stiffing the American taxpayer by hiding their profits overseas. The President says: Bring those profits home; pay your fair share of the taxes. So there is a fully paid-for proposal before us here in the House of Representatives for a $478 billion, 6-year transportation program.

Now, I think our Speaker represents an area in Ohio near Kentucky, and I believe there is a bridge in that area called the Brent Spence Bridge. It crosses the Ohio River between Kentucky and Ohio. It was built for 80,000 cars a day, and now there are over 200,000 cars a day that pass over that bridge--or try to pass over that bridge--creating a monumental traffic jam and slowing down the entire economy in that region.

By the way, don't ever walk or drive underneath the bridge because the concrete in the bridge is falling off. They have a nice little safety net over the road beneath it, so perhaps, therefore, you won't be hit by a falling piece of concrete.

So the issue for us, the Representatives of the American public, is: Are we willing to put together a full transportation program so that these kinds of bridge collapses are pictures of yesterday, not the pictures of tomorrow's future?

I would like to have the gentleman from Minnesota, Mr. Rick Nolan, join us now. If you would come on down and join us, perhaps here on the floor, and take one of the microphones.

Mr. Nolan, you have a fascinating history here in the House of Representatives. You were here in the early seventies as a Representative and then decided to go back to Minnesota and build a business, a lumber manufacturing, a timber manufacturing business. It was very successful. Then you came back to straighten us out, bringing all of that history to us.

Welcome, Mr. Nolan. Thank you so very much for joining us this evening as we talk about transportation and infrastructure in America.

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Mr. GARAMENDI. Well, you had an opportunity to learn about the private sector and learn about the necessity of transportation; and I think your business was dependent on that, both to get the materials to your lumber mill and then to export.

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Mr. GARAMENDI. Well, there is no doubt about the importance of it. If you want to build good middle class jobs, a lot of those jobs are in the infrastructure. It may be a hardhat job out there putting up the steel and the concrete, the ironworkers or the cement masons or the operators of the heavy equipment. All of those are really good middle class jobs, no doubt about it, wherever they happen to be across the Nation. But also, in the back office, somebody has to do the accounting; somebody has to do the design work--the architects, the draftsmen and -women that are involved.

So these jobs permeate the entire economy. And it is absolutely true that if we can fund--that is, pass--a 6-year, robust transportation bill that is fully paid for, Americans would go to work in middle class jobs. That is the first effect: people will have jobs. And in building the infrastructure, you then lay the foundation for future economic growth.

You have seen this in your area. I was thinking about your call for the family to be able to enjoy the fruits of life. And I am thinking about you have got some heavy-duty hunting country up in your area. You are out in the backwoods of Minnesota, if I recall.

Mr. NOLAN. I am. My nearest neighbor is a couple of miles away.

Mr. GARAMENDI. And in between are bear, deer, and fish.

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Mr. GARAMENDI. Well, there is no doubt that if we were to pass--well, we don't have a choice. If we don't pass a bill in the next 2 months, 2 1/2 months, all public works, transportation programs, will come to a screeching halt. There will be no more Federal money, and it will simply stop. So we have got work to do. As you say, if the committee could have its way, we could put together a good bill. There has been a long history here of the transportation bill being a bipartisan bill. We can do that.

If we don't--let me just go back through this. I get stacks and stacks of paper, and this one caught my eye. It is entitled, ``Infrastructure Investment Creates American Jobs.'' I said: Well, that is kind of a pretty good cover there. It has roads, bridges, ports, and so forth. It is the Duke Center on Globalization, Governance & Competitiveness. So it is the Duke University. Here they say:

Old and broken transportation infrastructure makes the United States less competitive than 15 of our major trading partners and makes manufacturers less efficient in getting goods to market.

Underinvestment costs the United States over 900,000 jobs, including more than 97,000 American manufacturing jobs.

Maximizing American-made materials when rebuilding infrastructure has the potential to create even more jobs. Relying on American-made inputs can also mitigate safety concerns related to large-scale outsourcing.

I am with you, Duke--Duke University. I am from the west coast, and I have problems with some of these east coast athletic teams, but, hey, I am with them on this one. Infrastructure creates American jobs.

This is something that I have used over and over again. This is from Mark Zandi, chief economist at Moody's Analytics. He is the former economics adviser for Senator John McCain when the Senator ran for the United States Presidency. He put it this way:

For every dollar invested in infrastructure investment, $1.57 is pumped back into the American economy with well paying, middle class American jobs.

This is just really critically important. The question for us, and the reason we are here on the floor and the reason we are talking about this issue of middle class economics and now transportation, is that we are up against another timeline here. We have got the transportation cliff, we have got a bridge that is collapsed, and the question is: Will this Congress provide a transportation bill that can bridge this collapsed bridge and rebuild it? I think we can. I know we must.

