Preserving the Nation’s Infrastructure Must Be a Top Priority of Leaders

Posted November 19, 2008 at 9:26am

After spending 20 years in Congress and serving as secretary of Commerce under former President Bill Clinton and secretary of Transportation under President George W. Bush, I’ve seen a lot of elections and witnessed the transition of new administrations. I started my first term in Congress in the 1970s, a decade that saw rampant inflation and slow economic growth, an unprecedented combination that led to stagflation. Here we are, more than 30 years later, and once again America finds itself in a time of great economic turmoil.

[IMGCAP(1)]Today, the number of families hit by unemployment is rising each day, and the first priority of the new administration and Congress must be to figure out how to get our economy turned around and people back to work. While infrastructure did not take center stage in the recent presidential election, my hope is that the stimulus package on which Congressional leaders are currently working will focus heavily on transportation and infrastructure projects.

Recently, Federal Reserve Chairman Ben Bernanke spoke cautiously on whether infrastructure spending would stimulate the economy in the near term, questioning “how much extra spending

and employment will you get from infrastructure projects that you would not have otherwise had.” He also expressed concern “that infrastructure projects usually take a long time to plan and develop … so the actual implications for the near term are limited.”

According to the recent release of joblessness numbers put out by the Bureau of Labor Statistics, there are more than 10.1 million people in this country who are unemployed. As a former secretary of Transportation, I know that for every $1 billion that is spent on transportation projects, an average 37,000 new jobs will be created, with the aftermath of these construction phases typically creating 5,000 to 6,000 permanent jobs. I would also challenge Bernanke’s assertion that the nation would not see an immediate creation of jobs through infrastructure projects. There are cities, counties and states throughout the country with environmental impact statements and detailed plans completed and ready to go; yet these projects are languishing because of a lack of funding. If Congress approves an infusion of cash for these projects, there will be very little time before they are moving forward. video platform video management video solutions free video player

Job creation is only one factor to consider when discussing investment in the nation’s infrastructure. The Interstate 35W bridge that collapsed over the Mississippi River in Minneapolis during rush hour on Aug. 1, 2007, aimed a spotlight on America’s crumbling public infrastructure and evoked a strong public response. Too many of the nation’s railways, highways, bridges, airports and neighborhood streets are slowly decaying because of lack of investment and strategic long-term planning. Last year, the Federal Highway Administration deemed 72,000 bridges, or more than 12 percent of the country’s total, “structurally deficient.” But the funds to fix them are shrinking, and in September 2008, the Highway Trust Fund had a deficit, which the Congress corrected with an $8 billion infusion.

President-elect Barack Obama’s campaign platform included a commitment to revitalizing and strengthening the country’s core transportation infrastructure. He believes that America’s long-term competitiveness depends on the stability of the country’s critical infrastructure, and he has pledged to strengthen the country’s transportation systems, including roads and bridges. Obama has also stated that he will enter into a new partnership with civic, political and business leaders at the state and local levels to create a national infrastructure policy focused on how to upgrade the nation’s infrastructure to meet the demands of a growing population, a changing economy and short- and long-term energy challenges.

One way that Obama plans to fund these infrastructure upgrades is through the creation of an independent entity called the National Infrastructure Reinvestment Bank. Over the course of a decade, this bank would invest $60 billion in transportation infrastructure. More funding needs to be identified as the bank’s funds would also have to be used for projects bolstering rail, air and water transportation. While there has been mention of seeking private-sector funds, the bulk is targeted to come from the money saved by reducing the nation’s involvement in Iraq, something that has yet to be realized.

The American Society of Civil Engineers estimates the United States needs to invest at least $1.6 trillion over the next five years to maintain and expand its infrastructure. One way to address the extreme budget gaps that the nation is facing at the federal and state levels is through the use of private funds to build and manage large-scale American infrastructure assets. Public-private partnerships allow federal, state and local governments that are struggling under mounting deficits to improve crumbling roads, bridges and even airports without using taxpayer money. With the threat of a national infrastructure crisis in sight, public-private financing should be looked at as a possible way to bridge that gap.

Additionally, Obama says he will create a $25 billion emergency Jobs and Growth Fund to replenish the Highway Trust Fund, prevent cuts in road and bridge maintenance, and fund school repairs. The Highway Trust Fund is essentially empty because the federal tax on fuel, which is currently at 18.4 cents a gallon on gasoline (24.4 cents on diesel), has not kept pace with inflation. It hasn’t been changed since 1993.

The nation’s transportation spending law expires in September 2009, which means Congress must reauthorize it next year. The current law, approved in 2005, allocates $286 billion to highway and transportation projects. However, most experts agree that simply reauthorizing that amount will not be sufficient, given the current state of deterioration of our nation’s infrastructure.

There are signs that Members of Congress are recognizing the tremendous positive benefit that can come from investment in transportation and infrastructure projects. At recent Congressional hearings, New York Gov. David Paterson and New Jersey Gov. Jon Corzine, both Democrats, spoke of state budget shortfalls and recommended a package including infrastructure investments. And recently, when asked about her priorities for the 111th Congress, Speaker Nancy Pelosi (D-Calif.) talked about the importance of rebuilding the nation’s infrastructure with green technology.

One example of how this can be accomplished is through investment in research and development of next-generation batteries for plug-in electric vehicles to help solve our country’s energy crisis and limit our dependence on foreign oil. Additionally, Congress could look at upgrading the U.S. electric grid to advance clean energy development and job creation.

My ultimate hope is that Congress appreciates the bipartisan nature and benefits of investing in our nation’s infrastructure. America’s roads, bridges, rails and airports are neither “red” nor “blue.” They are enduring assets that can generate a lot of “green” for struggling families and communities today and improve our economic environment for years to come.

Norman Y. Mineta, a former Democratic House Member from California, served as Commerce secretary under former President Bill Clinton and Transportation secretary under President George W. Bush. He is now vice chairman at Hill & Knowlton.