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Andrew Herrmann, P.E. SECB, F.ASCE
The American Society of Civil Engineers
Jobs Now Hearing
United States House of Representatives
Democratic Steering and Policy Committee
February 2, 2011
The American Society of Civil Engineers (ASCE)1 would like to commend the Democratic Steering and Policy Committee for holding a hearing today on how surface transportation investment can be a key factor for continued economic recovery and job creation. The Society is pleased to present to the Committee our views on investing in the nation’s infrastructure.
Infrastructure Receives a Grade of “D”
ASCE’s 2009 Report Card for America’s Infrastructure graded the nation’s infrastructure a “D” based on 15 categories (the same overall grade as ASCE’s 2005 Report Card), and stated that the nation needs to invest approximately $2.2 trillion from 2009 – 2014 to maintain the national infrastructure in a state of good repair. This number, adjusted for a 3 percent rate of inflation, represents capital spending at all levels of government and includes what is already being spent. Even with the current and planned investments from federal, state and local governments from 2009 - 2014, the “gap” between the overall need and actual spending will exceed $1 trillion by the end of the five year period.
In the Report Card, the nation’s surface transportation system included roads receiving a grade of “D-”, bridges receiving a grade of “C”, and transit receiving a grade of “D”. With nearly onethird of roads in poor or mediocre condition, a quarter of the nation’s bridges either structurally deficient or functionally obsolete, and transit use increasing to its highest levels in 50 years, it is not hard to see why the nation’s surface transportation system is in a state of critical decline. Additionally, to bring just these three surface transportation categories up to an acceptable condition would require a five year investment of $1.2 trillion, according to ASCE estimates. If the nation continues to under invest in infrastructure and ignores this backlog until systems fail, we will incur even greater costs.
As Congress begins the process of developing a comprehensive multi-year surface transportation authorization bill, and as President Obama discusses the administration’s hope to invest $50 billion on the nation’s infrastructure, our roads, bridges, and transit systems continue on in a state of decline. The total of all federal spending for infrastructure has steadily declined over the past 30 years, according to the Congressional Budget Office. The results of years of under investment can be seen in traffic and airport congestion, unsafe bridges and dams, deteriorating roads, and aging drinking water and wastewater infrastructure.
ASCE is concerned with the increasing deterioration of America’s infrastructure, reduced investment for the preservation and enhancement of our quality of life, and with the threatened decline of U.S. competitiveness in the global marketplace. In response, ASCE has not only issued multiple Report Cards on the condition of infrastructure, but has sought to advance solutions that provide for a clean and safe quality of life, as well as fuel economic growth.
5 Key Solutions
In 2010, ASCE brought together engineers and infrastructure policy experts to further focus on the 5 Key Solutions that were identified in the 2009 Report Card for America’s Infrastructure.
These solutions include:
• Increase federal leadership in infrastructure;
• Promote sustainability and resilience;
• Develop federal, regional, and state infrastructure plans;
• Addressing life cycle costs and ongoing maintenance; and
• Increase and improve infrastructure investment from all stakeholders.
During the infrastructure roundtables in both Washington, DC and throughout the country, several themes were identified as common problems or needs including the need for a clear national infrastructure vision, a better informed public, and the need for performance-based data that can target investments which reward good performance. By addressing these issues intelligently with smart infrastructure investments, we can develop a safer and more economically competitive nation.
Infrastructure Investment = Jobs
It is long established that money invested in essential public works can create jobs, provide for economic growth, and ensure public safety through a modern, well-engineered national infrastructure. By improving the nation’s deteriorating infrastructure system both economic and job creation opportunities will be provided, while creating a multi-modal transportation system for the Twenty-First Century. The nation’s transportation infrastructure system has an annual output of $120 billion in construction work and contributes $244 billion in total economic activity to the nation’s gross domestic product. In addition to the overarching economic benefits, the Federal Highway Administration estimates that every $1 billion invested in the nation’s highways supports 27,823 jobs, including 9,537 on-site construction jobs, 4,324 jobs in supplier industries, and 13,962 jobs throughout the rest of the economy. Additionally, Standard and Poor’s has stated that highway investment has shown to stimulate the economy more than any other fiscal policy, with each invested dollar in highway construction generating $1.80 toward the gross domestic product in the short term, while Cambridge Systematics estimates that every dollar taxpayers invest in public transportation generates $6 in economic returns.
