Dig we must: cities and states on their own, coping with the new fiscal reality.

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Years ago, I'm told, about a thousand miles north of here, the sign "Dig We Must for a Better New York" was something of a joke.

The sign was Con Edison's way of apologizing for tearing up a street to lay some new utility cables -- usually, it seemed, at the height of rush hour. At first, the sign was laughed with, because it was meant to be. People wanted to make America's largest city a better place to live and work. In fact, people demanded those kind of unglamorous, long-term investments.

But eventually -- as the grueling, time-consuming work of digging ditches, laying cable, and paving the streets seemed to drag on and on and on -- people stopped laughing with the signs and started laughing at them. And somehow, even when the work done, people never really got a sense that they had benefited.

Infrastructure improvements are so often hidden from plain sight that it is often impossible for people to appreciate the investments that have been made.

So as a joke, 'Dig We Must' went bust. And eventually, as money dried up in the 1970s and the 1980s, so did the mandate to spend the money that remained on painting bridges, fixing streets, laying new sewer pipe, and so forth.

Another Sad Story?

Is this another sad New York story?

No. Not really. These problems faced by New York are problems confronted in every town and city and state in our nation, particularly in the last 20 years.

The bricks and steel that have built this country into the world's economic powerhouse during the last 100 years are now rusting, crumbling, and deteriorating. And our transportation network of roads, bridges, and transit systems -- the most extensive the world has ever known -- is now chief among the casualties of our disinvestment during the last 20 years.

In the 1960s and 1970s, the United States invested more than 2.3% of our gross national product annually in our transportation systems. From the 1980s until this very day, that rate of investment has dropped to less than four-tenths of 1% -- which has brought with it the embarrassing rank of number 55 in the world. Well, that's not my idea of where the United States should be after winning a 45-year cold war.

And I'll go one step further. I do not believe this is where the United States is. For the last 35 years, we've invested $127 billion in the most extensive and intricate transportation system the world has ever known -- the National System of Interstate and Defense Highways. When President Dwight D. Eisenhower christened that project in 1956, the Cold War was as much on his mind as was opening up isolated regions of the country and making it possible to move Americans and commerce easily from one end of the country to the other.

Today, it is the end of the Cold War that should be on our minds.

Make no mistake. We won.

The United States won at great sacrifice of other domestic needs. Here in 1991, the Berlin wall is down, the Soviet Union is reorganizing itself, and our bombers are off 24-hour-a-day alert status for the first time in 30 years.

It is now time for us to be concerned with how commuters and tractor trailers move between San Francisco to San Jose rather than how an ICBM moves from its North Dakota silo to the Ukraine. And just as we invested in our defense to fight the Cold War, we now need to invest in our infrastructure to fight the wars of economic competition that will be waged in the 1990s and the 21st century.

When I received MBIA's invitation to this seminar, I must admit that I was particularly struck by the title you chose: "Cities and States on Their Own: Coping with the New Fiscal Reality'. I believe that you've hit the nail right on the head of the problem.

For years, through the disinvestment of the 1980s, the White House tried in many ways, shapes and forms to dismantle the responsibilities of the federal government. As recently as early this year, the White House proposed to shift all sorts of transportation charges to the states without the funding to meet those new responsibilities.

Putting on the Mayor's Hat

Now as many of you know, I was mayor of San Jose, Calif., twenty years ago. All I have to do is put on my old Mayor's hat to know what it means to have the federal government suddenly throw up its hand and dump what it had been holding in your lap. I call that the shift and the shaft. And we all know what gets shifted, and who gets shafted. That's not my idea of how to lead the United Stated into the 21st century.

As chairman of the surface transportation subcommittee, I have spent much of the last two-and-a-half years traveling throughout America, holding hearings, and listening to what the American people want and what their transportation needs are. What I believe the American people want and need is the legislation passed by the House of Representatives overwhelmingly in a vote of 343 to 83 less than three weeks ago.

When I introduced this legislation in my subcommittee this last July, I had in mind one central purpose: to lay a foundation of fairness and flexibility in America's transportation network. It is a foundation that will not leave cities and states flapping in the wind, nickel-and-dimed by faceless bureaucrats in Washington, and hoping for money that could come without endless strings attached. Our legislation avoids all those pitfalls. But we do more than that.

The highways, bridges and transit systems of the United States are today falling apart because the federal government has fallen down on the job and has tried to get states and localities to pick up the tab to fix the mess.

The House legislation is a genuine new transportation policy for America, and a tremendous investment in our future. Our six-year, $151 billion program will build our roads and bridges and transit systems into a comprehensive network that will in turn build our economy, enhance safety and improve our quality of life. The flexibility and fair funding designed into this law is unprecedented.

Studies have called for transportation investments of up to $3 trillion during the new 20 years. Even the administration's own assessments insist that we would have to double their proposed programs just to stay at 1989 levels of service.

Well, we can hardly afford to stay at 1989 levels of anything.

The United States needs to move into the future -- not return to the days when it was every town, city and state for itself. Yes, we can differ about the final costs, but to me there are no more universal truths than these:

* First, the needs are there.

* Second, how we spend the money we have is at least as important as how much money we spend.

The only way our transportation network will truly improve in the years ahead as if we put our increasingly scarce federal dollars where the needs are today, and where they must be in the future. And our legislation -- the Intermodal Surface Transportation Act -- addressed these needs. Our legislation includes a six-year $119 billion program for highway construction and repairs and $32 billion for mass transit.

We end the historical bias of some programs over others by creating a level playing field when it comes to federal-state matching formulas. All programs -- whether a road, a bridge, or a transit system -- would be funded on an 80/20 basis, except for our continuing 90/10 commitments to the Interstates.

In short, our legislation is about getting what you pay for, and what you plan for. American are frustrated with the gridlock that today jams our roads. They're also frustrated with any legislative gridlock in Washington.

Right now, the House is in conference with the Senate about our transportation policy. At first, I thought we might be like two ships passing in the night. But today I am considerably more optimistic that we will have a final transportation package on the President's desk as soon as possible.

When that happens, I hope that the President will understand the absolute need to add his signature to the voices of the American people and enact this law.

What's at stake is how we get from here to there, as well as the air we breathe, our quality of life, and the future of our economy. "Dig We Must" is no longer a joke to anyone. Making investments in America is no longer a luxury to be put off until the B-2 bombers are paid for. Pave we must. Lay rail we must. Clean our air we must.

These investments in our future are now imperatives.

And America needs nothing less.

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