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Rep. Waters Keynotes Torrance Chamber of Commerce State of the Region Event

February 27, 2018

Discusses Infrastructure Funding, Immigration, and Tax Law Changes in Legislative Update

WASHINGTON – Congresswoman Maxine Waters (CA-43), Ranking Member of the House Financial Services Committee, delivered a keynote address during the Torrance Chamber of Commerce "2018 State of the Region Luncheon" at the Doubletree by Hilton Torrance-South Bay. Congresswoman Waters and Congressman Ted Lieu (CA-33) were invited to provide a legislative update on a number of national policy issues and their impacts on the South Bay.

Given the vibrancy of businesses and communities within the 43rd Congressional District, which includes the cities of Gardena, Hawthorne, Inglewood, Lawndale, Lomita, Los Angeles, and Torrance, Congresswoman Waters opened her address by discussing her strong support for local import-export businesses, aerospace companies, and other industries located within her district.

"The 43rd Congressional District is a dynamic and thriving region filled with incredible people, brilliant and hard-working entrepreneurs, businesses that innovate, and local leaders who understand the importance of constantly reinvesting in our communities," said Congresswoman Waters. "As I proudly represent this region in Congress, I am working to support the programs and projects that are important to our communities. At the same time, I have been fighting for public policies that will allow this region to continue to thrive."

Infrastructure and job creation, which are among Congresswoman Waters' top priorities, were also a large focus of her legislative update. In the first session of the 115th Congress, Congresswoman Waters introduced a robust infrastructure package, the Transportation Infrastructure for Job Creation Act and Drinking Water Infrastructure for Job Creation Act, which will provide a total of $15 billion over the next six years for job creation through investments in our nation's infrastructure.

Congresswoman Waters also discussed her efforts to secure funding for transportation projects throughout the 43rd Congressional District, including Torrance Transit's Compressed Natural Gas Fueling Station and Electric Vehicle Charging Stations; Gardena G-Trans' CNG Fueling Facility and Maintenance Infrastructure Upgrades Project and its Solar Energy Powered Zero Emission Bus Transit System project; and Los Angeles Metro's replacement of 30 aging diesel buses with new, low-emission, clean fuel buses for uses specifically in the South Bay region.

"A safe, efficient, modern, and accessible transportation system and access to safe, clean drinking water is vital for a healthy environment and a vibrant economy. That is true here in the South Bay and in communities throughout the United States. I am working hard to expand federal support for infrastructure in communities nationwide" she said.

Congresswoman Waters also provided her analysis on the Trump Administration's infrastructure proposal. Despite purportedly leveraging $1.5 trillion in infrastructure spending over 10 years, in reality, the Trump proposal requires that state and local governments finance 80 percent of the costs for major infrastructure projects and limits federal investments to $200 billion over 10 years.

Congresswoman Waters also critiqued the president's fiscal year 2019 budget, which reduces transportation and infrastructure funding by $168 billion over 10 years; slashes highway, transit, and highway safety funding by $122 billion over 10 years; and eliminates the U.S. Department of Transportation's popular "TIGER" grants program, which currently benefits local transit agencies like Torrance Transit, Gardena's GTrans, and Los Angeles Metro.

"I think that there will be a robust conversation in Washington over the upcoming weeks and months about transportation and infrastructure funding, and the appropriate amount of federal investments. I have long advocated for additional federal transportation and infrastructure investments. At the center of the discussion will be an examination of how the federal government can invest in infrastructure without shifting the burden to states and local communities to come up with an unrealistic, or unreasonable, share of the funding," said Congresswoman Waters.

In addition to infrastructure, Congresswoman Waters also discussed several other contentious federal policy issues and their impacts on South Bay residents. Those issues include the Trump Administration's decision to open up the entire Pacific coastline to offshore oil drilling, which would be devastating for coastal cities in the South Bay, like Manhattan Beach, Redondo Beach, and Hermosa Beach; immigration and the fate of Deferred Action for Childhood Arrivals (DACA) program recipients; and the new federal tax law, which reduces or eliminates key deductions that are important to Californians.

