Infrastructure [Non]Spending
Apparently one of the very few areas of likely cooperation between the White House and our newly energized all-Republican Congress is spending on our lamentable infrastructure.
I am sufficiently cynical that I doubt we will see much more than a great deal of handwringing and posturing before the two sides retreat back into their well prepared and long occupied trenches. The White House will want a major federal initiative, whilst the Republicans will want a series of smaller and state run initiatives.
There is a very small glimmer of hope: Paul Ryan who now heads the appropriate committee in the House has suggested a rise in the gasoline tax which is still a primary source of funding for road maintenance. The federal gas tax has not been raised since 1993 and so still stands at a paltry 18.4 cents per gallon (4.86 cents per liter). It produces an equally paltry $25 billion a year, of which about 60% goes towards highway and bridge construction. The revenue from the gas tax, and the associated tax on diesel, flows into something called the Highway Trust Fund which was set up in 1956 to carve out funds specific to road and bridge construction. Prior to that all the necessary funding came from the general fund.
Given the American predilection for driving and the consequent political sensitivity to gasoline prices, it has been practically impossible to raise the needed funds from taxes to keep our roads in good order. Indeed by late summer 2014 the Highway Trust Fund had run out of cash and was having to be propped up out of general revenues.
Thus Ryan’s sudden conversion to the need for a tax increase.
The problem is that our infrastructure issues run deep and wide. In effect the US has not invested sufficiently in its basic infrastructure for over seventy years. The last true burst of construction was during the Great Depression, the legacy of which we still see around us in the form of old, but still functioning, bridges, roads, dams, and tunnels.
The Eisenhower initiative to build highways was a temporary break within this seventy year period of chronic underinvestment, but it merely added to the infrastructure that now needs upkeep.
Every four years the American Society of Civil Engineers publishes a national report card summarizing the dilapidated state of the nation’s infrastructure. The latest report dates from 2013. It makes grim reading. Here are the grades the ASCE issued:
- Ports: C
- Energy: D+
- Aviation: D
- Dams: D
- Drinking Water: D
- Hazardous Waste: D
- Roads: D
- Public Transit: D
- Wastewater: D
- Inland Waterways: D-
- Levees: D-
- Railways: C+
- Bridges: C+
- Solid Waste: B-
- Overall: D+
It’s very hard not to get depressed when you read the ASCE report. Private commerce depends on public spending to provide it with the roads, ports and so on through which that commerce flows. Yet America has deliberately allowed its infrastructure to deteriorate. It has lived off the investment of past generations and has deprived future generations of the kind of world class infrastructure they will need in order to compete properly.
It is an astonishing breakdown of civic responsibility. All the more so now that we could raise the funding to repair and replace where needed at historically low interest rates. Far from ‘burdening’ the future with more debt – a highly dubious concept to begin with – we could be empowering them with the basic structure they need to support healthy economic growth.
Instead we have decided to hobble them with rottenness. Presumably this is because we are radically tax averse and have allowed the link between taxes and government investment to break down in our political discourse. The ‘starve the beast’ mantra of the extreme right, whilst it was intended as an attack on entitlement spending has morphed into a general attack on all government spending, even the kind of spending that undergirds the economy. The result being decades of neglect of the very basis of commerce.
But here we are: a small, but possibly significant, step in the right direction. Will Ryan come through? We will have to wait to see.
In the mean time we ought to reflect on some of the ASCE’s statistics. The average age of our 84,000 dams is 52 years. One in nine of our bridges is structurally deficient. The average age of our 607,380 bridges is 42 years. And fully 45% of all American households have zero access to any form of public transportation – so much for our chances of reducing our dependency on oil!
One more thing: that $25 or so billion a year the gas tax brings in pales into irrelevance beside the $3.6 trillion the ASCE estimates we need to spend by 2020 to correct all the deficiencies it has identified.
And that’s the source of my cynicism. Do we really expect a Republican run Congress to undertake or fund programs of that magnitude? Of course not. All we can expect is a public relations campaign and a small amount of funding in order that they can claim to have done something
We can guarantee that the ‘something’ will be nowhere near enough.
Addendum:
On a personal note: the railway that links New York City with Albany is a prime example of neglect and deficiency. The approximately 140 mile distance takes about three and a half hours to cover. Amtrak, the service provider, doesn’t even own all the right of way so its ‘high speed’ service periodically has to give way to slow moving and very long cargo carrying trains. As an inter-city transport link it is an embarrassment. Just for reference we should recall that top speeds of around 60+ miles per hour were frequently achieved in the mid 1800’s. America’s railways have regressed rather than progressed since then.
