OPINION: Congress Should Resolve To Fix America’s Infrastructure Needs In Year Ahead

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Dan Eberhart CEO, Canary, LLC
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It’s a new year, and that means new opportunities for President Trump and the Congress to work together to address the crumbling roads and bridges holding back America’s economic expansion and competitiveness.

Many fear 2019 will be the year of gridlock and shutdowns as President Trump locks horns over differences on spending priorities and oversight investigations with a newly divided Congress and a reenergized House Speaker Nancy Pelosi. Fireworks and social media spats are assured, but those don’t have to be the only things lawmakers achieve.

Washington isn’t the only place suffering from gridlock. America’s roads, bridges and tunnels are overcrowded and broken down. The sense of national decline is palpable to the men and women who make their livings behind the wheel, but it doesn’t have to be that way.

Congress and the president have an opportunity to invest in projects that will help get America rolling again, creating jobs and boosting economic growth that conservatives and liberals alike can consider a win-win.

America’s transportation system is the backbone of the economy and critical to our shared prosperity whether you live in urban centers on the coast or in small-town America. A newly widened bridge or resurfaced highway can shorten driving times and distances for truck drivers and commuters, allowing individuals and businesses to be more productive and freeing up time and resources that can go toward generating additional economic output or used to enjoy more leisure time.

On the other hand, poor infrastructure affects every sector and region of the country because when one part of the system fails, the impact can quickly spread through the supply chain from manufacturer to retailer. For example, traffic congestion is estimated to add more than $63 billion to our nation’s freight costs every year — a bill felt not just by truckers, but also by retailers, small business and consumers.

Despite the importance of infrastructure, Congress has not spent enough for decades to maintain and improve our national transportation system bringing the highway trust fund to the brink of insolvency. The last president to make a case for funding infrastructure was Ronald Reagan.

But the decline in investment started long before President Reagan took office in 1981. Annual infrastructure investment by federal, state and local governments reached its peak – about 4.2 percent of gross domestic product (GDP) – nearly 90 years ago. Government investment in infrastructure of all kinds has declined precipitously since then, hitting 1.5 percent of GDP in 2016, according to the Congressional Research Service (CRS).

America also lags other developed countries with respect to annual infrastructure spending. Spending on infrastructure, as a percentage of GDP, is higher in all G7 countries, except for Italy and Germany, than in the United States, according to CRS.

The American Society of Civil Engineers’ (ASCE) most recent infrastructure report card gave the United States a D+ grade and estimates we’ve only been paying half our infrastructure tab. The ASCE estimates that $110 billion in investments will be needed annually over the next decade to address transportation capital investment needs. Given that the federal government has traditionally provided half of those funds, that amounts to an annual funding shortfall of $50 billion.

Meanwhile, the most recent annual report by the American Road and Transportation Builders Association (ARTBA) found that more than 54,000 of the nation’s 600,000 bridges are “structurally deficient” and in need of major reconstruction.

Underfunding and piecemeal repairs have over the long-term contributed to congestion and lost productivity that costs every American roughly $1,500 a year in lost time, additional vehicle repairs and wasted gas, according to the Texas A&M Transportation Institute.

The trucking industry, which delivers over 70 percent of consumer goods and other freight inside the country, also pays a hefty price for road congestion. Some estimates suggest professional drivers lose one billion hours each year idling in traffic — extra time and costs that eventually get added to every consumer product truckers deliver.

Smart infrastructure spending now will deliver long-term benefits and cost savings for private drivers and commercial transporters alike. The nonpartisan Congressional Budget Office estimates that a 1 percent increase in public investment in capital infrastructure would increase the long-term economic output of the private sector by about $9.2 billion.

Modernizing our national infrastructure assets remains broadly popular with voters. More than six in 10 Americans told Gallup last year that they supported the Trump administration’s call for $1 trillion in infrastructure spending. Infrastructure also has bipartisan support with 78 percent of Republicans and 54 percent of Democrats saying they agreed with Trump’s plan, according to Gallup.

So, what’s the hold-up? President Trump got the ball rolling in 2017 with an executive order to reduce the time it takes to obtain federal permits for infrastructure projects down from the current average of seven years to two years. The challenge to actually breaking ground on projects, though, is coming up with a viable funding source.

The American Trucking Association (ATA) has put forward a plan that it estimates would generate $340 billion over the course of a decade, which could not only cover the highway funding gap, but also create an account to invest in the nation’s most urgent infrastructure needs, including projects at the state and local level.

The Build America Fund would add a 20-cent-per-gallon user fee on all transportation fuels, including diesel, gasoline and natural gas. The fee would be applied at the wholesale terminal rack, before fuel reaches the retail gas pump, and indexed to inflation and improvements in fuel efficiency.

The proposal deserves consideration by Congress, which hasn’t raised the 18.4-cents per gallon federal gasoline tax — the primary funding source for the highway trust fund — since 1993. Gas taxes and other user fees now cover less than half of road construction and maintenance costs nationally.

Higher taxes are rarely popular with voters and therefore with politicians, but the 20-cents per gallon fee is far less than the cost of additional maintenance and lost productivity Americans are currently paying. According to a May 2017 Quinnipiac University poll, 51 percent of Americans support paying an additional fee at the gas pump for better infrastructure.

A sustained investment in our national highway system is long overdue. Modernizing our infrastructure would strengthen our economy, enhance our international competitiveness, create jobs and increase wages, and reduce the costs of goods and services. There’s no better opportunity to do so than with a Congress that wants to fix what’s broken with America and a president who likes to build things.

Dan K. Eberhart (@DanKEberhart) is chairman of Twin Express, a nationwide carrier headquartered in Minnesota; and CEO of  Canary, LLC one of the largest independent oilfield services company in the United States. Twin Express is a member of the American Trucking Association.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.