At the conclusion of her remarks, Congresswoman Waters thanked the Torrance Chamber of Commerce for its "continued commitment as a leading business advocate in the South Bay region," and pledged to continue "working collaboratively with [the Chamber]" and "fighting for this region to ensure that every resident can live the American dream."

A full transcript of her remarks, as prepared for delivery, is below:

I am so honored to be here with all of you.

This is a vibrant, diverse, dynamic and thriving region filled with incredible people, brilliant and hard-working entrepreneurs, businesses that innovate, and local leaders who understand the importance of constantly reinvesting in our communities. We have aerospace companies, a multitude of service industries, import/export businesses, and even micro-breweries!

As I proudly represent this region in Congress, I am working to support the programs and projects that are important to our communities. At the same time, I have been fighting for public policies that will allow this region to continue to thrive.

There is a lot going on in Washington, DC, right now, as you might well imagine. It's hard to know where to start. I know that there is tremendous uncertainty about the state of affairs in Washington D.C. and how it will impact our region. There is uncertainty as to whether there will be resolution to several public policy issues that have been long debated. There is also uncertainty as to the effects of recent changes in the tax laws, and how the government will deal with the national debt.

As you know, a great deal of the uncertainty of the past year has been due to a lack of clarity as to the long-term federal funding for programs and projects. It is not only important to federal agencies and federal employees that there be clarity in the long-term funding of programs, it is also important to states and localities as well as individuals and families that depend on those programs and services.

Infrastructure

A specific area, in which I have advocated for a significant federal investment, is infrastructure. I am working hard to expand federal support for infrastructure in communities nationwide.

A few months ago, I introduced a legislative package consisting of two bills, which will provide a total of $15 billion over the next six years for job creation through investments in our nation's infrastructure.

TheTransportation Infrastructure for Job Creation Act would provide a supplemental appropriation of $7.5 billion over the next six years for investments in transportation infrastructure through the U.S. Department of Transportation's popular "TIGER" grants program. This bill would provide additional funding for innovative highway and transit projects by local governments and transit agencies like Torrance Transit and Gardena's GTrans.

The Drinking Water Infrastructure for Job Creation Act would provide a supplemental appropriation of $7.5 billion over the next six years for the Drinking Water State Revolving Funds, which help public water systems finance infrastructure projects in order to replace lead pipes, upgrade water infrastructure, and ensure clean drinking water for American families.

A safe, efficient, modern, and accessible transportation system and access to safe, clean drinking water is vital for a healthy environment and a vibrant economy. That is true here in the South Bay and in communities throughout the United States.

Torrance Transportation

I am especially proud of the City of Torrance, and its commitment to public transportation. Torrance Transit, the city's municipal transportation agency, has been serving the needs of South Bay residents for over 75 years. Torrance Transit operates eleven different bus routes and connects with several regional transit hubs and services. System-wide, Torrance Transit experiences approximately 3.9 million passenger boardings every year.

I have worked closely with Kim Turner, the Director of Torrance Transit, to support Torrance Transit's work and make certain that Torrance Transit's priorities receive their fair share of federal, state and local funding.

In fiscal year 2014, I helped Torrance Transit obtain $175,000 for the construction of a Compressed Natural Gas Fueling Station. This funding was provided by the Mobile Source Air Pollution Reduction Review Committee, which brings together representatives of several local and regional transit agencies.

In fiscal year 2016, I helped Torrance Transit obtain $64,000 for the construction of eight Electric Vehicle Charging Stations. The funding was provided by the Southern California Air Quality Management District, and the electric vehicle charging stations will be located at the Torrance Transit Park and Ride Regional Terminal – a strategically-located, multi-modal transit center that will connect several modes of transportation in the South Bay.

Furthermore, as a strong supporter of the Transportation Department's "TIGER" grants program, I wrote several letters over the past few years supporting Torrance Transit's efforts to obtain federal TIGER funding to support the construction of the Park and Ride Regional Terminal. The TIGER grants program is a highly competitive federal program that provides financing to local transit agencies for innovative highway and transit projects, and I strongly believe that Torrance Transit's Park and Ride embodies the type of innovative thinking that TIGER was designed to promote.

Unfortunately, Torrance Transit was unsuccessful in obtaining a TIGER grant because of the limited federal funding available. Nevertheless, I am working to expand federal funding for TIGER so that more projects like the Park and Ride will be able to obtain TIGER support in the future.

