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America's Infrastructure: Time to Modernize

President and CEO
U.S. Chamber of Commerce

The U.S. Chamber has made infrastructure a driving focus for this year.

It’s time to invest in a 21st-century infrastructure system to support and grow our 21st-century economy. It’s time to make up for decades of underinvestment. It’s time to embrace innovation and equip our critical infrastructure with the technology that will improve efficiency, productivity and safety. And it’s time to approach this as a national imperative for long-term growth and competitiveness.

This will be no small undertaking.

The American Society of Civil Engineers estimates that we need some $3.7 trillion through 2025 to maintain and update our infrastructure. And the longer we wait to make this investment, the more it will cost us—not only in money to fix it, but in lost time and lost productivity, things we can never get back.

That is why the Chamber is determined to seize the moment for significant progress, with a four-part plan for infrastructure investment designed to serve as a set of ideas policymakers should consider as they begin work on this critical national priority.

Investing in Surface Transportation
How are we going to pay for rebuilding and modernizing our public transit systems, roads and bridges?

When it comes to our nation’s surface transportation, there happens to be an easy answer. We need to increase the federal fuel user fee [gas tax], which hasn’t been raised in 25 years: 5 cents a year for five years. Increasing the fee by a total of 25 cents, indexed for inflation and improving fuel economy, would raise $394 billion over the next 10 years.

By a 22-point margin, 50-28, voters support implementing a federal fuel user fee, provided the money will go toward modernizing our roads and bridges.

Investing in Critical Infrastructure

But we still need to pay for other core infrastructure, such as rail, airports and seaports, waterways, dams and levees and more. This doesn’t have to be a massive one-time investment funded up front and solely by the government.

If we use innovative financing mechanisms leveraging public and private resources, we can meet today’s infrastructure needs and build for the future while financing the costs over the long term.

When it comes to private funding, there is huge potential. Between 2005 and 2015, infrastructure equity bonds raised about $350 billion. Since equity is about 25 percent of a typical public-private partnership, that $350 billion could support projects worth $1.4 trillion.

We should strengthen and expand federal loan programs—such as TIFIA and RRIF loans, Private Activity Bonds, grants and other mechanisms to facilitate public-private partnerships.

State and local governments are also turning to federally backed loans to leverage their public dollars in support of major projects. For example, U.S. DOT recently approved a TIFIA loan allowing local government in Orange County, CA, to begin major improvements to I-405, upgrading the vital freight network that serves our nation’s two largest seaports.

Streamlining the Permitting Process

Despite recent improvements under MAP-21 and the FAST Act, the permitting process for major infrastructure projects remains broken. Projects become seriously delayed or even canceled and their budgets skyrocket.

The environmental review alone takes an average of five years. The Empire State Building was constructed in less than a year and a half. You could build at least three Empire State Buildings in the average time it takes bureaucrats to review paperwork today.

The Chamber believes that all federal infrastructure approvals should be completed within two years. State and local projects benefiting from federal funding or financing should also adhere to a two-year timeline, which should run concurrent to the federal process. And to help streamline permitting and eliminate duplicative reviews, a single lead agency should shepherd a project through the process from start to finish.

The Chamber applauds the administration’s “One Federal Decision” executive order requiring several of these important changes—and we call on Congress to codify them into law. Without permitting reform, all the funding and the financing you could dream of won’t get the job done.

Expanding the Workforce

Finally, modernizing America’s infrastructure will require people to do the work. However, we simply don’t have enough workers ready and able to take on new projects. Nearly 80 percent of construction firms report that they are having a hard time finding qualified workers. Who is going to fill those positions?

One way of expanding the workforce is by promoting work-based learning, like apprenticeships. Additionally, policymakers should expand the network of sector-based construction partnerships under federal workforce programs. They should also reform and boost support for federal career and technical education programs like the Perkins Act.

I am optimistic that we can advance an infrastructure package to achieve these priorities. And with leadership from both ends of Pennsylvania Avenue and from the business community, I think it can even be done this year. We’ve already lined up some of the most essential building blocks—political will, bipartisan leadership and public support.

Now it’s down to the details—coming up with the money to get started, figuring out the long-term financing, streamlining the permitting process and expanding the workforce.

This is just the beginning of the conversation. This is the next great opportunity to do something significant, something long-lasting and something long overdue for our nation’s future. And it will benefit all of us.

This Commentary was adapted from a speech delivered by Donohue on Jan. 18, 2018.

"Commentary" features points of view from various sources to enhance readers' broad awareness of themes that affect public transportation.
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