Four Fortune 100 companies and Burlington Northern Santa Fe Railway have formed the Alliance for American Competitiveness to push Washington to make strategic investments in infrastructure that support economic growth and job creation by reducing logistics costs relative to other countries.
The organization's start coincides with consideration in Congress this year of legislation to reauthorize surface transportation programs managed by the U.S. Department of Transportation. Also pending are a rail authorization bill and legislation to pay for modernization of inland waterways and harbors.
Government experts say that politicians need to hear firsthand how congestion and poor intermodal connections impact businesses in their districts and states. In the past, lobbying for transportation was generally left to the construction, trucking and transit industries that have a vested interest in increased spending. According to the new thinking, shippers who use the highways to move goods and services are more effective spokespersons for investment because they create permanent jobs and their employees vote. The U.S. Chamber of Commerce has tried in the past to mobilize shippers to make the case for a sustainable, multi-year transportation bill.
The current two-year, $105-billion funding bill expires Sept. 30. About $40 billion of the DOT's annual budget goes toward highway maintenance and upgrades, but the system faces a crisis because revenues from fuel taxes and other user fees have remained flat, while outlays to states for projects continue to rise. The drawdown of the Highway Trust Fund has required Congress to step in with cash infusions from the Treasury, weakening the user-pays principle that enabled the birth of the interstate network. The two-year MAP-21 law lacked new revenues to reverse the decline because lawmakers and the Obama administration were reluctant to raise fuel taxes, which have remained fixed since 1993.
The Highway Trust Fund balance is expected to reach zero in September, meaning the DOT will not be able to reimburse states for completed highway projects that were pre-approved when revenue projections were higher. Meanwhile, states are unlikely to start new projects for which payment seems uncertain.
President Obama last month proposed a four-year, $302 billion spending plan for rehabilitating highways, bridges and transit systems, with new money to come from vague ideas for corporate tax reform. A large portion from the tax windfall -- $63 billion -- would go to plug the hole in the Highway Trust Fund, and the rest be used to pay for infrastructure in most need of repair.
The AFAC is being led by Caterpillar Inc. Chairman and Chief Executive Officer Doug Oberhelman and former Mississippi Gov. Haley Barbour. Other founding members are Dow Chemical, Honeywell and United Parcel Service.
BNSF's parent company, Berkshire Hathaway, is the fifth U.S. company.
Leaders of all the companies have been vocal advocates for transportation infrastructure investment, including funding to support goods movement. The coalition is designed to amplify their voices for a more efficient transportation system.
"Caterpillar moves more than 12 billion pounds of machines, engines and parts around the world each year. Quick delivery to our customers is critical, and requires a modern road, rail, water and air transportation system,” Oberhelman said in a statement. “While other nations are investing hundreds of billions of dollars in infrastructure, the United States has been under-investing in infrastructure for decades. As a result, we are risking our competitive advantage."
Honeywell Chairman and CEO Dave Cote said the U.S. needs to build better roads, bridges, ports and an air traffic management system.
"While overall government spending needs to be cut drastically, there is such a thing as 'good' or 'investment spending' that helps grow the pie and infrastructure is one area that the U.S. needs to address now," he said.
said it will use traditional methods of persuasion and public affairs, hold district events and participate in transportation-related forums to persuade lawmakers to vote for a strong transportation bill.