Why fixing US infrastructure matters: $9 per household per day

The average household would save $9.31 a day by 2025, by one estimate, if the federal government fixed deteriorating roads, public transit, and other infrastructure. But as President Trump prepares a $1 trillion package to address the need, there are big divisions over how to fund it.

|
Frank Franklin II/AP
Cars enter and exit the New York City's Queensboro Bridge. A new study by the Partnership for New York City finds that excess congestion has risen 53 percent since 2006 and costs the New York metro area $20 billion a year in lost travel time, revenue loss, and increased fuel and operating costs.

Everyone agrees the $19.5 trillion US economy needs roads, bridges, railways, communications, and other modern infrastructure to run smoothly. But when these deteriorate, safety suffers and costs rise.

But the US has been underfunding infrastructure maintenance for years. Already, 1 in 5 miles of highway is in poor condition; 2 in 5 miles of urban Interstates are congested, according to the American Society of Civil Engineers. Four out of 5 major US airports could soon see Thanksgiving-like peak traffic at least once a week. 

Internationally, the US ranks ninth among nations for overall infrastructure, but 26th for the quality of its electrical supply. Overall, the ASCE gives US infrastructure a ‘D-plus.’ 

Where is the problem worst?

“All of the above,” says Jacob Leibenluft, senior adviser at the Center on Budget and Policy Priorities in Washington. In the ASCE's report last year, only the rail system rated a "B," and that's due in part to freight railroads funding their own maintenance. Every other category rated a "C-plus" or worse. Public transit earned a "D-minus."

Part of the problem is that the US spends about 2.4 percent of gross domestic product on infrastructure, whereas 5 percent is the norm in Europe, and China spends 9 percent, the Business Roundtable points out. That “deficit” grows yearly as infrastructure ages and the backlog of unfunded projects grows.

SOURCE:

American Society of Civil Engineers

|
Karen Norris/Staff

What would it cost to fix the deficit?

ASCE puts the infrastructure deficit at just over $2 trillion.

But in the long run, infrastructure spending pays for itself, according to several studies. To get that $9.31 in daily benefits per household, the US would have to spend $4.26 a day per household, ASCE calculates. According to projections in a Standard & Poor’s 2014 report, a $1.3 billion infrastructure plan would add $2 billion to GDP as well as 29,000 jobs.

That economic boost is why Democrats and Republicans have each talked up $1 trillion infrastructure plans.

If there’s bipartisan concern, will Congress act?

Many political analysts are doubtful, noting that the plan would need at least some Democratic support in Congress, and Democrats look little inclined to help the Trump administration score a legislative win heading into fall congressional elections.

“I’m hoping that there will be a path to some bipartisan support for a smart infrastructure investment plan from the federal government,” says Heidi Crebo-Rediker, an adjunct senior fellow at the Council on Foreign Relations in Washington. But “finding the ‘pay for’ is a significant hurdle.”

A key provision would be to raise the 18.4-cent-per-gallon gas tax, which funds the Highway Trust Fund. It hasn’t been raised since 1993 and has lost 40 percent of its value to inflation. As a result, the fund now needs periodic infusions of money from the General Fund to keep going.

But many Republicans are leery of raising taxes, especially so soon after passing huge income tax cuts.

The Trump administration is talking about pushing more responsibility onto states and localities, which already fund roughly 75 percent of infrastructure spending. And it wants to streamline permitting so projects can get under way faster.

Are there innovative approaches to funding?

The US typically uses general taxes or user fees to fund projects – and economists generally say the latter makes more sense. If somebody uses more water or drives more on roads, he or she pays more of the cost to maintain the needed infrastructure.

Federal funds could be used to incentivize states to launch projects using best practices, says Rick Geddes, a visiting scholar at the American Enterprise Institute. “There’s so much value created in the private sector” on every front, says Mr. Geddes, who makes the case for carefully designed public-private partnerships.

In an infrastructure outline released last year, the administration suggested privatizing the air-traffic control system – an arrangement used in Europe but roundly criticized in the US – as well as incentivizing more private investment in infrastructure. The Obama administration also pushed for more private investment, which is necessary, says Ms. Crebo-Rediker, “but it’s not a silver bullet.”

Will the US modernize infrastructure?

The Information Technology and Innovation Foundation is pushing for new information-technology networks, such as internet-connected sensors in water mains, which could detect leaks and reduce the 240,000 costly water-main breaks that occur every year. Smart traffic lights, which adjust on the fly to changing traffic flows, could cut travel time in cities by a quarter, ITIF says.

“Overall, studies find that investments in IT-enabled infrastructure can have 60 percent greater productivity impacts than investments in roads alone,” reads an ITIF report.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Why fixing US infrastructure matters: $9 per household per day
Read this article in
https://www.csmonitor.com/Business/2018/0118/Why-fixing-US-infrastructure-matters-9-per-household-per-day
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe