Obama points to infrastructure as a key driver for economic growth in speech to Congress

As anticipated, investment in transportation infrastructure was prominently mentioned in a speech President Obama made to Congress last night, which focused on job creation and the economy.

By ·

As anticipated, investment in transportation infrastructure was prominently mentioned in a speech President Obama made to Congress last night, which focused on job creation and the economy.

In a wide-ranging speech centered on a piece of legislation—the $447 billion “American Jobs Act”—transportation infrastructure was one of the key themes for job growth, with unemployment currently at 9.1 percent, and ways to improve the economy, with GDP growth growing at a sluggish 1.3 percent in the second quarter.

Obama wasted little time explaining current state of transportation infrastructure in the United States.

“Everyone here knows we have badly decaying roads and bridges all over the country,” he said. “Our highways are clogged with traffic.  Our skies are the most congested in the world.  It’s an outrage.” 

He went on to say that building a world class transportation system is what made the U.S. an economic superpower, while other countries like China are now building newer airports and faster railroads at a time when millions of unemployed construction workers could build them right here in America.

In pushing the urgent need for more infrastructure spending, the bill would call for $50 billion to be allocated for transportation spending—including highway, public transit, intercity rail, and aviation systems—and $10 billion for an infrastructure bank, which he has pushed for multiple times during his term as president.

Regarding the infrastructure bank, he explained it in simple but direct terms.

“[W]e’ll set up an independent fund to attract private dollars and issue loans based on two criteria:  how badly a construction project is needed and how much good it will do for the economy,” he said. “This idea came from a bill written by a Texas Republican and a Massachusetts Democrat.  The idea for a big boost in construction is supported by America’s largest business organization and America’s largest labor organization.  It’s the kind of proposal that’s been supported in the past by Democrats and Republicans alike.  You should pass it right away.”

The infrastructure bank legislation President Obama cited by Obama was drafted in March by Senators John Kerry (D-MA), Kay Bailey Hutchison (R-TX) and Mark Warner (D-VA) and is entitled the BUILD (the Building and Upgrading Infrastructure for Long-Term Development) Act.

The main objective of the legislation is to support the establishment of an American infrastructure bank in the United States to leverage private investment.

But unlike other calls for an infrastructure bank in the past, which have typically proposed an allocated funding amount that would serve as the primary source of funding for infrastructure projects, this one is different in the sense that it would require a lower up-front investment, which would subsequently be supported by private sector investment.

“These transportation and infrastructure investments would both be hugely helpful for Congress to act on,” said Leslie Blakey, executive director of the Coalition for America’s Gateways and Trade Corridors. “Shrinking the project delivery time through a revamped criteria [how badly a construction project is needed and how much good it will do for the economy] would be one of the most effective things Congress can do immediately to help move these transportation projects along. This plan would be hugely helpful for the construction industry and the delivery of transportation projects.”

Last night’s speech was encouraging in the fact the President Obama continues to be a believer in infrastructure, said Mortimer L. Downey, Chairman, Coalition for America’s Gateways and Trade Corridors, Senior Advisor, Parsons Brinckerhoff, and Former U.S. Deputy Secretary of Transportation.

“He talked about the right things when it comes to infrastructure and economic growth,” said Downey. “This and his recent call to extend current surface transportation funding [which is expiring on September 30] are key to having long-term success.”

Transportation and Infrastructure Committee Chairman John L. Mica (R-FL) had a tepid reaction to President Obama’s infrastructure bank proposal.

“While the President reconfirmed that our highways are clogged and our skies are congested, his well delivered address provided only one specific recommendation for building our nation’s infrastructure,” said Mica in a statement. “Unfortunately, a National Infrastructure Bank run by Washington bureaucrats requiring Washington approval and Washington red tape is moving in the wrong direction.  A better plan to improve infrastructure is to empower our states, 33 of which already have state infrastructure banks.”

Specific language for the “American Jobs Act” is expected to be sent to Congress on Monday, September 12.


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
Improving Packaging: The Cost of Shipping Air is Going Up
Retailers and manufacturers that insist on using inefficient and sloppy packaging methods—oversized boxes, inefficient packaging, poorly constructed palletized contents—are paying for their mistakes in sharply higher freight rates. Pitt Ohio White Paper, Logistics White Paper, Dimensional Packaging
Download Today!
From the July 2016 Issue
While it’s currently a shippers market, the authors of this year’s report contend that we’ve entered a “period of transition” that will usher in a realignment of capacity, lower inventories, economic growth and “moderately higher” rates. It’s time to tighten the ties that bind.
2016 State of Logistics: Third-party logistics
2016 State of Logistics: Ocean freight
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....

Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...
Port of Oakland launches smart phone apps for harbor truckers
Innovation uses Bluetooth, GPS to measure how long drivers wait for cargo