Tag: Repairing America’s transportation grid

At a hearing of the U.S. Congress Joint Economic Committee, Ranking Democrat Carolyn B. Maloney (D-NY) called for improving long-term economic growth by investing in infrastructure. “Investing in broad-based economic growth was at the core of America’s success in the decades after World War II. We invested in our people through the GI Bill, and in our infrastructure, building the nation’s interstate highway system. It paid off. While publically held debt more than tripled between 1945 and 1981, it fell by about three-quarters as a share of the economy.

Business Insider notes that “There’s a $1 trillion crisis threatening the American way of life as we know it.” Despite the obstacles, infrastructure repair and upgrade is vital. John Grady, no fan of the current White House, wrote in Chicago Business  “…if you want to make America great again, start repairing the nation’s failing infrastructure… I am referring to the infrastructure that is the backbone of the U.S. economy, such as bridges, drinking water systems, dams, navigable waterways, rail, roads, transit and wastewater. Industries and companies of all sizes are risking everyone’s safety by relying on the current state of America’s failing bridges, drinking water plants, roads, tunnels and wastewater treatment plants.”

A 2016 Reuters review highlighted in Fortune Magazine noted that “Nearly half of registered U.S. voters think American infrastructure has deteriorated in the last five years… Forty-one percent of Democrats said infrastructure has gotten worse over the last five years, while 53% of Republicans took that view.”

But can common ground be found on how to do it? Can the problems of waste and corruption, so endemic to almost all areas of federal spending, be minimized to make the task affordable?
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An example of this roadblock to real progress can be seen in how a significant portion of 9/11 funds were misused. A New York Daily News study found that “9/11 recovery aid was used to finance a plethora of projects that taxpayers elsewhere could be forgiven for characterizing as old-fashioned pork-barrel spending. Hundreds of millions of dollars were spent on projects that seemingly had nothing to do with 9/11 and lower Manhattan… more millions went to help projects already in the works before 9/11 or on the drawing board with no prior funding source. Huge contracts were given to companies and organizations linked to the very officials tasked with deciding how to spend the money – creating, at a minimum, the potential for multiple conflicts of interest. Substantial sums were given to companies to stay in lower Manhattan even though they had no intention of leaving…”

Even apart from corruption and waste, federal rules render many necessary projects expensive and potentially unaffordable. The Davis-Bacon Act increases the labor portion of any project. According to the Department of Labor, “The Davis-Bacon and Related Acts, apply to contractors and subcontractors performing on federally funded or assisted contracts in excess of $2,000 for …public works. Davis-Bacon Act and Related Act contractors and subcontractors must pay their laborers and mechanics employed under the contract no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area…The Davis-Bacon Act prevailing wage provisions apply to the “Related Acts,” under which federal agencies assist construction projects through grants, loans, loan guarantees, and insurance.” Tim Worstall, writing for Forbes notes that “Union Wages Increase Construction Costs By 20%.”

It is appropriate to question why the $780 billion “stimulus” package spent by the Obama Administration failed to even attempt to address this, and why the former president alleged that he couldn’t find “shovel-ready” jobs.  Addressing the infrastructure issue will be a test of whether the U.S. political environment can rise up partisanship to achieve a vital goal.

There is no area where more bipartisan agreement exists than that of repairing America’s crumbling infrastructure. The American Society of Civil Engineers (ASCE) rates the nation’s infrastructure at only a D+.

ASCE notes: “Our nation is at a crossroads. Deteriorating infrastructure is impeding our ability to compete in the thriving global economy, and improvements are necessary to ensure our country is built for the future. While we have made some progress, reversing the trajectory after decades of underinvestment in our infrastructure requires transformative action from Congress, states, infrastructure owners, and the American people. Our nation’s infrastructure challenges are significant but solvable. Through strategic, sustained investment, bold leadership, comprehensive planning, and careful preparation for the needs of the future, America’s infrastructure will be improved and restored. For the U.S. economy to be the most competitive in the world, we need a first-class infrastructure system—transport systems that move people and goods efficiently and at reasonable cost by land, water, and air; power transmission systems that deliver reliable, low-cost power from a sustainable range of energy sources; and water systems that protect public health. To achieve this, leaders on both sides of the political aisle need to make good on promises they have made to improve our nation’s infrastructure and ensure these pledges don’t fall by the wayside after each election cycle.”

But can work on this begin in 2018? From the potholed roads and overaged bridges of the Northeast to the worrisome levees of New Orleans and the inadequate mass transit of California, the United States is in urgent need of infrastructure upgrade and repair. That’s only part of the problem. The nation’s electrical grid, currently unprotected, could be wiped out by an EMP attack originating from either an attack or a natural solar event.

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The Trump Administration  believes that “Nothing more visibly reveals the failure of Washington than the crumbling roads, bridges, and infrastructure that dot America’s landscape. Instead of putting people to work, fragmented and unpredictable federal approval processes drag on for years and sometimes decades. It’s time to lighten the federal touch, provide clear rules of the road for new technologies, and empower communities to modernize this archaic system… Rebuilding America’s infrastructure is a critical pillar of President Donald J. Trump’s agenda to promote job creation and grow the U.S. economy. America’s infrastructure has fallen to 12th in the world and that is unacceptable. Every American depends on our roads, rails, ports, and airports, and the President is committed to fixing this problem, not just pushing more liabilities onto future generations… The Federal Government inefficiently invests in non-Federal infrastructure. In part, our lack of sustained progress has been due to confusion about the Federal Government’s role in infrastructure. During the construction of the Interstate System, the Federal Government played a key role – collecting and distributing Federal tax revenue to fund a project with a Federal purpose. As we neared the completion of the Interstate System, those tax receipts were redirected to projects with substantially weaker nexus to Federal interests. The flexibility to use Federal dollars to pay for essentially local infrastructure projects has created an unhealthy dynamic in which State and local governments delay projects in the hope of receiving Federal funds. Overreliance on Federal grants and other Federal funding can create a strong disincentive for non-Federal revenue generation. At the same time, we continue to apply Federal rules, regulations, and mandates on virtually all infrastructure investments. This is despite the Federal Government contributing a very small percentage of total infrastructure spending. Approximately one-fifth of infrastructure spending is Federal, while the other four-fifths are roughly equally divided between State and local governments on one hand and the private sector on the other. We will reevaluate the role for the Federal Government in infrastructure investment.”

The Report Concludes Tomorrow.