Jammed: Will Infrastructure Gridlock Ever End?

by JOHN GREGERSON, Senior Editor | June 19, 2016

For many of us, the month of June has long meant weddings, report cards, vacation planning, and reckoning for the past and future fiscal years.

Directly or indirectly, all of those traditional signs of summer have played at least some role in influencing the reliably poor grades that regularly appear on the American Society of Civil Engineers (ASCE) Report Card for America's Infrastructure, which lands with a thud on legislative desks in Washington every four years, only to elicit a shrug or a sigh before being filed away to collect dust. Since 1998, when ASCE issued its first GPA of 'D', the needle has never moved much. Another four years, another failing grade. Only the amount of funding required to repair U.S. infrastructure has grown steadily, but its multi-trillion estimate boggles the mind, verging on abstraction.

And at the end of the day, we are left wondering what exactly we are supposed to do with this dire data. In other words, the report does a superb job identifying our persistent problems; less so solutions.

The next national ASCE Report Card isn't due until 2017, but — in a thinly veiled effort to inject itself into the U.S. presidential debates — the group this spring did release a special report, Failure To Act: Closing the Infrastructure Investment Gap For America's Economic Future. Here, in connect-the-dots fashion, ASCE persuasively links failing infrastructure to falling worker productivity, a resulting drop in U.S. GDP, and an annual hit to disposable income per U.S. household of $3,400 per year for the next 10 years. Jobs — lots and lots of them — also could be on the line.

Problem is various gaps would require additional investment of $110 billion in surface transportation; $105 billion in water and wastewater, $177 billion in electricity, $2.1 billion for airports. All told, it adds up to a $1.4 trillion funding gap through 2025, and still another trillion-dollar shortfall through 2040. Failing a philanthropic windfall of "huge" proportions, that leaves infrastructure investment between the proverbial rock and hard place, the same uncomfortable space it has occupied for decades.

Why? How did the same nation that built the intercontinental railroad, the national highway system, the Hoover Dam, the Golden Gate Bridge, etc., manage to put itself in this jaw-dropping fix? Well, as Anirban Basu, chief economist for both Associated Builders & Contractors, and Procore Technologies, recently told BuiltWorlds: “Americans don't like paying tolls.”

Of course, as a nation, we're not particularly fond of gasoline tax hikes, either. Or so we are told. Those issues, and others like them, have resulted in excrutiating, longstanding inaction on Capitol Hill and in statehouses across the land.

True, President Obama signed a five-year, $305-billion transportation bill in December, but the stopgap, comically named "FAST Act", took several painstaking years to legislate, ending a two-decades-old cycle of short-term extensions and patches. Even so, it still sidesteps any gas tax or other serious, sustainable, infrastructure funding solutions, and instead draws on funds from the Federal Reserve. It amounts to a minor, short-term fix to a major, long-term problem.

when politics deny demand

To its credit, the Obama Administration at least has attempted to prioritize transportation infrastructure, almost from Day 1, leaning on the sector heavily in the wake of "The Great Recession". Indeed, such spending was the second-largest component of the American Recovery and Reinvestment Act of 2009. The White House subsequently also proposed the infrastructure-oriented "GROW AMERICA Act". But some lawmakers complained that of the $800 billion allocated by the Recovery Act, only $105 billion ever went to infrastructure, and even that only came after much delay. Not surprisingly, once the national financial crisis had faded from the front pages, "GROW AMERICA" withered on the vine in Congress.

“Congress and the White House have an obvious choice: more budget gimmicks that defy common sense and constrain state transportation plans, or a permanent revenue fix like (a $10-) per oil barrel fee, or some other user-based mechanism," said Peter Ruane, president and CEO of the American Road and Transportation Builders Association, writing in an op-ed earlier this year. “Any tax reform package that moves forward this year or next must address the Highway Trust Fund solvency problem head-on.”

The cruelest irony in all this is that there actually is bipartisan public consensus on this issue.

At a May press conference, President Obama blamed the nation's infrastructure shortfall on Republicans whom he said have “been resistant to address this in a serious way, and the reason is because of [their] ideology that government spending is bad.”

Indeed, as noted above, federal lawmakers have been unable to raise gas taxes since 1993. “It's politics,” explained Rep. Peter DeFazio (D-OR), ranking member of the House Transportation and Infrastructure Committee, in a recent interview with The Hill. Former U.S. Transportation Secretary Ray LaHood, an Illinois Republican, also told reporters, “Politicians don't want to raise the gas tax, because they are afraid they'll be thrown out of office."

Of course, at this rate, soon none of us will be able to get to the office. (Just last week, the traffic delays I encountered while driving downtown to BuiltWorlds for our Obama Library Design Competition event were the worst that I have ever seen in Chicago!)

“
Congress and the White House have an obvious choice: more budget gimmicks that defy common sense and constrain state transportation plans, or a permanent revenue fix like the per barrel fee or some other user-based mechanism”

— Peter Ruane, CEO, ARTBA

For decades, stretching from the Eisenhower era to the early 1990s, the nation had benefited from forward-thinking investments that at least acknowledged longer term infrastructure needs. As the funding shortfall started to grow along with political dysfunction and infrastructure, however, interested observers like ASCE began to lobby for sanity on this issue. In fact, that was the reason ASCE launched its first Infrastructure Report Card in 1998, which rated the national GPA that year as a 'D'. The overall grades that followed in 2001 (D+), 2005 (D), 2009 (D), and 2013 (D+) have barely budged.

Along the way, U.S. transportation infrastructure has slipped from No. 1 to No. 11, according to the World Economic Forum's Global Competitiveness Report 2015-16. Of course, the continuing tumble didn't happen overnight and the complexities of remedying the matter are immense, given the fact that roads, bridges, airports, power, rail, etc., form a vast and convoluted network in which actions in one sector invariably elicit reactions in others.

Regardless, funding, coordination, and open-mindedness all remain key.

A New Model to Modernize U.S. Infrastructure, a report issued last month by the nonprofit Bipartisan Policy Center, recommends increasing the use of public-private partnerships (P3s) to bridge the gaps for infrastructure financing. The group was founded in 2007 by former Senate Majority Leaders Howard Baker, Tom Daschle, Bob Dole, and George J. Mitchell.

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For his part, Basu says P3s are among a handful of immediate measures he would take to address the problem, though only judiciously, and when the stars align. The U.S simply doesn't have the experience or success rate that the U.K., Canada, Australia and other countries have. He also would implement dedicated toll-lanes on major urban roadways, as as been proposed for Chicago's I-55.

“When push comes to shove, people will pay $20 to avoid missing or being late for a meeting,” he says. Also, despite its unpopularity, the timing couldn't be better for a gas tax, given the relatively low gas prices that most Americans recently have enjoyed. Indeed, for more than a year now, most of us have grown accustomed to gas prices shifting daily by as much as 20 cents, if not more. For their part, states would contribute matching funds.

Finally, Basu also would push very hard for high-speed rail, he says, along significant travel corridors, such as the NYC to Washington DC, and LA to San Francisco routes. When reminded that more than a few of his recommendations have failed to launch in the past, Basu replied. “That doesn't mean they can't be revisited.” Which, in theory, is the idea, even if that places legislators in unpopular positions.

But for now, in a nod to the ASCE Report Card, let's give Basu an 'A' for at least offering a reasonable remedy, however politically impracticable or courageous it may seem to some. After all, we are in a new century now. And inaction is making the U.S. infrastructure calendar run backwards. That's not smart.

So, can all of us finally agree that the time for this nonsense to come to an end is now?