September 30, 2012, marks the three-year anniversary of the expiration of the federal highway and public transportation programs. While Congress has spent much of the last three years debating a new path forward for federal transportation efforts, states, local governments and private interests have struggled to maintain existing highways, bridges and transit systems and to keep new projects afloat through the sputtering stops and starts of short-term extensions. The uncertainty surrounding the federal programs – which constitute roughly 45 percent of all investments in highways, bridges and transit around the country – has further imperiled the construction sector, which, at over 14 percent unemployment, is still struggling to emerge from the recession.  In the meantime, critical economic opportunities are lost for the business community looking to sharpen its competitive edge in increasingly fierce global markets.

At Caterpillar, poor transportation infrastructure and increasing congestion undermines our ability to compete in the global marketplace. Because of our inefficient surface transportation system, Caterpillar and other U.S. manufacturers suffer a competitive disadvantage in our ability to quickly and cost-effectively get our products to the U.S. ports that send them around the world. Obviously, a great many jobs at CAT are dependent on our being able to sell our machines overseas. Because of the global industries we serve, Caterpillar was able to add nearly 6,500 U.S. jobs over the last year. Imagine the new manufacturing jobs we could create here in the U.S. if our transportation system lived up to its promise, and increased our competitive edge instead of serving as a drag on our business. 

Considering our reliance on the U.S. transportation network, the news out of Washington that the House and Senate were coming together on a transportation bill last week has been welcome news at Caterpillar.  Despite much partisan wrangling over reauthorization efforts during the last three years, there has been surprising agreement concerning what needs fixing: there are too many overlapping, duplicative federal programs; the project delivery process is unnecessarily lengthy and holds many projects up for years and drives costs through the roof; there is not enough flexibility provided to the states to ensure they can fund their most pressing priorities; etc.  Thankfully, consensus on these issues is growing and with strong leadership from both parties over the last week it appears an agreement is within striking distance.

House and Senate negotiators are now in the final stages of crafting compromise legislation and what is emerging is to be lauded.  While it is not the long-term six-year bill we had hoped for, an expected two year period would still give states and industry far more certainty to plan projects and make the necessary investments in equipment, materials and land than the repeated short term extensions have provided.  Reports from the conference committee indicate important reforms are being advanced that will streamline the federal programs, better target federal dollars, shorten project timelines and ensure states have the flexibility to tackle their most pressing problems.

It’s time for Congress to drive this over the finish line.  Reauthorization of these programs will help provide needed stability for states, contractors, and others so they are able to make critical long term capital investments.  In turn, these investments will help boost the economy in the near-term and in the long-term help ensure our transportation networks can efficiently deliver increasing U.S. exports which are critical to future economic growth.

Conversely, if Congress fails to advance a final agreement, there will be no reform and outdated and inefficient transportation laws will continue. Federal efforts in highway and public transportation investment will continue to be fragmented across over 90 programs wasting federal dollars on redundancies. States will not have the flexibility they need to ensure dollars flow to priority projects that facilitate economic growth. And without project delivery streamlining, federal dollars will continue to be wasted on duplicative reviews and unnecessary delays. Without a short-term solvency measure the highway, transit and safety programs will be forced to shut down in 2013, or face more than 50% cuts for highway, transit and safety programs due to a lack of funds in the Highway Trust Fund. In turn, uncertainty at the federal, state, and local levels will continue and seriously undermine any potential job growth in the construction sector over the coming months and years.

Congress has before it a great opportunity to build on bipartisan support and enact thoughtful policies that will help stabilize critical parts of the economy and strengthen our competitive edge abroad. But time is short – the next extension ends on June 30th and some in Congress want to shelve this debate until well after the elections. Punting now is a vote for the status quo, and a vote for the status quo is a vote for the failed policies that continue to hamper investment efforts around the country, wasted federal dollars, increasing congestion and business-killing uncertainty. After three years of debate, Congress can do better and it is our hope they will.

Stu Levenick is the Group President of Caterpillar, Inc.