Failure to Act on Infrastructure Has Severe Consequences

Jan 15, 2013

“Infrastructure is important to our economy, to jobs, to growth.”

“Doing nothing costs a lot.”

We hear these words from President Obama, the Secretary of Transportation, and from both Democrats and Republicans in Congress.

Leaders beyond the Beltway are talking, too.  Yesterday, in his State of the State Address, my home state governor, Matt Mead of Wyoming, made a statement that can and should be echoed by everyone in Washington:

I don’t want to continue every year to deplete large amounts of general funds that could be used for education, for savings, for health, for seniors, or the disabled – in order to fund what is one of the most basic functions of government – providing sound infrastructure. There is no sense in talking about economic development if you don’t have water, sewer, basic infrastructure. “

“Roads are the backbone for so much of our commerce, our recreation and our day-to-day living. It is an issue of safety. If we fail to maintain our roads it is no different than failing to maintain a car or a home. The price goes up and a higher price will be paid for poor maintenance. That is not a plan for being fiscally conservative.

What Gov. Mead is talking about is the price of failure to act, or exactly what the American Society of Civil Engineers (ASCE) quantified in its latest "Failure to Act" report. ASCE finds that with an additional investment of $157 billion a year between now and 2020, the U.S. can protect:

  • $3.1 trillion in GDP, almost the equivalent of Germany’s entire GDP
  • $1.1 trillion in U.S. trade value, equivalent to Mexico’s GDP  
  • 3.5 million jobs, more than the jobs created in the U.S. over the previous 22 months
  • $2.4 trillion in consumer spending, comparable to Brazil’s GDP
  • $3,100 in annual personal disposable income

The impact of current infrastructure investment on America’s economic future is significant on the nation’s businesses, large and small.

Exporters, especially those in agriculture, natural resources, and energy, require reliable, predictable inland waterways, freight rail, and port systems.  As U.S. Chamber President and CEO Tom Donohue said in his State of American Business address last week, there is a significant economic opportunity for this country if we are willing to expand domestic energy production—but we have to be able to move it at a cost that keeps American energy competitive.

Retailers need a multi-modal, intermodal system—one where ports, trucks, and trains move goods quickly and seamlessly to store shelves.

Manufacturers’ supply chains are complex, and the efficient management of those supply chains through sophisticated logistics systems are challenged by infrastructure that underperforms.

One of America’s biggest exports and economic drivers is travel and tourism. Inefficient air travel and customs and border operations and disconnected public transportation are deterrents for travelers, especially those coming from abroad.

And finally, most Americans work in the services sector.  Imagine a hospital that draws its workforce from a large region—how do those people get to work?  And how productive are they if they have to endure a long, painful commute?  Or put yourself in the seat of a truck driver, whose office is the road.  Directly and indirectly, transportation infrastructure has an impact on the ability of those people to do their jobs.

It is time to bridge the gap between recognition of the needs and willingness to act. The ASCE report cites large needs, and the statistics can seem daunting. But they can be met if our elected and appointed officials are willing to:

  1. Show leadership and address the revenue needs as soon as possible rather than waiting for the next infrastructure crisis;
  2. Tap private sector project delivery and financing resources to get projects done sooner so that the benefits start to add up;
  3. Get out of the way when the private sector is trying to invest in its own networks.

Deterioration of the nation’s infrastructure undermines the economy, jeopardizes our safety, threatens our quality of life, and harms the environment.  Public and private investment and new, innovative strategies are needed to repair, rebuild and revitalize our transportation systems -- from roads and bridges to air traffic control -- to safely connect workers with employers, employers with suppliers, and businesses with their customers.

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