Almost one-third of President Barack Obama's $447-billion plan to jumpstart the still-stagnant economy is devoted to improving the country's infrastructure.
Although the American Jobs Act provides far-reaching tax cuts to encourage business growth, one of the most significant portions of the proposed legislation involves $140 billion in infrastructure spending and aid to states, including $50 billion for surface transportation and creating a National Infrastructure Bank capitalized with $10 billion that would facilitate public-private partnerships to make such projects possible. The infusion of cash would put construction crews to work helping public agencies bring aging roads, sewers, and other assets back to life.
Although specific details have yet to be hammered out and the legislation must be approved by Congress, public works leaders and industry organizations are weighing in on the proposal's potential impact.
“Investments in infrastructure create jobs and strengthen the economy,” says American Public Works Association Executive Director Peter King. “Putting people to work to repair our nation's deteriorating infrastructure will make our economy more efficient and build the foundation for long-term and sustained economic growth.”
American Association of State Highway and Transportation Officials Executive Director John Horsley cites the plan's $50 billion investment in transportation spending, which would happen immediately, as essential to righting the economy.
“We applaud the president for his proposal to immediately boost transportation investment, and we're thrilled that the Senate Environment and Public Works Committee approved a bipartisan bill to extend highway and transit programs at current levels of funding,” he says, adding that Congress should work toward long-term reauthorization of surface transportation at levels sufficient to support sustained economic growth.
However, some experts have doubts about the plan's potential effectiveness in revitalizing infrastructure. Associated Builders and Contractors Chair Michael Uremovich says it lacks solid solutions: “Missing is an initiative on public-private partnerships as an opportunity to responsibly invest in improving our nation's infrastructure without adding to our deficit.”
Passage of the legislation isn't a sure thing considering the partisan divisions in both houses of Congress; response among Republican legislators has been tepid at best. House of Representatives Transportation and Infrastructure Committee Chair John Mica (R-Fla.) has derided the lack of detail on how initiatives will be funded. He recommends decentralizing decisions and putting more power in the hands of state and local leaders.
“Unfortunately, a National Infrastructure Bank run by Washington bureaucrats requiring Washington approval and Washington red tape is moving in the wrong direction,” he says. “A better plan is to empower our states, 33 of which already have infrastructure banks.”
The next step for the American Jobs Act: The president will ask Congress to pitch in by crafting a deficit-reduction package that will help fund his plan over the next decade.