US Chamber calls for modernising infrastructure

The plan is from the advocacy group's "Roadmap to Rebuilding America’s Infrastructure" report. “It’s time to approach this as a national imperative for long-term growth and competitiveness — not an exercise in parochial politics,” said president and CEO Tom Donohue at America’s Infrastructure Summit.

First the Chamber suggests an increase in the federal fuel fee. “We need to increase the federal fuel user fee, which hasn’t been raised in 25 years,” Donohue said. “Why? It’s the simplest, fairest, and most effective way to raise the money we need for roads, bridges, and transit.

The user fee was last raised in 1993. Since then, inflation and vehicle fuel economy have eroded its value. As a result, the federal highway and transit trust fund faces a shortfall of USD 138bn over the next decade.

The Chamber plan proposes a five-cent increase over five years. “Increasing the fee by a total of 25 cents, indexed for inflation and improving fuel economy, would raise USD 394bn over the next 10 years,” said Donohue.

From a cost-benefit perspective, this makes a lot of sense. The fee increase “would cost the average motorist about USD 9 a month,” Donohue said. But “our badly deteriorating roads are causing approximately USD 40 a month in increased maintenance and operating costs.”

With that additional revenue, we can get better and safer roads, something the public supports. “By a 22-point margin — 50 to 28 — voters support implementing a federal fuel user fee, provided the money will go toward modernizing our infrastructure,” said Donohue.

Secondly the chamber called for expand financing options, like public/private partnerships, for local communities. The Chamber proposes implementing a toolkit of options for supplemental funding and financing, including for the public to partner with the private sector.

“When it comes to private funding, there is huge potential. Between 2005 and 2015, infrastructure equity bonds raised about USD 350bn,” said Donohue. “Since equity is about 25 per cent of a typical public-private partnership, that USD 350bn could support projects worth USD 1.4tr.”

The Chamber said its plan would strengthen and expand federal loan programs to facilitate public-private partnerships. Also state and local governments should leverage public dollars with federally-backed loans.

The third component concerns the permitting process, which the Chamber said is currently a barrier. “Without permitting reform, all the funding the financing you could dream of won’t get the job done,” Donohue said.

The Chamber proposed permit streamlining requiring all federal infrastructure approvals to be completed within two years. State and local projects benefiting from federal funding or financing should also adhere to a two-year timeline, which should run concurrent to the federal process. And to help streamline permitting and eliminate duplicative reviews, a single lead agency should shepherd a project through the process from start to finish.

The final component is to develop a skilled workforce to build these projects. “Nearly 80 per cent of construction firms report that they are having a hard time finding qualified workers,” said Donohue. “At the same time, by some estimates, every USD 1M in additional infrastructure spending, means an additional six to seven construction jobs.”

The Chamber has called for more apprenticeship programs, and said “policymakers should expand the network of sector-based construction partnerships under federal workforce programs. They should also reform and boost support for federal career and technical education programs, like the Perkins Act.”

And added, "One thing that must be done is keep—not kick out—the skilled immigrants who have been legally contributing to our economy for years thanks to programs like DACA and TPS.”