President Barack Obama made the case for federal investment in transportation infrastructure during a visit to the Port of Miami Friday, where he observed the construction of a $900 million, privately financed port access tunnel that bypasses downtown streets to carry truck traffic between the port and nearby interstate highways.
The president used the event to tout his job-creation policies as he wrestles with Congress about how to bring down the federal budget deficit without harming the economy. He called for a Partnership to Rebuild America, first raised in his State of the Union speech in February, that would seek private capital to upgrade seaports and other infrastructure.
Obama credited the post-recession stimulus plan and other investments with repairing or building thousands of miles of roads and railroad track and thousands of bridges, but added the effort is not enough to overcome years of deferred maintenance.
"We still have too many ports that aren’t equipped for today’s world commerce. We’ve still got too many rail lines that are too slow and clogged up. We’ve still got too many roads that are in disrepair, too many bridges that aren’t safe," Obama said.
The American Society of Civil Engineers earlier this month gave the nation’s infrastructure a grade of "D+" - up from a "D" four years ago - and estimated the necessary infrastructure investment across all levels of government will reach $3.6 trillion by 2020.
"You ask any CEO where they would rather locate their business and hire new workers," Obama said. "Are you going to set up shop in a country that's got raggedy roads, runways that are pot-holed, and backed-up supply chains? Or are you going to seek out high-speed rail, Internet, high-tech schools, new state-of-the-art power grids, new bridges, new tunnels, new ports that help you ship products made in America to the rest of the world as fast as possible?"
Obama said the Miami Port Tunnel is an example of the types of projects needed around the country to reduce congestion, improve the flow of commerce, and increase exports that lead to high-paying jobs.
The tunnel, scheduled for completion in 2014, will provide long-term economic benefits to Miami and the state of Florida, Obama said.
"The port is in better shape, which means it's going to be able to get all the containers that are coming in from around the world, matched up with the improvements that are being done on the Panama Canal - which means we're not going to be losing jobs to other countries," he said.
Obama's infrastructure plan
would establish an independent fund to attract private investment in multi-modal, regional projects selected by independent experts using economic-benefit criteria. Private financing, combined with streamlined government approval processes, would speed up project development, Obama said.
The Obama administration for several years has supported the concept of an infrastructure bank capitalized with $10 billion and the MAP-21 surface transportation law passed last summer requires the federal government to take steps to reduce the time of project completion, primarily through a more efficient environmental permitting process.
Obama's plan also calls for the creation of America Fast Forward bonds to enable cities and states to leverage private money for public projects and strengthening the Department of Transportation's TIFIA loan program, which was expanded eight-fold to $1.75 billion over two years under MAP-21.
America Fast Forward bonds are modeled after the tax-exempt Build America bonds authorized under the stimulus legislation. They provide for the payment of a direct subsidy to bond issuers instead of providing an exemption from federal income tax to holders of the bonds for interest received. Under the president's proposal, the subsidy for America Fast Forward bonds would equal 28 percent of the interest payable to holders, instead of the 35 percent provided for Build America Bonds.
The White House proposal also would increase from $15 billion to $19 billion the amount of tax-exempt private activity bonds issued for surface transportation projects. Private activity bonds allow private investors the same bond rates as a public agency if the work is for a public purpose. Privately-owned airports, ports, wharves and commuter transport facilities would also be eligible for the preferred financing.
On the eve of presenting his budget to Congress, the White House also is seeking another $4 billion for new competitive funding under the TIGER grant and TIFIA programs.
"We can’t afford Washington politics to stand in the way of America’s progress. So I’ve put forward some ideas to get the private sector involved to protect taxpayer dollars. But ultimately, Congress has to fund these projects," Obama said.
"Let’s get this done. Let’s rebuild this country we love. Let’s make sure we’re staying on the cutting edge. Let’s make sure we’ve always got the ports. Let’s make sure we’ve got the best airports. Let’s make sure we’ve got the best rail lines. Let’s make sure we’ve got the best roads. Let’s make sure we’ve got the best schools," he urged the crowd.
Former Pennsylvania Gov. Ed Rendell, who heads an infrastructure advocacy group called Build America's Future, applauded the White House's plan. "But we all know our national infrastructure is in such poor shape that we will need even further investment for decades to come. The programs that the president outlined in Miami will create jobs, grow the economy and upgrade the roads and bridges that Americans rely on every single day. Our ability to stay competitive in the global economy depends on these investments," he said in a statement. - Eric Kulisch