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4 recommendations for smarter American infrastructure

4 recommendations for smarter American infrastructure

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A bipartisan coalition advocates a long-term infrastructure plan that would invest $200 billion per year for next decade and supports an alternative funding model to foot the bill.

As Congress gets ready to pick a "supercommittee" that must find at least $1.5 trillion to cut from the U.S. deficit, a bipartisan coalition backed by several political heavyweights has released a new report urging Congressional leaders to reconsider American investments in roads, ports, broadband and other elements of a high-tech transportation network.

The coalition, called the Building America's Future Educational Fund, doesn't mince words, suggesting that America's infrastructure is "falling apart" and that the economy is at peril because of this. For example, the declining infrastructure now costs American families an average of $1,000 annually in vehicle repairs, wasted time and so on.

But that's just the tip of the iceberg.

Former Pennsylvania Governor Ed Rendell, one of the fund's co-chairs, said the urgent need to invest in American infrastructure cannot be overlooked. What's more, he believes these investments can be made without adding a substantial amount of new debt to the country's extraordinary burden. Rather, the investments could come in the form of an Infrastructure Bank that would, instead, earn a return on projects over time.

"While we are doing serious debt reduction, we can still invest in American competitiveness," Rendell said.

Also co-chairing the coalition are New York mayor Michael Bloomberg and former California governor Arnold Schwarzenegger.

The specific call to action in the group's report, "Falling Apart and Falling Behind," is a revitalization plan that specifies at least $200 billion in investment over the next decade. (The report was funded by the Rockefeller Foundation.) One reason this should be attractive in the short term is that these investments could help spur the creation of an estimated five million jobs, according to Rendell. Right now, the major transportation policy under consideration includes a six-year proposal by the House transportation committee that would dramatically decrease funding in this area. Not the right approach, the coalition suggests.

Bloomberg noted:

"In Washington, everyone is talking about the need to fix the economy, but our long-term economic prospects will only get weaker the longer Congress allows our infrastructure to crumble. As Congress stands idly by, our competitors around the world are racing ahead -- especially when it comes to building modern transportation networks. Washington needs to get in gear transforming our infrastructure or else our economy will be stalling out for decades to come."

Consider these gloomy stats, repeated by Rendell on a phone briefing about the report:

  • Seven out of the top 10 ports in the world are located in China; none are in the United States
  • The U.S. rail system ranks 18th globally
  • The U.S. air transportation system ranks 32nd in the world

I think it bears repeating that the coalition isn't naive enough to suggest that we oodles of new spending by the federal government, although there would be some: roughly $18 billion to $20 billion per year. Rather, it encourages the development of policy to inspire innovation and investment.

In fact, the idea of the infrastructure bank was sounded several times during the briefing. One formal idea, proposed in March 2011 by Senator John Kerry (D-Mass.) and Kay Bailey Hutchison (R-Texas), would create a financial authority for infrastructure projects. The concept has been embraced by President Obama, and it has been the subject of recent economic essays published by McKinsey and The New York Times. (Both of the links are articles by Michael Likosky, who is author of "Obama's Bank: Financial a Durable New Deal.")

The Infrastructure bank is one of four practical recommendations that are outlined in detail in the coalition's report.

They are:

  1. Adopt a nation strategy toward infrastructure investments, rather than handling them piece-meal on a short-term cycle and according to political agendas. Notes the report's authors: "To keep America economically competitive, this plan must be as significant in scale as the plans adopted by our competitor nations."
  2. Pass a REAL transportation bill, rather than recycling one that expired in 2009. The report wants this bill to focus on things that it believes will produce tangible economic benefits, including high-speed rail, the Next Gen aviation system, freight rail and public transit.
  3. Be innovative and realistic about how to pay. This is where the coalition advocates the idea of an Infrastructure Bank that will encourage private investment in the "best big projects." To do this, projects must be considered on a cross-state, cross-modal basis. In other words, the big picture must play a role in decisions. (See #1, where the coalition advocates a strategy.)
  4. Seek accountability. For any plan to succeed, practically, there must be clear criteria for funding and systems to make sure that project are completed on time, under budget and as expected.

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Heather Clancy

Section Editor

Heather Clancy has written for United Press International, ZDNet, Entrepreneur, Fortune Small Business, the International Herald Tribune and the New York Times. She holds a degree from McGill University. She is based in New Jersey. Follow her on Twitter. Disclosure