On February 1, the U.S. House Committee on Transportation and Infrastructure met and listened to witnesses about the challenges facing the U.S. transportation and infrastructure. According to the American Society of Civil Engineers the U.S. transportation system, wastewater and drinking water infrastructure, schools and energy grid need improvements estimated at $3.6 trillion. Witnesses including the AFL-CIO, BMW North America, Cargill, FedEx and Vermeer Corporation.
Importance of U.S. Transportation Systems
In a memo to Committee members both Chairman Shuster and Ranking Member Peter DeFazio (D-OR) explained the importance of transportation infrastructure that “provides a strong physical platform that facilitates economic growth, ensures global competitiveness, creates American jobs, and supports national security. In addition, it affords Americans a good quality of life by enabling them travel to and from work, to conduct business, and to visit family and friends.”
“The Nation’s transportation infrastructure is an extensive network of highways, airports, railroads, public transit systems, waterways, ports, and pipelines. It includes over 4 million miles of public roads, nearly 20,000 airports, over 140,000 miles of railroad, over 272,000 miles of public transit route miles, over 2.6 million miles of pipeline, over 25,000 miles of navigable waterways, and 360 commercial ports.
Our Nation’s transportation infrastructure is the backbone of the U.S. economy. In 2015, all modes of transportation moved an estimated 18.1 billion tons of goods worth about $19.2 trillion on our Nation’s transportation network. On a daily basis, 49 million tons of goods valued at more than $53 billion are shipped throughout the country on all transportation modes. In addition, nearly 13 million Americans, approximately nine percent of the U.S. workforce, are directly employed by transportation related industries. In 2015, Americans drove 3.1 trillion miles commuting to and from work and conducting other activities.”
Future Needs for U.S. Transportation
Over the next 30 years, our Nation’s transportation infrastructure will need to keep pace with anticipated increases in population and demand for freight transportation. Forecasts predict that America’s population will grow from 319 million in 2014 to approximately 400 million in 2051. 5 The movement of freight is expected to increase by 40 percent over the next 30 years. U.S. trade volume is expected to double by the year 2021, and double again by the year 2030. By 2030, large “post-Panamax” ships are expected to comprise a majority of the world’s container ship capacity, although, fewer than 10 of America’s 360 ports are now capable of receiving ships of this size. Air travel demand is expected to increase from 750 million passengers annually to nearly one billion passengers annually by the end of the next decade. New forms of air transportation, including drones and commercial space transportation will also need to be integrated into the aviation system. In terms of highway usage, vehicle miles traveled are projected to increase by nearly 20 percent by 2035. Between 2015 and 2045, freight rail tonnage will increase by 24 percent, from 1.7 billion tons to 2.1 billion tons.”
How Do We Pay For It?
All types of ideas have emerged on how the debt-plagued U.S. can pay for the needed infrastructure improvements. Some of those ideas include repatriation of the estimated $2.5 trillion in U.S. corporate funds in foreign accounts, increasing the $0.184/per gallon gas tax and tolls – although 60 percent of U.S. highways do not have enough traffic to support toll collection. The Trump administration has touted an 82 percent tax credit to attract investors to commit to private-public ventures.
Chairman Shuster does not believe private investors will find it feasible to provide funding for projects, especially in rural areas throughout the nation where return on investors profits will be limited. He also understands tolls on existing highways and interstates is not a viable solution.
It’s likely going to take a combined approach to adequately fund and maintain U.S. transportation systems and infrastructure. This combined approach should include, gas tax reforms that adequately fund the Highway Trust Fund, repatriation incentives and other tax breaks.
Without question the drinking water crisis in Flint, Michigan in 2014 heightened the public’s attention across the U.S. about the issue of the deteriorating, decades-old drinking water infrastructure. Since the crisis unfolded, Members of Congress and state and federal regulatory officials have conducted multiple hearings and site visits to learn more about these challenges occurring in multiple municipalities throughout the U.S. What they have learned is, drinking water infrastructure issues are likely to remain prominent in the U.S. through 2037 and beyond.
According to the American Water Works Association (AWWA), much of the U.S. drinking water infrastructure includes more than one million miles of pipes beneath our streets and is nearing the end of its useful life. Compounding the challenges is the shifting U.S. population that generates significant growth in some areas of the country and requires larger pipe networks to provide water service.
Bottom line: the AWWA estimates that restoring the deteriorating existing water systems in the U.S. and expanding them to serve growing populations will cost at least $1 trillion over the next 25 years, if we are to maintain current levels of water service.
Back in March 2016, then-Environmental Protection Agency (EPA) Administrator Gina McCarthy testified before a House Appropriations Subcommittee hearing stating, “We are looking at a significant challenge in terms of water infrastructure (beyond the crisis in
Flint, Michigan)… Across the U.S. we took a look at this in 2011 and 2012 and we estimated that the backlog of need for drinking water up through 2030 was something in the order of $300 some-odd billion. I do not have the exact figure in my head but I think that is a lowball estimate now. There are others that are now estimating it’s upwards of $600 billion.”
Without question drinking water infrastructure must be included in any U.S. infrastructure improvement plan. Delaying investment in the U.S. water infrastructure will further degrade current water systems and result in increasing water service disruptions throughout the U.S. Moreover, EPA already has a viable program in the Drinking Water State Revolving Fund (DWSRF) that is capable of getting needed financial assistance out to help water systems and states improve their systems. Typically, Congress appropriates funding for the DWSRF. EPA then awards capitalization grants to each state for their DWSRF based upon the results of the most recent Drinking Water Infrastructure Needs Survey and Assessment. The state provides a 20 percent match. EPA also administers the Water Infrastructure Finance and Innovation Act of 2014 (WIFIA) program, a federal credit program for eligible water and wastewater infrastructure projects. WIFIA can also be used to finance water projects.