Obama calls for a "National Infrastructure Reinvestment Bank"
Jeff Berman, Senior Editor -- Logistics Management, 2/15/2008
JAMESVILLE, Wis.—Earlier this week, Presidential candidate Barack Obama may have helped transportation infrastructure become a critical issue leading up to this November’s election, when he called for the establishment of a National Infrastructure Reinvestment Bank that would invest $60 billion over a ten year period for highways, technology, and other projects.
Obama proposed this concept as a component of his $210 billion economic stimulus package, when he made an economic policy address at a GE Assembly Plant on Wednesday.
“For our economy, our safety, and our workers, we have to rebuild America,” said Obama. “This investment will multiply into almost half a trillion dollars of infrastructure spending and generate nearly two million new jobs—many of them in the construction industry that’s been hit hard by the housing crisis.”
Funding for this endeavor, said Obama, will be made available by ending the war in Iraq.
Obama’s concept comes at a time when transportation infrastructure has received a fair amount of attention in recent weeks, following the January roll-out of a report released by the National Surface Transportation Policy and Revenue Study Commission. This report focused on the current state of surface transportation in the U.S., and it addressed the myraid needs to improved transportation infrastructure improvements needed to meet the expected demand in domestic freight transportation growth in the coming years.
Some of the things needed to help remedy an ailing and aging surface transportation system to better meet the Department of Transportation’s projected 70 percent increase in freight between now and 2020, included: the U.S. spending at least $225 billion per year for the next 50 years on its surface transportation system from all levels of government compared to the less than 40 percent of that figure spent today; fixing the current highway trust fund shortfall by recommending financial measures such as raising the gas—or federal motor fuels—tax to from five-to-eight cents per year to 25-to-40 cents per gallon per year over the next five years (or 41 to 66 cents per day), which would eventually be followed by a vehicle miles traveled tax until at least 2025, implementing a federal freight fee, and having a portion of Customs fees be dedicated to the highway trust fund.
Other Commission recommendations cited included an increase in tolling to add interstate capacity, congestion pricing in metropolitan areas of a million or more people to finance interstate and new capacity initiatives, and bringing private capital into surface transportation systems through public-private partnerships (PPP) that can help facilitate international trade with intermodal connections, which relieve congestion that add time and costs to the supply chain.
The fact that surface transportation is getting some overdue attention in an election year may prove to be good timing for shippers that count heavily on our nation’s transportation infrastructure to move freight through continually their supply chains, according to some well-respected transportation officials inside the Beltway.
“Obama’s plan reflects the urgent need we have in this country for finding a way to invest in infrastructure and invest with federal leadership,” said Leslie Blakey, executive director, Coalition for America’s Gateways and Trade Corridors, in an interview. “As I understand it, this [amount] would be over and above what we are already investing into transportation infrastructure...it would be a significant addition to what is already being put into the system."
While it is not know if all of the proposed $60 billion would go into transportation infrastructure, Blakey said it is undoubtedly where a great deal of it is likely to be spent and is where some of the most urgent needs are. She added that this plan represents “good strategic thinking” from an economic point of view, because within the transportation sector—and related associations—there was a push to get transportation infrastructure projects included in the recently-passed $168 billion economic stimulus package. There are many projects she said that could be translated into jobs 30-to-90 days if the funding were available, said Blakey. And the fact that Obama recognizes the need for improved transportation infrastructure to meet real needs, rather than just spreading money around, is also very helpful in stabilizing the economic problems being experienced in the country, she added.
“The issue of changing goods movements and logistics patterns, fixing capacity problems, and issues of economic importance are things important to shippers,” said Mort Downey, chairman of PB Consult and former U.S. Department of Transportation secretary in a January interview. “It is timely and also all connected.”
Downey added that it can be hard for shippers and freight carriers to get deeply involved with transportation infrastructure policy at the national, but with last month’s report [and Obama’s recent announcement] at that level, it appears there is a national level discussion starting, where everyone is invited to the table, he said.
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