Separately, I have sought support from both the U.S. Department of Transportation and the California Air Resources Board for Torrance Transit's plans to develop its proposed "Return of the Red Car" trolley service. This zero emission, all electric rubber tire trolley service would start and end at the Park and Ride and further expand access to transit service in the South Bay.

While not all of these efforts were successful, Torrance Transit is expected to receive more than $16 million in federal support through transportation formula grants for the period between fiscal year 2014 and fiscal year 2018.

Gardena Transportation

I am also proud to represent the City of Gardena, which operates GTrans – formerly known as Gardena Bus Lines. Over the past four years, I have written several letters to federal, state, and regional agencies in support of funding for GTrans priorities, including GTrans' compressed natural gas (CNG) Fueling Facility and Maintenance Infrastructure Upgrades Project and its Solar Energy Powered Zero Emission Bus Transit System project. These projects illustrate the City of Gardena's commitment to transition to a fleet of low-emission, clean energy buses, while providing efficient bus service to the South Bay region.

Metro/South Bay Transportation

Finally, I helped Metro obtain a federal Bus and Bus Facilities grant for $10.5 million to replace about 30 aging diesel buses with new, low-emission, clean fuel buses for uses specifically in the South Bay region.

Torrance Water Infrastructure

Water infrastructure is also critical for the South Bay region. The Torrance Municipal Water Department serves more than 100,000 residents and business customers covering 78 percent of the City.[1] I supported the City's efforts to serve its municipal water customers by seeking federal funding for the North Torrance Wellfield Project, a comprehensive project to design and construct new water infrastructure.[2] Just two weeks ago, I sought federal funding for the Torrance Airport Storm Water Infiltration Project, which will be installed at the Torrance Municipal Airport,[3] and the Walnut Storm Water Capture and Groundwater Replenishment Basin Project, which will develop infrastructure to divert storm water to an above-ground storage basin and increase local water supplies.[4] These two funding requests are still pending.

Inglewood

Like many of the other cities in this region, Inglewood is flourishing as well. There is exciting news of development projects in Inglewood that will allow that city and the surrounding area to thrive. Most notably, as you know, Inglewood is poised to become home to three professional sports teams. The Rams and the Chargers are moving into a new football stadium in Inglewood. The project includes a football stadium, retail space, office space, a hotel, and other feature that will make a huge impact on the community. For example, since the Rams announced they were moving to Inglewood, the city's median home price increased dramatically, from $398,000 in January 2016 to $448,000 in March 2017.[1] The owners of the property where the stadium is being built have estimated that the stadium project could create as many create 40,000 jobs counting construction and ongoing operations.

The Clippers are also on the verge of a move to Inglewood. Just this Tuesday, February 20th, we learned new details of the Clippers proposal to build a world-class basketball arena, practice facility and entertainment center complex in Inglewood. This event would host sports events and concerts, and would make a huge impact on the City and the surrounding region.

National Infrastructure Discussions

I am determined to advocate for additional federal investments our communities and in infrastructure so that additional funding is available for transportation and infrastructure projects in the South Bay and communities across the county.

Lately, as you know, there has been a lot of discussion about infrastructure at the national level. Last week, on February 12th, the president released the administration's fiscal year 2019 budget proposal along with a plan that is purportedly intended to leverage $1.5 trillion in infrastructure spending over 10 years. However, the president's plan provides only $200 billion in federal infrastructure funding over 10 years, and it relies on states, local governments, and private investors for the rest of the funding.

Of that $200 billion, the plan makes $100 billion available as an incentive for states and local governments, which would have to provide an 80 percent match. For comparison purposes, the 1956 law signed by Republican President Eisenhower that built the Interstate Highway System, provided 90 percent of highway construction costs, while the states were required to pay only a 10 percent match.[2] Most states and local governments will not be able to finance 80 percent of the costs of a major infrastructure project, so they will not benefit from the president's plan.

Of the remaining funds made available in the president's plan, $50 billion would go to rural communities, and would not be accessible by our region. Another $20 billion would be made available for federal loans to attract private investment which could result in private companies building toll roads. The remaining funds would go to other activities.

