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Obama still heeding the call for more action on infrastructure

By Jeff Berman, Group News Editor
April 01, 2013

It is well known that the White House has made an effort to push for increased investments into the nation’s infrastructure for many reasons.

These, reasons, though tend to have one common theme: to make the United States more economically viable and competitive. Now that I think about it there is one other theme, too: infrastructure investment is very expensive and finding optimal ways of paying for it is something which ostensible comes with more than its share of frustration and political squabbling.

Last Friday, President Obama paid a visit to the Port of Miami to explain the White House’s most recent call for infrastructure investment, entitled the “Partnership to Rebuild America,” which was first heralded during Obama’s State of the Union Address in February.

The main components of the Partnership to Rebuild America include:
-a “Fix-It-First” program that would focus on putting people to work “as soon as possible on our most urgent repairs, like the nearly 70,000 structurally deficient bridges across the country,” calling for $50 billion in frontloaded transportation infrastructure investment and would direct $40 billion towards reducing the backlog of deferred maintenance on highways, bridges, transit systems, and airports nationwide;
- a Partnership to Rebuild America that attracts private capital to upgrade things businesses need such as modern ports to move our goods, among others; and
- the investment of $10 billion to create and capitalize an independent National Infrastructure Bank (NIB), which would leverage private and public capital for infrastructure projects that show the greatest merit. Each dollar of federal funding can leverage up to $20 in total infrastructure investment, mainly from partners in the private sector and state and local government

“When you ask companies who brought jobs back to America in the last few years they’ll say, if we upgrade our infrastructure, we’ll bring even more,” Obama said at the Port of Miami last week. “So what are we waiting for?  There’s work to be done; there are workers who are ready to do it.  Let’s prove to the world there’s no better place to do business than right here in the United States of America, and let’s get started rebuilding America.”

It is good to be positive as there is tons of room for improvement when it comes to U.S. infrastructure.

Consider this: The American Society of Civil Engineers (ASCE) handed the U.S. a D+ for the quality of its infrastructure. The good “news” here is that it represents an improvement of its previous grade of a D. Still not quite Dean’s List material, it is fair to say though.

The ASCE said in a report it issued earlier this year that with an additional investment of $157 per year—in conjunction with expected U.S. spending of roughly $207 billion per year—between now and 2020 the U.S. could eliminate a drag on economic growth and protect $3.1 billion in GDP, $1.1 trillion in U.S. trade value, 3.5 million jobs, $2.4 trillion in consumer spending, and $3,100 in annual personal disposable income.

What’s more, it said that in tandem with current investment trends cumulative infrastructure investment needs will be about $2.7 trillion by 2020 and rise to $10 trillion by 2040. ASCE said it is expected that there will only be available funding to cover 60 percent—or about $1.7 trillion—of those needs through 2020, which will subsequently drop to 53 percent by 2040, leading to the expected investment gap of $1.1 trillion by 2020 and $4.7 trillion by 2040.

These are pretty significant numbers. By now, we all well know that these projects equal more jobs and more jobs equals a better and more cohesive economy (which we are seeing some signs of). But we also know that to truly get the ball rolling an upfront investment is needed. This is, of course, where Washington comes in and invariably things get mothballed.

If Maryland and Virginia can take matters into their own hands, with their respective plans on fuel taxes to pay for transportation infrastructure, maybe they can serve as an example for the federal government to get our nation’s infrastructure to get to where it really needs to be…before it is too late.

About the Author

Jeff Berman headshot
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. .(JavaScript must be enabled to view this email address).

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