U.S. Transportation & Infrastructure Funding Needed to Remain Globally Competitive

Loading Grain on Ship iStock_000022946090XSmallAccording to the U.S. Department of Agriculture the value of U.S. agricultural exports for calendar year 2012 was $141.3 billion.  Already in calendar year 2013 the U.S. is set to match, or exceed last year’s amount.  Through June of this year U.S. agricultural exports totaled $68 billion, or 48% of last year’s amount.  The U.S. agricultural trade balance (exports minus imports) has been positive since August 2006.  The average monthly trade balance for 2013 is $2.3 billion, down about $890 million from last year’s monthly average.

While U.S. agricultural exports remain a bright spot for the U.S. economy it remains questionable whether or not the U.S. can maintain these positive agricultural trade balances into the future as the condition of the nation’s transportation and infrastructure systems remain in poor condition.  Poor transportation and infrastructure systems lead to inefficiencies in the food supply chain and those inefficiencies could hurt U.S. competitiveness in global agricultural trade.

Every four years the American Society of Civil Engineers (ASCE) releases a comprehensive assessment of the nation’s major transportation and infrastructure systems.  In their assessment ASCE issues a Report Card for America’s Infrastructure using the simple A-to-F school report card format.  This year ASCE report card gave the U.S. infrastructure a cumulative grade of D+, a slight improvement over the previous report card.  Below are the available ASCE grades for each transportation and infrastructure system important to agricultural trade:

Dams:  Dams earned a grade of D. The average age of the 84,000 dams in the country is 52 years old. The nation’s dams are aging and the number of high-hazard dams is on the rise. The overall number of high-hazard dams continues to increase, to nearly 14,000 in 2012. The number of deficient dams is currently more than 4,000. The Association of State Dam Safety Officials estimates that it will require an investment of $21 billion to repair these aging, yet critical, high-hazard dams.

Bridges:  C+.  In total, one in nine of the nation’s bridges are rated as structurally deficient, while the average age of the nation’s 607,380 bridges is currently 42 years. The Federal Highway Administration (FHWA) estimates that to eliminate the nation’s bridge backlog by 2028, we would need to invest $20.5 billion annually, while only $12.8 billion is being spent currently. The challenge for federal, state, and local governments is to increase bridge investments by $8 billion annually to address the identified $76 billion in needs for deficient bridges across the United States.

Inland Waterways: D-.  U.S. inland waterways and rivers carry the equivalent of about 51 million truck trips each year. In many cases, the inland waterways system has not been updated since the 1950s, and more than half of the locks are over 50 years old. Barges are stopped for hours each day with unscheduled delays, preventing goods from getting to market and driving up costs. There is an average of 52 service interruptions a day throughout the system. Projects to repair and replace aging locks and dredge channels take decades to approve and complete, exacerbating the problem further. Conditions remain poor and investment levels remain stagnant.

Ports: C. This new category for 2013 debuted with a grade of C. The U.S. Army Corps of Engineers estimates that more than 95% (by volume) of overseas trade produced or consumed by the United States moves through our ports. To sustain and serve a growing economy and compete internationally, our nation’s ports need to be maintained, modernized, and expanded. While port authorities and their private sector partners have planned over $46 billion in capital improvements from now until 2016, federal funding has declined for navigable waterways and landside freight connections needed to move goods to and from the ports.

Rail: C+. Railroads are experiencing a competitive resurgence as both an energy-efficient freight transportation option and a viable city-to-city passenger service. Both freight and passenger rail have been investing heavily in their tracks, bridges, and tunnels as well as adding new capacity for freight and passengers. In 2010 alone, freight railroads renewed the rails on more than 3,100 miles of railroad track, equivalent to going coast to coast. Since 2009, capital investment from both freight and passenger railroads has exceeded $75 billion, actually increasing investment during the recession when materials prices were lower and trains ran less frequently.

Roads: D. Forty-two percent of America’s major urban highways remain congested, costing the economy an estimated $101 billion in wasted time and fuel annually. While the conditions have improved in the near term, and federal, state, and local capital investments increased to $91 billion annually, that level of investment is insufficient and still projected to result in a decline in conditions and performance in the long term. Currently, the Federal Highway Administration estimates that $170 billion in capital investment would be needed on an annual basis to significantly improve conditions and performance.