At the same time, the president's budget reduces transportation and infrastructure funding by $168 billion over 10 years. Highway, transit, and highway safety funding is cut by $122 billion over 10 years. In addition, the budget proposes to eliminate the U.S. Department of Transportation's popular "TIGER" grants program, which funds investments in transportation infrastructure by states and local transit agencies like Metro, Torrance Transit and Gardena's GTrans. Overall, the budget proposal released last week would cut fiscal year 2019 transportation funding by 14 percent below the fiscal year 2017 level.

I think that there will be a robust conversation in Washington over the upcoming weeks and months about transportation and infrastructure funding, and the appropriate amount of federal investments. I have long advocated for additional federal transportation and infrastructure investments. At the center of the discussion will be an examination of how the federal government can invest in infrastructure without shifting the burden to states and local communities to come up with an unrealistic, or unreasonable, share of the funding.

Beach and Coastal Communities: Offshore Oil Drilling

The president's decision to open up the entire Pacific coastline to offshore oil drilling is also causing a robust debate in Washington. I believe this decision would have a devastating impact upon California, especially for coastal cities in the South Bay, like Manhattan Beach, Redondo Beach, and Hermosa Beach. Offshore oil drilling is opposed by overwhelming bipartisan majorities throughout California. California families and small businesses depend upon the health of our oceans for food, commerce, and a thriving tourism industry. An offshore oil disaster like the Deepwater Horizon oil spill would be severely damaging for our state. I strongly oppose the president's decision, and I am working with my colleagues to protect our coastline from offshore oil drilling.

Immigration

 

As you know, aside from the debate on federal spending, infrastructure investments, and offshore oil drilling, one of the most contentious and robust public policy debates in Washington, D.C. is on the topic of immigration. Again, this is an area of uncertainty, in which affected immigrants, businesses, state and local governments, and the various stakeholders on all sides of the debate are desperate for long-term clarity in the law.

 

Recently, much of the discussion has centered on the continuation of the Deferred Action for Childhood Arrivals (DACA) program, which the administration announced would be phased out by March 5, 2018. Nationally, there are about 800,000 DACA participants. These participants are people who came to America as children, innocent of any wrongdoing, pay taxes, passed a background check, and are valued and active members of our society and contributors to our economy. About a quarter of those individuals live in California, and roughly 13 percent live in this region. Outside of just DACA – and referring to immigrants in general – there are roughly 2.5 million green card and visa holders living in the state.[3] The American Immigration Council (Council) estimates that nearly 34 percent of California's entire labor force is foreign-born, as are 40 percent of business owners in the Los Angeles/Long Beach/Anaheim metropolitan area.

 

Immigrants are our neighbors, business owners, employees and taxpayers. It is to everyone's benefit – immigrant and natural-born citizen alike – to reform our immigration system to, at the very least, establish certainty in the law.

 

Reforming our nation's immigration laws is not a new endeavor. Over the last several years, and over the last few presidential administrations, there have been attempts at bipartisan agreements on immigration reform. For example, in 2004, during President George W. Bush's administration, Sen. John McCain (R-AZ) and the late Sen. Edward M. Kennedy (D-MA) introduced the Secure America and Orderly Immigration Act. Among other provisions, that bill offered a path to citizenship for undocumented immigrants, increased border security, and addressed hiring practices regarding undocumented immigrants. The Senate passed the bill, but it did not pass the House, despite being supported by President Bush.

 

We then crossed into the Obama Administration, where there was significant discussion, but again no successful legislation. Perhaps the most notable attempt at immigration legislation during that timeframe was in 2013, when the "Gang of Eight," a bipartisan group of senators introduced a bill that would have made it possible for millions of undocumented immigrants to gain legal status while also putting them on a 13-year path to citizenship. However, at the same time, that bill also included increased border security and repealed the Diversity Visa Lottery program, which gives a limited number of visas to immigrants from underrepresented countries. That bill died in the 113th Congress.

 

Those were some conservative attempts at reaching bipartisan compromise. Many people across the country, on both sides of the aisle, were hopeful that the conversation on immigration, which reached a fever pitch in the last month, would spark legislative action that could resolve the YEARS of lingering uncertainty with respect to our immigration system. However, we appear to have returned to the persistent stalemate that has existing on many of these issues.

