By Ty Gable President National Precast Concrete Association
At the same time that reports are cascading through Washington, D.C., describing the nation’s crumbling roads and failing bridges, we could be headed for a funding showdown that could put the brakes on current highway projects. The continuing resolution that funds the nation’s highway bill (SAFETEA-LU) is set to expire again Sept. 30. That highway bill is funded similarly to the Federal Aviation Administration bill that stalled last summer in Congress and shut down the FAA for two weeks, during which time all airport construction projects were halted and thousands of construction workers were furloughed.
While another extension of SAFETEA-LU would be considered routine in normal times, the partisan gridlock in Washington makes any long-term highway funding uncertain. The best that the precast industry could realistically hope for right now is a continuation of the 18.4 cents-per-gallon gas tax, which would fund highway and bridge work at current levels and keep projects going. The proposal by Rep. John Mica (R-Fla.), chair of the House Transportation and Infrastructure Committee, is an austere $230 billion that according to some analysts would have the effect of reducing the transportation budget by 35% over the next six years. To Mica’s credit, he is living within the spending cuts and funding restrictions that are contained within the budget passed by the House last spring. A lean transportation budget is a budget nonetheless, and it provides six years worth of certainty, while lacking any big ideas for real progress in rebuilding our transportation infrastructure. Call it a maintenance budget.
Meanwhile, the Senate has two versions of an infrastructure bank in the works. One version, proposed by John Kerry (D-Mass.) and Kay Bailey Hutchison (R-Texas), would create an independent entity with $10 billion in seed money that would, in theory, leverage hundreds of billions of dollars in private capital for infrastructure projects through loans and loan guarantees. The other proposal, backed by Frank Lautenberg (D-N.J.) and John Rockefeller (D-W.Va.), would house an infrastructure “fund” within the USDOT that would enable the USDOT to fund projects through a grant-making process. Both of these proposals are much more complicated than that, of course, but they’ll be batted back and forth in the Senate this fall. There’s talk of merging the two into a hybrid that would likely run into fierce House opposition – and more delays.
The American Society of Civil Engineers stepped into the debate this summer by publishing a study that describes the economic impact that failing infrastructure has on society every day in the United States. According to the study, deteriorating infrastructure will “cost the American people more than 870,000 jobs and suppress the growth of the country’s gross domestic product by $3.1 trillion by 2020.” Not all of that is transportation infrastructure – municipal stormwater and wastewater systems are included, of course, as well as other vital infrastructure components. For most precasters, however, these are all nuts-and-bolts products that form a critical share of many precast businesses.
If you accept the conclusions of the ASCE study, the choice is pretty clear. Members of Congress – both parties – need to put aside the grandstanding, stay away from the TV cameras, stop the name-calling and sit down together in a room and start working on bold solutions to rebuild our infrastructure and put the construction industry back to work. There are many credible ideas out there, but no silver bullets. What needs to emerge is a comprehensive bill that provides certainty of transportation funding for at least five years, combines traditional gas tax funding with innovative new public-private partnerships to rebuild transportation and water infrastructure and incorporates technology to create efficiencies. We need a top-to-bottom restructuring that makes the best use of every available dollar. Here’s the deal: It can’t be done by either party or the administration, but if all sides can set aside their ideologies for this one issue, perhaps they can do something really big for the country. Our future prosperity depends on it.