My fear--my fear--Mr. Nolan, is that we have become really, really good at something we used to play when I was a kid, and it is called kick the can. We have become really good at kicking the can down the road rather than just coming to grips with the reality that we have to have a long-term transportation bill.

There are many reasons for it. These are long-term projects, and over the last I guess almost 7 years now we have not had a long-term bill. The longest one has been a 2-year bill that passed 2 years ago, and that doesn't give the planners enough time to plan these long-term projects or the assurance that the money, the Federal money, will be there; $478 billion, 6 years, fully paid for, doesn't increase the gasoline or diesel tax but requires American corporations that have run away from their obligation to this Nation by hiding their profits overseas to bring those profits back and tax them accordingly.

That is the President's plan. It is all there for us. Can we do it? I don't think we have any choice. I think we have to do it, Mr. Nolan. I don't know how you feel about it from Minnesota, but I know in California that we are in the midst of a major drought, and this is going to be the fourth year of a major drought in California, and it has been at least 30 years since there have been any major water infrastructure investments in California. Our economy in California is paying dearly for it. About one-third of the rice fields in my district are fallow. If you go further south into the San Joaquin Valley it is probably about the same percentage. Cantaloupes, cotton, and other kinds of row crops, tomatoes, are not being planted.

We have to have in California investments in our water infrastructure. One of the things that my Republican colleague--and Mr. Nolan, you spoke about bipartisanship--my Republican colleague from my area, Mr. LaMalfa, he and I are going to introduce tomorrow a piece of legislation to build a very large, offstream reservoir called Sites Reservoir. It is about 1.8, 1.9 million acre-feet of water. If that had been built a decade ago, the drought would still be very difficult. There would be a lot of trouble and a lot of lost opportunity. But at least we would have a very significant amount of water available stored in that reservoir to help us along. So we are going to do that. That is a major infrastructure program, and we will see if we can participate here at the Federal level with the participation that the State of California voters have already approved, a $7.6 billion bond act in which there is money for storage, both aquifer, underground, as well as surface storage, probably including the Sites Reservoir.

So there are things we can do. And this is a piece of legislation, we will present it to the Congress and the Senate and hopefully it will move along. Mr. Nolan, I am sure that you have projects up in your area that are important, and perhaps you would like to pick up here.

Mr. NOLAN. I sure do, Mr. Garamendi. I think the fact that our bridges are falling down could not be more evidenced than in Minnesota, where we had the catastrophic collapse of the I-35 bridge, which killed a number of people and did obviously irreparable damage to their lives and many others.

Mr. GARAMENDI. This was the bridge across the Mississippi in Minneapolis?

Mr. NOLAN. Yes. Very tragic. I have got several thousand bridges in my district alone, and several hundred of them have been certified as obsolete and in disrepair, in need of repair, and, of course, there are thousands and thousands of those bridges across the country. I held three transportation hearings back in Minnesota here recently, and the unanimity of agreement on what needs to be done is really quite unique. I mean, generally, if you get 50 people in a room in Minnesota you will have at least 40, 45 opinions.

Mr. GARAMENDI. Well, in California, you would have 150 opinions if you had 50 people.

Mr. NOLAN. Well, everybody agreed, as you pointed out, we need a long-term plan so that you can plan accordingly, and then do it responsibly in the most efficient and economical way. Everyone came up and said that we need it for our economic growth and our business, and they understand that, as you were pointing out earlier, good infrastructure is the foundation, it is the foundation for every single successful economy in this world. I have said to people on occasion: If you don't want to pay any taxes, you can move to Zaire. I think they have about 2 miles of roads and no taxes, but you had better bring a little army with you to protect you.

So the other thing, of course--it has become real apparent--is the congestion. You must see that. We are seeing it in Minnesota. People are spending endless hours sitting in their cars trying to get to and from work, time that they could have used to sleep in an extra hour, get home in time for dinner with their family.

Mr. GARAMENDI. Work with the kids on their homework.

Mr. NOLAN. Of course, you mentioned the collapse of the bridge. The other thing they want to see is some bipartisanship. I would like to remind our colleagues, as well as the folks back home, because you and I were there, and we were part of a couple of the few instances where, in the last session of Congress, the process was allowed to work. It was cumbersome, and it was contentious, but at the end of the day, we came together, and we passed a good, bipartisan farm bill. You and I were part of that.

Mr. GARAMENDI. You were on the committee.

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Mr. GARAMENDI. There is no doubt about it--you can ruin your car real fast. That 5-mile road was a county road, I assume, it was not your personal road?

