‘Big and bold push’ for increased infrastructure spending in Washington

A photo op at the White House between leaders of both political parties has renewed hopes for a comprehensive, costly, and sorely needed huge package on infrastructure improvements that supporters say is “big and bold” and amount to as much as $2 trillion in new spending.

Neil Bradley, executive vice president and chief policy officer of the U.S. Chamber of Commerce, said the meeting between House Speaker Nancy Pelosi, D-Calif., Senate Minority Leader Chuck Schumer, D-N.Y., and President Donald Trump was “historic.”

“It’s rare you get these types of opportunities for these types of historic breakthroughs,” Bradley said, invoking President Ronald Reagan’s reaching across the aisle to House Speaker Tip O’Neill in 1982 which opened the door for longer combination trucks in exchange for a nickel increase in the diesel fuel tax.

Pelosi called the meeting “very productive” and said the parties would meet in three weeks to decide how to pay for it. “It's about jobs, jobs, jobs…it's a quality of life issue,” Pelosi said. “And in every way it's a safety issue.”

“It’s high time we end the gridlock in Washington so we can end the gridlock on the street,” Bradley said. “Everyone wins if we can get this done. There are lots of reasons for optimism.”

And there’s some pessimism as well. Reports indicated Schumer told Trump that the Senate Minority leader would not consider a gas tax hike — which would be a disproportionate burden on the poor. Schumer said he would agree to a fuel tax increase under one condition: Republicans reduce some of their tax cuts for corporations and wealthy Americans.

That’s questionable. What’s not questionable is the need. A 2017 study by the American Society of Civil Engineers said the U.S. had nearly a $1 trillion backlog of highway and bridge reconstruction needs.

“We're feeling our way, we don't have anything in concrete,” top Trump economic adviser Larry Kudlow told reporters.

  If business and labor can come together on this, there’s absolutely no reason Republicans and Democrats can’t come together on this, Bradley said. “The riskiest decision is to do nothing and allow this situation to fester. Waiting is not an option,” he said.

A recent Business Roundtable study shows such an investment would give the average U.S. household an additional $1,400 in annual disposable income and create 1.1 million new jobs over the next decade.

In addition the Business Roundtable study finds:

• Every $1 invested in infrastructure drives roughly $3.70 in additional economic growth;
• Average wages would rise by $1.34 per hour after 20 years;
• Average annual labor productivity would be 0.56 percent higher than baseline;
• U.S. businesses would invest an additional $1.9 trillion over 20 years; and
• $5.9 trillion would be added to gross domestic product (GDP) over the same period

The U.S. Chamber said infrastructure plan “needs real money and not gimmicks” for funding. The Chamber, American Trucking Associations and some major labor groups have all called for “modernizing” the fuel tax—18.4 cents on gasoline, 24.4 cents on diesel.

And it is also calling for an increase of 5 cents a year in each of the next 5 years for a total of 25 cents. The proposal would include indexing the tax for inflation and for future increases in fuel economy, so there would be no need to revisit this issue in the foreseeable future.

That would raise $394 billion over the next 10 years. All this would cost the average American only about $9 a month in additional gas taxes, according to the Chamber’s estimate.

As a show of unity, the Chamber provided representatives from labor and management to emphasize the need for greater infrastructure funding.

Tom Trotter, AFL-CIO legislative affairs representative, said he favors a “big, broad package” of infrastructure spending. “We’d like to go as big as we can right out of the gate,” Trotter said.

“Years past we used to pride ourselves in our ability to do that. We’ve been coasting too long. We need to do this in a big way.”

As for funding, Trotter said solving vast infrastructure needs “will require major investment,” hinting that an increase in the fuel tax (unchanged since 1993) was necessary.

“The cost of action is high—in the billions. But the cost of inaction is even higher,” he said. “American people win, workers win, businesses win, and both parties will win,” Trotter said. “Infrastructure is not a partisan issue.”

Bill Sullivan, executive vice president for advocacy of the American Trucking Associations, said the trucking industry sees infrastructure as a “nonpartisan” issue.

“We know there is politics involved,” Sullivan admitted. “We believe this is a moment when it can actually move ahead.”

Trucks account for nearly half of the Highway Trust Fund. “It strikes us when you have the biggest payer into the trust fund to pay more it should tell people that it’s high time to do it,” Sullivan said.

Because it’s barely a year before the presidential campaign consumes Washington, Sullivan said, the time to act is now.

ATA has identified the 100 worst bottlenecks in the nation. “We believe this is a kitchen table issue and the leaders are approaching it in a way that will help it go forward,” Sullivan said.

Infrastructure has a chance to be a bipartisan issue but it isn’t going to be nonpartisan if both parties bring up extraneous issues, the Chamber’s Bradley said. “Trying to re-litigate other fights isn’t going to help us get to a solution,” said the Chamber’s Bradley.

There has been some action at the state level. Ohio, Alabama, and Arkansas passed fuel tax legislation this year to help fund infrastructure work. But Congress and President Trump have remained stalled on any overarching federal infrastructure legislation.

“Small business owners are more affected by inaction in the infrastructure area and can be the greatest beneficiaries of infrastructure investment made by all levels of government,” Ed Mortimer, the U.S. Chamber’s vice president of transportation infrastructure policy, said recently. Of the U.S. Chambers’ roughly 3 million members, 96% are companies with less than 100 employees and 75 percent have less than 10.

Karen Olson Beenken, president and CEO of Blue Rock Companies, a beverage distributor in Montana, expressed concern for the safety of her employees and the cost of maintenance of her 93-truck fleet.

Beenken’s employees drive 1 million miles per year, causing her concern for their welfare. “This infrastructure bill is important to us for ultimately the safety and efficiency of our employees and company,” she said in a posting on the Chamber web site.

But not everybody is keen on raising fuel taxes. Americans for Prosperity Chief Government Affairs Officer Brent Gardner is urging the administration not to undermine its historic tax reform success with a gas tax increase that will harm most those who can least afford it.

“The best deal for the American people would be to take a gas tax hike off the table right now and to protect the historic achievement of the most significant tax relief in a generation,” Gardner said in a statement. “Anything to undermine that progress should be a nonstarter with both parties. Congress has the money they need to improve roads and bridges – they just need to be smarter spenders.”