Finance Infrastructure

Update: Public Works Investments

I missed this in this morning’s post: looks like Speaker of the House Nancy Pelosi, looking to find alternatives to the current crisis in funding for infrastructure projects that we’ve discussed several times here, will propose next month a $100-$300 billion bill to pay for such a program. Senator Barbara Boxer, head of the Senate’s Committee on Environment and Public Works, similarly is looking to provide funding for such a program. This is excellent news and proves that Democratic leadership is looking for an effective antidote to not only the current economic crisis but also the overall infrastructure problems currently facing the country. For the first time since the Eisenhower Interstate Program, we are talking about massive investment to improve this country’s mobility and communication.

Some economists, notably those from the anti-investment league of the Bush Administration, say that infrastructure projects are too slow to provide an effective antidote to the mounting recession. As a result, as we also recently documented, the Bush Administration has abandoned the idea that the federal government should invest in infrastructure and significantly reduced funding as a percentage of GDP from the Clinton years. (Note: China invests 8% of GDP in infrastructure projects; we invest around 2%.)

Nonetheless, Congressman Jim Oberstar, head of the House’s Committee on Transportation and Infrastructure, defended the idea of infrastructure investment, claiming rightfully that these projects not only do produce jobs, but also provide incalculable improvements to the nation’s physical plant, essential for the economy to function effectively. As the New York Times story notes, $18 billion worth of highway projects are ready to begin construction in 90-days; the same can be said of $8 billion worth of transit projects.

Oberstar is correct in his evaluation of our nation’s current situation. We must invest in infrastructure if we intend for the nation’s roads and railways to survive the next fifty years. Congratulations to Congress for finally getting its act together! Let’s have a collective (if premature) sigh of relief for stressed and underfunded transit agencies! If Obama wins, expect passage in late November or early December in the Democratic-controlled House and Senate. We’ll see if lame-duck President Bush can pull it together enough not to veto.


Statement from Senator Barbara Boxer

Statement from Congressman Jim Oberstar

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