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Rebuilding and modernizing America’s infrastructure is a major priority for the business community.
“This year, we are calling on our lawmakers to take bipartisan action on a meaningful infrastructure package now,” said U.S. Chamber and CEO Tom Donohue in February at the America's Infrastructure: Time to Invest event.
On Wednesday, Donohue took that message to Capitol Hill in testimony before the House Ways and Means Committee. He was joined by AFL-CIO president, Richard Trumka and two members of the Chamber-led Americans for Transportation Mobility coalition, Gregory DiLoretro of the American Society of Civil Engineers and Chris Spear of the American Trucking Associations.
In the committee’s first hearing on infrastructure since 2015, Donohue outlined the business case for Congress to stop talking and take action to rebuild our infrastructure.
“Congress must come to grips with the fact that most of this system was built 60-150 years ago,” Donohue said. “The Chamber believes the time has come to enact a federal infrastructure modernization plan to provide every American a 21st century system.”
The costs of inaction for American businesses, workers, and families are piling up.
“According to the American Transportation Research Institute, congestion on the Interstate highway System alone cost the trucking industry nearly $74.5 billion in 2016 and wasted more than 1.2 billion hours,” Donohue explained. In addition, congestion and vehicle repairs due to poor roads cost the average commuter over $1,500, he added.
Last year, the U.S. Chamber led the infrastructure discussion by laying out four pillars of an infrastructure modernization plan. Donohue reiterated the plan to the committee with a main focus on the first pillar – a modest increase in the federal motor fuel user fee:
The user fee was last raised in 1993. Since then, inflation has eroded over 40 percent of the value of the fee. In addition, vehicles are significantly more fuel-efficient than they were 25 years ago. As a result, motorists use less fuel to drive the same number of miles, and there is significantly less revenue to maintain the roads upon which they drive. Raising the gas tax by just 25 cents would generate $394 billion over the next 10 years to invest in our roads, bridges, and transit systems.
The second pillar is encouraging private investment. “There is $100 billion in private global capital looking for investment opportunities in infrastructure, and there will be a lot more private money to invest in infrastructure if we make the kinds of policy changes we are calling for,” said Donohue.
Donohue advised strengthening and expanding federal loans programs “such as TIFIA and RRIF loans, Private Activity Bonds, grants, and other mechanisms to facilitate public-private partnerships, or P3s.”
The third pillar is permit streamlining. “I’ve said this before and I’ll say it again, you can line up all the cash you need, but if the permitting process is slow or broken – there’s no point in doing an infrastructure deal,” Donohue warned. “Any proposal that fails to reform the permitting system won’t have the Chamber’s support.”
The fourth pillar deals with workforce issues. Even with adequate financing and prompt government agency project approvals, unless there are enough workers available to do the work, we won’t be able to build a modernized infrastructure, cautioned Donohue:
Last year, the USG-U.S. Chamber Commercial Construction Index consistently found that a majority of builder have a difficult time finding skilled employees. In October of 2018, the number of unfilled construction jobs hit 323,000 – the highest number of open positions in the sector since the Bureau of Labor Statistics began keeping track.
Let me state it more simply, the American economy is out of workers. Congress, the administration, and the private sector must act to expand our labor force, including the construction workers.
Along with more technical education opportunities and apprenticeships, immigration reforms are needed. “Nearly 100,000 immigrants who are protected under the [Deferred Action for Childhood Arrivals] DACA or [Temporary Protected Status] TPS programs are construction workers,” Donohue said. “We need a permanent solution for Dreamers and TPS beneficiaries so they can stay in their homes and jobs and continue to contribute to our economy.”
One group that would benefit from improved infrastructure investments are small businesses.
The Q1 2019 MetLife & U.S. Chamber of Commerce Small Business Index found a majority of small businesses consider roads and bridges as critical to their success. But 62% said local roads and bridges are in average, poor, or very poor conditions, and 52% said the same about the state of U.S. highways.
“The Index results add to a mountain of evidence that America’s infrastructure isn’t meeting the demands of today’s business owners and today’s economy,” said Neil Bradley, U.S. Chamber Executive Vice President and Chief Policy Officer, about the findings. “This should be a wake-up call to leaders in Washington: It’s time to invest in modernizing our nation’s infrastructure.”
After laying out a proactive course of action, Donohue cautioned lawmakers from reversing 2017’s historic tax reforms to pay for infrastructure, calling it a “non-starter for the business community and for many in Congress.”
Instead, Donohue argued, “we need to build upon tax reform by significantly increasing infrastructure investment to support long-term economic growth and to compete globally.”
He reminded the committee that action on infrastructure is urgently needed: “Without a serious commitment from federal lawmakers, we will not make the kind of progress demanded by the challenges we’re facing.”