U.S. Transportation System ‘Hitting a Wall,’ Donohue Says
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The nation’s transportation system is underperforming and unable to meet the needs of the business community and the overall economy, according to a groundbreaking new index released by the U.S. Chamber.
The Chamber’s Tom Donohue warns that the economy could lose $336 billion over the next five years unless Congress and the administration increase funding and remove barriers to improving the nation’s transportation infrastructure.
“The performance of the nation’s transportation system is not keeping pace with the rate of growth of the demands on that system,” said Chamber President and CEO Tom Donohue. Donohue released the Transportation Performance Index at a September 23 event at the Capitol Hilton in Washington D.C. “The bottom line is this: our nation’s deteriorating infrastructure is placing a major drag on our economic growth.”
The index, which was created by a team of experts led by the Chamber’s Janet Kavinoky, found that from 1990-2008 the effectiveness of the national transportation system increased about 6% overall. However, when compared to double-digit growth in population, passenger travel, and freight traffic, it’s clear that the infrastructure is not keeping up, said Kavinoky, who also leads the Let’s Rebuild America initiative.
The index found that every one point increase in transportation effectiveness results in a 0.3% increase in GDP, or $42 billion. But, “if we pursue business as usual for the next five years, the index will fall by 8 points,” Donohue said. An 8-point drop equals $336 billion in lost economic growth.
The index also ranks each state and Washington D.C. on its transportation effectiveness. Washington D.C. fared the worst in the rankings, followed by New Jersey, Hawaii, Nevada and California. North and South Dakota have the best systems, followed by Nebraska, Montana and Iowa.
By following the lead of the top five states, the nation could add another $1 trillion to GDP, the index found. “We're leaving $1 trillion on the table in GDP by not getting the most bang for the buck out of our transportation system,” Donohue said. “If we don't head off that decline, we’re taking money out of every American's pocket.”
To reverse the downward trend, the Chamber is calling on Congress and the administration to pass pending legislation funding highways and transit, water, and aviation improvements—as well as an infrastructure investment tax credit for railroads.
The Chamber is also urging policy makers to eliminate the red tape that endlessly delays and raises project costs and streamline the project review and approval processes to ensure that improvements to the transportation system are finished in a timely and environmentally sound manner.
Finally, the Chamber supports private sector financing of transportation projects and the concept of a national infrastructure bank. “There is north of $180 billion in private capital just waiting to be invested if only we swept away regulatory roadblocks and encouraged its use,” Donohue said.
The Transportation Performance Index can be found here.