Investment leads to economic growth
In New Mexico, upgrading our aging infrastructure is a major issue facing the folks in Santa Fe. With limited financial resources, we need to be smart about how we allocate our funds. The governor has made water a priority, and rightfully so.This speech given by U.S. Chamber of Commerce Chairman Tamara Lundgren Aug. 4 in Portland, Ore., shows that the infrastructure issue is a nationwide problem that needs addressing.
Here and across America, much of our infrastructure is unsafe, inefficient and a drag on our economy. This needs to change.
It’s not a choice. It’s an economic and moral imperative. Economic, because by making the necessary improvements and investments in our infrastructure, we can create jobs and increase America’s competitiveness. And it’s a moral imperative because by making the necessary improvements in our infrastructure, we can save lives and help clean the environment.
I’m sure there is no shortage of community and business leaders who wonder how gridlock in their cities and snags in their supply chains can be solved when there is so much gridlock in Congress. But here’s the good news. Although there is an extraordinary amount of disagreement in Washington, when it comes to infrastructure there is agreement on both sides of the political aisle that a modern, seamless,and safe infrastructure system is critical.
Though the business community welcomes these positive steps forward and their immediate beneficial impacts, we can and must do more.
What we need is a long-term strategy for infrastructure investment. The system must be able to meet our nation’s needs – not just tomorrow, but for years and decades to come. It won’t be easy to achieve, but I believe we have the potential to do it, because our leaders have shown that they are willing to act.
But now comes the hard part. How do we pay for it?
One obvious answer is simple, straightforward, and direct – which is probably why it’s not very popular. And that’s to raise the gas tax user fee at the pump. It hasn’t been done in nearly 20 years, and major increases in fuel efficiency mean that people can and do drive more miles while paying relatively less in taxes to maintain the system. A modest, phasedin increase in the gas tax would provide more federal funding for highways and transit.
The U.S. Chamber of Commerce believes that this is one of the most promising solutions. But that’s not the only idea that should be considered.
We need to improve regulations, incentives and legal protections in order to attract more private capital to infrastructure projects. There are hundreds of billions of dollars in capital markets and major pension funds that could potentially be unlocked and invested if we change our way of thinking about infrastructure.
The government’s role is critical – but not every project has to be wholly financed, owned and operated by the government. We should be far more open to public-private partnerships and privately financed, owned and operated facilities, just as many of our global competitors are doing throughout Europe and in Asia.
Policymakers must improve transparency and accountability – especially when it comes to how projects are selected, implemented and paid for. Taxpayers might be more open to supporting a gas tax or other user fees if they knew where the money was going and had confidence that it would be used prudently.
Streamlining the regulatory system and permitting process could also help draw investment and allow job-creating projects to move forward more quickly. In fact, increasing the private sector role in American infrastructure can help bring private sector innovations to the system. That’s one more good reason to remove barriers and facilitate access to private capital.
It comes down to this. We need to be willing to explore all of the options – because the alternative, doing nothing at all – isn’t acceptable.
Coming up with a long-term solution to our infrastructure challenges won’t be easy – nothing in Washington ever is. But if there’s a chance to do something significant for the good of this country, infrastructure is it.