In his long-awaited speech on jobs today, President Obama reinforced his support for investing in America’s transportation infrastructure. The President calls for Congress to pass an American Jobs Act “right away.” Impressively, the bill includes about $60 billion to fund projects such as new transit lines in Denver and Houston, which will protect and create tens or even hundreds of thousands of jobs.
First things first, though. As the President urged in his Rose Garden speech last week, Congress must pass a clean extension of the transportation bill to save hundreds of thousands of jobs across the country. Let’s hope common sense prevails and Congress pushes through the clean extension, which – thanks to rare bipartisan leadership by Senators Boxer (D-CA) and Inhofe (R-OK) – was passed unanimously by the Senate Environment and Public Works Committee this morning.
Then our elected officials can get to work on the American Jobs Act, or put the transportation pieces in a desperately needed new transportation bill. This would embody the President’s vision for boosting jobs and the economy – a bill that will put Americans back to work while bringing our aging transportation infrastructure back to world class standards. Many studies show that infrastructure spending is a wise investment -- generating $1.57 for every dollar, according to a 2010 study from economists at Princeton and Moody’s -- and that investing in transit, in particular, creates more jobs than highway spending.
The good news is that it looks like the President has chosen some tried-and-true programs for deploying transportation investments effectively:
- An infrastructure bank, which has been proposed by the Administration before and by Members from both Parties in both chambers of Congress. As the President pointed out, one of the bills was offered by Senators Kay Bailey Hutchison (R-TX) and John Kerry (D-MA). I’ve blogged about the advantages of such a proposal before.
- More grants through the Transportation Investments Generating Economic Recovery (TIGER) program, an oversubscribed initiative first enacted in the recovery act two years ago.
- The Transportation Infrastructure Finance and Innovation Act (TIFIA), a program enacted several years ago, which provides loans for transportation projects.
Very smart to choose these tools, for three reasons. First, they foster virtuous competition. TIGER specifically has spurred cities and states to submit hundreds of proposals, and rewarded the most effective ones. Second, they can be merit-based. That means cost-effectiveness, and also allows for other criteria such as contributions to energy security (e.g., does the project save oil?). This ensures a good return-on-investment for taxpayers, which may not be the case if the funds are just doled out to state transportation agencies by dumb, simple formula. Last but not least, in an era of huge fiscal constraints they leverage federal dollars. For every taxpayer dollar invested, they leverage many local, state and most importantly private dollars. We have all heard about the trillions of dollars sitting on the sidelines in the private sector while our economy founders; these programs would pull some of that much-needed capital onto the playing field.
As the American Society of Civil Engineers found in their latest economic study, this kind of investment is just what the doctor ordered for our ailing economy, helping to repair and build assets that last decades, generating jobs in the short-term and boosting GDP in the long.
Let's hope fellow policymakers take their cue from actions today by the Environment and Public Works Committee and the President. By choosing to invest in transportation, we not only give our economy the boost we so desperately need right now – we are investing in the future of this country.