Finding infrastructure solutions, big and small

By Scott Thomasson, president, NewBuild Strategies LLC - 04/09/12 03:24 PM ET

The United States has huge unpaid bills coming due for its infrastructure. A generation of investments in world-class infrastructure in the mid-twentieth century is now reaching the end of its useful life. Cost estimates for modernizing run as high as $2.3 trillion or more over the next decade for transportation, energy, and water infrastructure. Yet public infrastructure investment, at 2.4 percent of GDP, is half what it was fifty years ago. Congress has done little to address this growing crisis, as evidenced by the ongoing political fiasco over key infrastructure legislationthe surface transportation authorization bill, also known as the highway bill. Historically a model of bipartisan cooperation, transportation funding is now the latest casualty of Tea Party extremism in the House of Representatives. What makes the highway bill so important? For starters, it represents thousands of jobs for the beleaguered construction sector, which saw its unemployment rate rise to 17.2 percent in March, twice the rate of overall unemployment. Just as important, it is exactly the kind of comprehensive legislation we need to guide strategic, long-term investments. It is the largest source of federal infrastructure spending, allocating hundreds of billions of dollars over several years for highways, rapid transit, and rail.

Congresss inability to maintain stable infrastructure investment is a national embarrassment. The last six-year highway bill expired in 2009, and Congress has been unable to agree on a new bill since then. The Senate managed to pass a new bill in March that provides only two years of funding, but efforts in the House to pass a longer-term bill have nearly collapsed. The continuing impasse forced Congress to pass its ninth temporary extension of the old lawthis time for 90 daysat the eleventh hour before heading home for a two-week recess. Transportation secretary Ray LaHood said in February that he does not expect a bill to pass before the election, a view many experts share. The stalled highway bill is further proof that go big approaches to solving big problems are destined to fail in the current political environment. But our infrastructure needs only get more expensive when we put off paying for them. In cases where modest reforms can make more creative financing solutions possible, good ideas should not be held hostage to grand bargains on big legislation like the highway bill. Congress and President Obama should think beyond the highway bill alone and look to politically viable proposals that stand a chance of passing both houses this yearincremental steps that can unlock billions of dollars in additional investments without large federal costs. For example, Congress should give states more flexibility to supplement federal funding by pursuing alternative financing sourcespublic-private partnerships, tolling and user fees, and low-cost borrowing through innovative credit and bond programs. Billions of dollars to finance new infrastructure could be raised every year from private-sector capital and untapped revenue sources like tolls and user fees. Neither is a free lunch, but they are potential alternatives to unpopular gas tax increases and deficit spending. At the federal level, Congress and the president should improve federal financing programs and streamline regulatory approvals to accelerate planned projects that are waiting to move forward. As a modest but viable alternative to the presidents infrastructure bank proposal, he should make the most of existing financing resources by coordinating the many loan programs for infrastructure that are already spread across various federal agencies and departments. The president already issued a new executive order last month to cut red tape for infrastructure projects, but the order is short on substance and long on studies and steering committees. A bolder step would be directly eliminating duplicative reviews by ordering agencies to work together in single-track proceedings wherever possible, without needing to wait for congressional approval or new steering committee plans. There is no silver bullet for meeting our infrastructure needs. Passing a highway bill is one of many steps that must be taken, and we must continue to pressure House leaders to finish the job that the Senate started for them. But big legislative successes may be hard to come by before the 2012 election. In the meantime, small victories are better than

none. With pragmatic solutions that do not carry big federal price tags, Congress and President Obama can offer some relief to the states and local governments who know firsthand that the country cannot afford to wait any longer to make these investments. Scott Thomasson is president of NewBuild Strategies LLC and has testified before Congress as an expert in infrastructure finance and pending legislative proposals. More details on his proposals here can be found in a policy paper written for the Council on Foreign Relations. Source: http://thehill.com/blogs/congress-blog/politics/220605-finding-infrastructure-solutions-big-and-small
The contents of this site are 2012 Capitol Hill Publishing Corp., a subsidiary of News Communications, Inc.