economics | 2013 Report Card for America's Infrastructure

Obama Expands On Infrastructure Proposals

February 25th, 2013 | By: America's Infrastructure Report Card

President Obama last week provided more detailson his infrastructure plans that were first

(Photo credit: Steven Vance)

mentioned during the State of the Union address. The administration released a fact sheet that offers some specifics, however many of the details will still have to wait until the President releases his budget proposal in a few weeks. The announcement this week focused on three items: A “fix-it-first” proposal to repair existing infrastructure before building new projects, a “Rebuild America Partnership” to bring private money off the sidelines through a new bond program, and a continued “modernization effort” to speed up permitting and construction. The President’s plan would immediately invest $50 billion in our nation’s transportation infrastructure, with $40 billion targeted to the most urgent upgrades and focused on fixing our highways, bridges, transit systems, and airports most in need of repair. However, the President’s proposal does not outline a funding source for this infusion. In the past, Obama has said his infrastructure proposals could be paid for by using savings from winding down wars overseas, but that has not been specifically mentioned this time around. We applaud the President for focusing on infrastructure investments and looks forward to working with the administration and Congress on how we can make these much needed investments. We are also hopeful that a long-term funding plan for surface transportation can be implemented that averts insolvency of the Highway Trust Fund.

Tags: congress, economics, highway trust fund, infrastructure, infrastructure investment, state of the union address
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The Federal Role in Infrastructure

February 14th, 2013 | By: America's Infrastructure Report Card

The House Transportation and Infrastructure Committee held a hearing on Wednesday to examine the federal role in infrastructure. The hearing came the day after President Obama proclaimed in his State of the Union address that that nation must make a commitment to fix the infrastructure that we have. Chairman Shuster (R-PA) put together an A-list panel, with US Chamber of Commerce President Tom Donahue, LiUNA President Terry O’Sullivan, and Building America’s Future Co-Chair and former Pennsylvania Governor Edward G. Rendell all agreeing that the Federal government must be a key player when it comes to the nation’s infrastructure. The witnesses stated that all funding options, including a gas tax increase, MUST be a part of the conversation because it will be costly to build and maintain the world class infrastructure that is required for continued economic growth. Infrastructure’s relationship to public safety, national security, and economic competitiveness, makes it clear why a strong infrastructure system has always played a critical role to the federal interest. In fact, infrastructure spending and the federal government have a history that dates to Article 1, Section 8 of the U.S. Constitution that gave Congress the power to “establish post offices and post roads.” The country has expanded significantly since that time, and with it the nation has needed to expand its infrastructure in order to maintain a modern economy. During the 20^th Century, the federal government led the way in building our nation’s greatest infrastructure systems from the Intercontinental Railroad, to New Deal programs, to the Interstate Highway System, and the Clean Water Act. Since that time, federal leadership and investment have decreased, and the condition of the nation’s infrastructure suffered. Unfortunately, according to the Congressional Budget Office, the total of all federal spending for infrastructure has steadily declined over the past 30 years. As the Committee begins work in the 113^th Congress, our nation’s infrastructure will require significant attention. Congress has not reauthorized a Clean Water Act since 1987, a Water Resources Development Act (WRDA) since 2007, and the Passenger Rail Investment and Improvement Act will expire in September. The National Dam Safety Program has not been reauthorized since it expired in 2010, and, surface transportation programs while authorized through 2014 still require a sustainable revenue source for the Highway Trust Fund to be viable in the future. Each issue also acts as an example for why the federal government must continue to play a role in funding different facets of our nation’s infrastructure. ASCE submitted a statement for the hearing, which outlined the economic benefits from a well-functioning infrastructure. ASCE’s Failure to Act reports have found that 3.5 million jobs would be at risk by 2020 if we do not increase investments and that there would be a loss of 3.1 trillion in GDP. Additionally, the current investment shortfall of $1.6 trillion would grow to $2.7 trillion over the next 7 years if we do not increase infrastructure investments now. By improving the nation’s deteriorating infrastructure system both economic and job creation opportunities will be provided, while creating a multi-modal transportation system for the Twenty-First Century.

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ASCE Statement on the President's State of the Union Address

February 13th, 2013 | By: America's Infrastructure Report Card

The following is a statement from Gregory E. DiLoreto, P.E., P.L.S, D.WRE, president of The American Society of Civil Engineers (ASCE), regarding President Obama’s State of the Union address: “As stewards of our nation’s infrastructure, the American Society of Civil Engineers applauds President Obama’s efforts to improve our country’s ailing infrastructure and get America back to work. Infrastructure is the foundation of our communities, and without it, our businesses, schools, and our everyday lives cease to function. “The President said it himself; we have an ‘aging infrastructure badly in need of repair.’ Simply, we must invest in our roads, bridges, ports, and water systems. This will help us build a 21st Century America for an ever-changing 21st Century economy.

