President Obama’s American Jobs Act calls for about $60 billion overall in transportation investments, including $27 billion to fix neglected roads and bridges, $9 billion to improve rail and transit service, and $10 billion to establish a national infrastructure bank.
President Obama is now on a tour promoting the bill, and in fact appeared in Cincinnati just an hour ago urging Congressional leaders to "rebuild this bridge" while standing in front of one of the thousands of structurally deficient bridges in America.
Putting people back to work by rebuilding our national transportation infrastructure is a natural fit. Our surface transportation infrastructure was given a D grade by the American Society of Civil Engineers, and our world ranking in infrastructure has dropped from 6 to 16 since 2007. Our infrastructure is crumbling, and unemployment is hovering around 9 percent.
So the infrastructure investment that the President proposes is smart on two levels. First, it’s a quick way to create thousands of jobs, largely in construction and manufacturing, two sectors of the economy that have been hit hard in the downturn. Second, and perhaps more important than a quick fix, transportation investments, particularly in public transit, have long-term economic and environmental benefits for an even larger population.
Infrastructure investments provide returns on the order of $1.57 for every $1.00 invested, according to economists from Moody’s and Princeton. They create more jobs per dollar than tax cuts. Public transit investments, in particular, are highly effective job creators. They require more manufactured “parts,” such as bus seats or train tracks, than highway projects do, creating a ripple effect in the economy. A manufacturer in Lincoln, Nebraska, for example, builds cars for the New York City subway system. So a public transportation investment in New York creates employment in Nebraska.
A 2004 analysis from the Surface Transportation Policy Project concluded that public transportation spending creates 19 percent more jobs than new road and bridge projects. A study of data from the American Recovery and Reinvestment Act, which pumped $20 billion into transportation projects, showed that money invested in public transit created twice as many jobs as did highway investments.
President Obama’s plan includes plenty of highway spending – and we do need to fix about 70,000 bridges and 32 percent of our major roads -- but it also includes $9 billion to improve public transit and intercity rail systems. It steers $5 billion toward the TIGER and TIFIA programs, which support innovative, multimodal transportation projects. These are competitive, merit-based, grant and loan programs that ensure smart investment of taxpayer money, rather than formula hand-outs, and leverage funds from the private sector as well.
And once again, the President calls for a National Infrastructure Bank, funded at $10 billion. This independent institution would leverage private sector money to help finance nationally or regionally significant infrastructure projects that will create jobs, improve mobility, and meet rigorous environmental and technical standards. This would go a long way toward taking the politics out of transportation spending, and direct money to projects with maximum public benefit.
In the long run, smart investments in transportation can have powerful, transformative effects on communities and the economy. Improving public transit service, repairing neglected roads and bridges, and creating safe paths for bikers and pedestrians all help keep people and goods moving. Children can walk to school. People can get to work. Businesses can move products dependably and cost-effectively. With a clean, modern, multimodal transportation system, we can all stay connected while breathing cleaner air and saving money on gas.
Congress is in a stingy mood, to be sure, but the pressure is on to create jobs and strengthen the economy. If we’re looking for a bargain, and a jobs bonanza to boot, investing in our transportation infrastructure – whether it’s through the American Jobs Act or in a new transportation bill -- is the way to go.