President Obama met today with several governors and mayors to highlight a new report prepared by the Treasury Department and the Council of Economic Advisers which looked at infrastructure spending in the United States and its impact on the economy.
The report, available here, offers four reasons indicating that now is an optimal time to increase our investment in transportation infrastructure as follows:
- Well designed infrastructure investments have long term economic benefits;
- The middle class will benefit disproportionately from this investment;
- There is currently a high level of underutilized resources that can be used to improve and expand our infrastructure; and
- There is strong demand by the public and businesses for additional transportation infrastructure investments.
The report also reiterates six principles offered by USDOT that the transportation system should satisfy to improve the lives of working families:
· Provide more transportation choices to decrease household transportation costs, reduce our dependence on oil, improve air quality and promote public health.
· Improve economic competitiveness of neighborhoods by giving people reliable access to employment centers, educational opportunities, services and other basic needs.
· Target federal funding toward existing communities – through transit-oriented development and land recycling – to revitalize communities, reduce public works costs, and safeguard rural landscapes.
· Align federal policies and funding to remove barriers to collaboration, leverage funding and increase the effectiveness of programs to plan for future growth.
· Enhance the unique characteristics of all communities by investing in healthy, safe and walkable neighborhoods, whether rural, urban or suburban.
· Expand location- and energy-efficient housing choices for people of all ages, incomes, races and ethnicities to increase mobility and lower the combined cost of housing and transportation.
The report also notes that infrastructure spending as a percentage of gross domestic product has fallen by 50% in the U.S. since 1960, and now accounts for 2% of the country’s GDP. In contrast, China spends about 9% of its GDP on infrastructure, and Europe, about 5%, according to the report.
Today’s event is a followup to the President’s Labor Day announcement where he suggested that the Administration is ready to get to work on a six year highway and transit reauthorization measure. In that speech he suggested that $50 billion should be “front-end” loaded in the reauthorization to address current high unemployment conditions. This latest report presents the more long term benefits that come from infrastructure investment. The President did not call for action on the transportation bill before the end of the year.