The transportation industry’s experience with the American Recovery and Reinvestment Act of 2009 illustrated the strong job creation impact of dedicated transportation investment, with the $48 billion for transportation improvements in the legislation supporting tens of thousands of jobs in engineering, construction, and supporting industries. The concern now is that with funding from the Recovery Act drying up and a continued delay for a new multi-year surface transportation bill that jobs created with the legislation will disappear in 2011.
The job creation potential of infrastructure investment is only one contributing factor toward how surface transportation allows for the nation to compete on in the global marketplace. Equally, important are the benefits to the region’s long term growth and productivity. A significant challenge to this economic growth is increased congestion, which contributes to the deterioration of the nation’s infrastructure. Therefore, the importance of freight movement and the impacts of congestion on the nation’s economy must be emphasized.
The U.S. is Falling Behind
While taken for granted by most Americans, our infrastructure is the foundation on which the national economy depends. As the economy grows, these assets must adjust accordingly. The current system was originally built in the 1950’s and 1960’s at a time when the country had different transportation needs and a smaller population. With an expanding population and a larger economy the nation needs a transportation system that could keep pace. Unfortunately, due to the rapid growth of the country highway and freight capacity failed to keep up. Just last month, the Texas Transportation Institute released the 2010 Urban Mobility Report, which paints an accurate picture of urban congestion in the United States. The cost of congestion in the nation has risen from $24 billion in 1982 to $115 billion in 2009, when measured in constant 2009 dollars. The average cost to commuters has risen to $808 in 2009 compared to the inflation adjusted $351 in 1982. As the nation grows the surface transportation system has not kept pace, leading to a drain on the economy in delayed delivery of goods and services.
To meet the demands of our global economy, Congress must enact a multi-year surface transportation authorization bill that enhances and improves connectivity and level of service across the nation. Congress should be working with the Department of Transportation to address the movement of freight as well as freight bottlenecks that plague our current surface transportation systems. By relieving freight congestion through capacity building in appropriate corridors while making smarter, integrated transportation and land use decisions, our nation’s ability to compete in a global economic market can continue to grow.
Freight and passenger rail generally share the same network, and a significant potential increase in passenger rail demand will add to freight railroad capacity challenges. Interstate commerce remains the historic cornerstone in defining the federal role in the nation’s transportation system. A new authorization of surface transportation program should provide for a strong federal role in freight mobility and intermodal connectors. This should include the creation of a program funded with dedicated revenue to provide new capacity and operational improvements focused on securing safe, efficient movement of freight across all sectors.
Transportation Investment and a Strong Economy
To illustrate further the correlation between transportation and a strong national economy, the U.S. Chamber of Commerce in late 2010 released a transportation performance index that examines the overall contribution to economic growth from a well-performing transportation infrastructure. The index displays a decline in the nation’s economic competitiveness, due to a continued lack of investment in surface transportation systems on all levels. However, the results also indicate that a commitment to raising the performance of transportation infrastructure provided long-term value for the U.S. economy. While, efforts like the American Recovery and Reinvestment Act of 2009 have provided some short term relief to a struggling engineering and construction sector, without a new multi-year surface transportation bill a sustained recovery, leading to job creation and growth in the sector will remain difficult.
Surface transportation infrastructure is a critical engine of the nation’s economy. It is the thread which knits the country together. To compete in the global economy, improve our quality of life and raise our standard of living, we must successfully rebuild America’s public infrastructure. Faced with that task, the nation must begin with a significantly improved and expanded surface transportation system. A surface transportation authorization must be founded on a new paradigm; instead of focusing on the movement of cars and trucks from place to place, it must be based on moving people, goods, and services across the economy. Beyond simply building new roads or transit systems, an intermodal approach must be taken to create a new vision for the future.
ASCE looks forward to working with the Congress as it develops progressive surface transportation authorization legislation which is founded on a strong national vision, adequate funding and new technology, and creates an integrated, multi-modal national transportation system.