Courtesy of Wikipedia Commons

“In a first-of-its-kind economic report on our failure to invest in infrastructure, ASCE has found that infrastructure investment is inherently linked to our nation’s economic success. The Failure to Act report found that if we fill our infrastructure funding gap by 2020, the U.S. can eliminate potential drags on economic growth, protect 3.5 million jobs, and protect $3,100 in annual personal disposable income. “President Obama’s ‘Fix-It-First’ plan is a great step toward rebuilding America. Private investment along with political leadership can help our nation grow and create much needed jobs. First class roads, bridges, and ports will lead to first class jobs, homes, and lives for American families. “Rebuilding our nation’s roads, bridges, and water systems is not enough. We must have long-term plans for maintenance and repair, sustainable funding mechanisms that assure reliability, and the political leadership to invest in our own communities. “On March 19th, ASCE will release the 2013 Report Card for America’s Infrastructure, a comprehensive assessment on the state of our nation’s core infrastructure. In the 2009 Report Card for America’s Infrastructure, ASCE awarded our country a ‘D.’ A ‘D’ is not good enough for our students in the classroom, and certainly not good enough for American families or our economy. “Next month’s Report Card grades will give the country, as well as the President, a clearer picture of where America can improve and offer solutions for how to do just that. The President’s State of the Union address offered a strong vision for investing in our economic foundation and jumpstarting our economy. We look forward to working with the Administration, Congress, and all those who are concerned with our country’s economic future on how we can reinvest in our communities and build the infrastructure America needs to prosper.”

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The Big Picture on Infrastructure Investment

January 28th, 2013 | By: America's Infrastructure Report Card

With our final report in the Failure to Act series released this week, we saw the big picture consequences of failing to invest in our nation’s infrastructure. With this report, ASCE set out to answer this key question: What is impact on America’s economic future if we do not invest in our infrastructure today? With our analysis – based on current investment trends and expecting funding levels, no sector is meeting its full potential – there are significant investment gaps, or funding shortfalls, in every sector we studied (surface transportation, water/wastewater, electricity, and airports, ports, and inland waterways) by the year 2020. The investment shortfalls mean that much-needed mai

ntenance and modernization is not getting done, and our infrastructure systems start to deteriorate further. For the most part, this isn’t something dramatic you will notice overnight, but a gradual worsening of conditions over time. Your commute will become less reliable, your shipments will take longer. You may experience more electrical outages and water issues. And these things cost us something. What we did for this final Failure to Act report was to look at the combined, interactive effect of the investment trends in infrastructure between now and 2020. It’s important to note that this wasn’t a simple math problem of combining the costs and impacts of previous studies. Rather, each infrastructure sector is linked to one another. For example, deteriorating conditions on our nation’s roads may shift goods to travel by rail or barge on the inland waterway system. What we found in this new study is that the overall cost to households and businesses of deficient infrastructure grows to $1.2 trillion for businesses by 2020 and $611 billion for households, under current investment trends. Thus, the investment gaps will total $1.1 trillion by 2020, and will grow to $4.7 trillion by 2040. If we don’t address this funding shortfall of $157 billion a year for our nation’s infrastructure, we will be faced with the following by 2020:

A projected loss of $3.1 trillion in GDP, almost the equivalent of the 2011 GDP of France
A $1.1 trillion decline in U.S. trade value, equivalent to Mexico’s GDP
A loss of 3.5 million jobs in the year 2020 alone, more than the jobs created in the U.S. over the previous 22 months
A $2.4 trillion decline in consumer spending, comparable to Brazil’s GDP
A drop of $3,100 in disposable income per year, per household

And while the investment needed may seem daunting, the real story of this report is that we can’t afford not to. It’s almost impossible to fully separate the sectors –transportation, water, ports, and the electric grid. The cumulative impact of failing to invest over time and the interaction between modes ensures that deficiencies in one sector will have an impact on other sectors. Each of our Failure to Act reports demonstrated a common theme – deteriorating infrastructure has a cascading impact on the nation’s economy, negatively affecting business productivity, gross domestic product (GDP), employment, personal income, and international competitiveness. The message is clear: if we don’t invest now, we all end up paying more in the long run.

