Transportation infrastructure: Obama's focus on transportation infrastructure may serve as a catalyst for economic recovery
President-elect vows to leverage infrastucture investment into job creation, long-term economic growth
Jeff Berman, Group News Editor -- Logistics Management, 12/9/2008
WASHINGTON—As part of his plan to get the U.S. economy back on track, President-elect Barack Obama plans to make infrastructure investment a cornerstone of his economic recovery plan.
In his weekly radio address on Saturday, December 6, Obama said that rebuilding the nation’s infrastructure is a major driver for saving or creating at least two and a half million jobs. And he vowed that his commitment to infrastructure will be the single, largest new investment in national infrastructure since the creation of the federal highway system under President Dwight D. Eisenhower in the 1950s.
“We’ll invest your precious tax dollars in new and smarter ways,” said Obama, “and we’ll set a simple rule—use it or lose it. If a state doesn’t act quickly to invest in roads and bridges in their communities, they’ll lose the money.”
Obama’s pledge to leverage infrastructure investment as a springboard for job creation and an economic recovery comes at a time when news regarding the economy gets worse by the day, as evidenced by the Bureau of Labor Statistics recent report that 533,000 U.S. jobs were cut in November, the largest monthly number of U.S. job losses since December 1974.
Investing in infrastructure has been a major issue for the President-elect. While campaigning for the Democratic nomination in February, Obama called for the establishment of a National Infrastructure Investment Bank that would invest $60 billion over a ten-year period for highways, technology, and other projects.
The timing for this endeavor also matches up well with House Legislation—H.R. 7110, Job Creation and Unemployment Relief Act of 2008—passed in September that allocates nearly $30 billion for transportation infrastructure initiatives, with $12.8 billion pegged for highway infrastructure specifically for aging U.S. highways and bridges to improve safety and reduce congestion. A Senate version of this bill, with $10.8 billion slated for building and repairing highways, bridges, and other projects did not pass.
“Obama has it right…now is really the time to inject some dollars into ready-to-go projects to support and preserve jobs that are out there and create additional ones,” said Janet Kavinoky, Director, Transportation Infrastructure, at the U.S. Chamber of Commerce. “We truly hope this is something that can happen in the short term, and we hope that bodes well for the important work that needs to be done over the course of the year on authorizing highway, transit, aviation, and water projects, too.”
Kavinoky added that it seems like probable recipients of federal dollars have “gotten the message” that they need to be ready to put the dollars to work and to sell the stimulus plan to Congress and the American people by showing that this effort is not another example of Washington spending money. Instead, it needs to be seen as Washington providing money to states and communities for real projects.
Along with job creation, what is driving this effort is the need and desire for the U.S. to be economically competitive with other countries so goods can be moved more efficiently from ports into cities, according to Frank M. Rapoport, Chair of the Public Private Partnership (P3) team at McKenna, Long & Aldridge LLP.
“That is why we rebuild infrastructure,” said Rapoport. “Sure we don’t want bridges to fall down, but it is not to make bridges look pretty; it is to make sure they are connected [and connected to intermodal transportation]. Obama intimately understands there is a dual purpose to this immediate gratification in terms of job creation and long term economic creation by making the U.S. an easier place to do business for countries bringing their goods overseas and to U.S.-based distribution points.”
Taking a look at the actual number of “ready-to-go” transportation projects, the American Association of State Highway and Transportation Officials (AASHTO) said this week that—based on the results of a survey sent to the Departments of Transportation for the District of Columbia and all 50 states—there are 5,148 “ready-to-go” transportation projects worth more than $64 billion. AASHTO said that these projects are considered “ready-to-go,” because they could be under contract within 180 days and support an estimated 1.8 million jobs if sufficient funding were available.
While the AASHTO focuses on transportation projects at the state level, the need for funding transportation infrastructure projects at the local level is not lost, as evidenced by this week’s U.S. Conference of Mayors. At the conference, participating U.S. Mayors unveiled its second report that is comprised of an inventory of ready-to-go local infrastructure projects that could be started and completed within two calendar years. The report revealed that 427 cities cited 11,391 infrastructure projects at a cost of $73 billion, creating 847,641 jobs.
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