Mr. NOLAN. No, no. It was not my personal road. No, no, no. It was a combination county and township. But it helped to have been on the township planning committee.

Mr. GARAMENDI. Whatever it took, you got it done.

A couple of things that I think are also important as we go about this infrastructure, and that is: Who is going to provide the material? I want to give you an example of why it is important that we honor the Buy America laws that exist today. We have had Buy America requirements in laws for almost 50 years now, and those requirements simply say that if it is our taxpayer money or your taxpayer money, then it should be used to buy American-made products and materials.

Now, out in California, we have the San Francisco Bay Bridge. This is about a--what do we have here--$3.9 billion project. Excuse me--it is not $3.9 billion; it is about $6 billion. It is $3.9 billion over budget. This project replaces the old San Francisco-Oakland Bay Bridge connecting the two cities across the bay that collapsed during the 1989 earthquake. The bridge went out to bid, and the contractor said: I can use Chinese steel, and it will be 10 percent cheaper if we use Chinese rather than American-made steel. So the State waived the Buy America requirements. They didn't use them. They went out and bought Chinese steel.

Well, they got 3,000 jobs in China and overbudget and poor material. In fact, today it is reported in the California newspapers that one of the major bolts, which is a 25-foot bolt, and I don't know, it must be several inches across, that holds down the main pier to the bridge is cracking. So we have a problem here.

Now, New York is undertaking a bridge across the Hudson River. It is called the Tappan Zee Bridge, and it is made with American steel. American steel is being used. The total cost is $3.9 billion--notice, that is the cost of the overrun in California. There are 7,728 American jobs, and it is 100 percent made in America.

When we go about this infrastructure, I want to make very, very sure that we maintain the Buy America requirements. We can do it.

I am going to put up one more placard here. This is one of my favorites. This is a brand-new 100 percent American-made electric locomotive for the Washington, D.C., to Boston Northeast corridor. About 70 to 80 of these will be made.

In the American Recovery Act--you remember the stimulus bill--somebody wrote in $700 million for Amtrak to buy new locomotives, and they said: 100 percent American-made.

General Electric looked at it, other companies looked at it, and a German company looked at this $700 million or so and 70 to 80 locomotives, 100 percent American-made, and they go: We can do that.

So Siemens, a major international German company, had a manufacturing plant in Sacramento, and they set about to make 100 percent American-made locomotives. They built double the size of their factory, hired several hundred new workers, and they went out across the United States to find all the parts.

They are now building 100 percent American-made locomotives, a major infrastructure project, great for American jobs, great for the future. This is one of the first ones that came off the lot.

Now, my final point and then I want to turn this back to my colleague from Minnesota. Today, on the east coast, Amtrak is going out to bid for 28 new high-speed train sets to travel between Washington, D.C., and Boston at maybe half again as fast as the current trains, so you can zip between the two cities--Washington, D.C., and New York--in, I don't know, 2 hours or less. They want--Amtrak--wants a waiver from the Buy America provisions, and I am saying: No way, period.

This is American taxpayer money that is going to be used. You are going to buy America, we are going to make those train sets in America, and we can do it. Yes, we can--si se puede.

We can do it. We can build these things in America and create good middle class jobs in America, just like Siemens is doing in Sacramento when they are making 100 percent American-made locomotives in Sacramento.

This is an opportunity for us as we build our infrastructure, as we put together the surface transportation plan, as we take the Water Resources Reform and Development Act. Keep in mind and always keep in place the Buy America provisions, so that your tax money is used on American-made equipment and employing Americans making those things.

I am sure this is important up in your area, as well as it is in Sacramento, California, on the edge of my district, Mr. Nolan. I know it is important to me, and I think it is important to Americans, that we use our tax money to buy American-made products that are employing Americans.

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Mr. GARAMENDI. Well, here it is, the San Francisco Bay Bridge built with Chinese steel. They built a brand-new, one of the most advanced steel mills, making one of the most advanced types of steel in China--3,000 Chinese jobs, zero American.

Then the Tappan Zee Bridge in New York, American steel--probably some of that iron ore from your district goes into making that steel.

Mr. NOLAN. Oh, it did, no doubt.

Mr. GARAMENDI. No doubt about it.

Mr. NOLAN. And do you know what, John, I found in international trade, when it comes to quality, American steel is considered to be the best quality.

Now, what is the importance of that? Well, it might be the difference between a bridge falling down or standing; it might mean the difference between a pipeline breaking and polluting a wetland versus not doing that.

There is an economic reason here, there is a reason for the middle class, there is a reason for our economy, there is a reason for safety, there is a reason for health, there is a reason for environment, there are so many good reasons to make it in America, John.

Mr. GARAMENDI. You were just singing my song there.

This Bay Bridge, why was it $3.9 billion over? Because the steel was unsatisfactory. It was low quality, it had cracks in it, it didn't meet the requirements, they had to go back and redo the welds--many, many issues. You are absolutely correct about quality, as well as about the jobs in America.

We are going to make it in America. We have an opportunity here.

Can I take up one more issue?

Mr. NOLAN. Well, I am going to depart, but I really want to thank you for this session here and bringing it to the attention of our colleagues and people all across this country that care about America, care about good-paying middle class jobs, and want to see us do what we have got to do here to come together, fix this thing, and continue the great progress that America has enjoyed.

A big part of being an American is paying it forward, and now, it is time for us to step up and do what we have to do for the next generation.

Mr. GARAMENDI. Mr. Nolan, I thank you so very much. The folks in the northern Minnesota area are blessed to have you return after a 32-year hiatus. You came back with a fire in your belly, and you are ready to go.

Mr. NOLAN. Well, I am honored and thrilled and glad to be here.

Mr. GARAMENDI. Thank you so very much for joining us this evening.

I want to bring up just one more issue, and then we will call it a night. America is blessed with a lot of energy. We have seen a resurgence of American energy here in the United States. We have seen us go from an importing Nation--we can be an exporting Nation.

One of the things that the American gas industry wants to do is to export a strategic national asset, that is our natural gas. It has allowed us to have one of the lower energy prices in the world.

That has allowed for a resurgence of manufacturing in the United States. There are other factors. Clearly, the ability to have low-priced natural gas is one of the ingredients in the resurgence of American manufacturing.

Now, the gas industry wants to import a lot of gas so they can get two or three times more for the gas overseas. I want to be really careful here, I don't want to drive up the price of natural gas, but if we are going to export this strategic national asset, then we ought to consider two other strategic issues for the United States.

One of them is the merchant marines. These are the American sailors and American ships. Our military is absolutely dependent on the merchant marines. We ship a lot of things through the air on the big C-5As and the C-17s, but it is a small percentage of what we need if we go to Iraq or any other part of the world with our military. The merchant marines have historically, from the very earliest days of this Nation, been one of the key strategic assets in the United States.

A third strategic asset is the U.S. Navy and the shipyards that build the naval ships. Those shipyards are absolutely critical. If we didn't have them, would we go to China to have them build our aircraft carriers and our submarines? I don't think so. The shipyards are a strategic asset, absolutely essential for American defense.

You have got these three things: the natural gas, a strategic asset; the merchant marines; and the shipbuilding.

Here is a key to American jobs, and that is, if we are ever to export natural gas, it will be done in liquefied natural gas. You take the natural gas, you compress it into a liquid, and you put it on an LNG--liquefied natural gas--ship. This is an example of one liquefied natural gas ship.

Sometime this year, a company--Cheniere--located in Texas will begin exporting LNG from a facility in Texas. They will need about 100 ships to export the full capacity of that LNG export facility. My sense of this is let us use that export of a strategic national asset to build and to grow the other two strategics.

We should require that any LNG shipped from the United States be shipped on American-made tankers with American crews, thereby lifting up the ability of our Nation to grow its economy and to maintain its strategic defense industries--shipbuilding and the merchant marines--at the same time we ship and export a strategic asset.

What does it mean? It means that the shipyards in America in the next two decades would be busy. American workers would be in those shipyards, they would be making the ships, so it would be the shipbuilders.

You can imagine what could happen in the ports around the United States--in Baltimore, in the south coast, along the gulf coast, and in California, San Diego, up in Washington, and even San Francisco--an opportunity to build our economy with, once again, infrastructure, a different kind of infrastructure, this is moving infrastructure, the great ships that will be all across the oceans of this Nation and in the harbors around the United States, American ships, American-built ships, American sailors, exporting American liquefied natural gas.

Si se puede--yes, we can. We can make it in America. We can rebuild the American economy. We can focus on middle class economics with the infrastructure systems that we must build, the foundation for future economic growth, and the foundation for American jobs today.

Make it in America, build America, build our ports, our water systems, our highways, our bridges, our airports, our sanitation systems. Let us have the American Society of Civil Engineers come back with an A-plus rating when they look at our airports, an A-plus rating when they look at our rail lines, our transit lines, when they look at our transit systems, when they look at our waste disposal systems. We don't want to be a backwater.

This is America. We are the people that can build for the future. All it takes is the Senate and the House to pass a 6-year surface transportation bill and infrastructure bills that are fully funded, that provide the foundation for middle class jobs, middle class economics, putting Americans back to work, and building this Nation's future.

Mr. Speaker, I yield back the balance of my time.

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