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Eno Transportation Weekly

America’s Infrastructure Crisis Isn’t Overstated

BY BRIAN PALLASCH
Managing Director of Government Relations and Infrastructure Initiatives
American Society of Civil Engineers

JANET KAVINOKY
Executive Director of Transportation Infrastructure
Chamber of Commerce

When a doctor tells you that you are sick, you should probably stay home. When a contractor tells you that your roof is caving in, you should probably move out. When the American Society of Civil Engineers (ASCE) tells our country that our infrastructure rates a D+, you should probably ask how we can raise the grade.

The 2013 Report Card for America’s Infrastructure was released early last year, highlighting our country’s infrastructure needs. Due to a growing backlog of infrastructure projects, by the year 2020, United States infrastructure needs face a funding shortfall of $1.6 trillion.

James Pethokoukis, a conservative blogger for the American Enterprise Institute, wrote a post that argued that American infrastructure is doing just fine. In fact, he argues three points to make his case:

1) Our public investment is equal to “peer” nations, as thus, adequate;
2) Public construction spending has been the same since 1993; and
3) Private industry can solve all of these problems alone.

The argument that since our ­public investment is on par with Canada, ­Germany, and Australia, and that we should be unconcerned, is only valid if all of these counties share similar issues and similar history.

Most of America’s infrastructure was built after WWII. These investments of the 20th century spurred our nation’s economic boom and made us a global power. Today, quite simply, that tab is coming due. Australia currently spends 2.4 percent of GDP on capital investment, compared to 0.60 percent by the U.S.

Canada’s federal government investment in infrastructure is approximately 2.9 percent of GDP. And though our percentages of GDP spent on infrastructure are indeed comparable to Germany, in 2011 Germany adopted a five-year, $52 billion federal Framework Investment Plan for infrastructure. The question facing our country is are we going to maintain our 20th century foundation while making new investments for a prosperous 21st century. This is a unique challenge. America’s economy must lead the world, and as such, the foundation of that economy—our infrastructure—should lead the way.

If we are going to build a sustainable infrastructure network for the 21st century, we also should not take pride in the fact that our investments are unchanged from 1993. Imagine living on the salary you made in 1993 today. Our economy and our nation have both grown since then. The fact that we have maintained the same level of construction spending should serve as a wakeup call to our leaders that we are not doing enough. Roads, bridges, and water systems only cost more to repair and maintain the longer we wait.

In addition to the obvious costs of inaction, our aging infrastructure’s effects on our economy continue to grow. In preparation for their Report Card, ASCE conducted a series of economic analyses to see the effects our ailing infrastructure has on businesses and families. ASCE found that if our country continues on our current investment path between now and 2020, the U.S. will lose:

  • $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
  • 5 million jobs, more than the jobs created by the America Recovery and Reinvestment Act
  • $2.4 trillion in consumer spending, comparable to Brazil’s GDP
  • $3,100 in annual personal disposable income

Given these impacts, it is easy to see that America is already paying for its D+ infrastructure system. Investment would create long-term jobs, spur growth, and increase America’s standing in the global economy.

Some of this investment will undoubtedly come from the private sector. Private investment is an essential part of repairing America’s infrastructure. We are seeing public-private partnerships help businesses and families alike, such as the 495 Express Lanes in the Washington, DC. area. Yet, as one can see, the size and scope of our problems are massive. The private sector can’t do it alone. ­During the 20th century, the federal government led the way in building our nation’s greatest infrastructure systems, from the New Deal programs to the Interstate Highway System and the Clean Water Act. Since that time, federal leadership has decreased, and the condition of the nation’s infrastructure has suffered.

We need a strong national vision to fix our ailing infrastructure. Long-term planning, combined with long-term funding, will allow our communities to plan for the future and face the challenges of an ever-changing economy.

We agree that infrastructure is an underpriced commodity. Too often, our roads, pipes, and waterways are out-of-sight, out-of-mind. We must embrace the reforms put forth in MAP-21 and the Water Resources Reform and Development Act that will increase efficiencies, cut red tape, and deliver projects faster.

For the U.S. economy to be the most competitive in the world, we need a modernized infrastructure system to support it. No one disagrees with the notion that we must invest as efficiently and intelligently as possible, but the only way of being able to ever do so is by acknowledging the breadth and costs of the problem at hand.

© 2013 American Society of Civil Engineers. All rights reserved. Reprinted with permission.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of The Eno Center for Transportation.

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