 

Last week, the Senate engaged in a debate on the issue of immigration. Although the prospects had seemed promising that a bipartisan compromise bill could pass the Senate, the Senate failed to advance any of the four immigration proposals before it last Thursday. Those proposals included a deal that was spearheaded by Senator Susan Collins (ME), which was considered by many to be the legislation with the best chance of passing. That bill offered a path to citizenship to DACA eligible immigrants, provided as much as $25 billion for border security, and maintained the Diversity Visa Lottery program. While that particular bill, like the other proposals on the table, failed to achieve the 60 votes necessary to advance, that bill had the support of a bipartisan group of at least 54 Senators.

 

Unfortunately, it seems as though we may not be close to a resolution on this issue that will pass both the House and the Senate and become enacted into law. Nevertheless, I, like many of my colleagues, strongly believe that there is a need for urgent action, and I will continue to be engaged on this issue.

 

Tax

 

While immigration and infrastructure are two of the unresolved policy debates in Washington D.C., a great deal of the uncertainty of this past year has related to the debate over the new tax law.

 

California faces unique challenges under the new law, with many economists suggesting it will negatively affect growth and harm the state's competitiveness. The new law, which was enacted late last year, reduces or eliminates key deductions that are relied on by Californians. It is expected to raise the cost of living for many middle class households.

 

Some of the most important changes in the tax law are alterations to the state and local tax deduction, or SALT, and the mortgage interest rate deduction. These two changes greatly affect California. Before the new tax law, taxpayers could deduct everything they pay in state and local income, property, and sales tax. The new law caps SALT to $10,000 for income, property, and sales tax combined. Approximately 3 million Californians already pay more than $10,000 a year in state taxes.[4] In California, 34 percent of people claim the deduction, including 29 percent of tax filers right here in my congressional district. The average value of the SALT deduction for a California household that claims it is over $18,000.

 

Before the new tax law, if you itemized your deductions you could write off qualifying mortgage interest payments for real estate purchases of up to $1,000,000. This $1,000,000 cap used to apply not only to a primary residence, but also a second home. The new law reduced the mortgage interest rate deduction by 25 percent, which has a particularly significant impact on California, and specifically homeowners in this region and in other high-cost cities. From January to October of 2017, approximately 10 percent of all new home loans in California were over the new $750,000 cap. Notably, the new cap is less than the median home value in Torrance, which is $812,400.[5]

 

In addition to the changes in deductions, the new tax law significantly increases the national deficit. The amount of projected debt added to the deficit is at least $1.5 trillion over the next decade, with some economists estimating that it could be significantly higher than that, even over $2 trillion. Some have argued that those estimates don't account for economic growth created by the law, but the bipartisan Joint Congressional Committee on Taxation has estimated that the law still adds at least $1 trillion to the deficit even when accounting for economic growth.

 

Adding too much to the deficit, especially this fast, can have severe negative consequences on our economy in the long-term. This type of deficit spending is not sustainable.

 

As the Ranking Member of the Financial Services Committee, I will be monitoring the deficit closely, and I will advocate policies that will help keep the economy stable and support working families. I will also do everything within my power to fight for the people of California and make certain they are not unfairly disadvantaged by the new tax law.

 

Conclusion

 

Many of the issues and problems facing this country require immediate attention. Inaction, or the wrong action, on infrastructure, immigration, public transportation, and the national deficit, among many other issues, is not sustainable. Action and solutions are required. I have fought and will fight for these solutions, and I will not stop until the South Bay region and other communities in our district are better off than they are today.

 

In conclusion, I want to say thank you to the Torrance Area Chamber of Commerce for your continued commitment as a leading business advocate in the South Bay region. I look forward to working collaboratively with you in my capacity as your Representative of California's 43rd District and in my position as Ranking Member of the House Financial Services Committee. I remain committed to fighting for this region to ensure that every resident can live the American dream.

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[1] https://www.kcet.org/shows/town-hall-los-angeles/how-the-rams-stadium-development-could-impact-inglewood

[3] Public Policy Institute of California. http://www.ppic.org/publication/immigrants-in-california/