DMI Blog

Harry Moroz

The Age of Infrastructure

Perhaps because national infrastructure is so amenable to physiological comparison – highways are the nation’s bloodstream, its sewage systems the digestive tract, its bridges synapses – it is also subject, at least in journalistic cliché, to one of life’s few inevitabilities: aging.

Much of the evidence for this “infrastructural maturity” results from a 2005 report by the American Society of Civil Engineers (ASCE) that gave America’s infrastructure an average of a D on its Infrastructure Report Card. Grades ranged from a D- for drinking water systems (there is a wide funding gap for improvements, particularly in urban centers) and navigable waterways (half the nation’s locks are functionally obsolete) to a relief-inspiring C+ for solid waste (the number of landfills has declined, but mammoth regional fills have replaced them). The Center for Strategic and International Studies (CSIS) outlined similar concerns in its 2006 “Guiding Principles for Strengthening America’s Infrastructure”: aviation traffic will grow 39% by 2016, freight tonnage will increase 50% by 2020, and severe highway bottlenecks have already increased 40% in the last five years, but the structures that support these systems are deteriorating. 13,000 fatalities result each year from inadequate maintenance of highways, $63.2 billion are lost to traffic on the roadways, and $9 billion are lost to aviation delays.

Despite the ASCE’s empirical evidence and our intuitive sense (when was the last time you sat bumper-to-bumper with an SUV or stood jowl-to-jowl with someone in the subway) that infrastructure is aging and inadequate, no large-scale effort has been undertaken to confront the problem in a comprehensive and purposeful manner. Even after a bridge collapsed in Minnesota , a steam pipe burst in New York City, and levees broke in New Orleans, attempts to mend our bridges, highways, and waterways still stall because of bureaucratic strife and ineffective funding.

What often hinders large-scale infrastructure projects is not the knowledge that such projects are necessary or the lack of technical skill to carry them out. Rather, when politicians and government agencies tackle endeavors of such proportions, priorities clash, funding streams are challenged, and reputations are put on the line (For an international example, see Chile’s Transantiago bus service. Transantiago was designed to be self-financing, but is now expected to cost $40 million a month.). This means that massive construction plans become as much about individual personalities and personal ambition as about concrete, steel girders, and getting a car across the Hudson River. As Robert Puentes of the Brookings Institution remarked at a congressional hearing on ground transportation, “The sad fact is that now that the Interstate Highway System is completed there is no coherent national vision for addressing a complex and conflicting set of transportation challenges. As a result, America’s transportation policy is adrift with no clear goals, purpose, or ability to meet these challenges.”

A unique solution to the bureaucratic and financial problems that often beset large-scale infrastructure projects has been proposed by Senators Chris Dodd and Chuck Hagel. On the morning of the Minnesota bridge collapse, as New York Times columnist Bob Herbert pointed out, the senators announced their sponsorship of legislation to create a National Infrastructure Bank. The Bank would issue bonds to raise funds for infrastructure projects that would be selected based on a strict set of criteria. Applications would be accepted only for projects that cost at least $75 million, have a public sponsor (a state or local government), and are of regional or national significance. The Bank would then rate each application based on its promotion of economic growth, its mobility improvements, its reduction of poverty concentration, its environmental benefits, its potential to promote smart urban growth, and its regional or national significance (the criteria vary slightly for each type of infrastructure project).

The National Infrastructure Bank is a first step in creating a coherent vision of American infrastructure. First, the use of bonds – rather than a pay-as-you-go system that relies on yearly revenues – allows the federal government to develop a stable, long-term strategy for economic growth based on infrastructure improvements. Such a financing stream is less subject to political whims and to revenues, which fluctuate with the economy and with legislative action (and inaction). Second, federal funding for infrastructure – in particular, for the transportation system – is often diverted by state governments to other (sometimes) worthy, yet non-infrastructure, projects. Puentes of Brookings points out that the Government Accountability Office has called the federal transportation fund a “cash transfer, general purpose grant program,” and that “the U.S. code neuters the federal role and states specifically that the appropriation of highway funds ‘shall in no way infringe on the sovereign rights of the States to determine which projects shall be federally financed.’” The National Infrastructure Bank would ensure that federal funds are used by state and local governments for specific infrastructure projects, rather than diverted to make up for, say, underfunded federal mandates.

