Rendell and Timmons: Long-Term Economic Growth Relies on First-Class Infrastructure

Posted April 1, 2013 at 4:51pm

You don’t see bumper stickers touting “My child is a D+ student.” That’s because it’s not something to boast about, and neither is the D+ rating that our nation’s infrastructure earned in the American Society of Civil Engineers’ 2013 Report Card for America’s Infrastructure.

The ASCE’s report presents a sobering assessment of our nation’s current infrastructure and transportation conditions and needs across 16 sectors, including our nation’s roads, bridges, ports and electrical grid. If your child comes home with this report card, then you know it is time for a parent–teacher conference on what actions are needed to turn things around.

The same can be said for our neglected roads and bridges, our inadequate ports, our strained electrical grid and our outdated aviation system.

A well-functioning infrastructure is fundamental to our competitiveness and economic survival. Families depend on the electrical grid to turn on the lights in their homes. To thrive, communities count on safe drinking water and sound wastewater systems. Manufacturers and businesses rely on safe and reliable roads to transport goods to domestic and international markets.

However, it is easy to miss the larger economic role infrastructure plays in our lives. In addition to having a direct effect on long-term economic growth, infrastructure increases gross domestic product, employment, household income and exports.

This D+ rating serves as a much-needed wake-up call to prioritize investment in our infrastructure. Not only will investment in our infrastructure bolster U.S. global competitiveness and help lower the cost of manufacturing in the United States, but it will provide businesses efficient means to deliver goods here and overseas. This investment will attract businesses to our country, create jobs and increase federal revenue.

Without it, our country will face deteriorating conditions across multiple sectors and miss the opportunity to begin modernizing infrastructure systems critical to manufacturing in the United States. Our global competitors are already undertaking vast infrastructure projects; falling behind them is not an option, but it is becoming a reality.

Infrastructure in the United States was ranked first place in 2005 by the World Economic Forum’s annual Global Competitiveness Report, but by 2012, the nation had fallen to 14th in the world.

Unfortunately, a cohesive vision to direct strategic investment to our infrastructure has been nonexistent in Washington for too long. By restoring fiscal order and making infrastructure investment a critical legislative priority, we can lay the foundation for sustained economic growth that will shore up confidence in our economy and put Americans back to work.

The promising news from the ASCE report is that when smart, strategic investments are made by both the public and private sectors, we see real improvements in our infrastructure that boosts our competitiveness.

For example, in 2009, Pennsylvania split a $95 million investment with a major company to create an intermodal rail and truck facility. The return on this investment has been the creation of more than 10,000 new jobs from businesses that located distribution centers near this transportation hub. Pennsylvania ended that year 2 points lower than the national unemployment average and the lowest among the industrial states in great part because of its policy in making significant investments in its infrastructure.

If we are going to make the United States the best country in the world in which to manufacture, we need to invest in our inland waterways, ports, airports, highways, transit, rails, telecommunications, energy pipelines and power grids, as well as our water and wastewater systems. A stark reminder of the need to modernize these systems was the threat of a shutdown of the middle Mississippi River late last year due to drought conditions. A closure of this magnitude would have prevented towboats and barges from moving agricultural products, steel, coal, petroleum products, chemicals and other commodities critical to manufacturing. Aging locks along our inland waterway systems pose the same threat as the drought did, and any failure will affect supply chains for thousands of manufacturers, resulting in lost production time that will hurt our economy and competitiveness.

Washington caught a rare glimpse of bipartisanship when the Senate Environment and Public Works Committee unanimously passed its Water Resources Development Act proposal. This is action toward addressing the long-standing issue of under-investment in our nation’s commercially navigable inland waterways, as well as our ports and harbors. These infrastructure assets ensure manufacturing inputs are received and finished products delivered.

At a time when America’s financial woes are taking a toll on every family and business, Washington needs the foresight to understand the difference between reining in reckless spending and forging ahead with strategic investment in our nation’s infrastructure. The committee’s action last week with unified bipartisan support helps pave the way for a divided Congress to focus on improving our infrastructure to help grow the economy and make us more competitive.

Ed Rendell, a Democrat, was governor of Pennsylvania from 2003 to 2011 and is a co-chairman of Building America’s Future. Jay Timmons is the president and CEO of the National Association of Manufacturers.