Decaying infrastructure costs U.S. billions each year, report says
As Congress debates how to meet the nation’s long-term transportation needs, decaying roads, bridges, railroads and transit systems are costing the United States $129 billion a year, according to a report issued Wednesday by a professional group whose members are responsible for designing and building such infrastructure.
Complex calculations done for the American Society of Civil Engineers indicate that infrastructure deficiencies add $97 billion a year to the cost of operating vehicles and result in travel delays that cost $32 billion.
“If investments in surface transportation infrastructure are not made soon, these costs are expected to grow exponentially,” the ASCE said. “Within 10 years, U.S. businesses would pay an added $430 billion in transportation costs, household incomes would fall by more than $7,000, and U.S. exports will fall by $28 billion.”
Deterioration of the U.S. transportation system has been likened to an iceberg, with just the tip of an enormous obstacle to economic growth showing above the surface. The ASCE report contends that infrastructure failure already is dramatically affecting travel and commerce.
It is the latest of several reports to predict dire consequences if the nation does not swiftly address the need to rebuild 60-year-old highway systems and rail lines often far older than that.
In May, a report by the Urban Land Institute warned that the United States is falling behind three emerging economic competitors: Brazil, China and India. The institute’s report put in global perspective an issue addressed last year by 80 experts led by former transportation secretaries Norman Y. Mineta and Samuel K. Skinner. That group concluded that as much as $262 billion a year must be spent on U.S. highways, rail networks and air transportation systems.
The infrastructure crisis is not lost on Congress, but Republicans who control the House and Democrats who control the Senate have different ideas about how to address it.
Unable to agree on long-term aviation funding, Congress proved incapable last week of passing a simple extension of current funding levels, something it has done 20 times since funding for the Federal Aviation Administration expired in 2007. The agency has been operating in a partial shutdown since midnight Friday, losing an estimated $30 million a day in airline ticket tax revenue.
There is an equally deep divide between the two houses on a long-term plan for funding surface transportation.
House Republicans favor a six-year plan that would provide about $35 billion a year, an amount that transportation committee Chairman John L. Mica (R-Fla.) says can be leveraged into about $75 billion through a variety of means, including public-private partnerships.
Mica calls a two-year, $109 billion funding proposal that has won bipartisan support in the Senate “a recipe for bankruptcy” of the Federal Highway Trust Fund, which bankrolls surface transportation.
Rep. Nick J. Rahall II (W.Va.), ranking Democrat on Mica’s committee, said the ASCE report underscored the folly of efforts to “do more with less.”
“Today’s report provides the cold hard truth that America’s economic recovery and long-term competitiveness will suffer if we continue to under-invest in our future,” Rahall said. “Slashing investments by one-third, as Republicans have proposed to do, will make the economic impact on America’s middle class even worse than the grim predictions by the economists in this report.”
The ASCE report predicted that without infrastructure investment, 870,000 jobs would be lost and economic growth would be stifled to the tune of $3.1 trillion by 2020. To avert that, the report says, will require an investment of about $1.7 trillion by 2020. It estimated the gap between what is being spent and what needs to be spent at $94 billion a year.
“The link between a nation’s infrastructure and its economic competitiveness has always been understood,” said Kathy J. Caldwell, president of the ASCE. “But today, for the first time, we have data showing how much failing to invest in our surface transportation system can negatively impact job growth and family budgets.”
Thomas J. Donohue, president of the U.S. Chamber of Commerce, said the necessary spending was “not just transportation for transportation’s sake.”
“Without more robust economic growth, the U.S. will not create the 20 million jobs needed in the next decade to replace those lost during the recession and to keep up with a growing workforce,” he said.
Ultimately, Americans would get paid less, the ASCE report says. The economy would lose jobs, and the paychecks of those who are able to find work would be cut by nearly 30 percent.
The cost of a crumbling transportation system was described by Steven Landau of Boston’s Economic Development Research Group, which did the research for the ASCE.
“Business will have to divert increasing portions of earned income to pay for transportation delays and vehicle repairs, draining money that would otherwise be invested in innovation and expansion,” Landau said.