Perhaps most importantly, the selection criteria required by the National Infrastructure Bank would encourage the federal government to undertake projects that are significant to the country’s long-term well-being: rather than stop-gap measures to repair existing problems, such projects would take into account new challenges like climate change, the growing importance of urban areas, and the need for more affordable housing, while at the same time confronting the more typical concerns associated with economic growth (increased air, highway, and port traffic). A database with details about each infrastructure project and its funding would provide at least some public oversight.

Interestingly, political support for an infrastructure bank is growing. The day after Senators Dodd and Hagel announced their plan – and the day after the Minnesota bridge collapse – Senator Hillary Clinton signed onto the bill as a co-sponsor. A week later, Senator Clinton gave a major speech entitled “Rebuilding America: Improving Our Infrastructure” and endorsed the legislation, lamenting that we in the United States “are treading water and being swept backwards.” Her specific plan – like her economic stimulus package – includes a panoply of measures to repair the “backlog” of deficient transportation structures, to conduct safety reviews, to increase public transit funding (and to link these funds to local land use policies), to invest in intercity passenger rail systems, to modernize seaports, to increase funding for congestion reduction programs, and to improve broadband deployment. Senator Barack Obama’s proposal was – like his economic stimulus package – more straightforward. In his “Keeping America’s Promise” economic speech on February 13th, Senator Obama proposed a National Infrastructure Reinvestment Bank to invest $60 billion in transportation infrastructure over ten years. He has previously called for increased Amtrak funding, high-speed railways, metropolitan planning to reduce traffic congestion, and improved transportation access for low-income commuters. On February 13th, a day after his speech, he signed onto Dodd and Hagel’s bill as a co-sponsor.

Additionally, Senator Ben Nelson of Nebraska proposed an amendment to the Senate’s economic stimulus package that would have directed $5 billion to states for infrastructure projects to be used before October of 2008. Senator Nelson suggested that “An investment in infrastructure and public works projects will not only achieve a much-needed boost to our economy, but will also promote long-term economic growth.”

Pronouncements by presidential candidates and a rather optimistic amendment to fast-tracked legislation are positive, if modest, indicators that a national movement to invest in infrastructure is mounting. Even relatively insignificant problems with infrastructure have received ample attention recently. Earlier this month, the New York Times reported that two bridge inspectors in Georgia had been falsifying inspection records because of a fast approaching federal deadline. Officials were alerted when they noted that the two were inspecting bridges at a rate of 18 per day; the average is 12 per week. Admittedly, there are significant issues to work out with a national infrastructure bank. The European Investment Bank, an infrastructure-financing behemoth established in 1953 and a likely model for an American infrastructure bank, is criticized for its lack of transparency and its lack of social and environmental standards.

Large-scale public works projects will always be subject to conflicting priorities, funding difficulties, cronyism, and, of course, the mafia. Indeed, such infrastructure projects are designed to be patronage machines because they use public funds in part simply to create jobs. Yet, this is no reason to fall prey to the starve-the-beast philosophy of the current administration that has allowed American infrastructure to age and permitted a patchwork of private firms to profit from the spoils of disaster capitalism. Rather, emphasis must be placed on centralizing funding streams for infrastructure that can then be distributed based on a long-term vision of American economic success. Such a vision would emphasize the urban areas where most of the American population lives and from where most American prosperity is generated; would confront the environmental challenges associated with both aging infrastructure and new construction; and would consider the benefits and the dilemmas linked to the ever-increasing mobility of people and goods. With this purposefulness, infrastructure projects as fundamental and as forgotten as urban sewage facilities and desalination plants would receive the attention and the financing that they have long been denied. A National Infrastructure Bank is a means of encouraging this far-sighted vision.

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Posted at 7:00 AM, Feb 26, 2008 in Infrastructure | Urban Affairs
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