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Driving Off the Fiscal Cliff

December 12th, 2012 | By: America's Infrastructure Report Card

Courtesy Flickr/Les Chatfield

Congressional leaders and Obama Administration officials continued to meet behind closed doors the past several weeks in order to come to a compromise on the fiscal cliff. Many in Washington are speculating the possibility that the federal gas tax may be reexamined as a revenue option during discussions. Incoming House Transportation and Infrastructure Chairman Bill Shuster (R-PA) and Ranking Member Nick Rahall (D-WV) have both said publicly that raising the gas tax should be on the table at this time, in order to create a reliable revenue stream for the nation’s surface transportation system. However, outgoing Chairman, John Mica (R-FL),has refuted those comments by declaring that raising the gas tax as this time is too politically charged and therefore will not currently be under consideration. In the meantime, President Obama has recycled an old idea during the fiscal cliff talks by proposing once again a one-time infusion of $50 billion for the nation’s infrastructure. Many House Republicans quickly argued that the expense should not be made as part of a compromised package, including long time infrastructure advocate, and retiring Congressman, Steve LaTourette (R-OH). Talks continue behind closed doors, and President Obama and Speaker Boehner are reported to be personally communicating on ways to avert going over the cliff, including the possibility for a much anticipated but mythical “grand bargain”.

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Pikes Peak Rural Transportation Authority Up For Renewal on November 6th

October 15th, 2012 | By: America's Infrastructure Report Card

On November 6th, our country will face many difficult decisions about its future. However, one issue in Colorado Springs, CO is not difficult whatsoever: the

Pikes Peak Cog Railway Car. Courtesy Flickr/wallyg

renewal of the Pikes Peak Rural Transportation Authority (PPRTA). Question 5A asks voters in El Paso County, Colorado to approve the extension of the PPRTA, a one percent tax to improve roads and bridges. The initiative is not a tax increase, but rather a continuation of an already successful program. Currently, the PPRTA funds the construction and maintenance of area road projects. In fact, the Colorado Springs Independent argues “the accomplishments of PPRTA I were huge,” and “the projects now are equally vital, taking care of major needs to existing infrastructure, and improving roads and bridges that our governments no longer have the wherewithal to address.” Civil engineers have taken to supporting the PPRTA. ASCE is releasing the 2012 Report Card for Colorado Springs Infrastructure this coming Wednesday. In the report, local civil engineers examine the needs of El Paso County and how and why PPRTA is vital for continued infrastructure improvements. So on November 6^th, please remember that transportation infrastructure allows us to go to work in the morning, get our children to school safely, and connect to businesses all over the world.

Tags: economics, state report cards, transportation
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New Mexico Releases New State Infrastructure Report Card

October 1st, 2012 | By: America's Infrastructure Report Card

On September 21, the New Mexico Section of the American Society of Civil Engineers released the 2012 Report Card for New Mexico’s Infrastructure(Report Card). In its newest report, the New Mexico Section graded the state’s infrastructure a C overall, with aviation, rail, road, and solid waste infrastructure worsening since the last report in 2005. The Report Card urges public officials to increase infrastructure investment and keep pace with New Mexico’s rapid growth. “How we get to work, how we raise our families, and how we can build a more sustainable future all depend on infrastructure,” said ASCE President Andrew W. Herrmann, P.E., SECB. “Given that only one of the 10 areas grades above a ‘C,’ we hope this Report Card will serve as a wakeup call that we must do more. Maintaining and modernizing our infrastructure – our roads, bridges, and water systems –should be a top priority to meet the needs of New Mexican families now and in the future.” The Report Card was picked up by numerous media outlets, including the Santa Fe New Mexican, the Farmington Daily Times, the New Mexico Business Journal, and KOB Eyewitness 4 News. To view the media coverage, please click on the respective link and feel free to share the stories with anyone you know. Only through working together can we hope to improve New Mexico’s infrastructure.

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Senate Passes Temporary Spending Bill

September 26th, 2012 | By: America's Infrastructure Report Card

Early last Sunday, the Senate voted to pass a continuing resolution (CR) that funds the government for the first half of Fiscal Year 2013, which begins October 1. The bill expires March 27, 2013 and will provide $1.047 trillion in discretionary spending, which matches the cap set in the Budget Control Act (BCA) signed in August 2011. The House passed the CR the previous week. The funding will be about $8 billion above current levels and the increase — about 0.6 percent — will be spread across the board for all agencies. However, Congress still must deal with the automatic spending cuts it ordered last year when it required the president to sequester $110 billion in FY 2013 if the House and Senate failed to come up with comprehensive budget cuts. So far, those efforts have failed, and the automatic cuts are scheduled to take effect on January 2. Last week the Office of Management and Budget(OMB) released a report detailing the across-the-board cuts in the FY 2013 budget under the mandatory

