Problem Solvers Caucus report takes deep dive to address U.S. infrastructure concerns

A report recently issued by the Problem Solvers Caucus platform, a bipartisan group in Congress comprised of around 40 members focused on working towards bi-partisan cooperation on key issues, focuses on bipartisan policy solutions with an eye on augmenting United States’ infrastructure.

Entitled, “Rebuilding America’s Infrastructure,” the report comes at a time when the current status of U.S. infrastructure planning, from both an operational and financial perspective, is somewhat stuck in neutral, as the White House has stated it is a core focus and has offered up $200 billion to help remedy the nation’s infrastructure woes. But the U.S. Chamber of Commerce recently noted that the real “infrastructure debt” facing the nation is $2 trillion, coupled with the fact that the national gasoline tax has not been raised in 25 years and other viable funding options have ostensibly stalled out.

The core focus of the report, according to its authors, is to detail bipartisan solutions that will improve U.S. highways, roads and bridges, transit and railways, ports and airports, water and sewer systems, energy systems and the power grid and communications networks.

“By modernizing existing user fees, incentivizing private innovation and investment through public private partnerships [P3], making smarter investments with limited federal dollars, and increasing accountability to taxpayers, this taskforce believes we can build a 21st Century infrastructure network that will foster a truly 21st Century economy that works for every single American,” the report stated.

For funding and financing, the report calls for various solutions to address the growing infrastructure deficit the U.S. is up against, through various approaches, including:

• Congress fulfilling its duty to provide stable long-term sustainable funding for infrastructure;
• preserve and expand tax-advantaged infrastructure financing options by maintaining the federal tax exempt status for municipal bonds and private activity bonds, as well as increasing the private activity bond state volume cap for all infrastructure categories;
• incentivize states to adopt P3 enabling legislation and establish P3 units to evaluate projects for viability as P3;
• support increased transparency in competitive federal grant program decision making;
• implement reforms to the Transportation Infrastructure Finance and Innovation Act (TIFIA) Water Infrastructure Finance and Innovation Act (WIFIA) and other federal financing programs that expand eligibility criteria and encourage more small system applications in rural communities; and
• consider additional private sector solutions, with federal government oversight, to finance large-scale infrastructure development, among others

In a section of the report addressing surface transportation, the authors observe that even though the vast network of surface transportation infrastructure has given the U.S. “a major economic competitive advantage in a global economy,” Congress has allowed a large backlog of deferred maintenance to grow in the country’s existing infrastructure and not keep up with current demand. This has, in turn, made it harder for businesses to remain competitive, left people stuck in heavy traffic, and also left much of U.S. infrastructure crumbling and unsafe.

What’s more, the report said that state and local governments pay for around 75% of funding for all transportation infrastructure projects, with the federal government paying the balance through the Highway Trust Fund, which is financed through the aforementioned federal gasoline tax. Revenues from that tax have seen spending exceed declining revenue going back to 2008.

Among the solutions cited in the report to reverse course were indexing this tax to inflation or the consumer price index, the National Highway Construction Cost Index, or the Corporate Average Fuel Economy (CAFE) standards, or some combination of them.

For ports and federal waterways, the report noted that the failure to properly fund dredging and to accommodate Post-Panamax ships is causing the U.S. to lose business to Canada and Mexico, while placing national security in jeopardy as more goods are brought overland through U.S. borders. On top of that, it said that the harbor maintenance fee, a .125% tax placed on the value of imported cargo pays out less than what is collected through the harbor maintenance fee. Funds from this are allocated for harbor maintenance and dredging.

One way to remedy this situation would be for Congress to dedicate 100% or revenue raised for the Harbor Maintenance Trust Fund for its intended purpose of supporting port and harbor dredging activities.

The report was strongly supported by the Washington, D.C.-based Coalition for America’s Gateways and Trade Corridors (CAGTC).

“I think the top takeaway from the report is that this very much is a bipartisan priority and not in name only,” said CAGTC Executive Director Elaine Nessle in an interview. “What it really does is lay out a number of principles of agreement of real substance, with a path forward that shows things that Democrats and Republicans are in agreement on. That in itself is very significant.”

From a supply chain perspective, as the report relates to shippers, carriers, or 3PLs, Nessle said there are various takeaways, starting with how these groups rely on an efficient supply chain to move goods to market.

“The good news is that goods movement-related infrastructure is one those things that people on both sides of the aisle look at and agree that it is critical to the success of our national economy and also regional economies,” she said. “Virtually every single member of Congress has a manufacturer or an agricultural producer or provider of some type of goods or service that needs to be moved in a way that is cost efficient. The fact of the matter is that freight and goods-related infrastructure that supports that movement is something that both Republicans and Democrats, urban and rural alike, can agree on in that it is critically important going forward.”

She added that as a nation it is an area that up until MAP-21 and the FAST Act has not received an appropriate amount of emphasis on that type of infrastructure, although that is changing now.

“People are certainly realizing that is going to be a priority going forward, and it should be,” she said.