Ralph R. Peterson, Chairman, Construction Industry Round Table (CIRT)
(December 3, 1998)

Testimony: Mr. Peterson noted that while a federal capital budget presents challenges in areas such as "scoring" and depreciation, a federal capital budget represents an approach that has merit and potential value. For this reason, Mr. Peterson urged the Commission "not to state in its final report that it does not endorse or support 'capital budgeting,' instead that it recommends aspects of the capital budgeting approach that would improve current budget practices.

CIRT believes a capital budgeting approach should not require all capital or investment expenditures to be financed by borrowing, but rather an approach that permits or allows for borrowing. CIRT believes a capital budget approach has great potential merit because it:

To demonstrate the lack of adequate funding for capital infrastructure in the U.S., CIRT referred to a recent report prepared by the American Society of Civil Engineers (ASCE). This report found significant backlogs of funding needs for maintaining or improving the Nation's infrastructure, including roads and bridges, mass transit, aviation/airports, schools, drinking water, wastewater, and hazardous waste.

In concluding remarks, CIRT urged that at a minimum, the Commission should strongly endorse a two-year approach to developing budget needs (with establishment of a Capital Acquisition Fund), within the framework of a five-year strategy to reach stated and measurable objectives. CIRT believes moving toward a federal capital infrastructure budget type approach would be an important first step in ensuring proper funding for the infrastructure needs facing the nation.

Questions from the Commissioners: Mr. Peterson did not testify before the Commission.

President's Commission to Study Capital Budgeting