Transportation and infrastructure systems connect people with goods and services and drives our economy.  In fact almost all (95 percent) of agricultural exports and imports are transported using U.S. ports, inland waterways, rail and on our roadways.  Yet, improvements and upgrades to the nation’s aging transportation and infrastructure systems are as critical as they’ve ever been.

Next week congressional members return to Washington, DC for what will likely be a tumultuous Fall as Congress continues to grapple with uncompleted issues like immigration reform, farm bill, nutrition entitlements and all 12 of the annual appropriations bills, including transportation and infrastructure.

Prior to the House adjourning for the August recess a watershed moment occurred in the U.S. House when Republican leaders had to pull (H.R. 2610) the FY 2014 Transportation, Housing and Urban Development (THUD) appropriations bills from the floor for lack of Republican support to pass the measure.  The THUD bill adhered to limits enacted by the Budget Control Act (BCA) of 2011 that allows a total $967 billion in spending in FY2014.  The BCA protects defense spending while making deeper cuts in non-defense discretionary programs like the T-HUD bill.  The lack of Republican support to pass the T-HUD bill is viewed by political pundits as a sign that the cuts approved by the House Appropriations Committee, in-line with the BCA, are too steep even for Republicans who claim to want to reduce the deficit through spending cuts alone.


U.S. House Appropriations Committee Chairman Hal Rogers (R-KY)

After Republican leaders pulled the bill House Appropriations Committee Chairman Hal Rogers (R-KY) issued a statement claiming he was “deeply disappointed with the decision to pull the bill.”  (This action means)”the House has declined to proceed on implementation of the very budget it adopted just three months ago.”

The House THUD bill provides a total $44.1 billion in discretionary spending – a reduction of $7.7 billion below the fiscal year 2013 enacted level and $13.9 billion below the President’s budget request. This level is approximately $4.4 billion below the level caused by automatic sequestration cuts for these programs.

  • $15.3 billion was provided for the Department of Transportation for fiscal year 2014. This is $2.6 billion below the fiscal year 2013 enacted level and $7.4 billion below the President’s request.
  • $41 billion is provided from the Highway Trust Fund to be spent on the Federal Highway program – the same level authorized in the MAP-21 transportation authorization legislation, which expires on September 30, 2014. This is an increase of $557 million from the fiscal year 2013 level.
  • The Federal Railroad Administration is funded at $1.16 billion, a reduction of $468 million below the fiscal year 2013 enacted level.
  • $326 million is provided for the Maritime Administration, a decrease of $25 million below the fiscal year 2013 enacted level. The bill will help promote U.S. commerce by providing funding to ensure the efficiency and safety of the nation’s ports and inter-modal water and land transportation.

The Senate Budget Resolution provides about $91 billion more for the Appropriations Committee to spend in its 12 annual FY2014 appropriations bills than the House.  The Senate THUD appropriations bill, S. 1243, provides budget authority of $54.0 billion, $9.9 billion above the House level and $2.3 billion more than the 2013 enacted level.  On August 1 the U.S. Senate failed to obtain the necessary 60 votes to invoke cloture on the THUD bill (54-43).  Senate Majority Leader Harry Reid (D-NV) has not committed to bring the bill back to the Senate floor.

House Speaker John Boehner (R-OH) has said that Congress will need to extend current federal funding for all agencies for a “short period of time” when the next fiscal year begins Oct. 1 because appropriations bills won’t be completed.

If you need quality representation from an entrepreneurial lobbying firm, contact Cansler Consulting. We are a certified lobbying practice experienced in the multi-faceted and inter-related industries of Agriculture, Food and Drug Safety, Immigration, Transportation & Infrastructure, International Trade and Energy. Through our congressional and regulatory relationships established for over two decades we can help you influence the policy makers on Capitol Hill and navigate the federal budgeting process. You can contact us at info@canslerconsulting.com or at (202) 220-3150.

Tim Cansler