Courtesy Flickr/Tax Credits

sequestration law. “The sequestration would result in a 9.4 percent reduction in non-exempt defense discretionary funding and an 8.2 percent reduction in non-exempt, non-defense discretionary spending,” the OMB reported. Congress exempted certain programs from the automatic cuts in the Budget Control Act –sequestration. Among the infrastructure accounts exempted are the federal Highway Trust Fund and the Airport Improvement Program grants-in-aid. The National Flood Insurance Program funding of $171 million in 2013 also is exempt from sequestration. “The administration cannot choose which programs to exempt or what percentage cuts to apply,” the OMB said. If Congress does not take action before January 2^nd, among the infrastructure programs to undergo mandatory cuts in 2013 is the Corps of Engineers military construction program, a decrease of $383 million (9.4 percent) from $4.072 billion in the BCA. The Corps’ Civil Works program will be reduced by $505 million from $5.772 billion. These cuts included $150 million in construction, $176 million in operation and maintenance, and $86 million in Mississippi River and Tributaries spending. The State and Tribal Assistance Grants program at the Environmental Protection Agency (EPA) funds wastewater and drinking-water infrastructure through the State Revolving Loan Fund (SRF) programs. The account will be reduced by $293 million (8.2 percent) overall from $3.5 billion. The OMB does not identify how much money will be cut from the wastewater SRF and how much from the drinking-water SRF. The Federal Transit Administration would be cut by $172 million, including $156 million from a total of $1.9 billion for capital investment grants, an 8.2 percent reduction. Customs and Border Protection would lose $19 million of $237 million (8.2 percent) from its construction program. The water program at the Bureau of Reclamation would be cut by $89 million (8.2 percent) from $878 million. A further $302 million from the account’s total of $1 billion would be exempt from sequestration. The National Park Service budget for construction would be cut $13 million from the $156 million in budget authority. Another $126 million would be exempt. The State Department’s embassy construction program of $1.5 billion would be cut by $129 million. Congress has the authority to act before January 2 to eliminate or redistribute some or all of the sequestration requirements for FY 2013 in an effort to reduce spending by $110 billion. The full OMB report can be seen here.

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Congressional Budget Office Shows Concern for HTF

September 4th, 2012 | By: America's Infrastructure Report Card

The Congressional Budget Office (CBO) predicts both accounts of the Highway Trust Fund will go broke sometime in FY 2015 unless Congress acts to shore up the fund that pays for surface transportation projects. According to a CBO chart obtained, the highway account will end FY 2012 with $8.7 billion and the transit account with $4.7 billion. The transit account could run dry in late 2014. ASCE has long supported an increase in the gas tax to provide additional revenues for investment in surface transportation systems, a move that has been supported by many economists as consistent with reducing the federal budget deficit. However, the political climate in Washington has not allowed a serious discussion on this matter in some time. More information on the gas tax can be found here and the CBO chart can be viewed on this site.

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ASCE Makes The Case For Infrastructure at NCSL

August 15th, 2012 | By: America's Infrastructure Report Card

Legislators from around the country gather every year at the National Conference of State Legislatures (NCSL) Legislative Summit to talk about policies that work in the real world. State legislators are literally hunting for ideas they can bring home to their communities to help them bolster their local economies and create jobs. Among the key sessions, was a dynamic panel on creating jobs through infrastructure investment. Focused on the reality that construction costs are rising yet states needs to borrow at affordable rates, this session’s speakers discussed both the polices that work and the next wave of potential investments that legislators can focus on now. To start the panel off, ASCE President Andrew Herrmann P.E., M.ASCE began the discussion by highlighting the clear case for investing today using the Failure to Act economic studies which show the high costs to the US, jobs, and businesses if necessary infrastructure investments are postponed. Deb Miller, former Secretary of Transportation, Kansas, now with Cambridge Systematics, Inc., and Illinois Senate President John J. Cullerton highlighted how accountability and clear expectations allowed several key investments to move forward in their states and how these projects supported local businesses and the state’s economic goals. Geoffrey Buswick, Standard & Poor’s, touched on the financing options available and the reality that borrowing options may change as the economy recovers. Through our participation in meetings like this, ASCE is able to interact with leading policymakers from around the country, and particularly those legislators who have been leaders in their states on infrastructure issues. As sates continue to face fiscal challenges it’s encouraging that state legislators like those gathered in Chicago continue to seek solutions to the infrastructure deficit.

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