The stakes are high in the search for a big deal
In many regions in Asia and Europe, a monumental transportation shift is taking place. High-speed rail, bolstered by new technology and expanding networks, is offering comparable service to airlines on longer and longer trips.
Routes like Paris-to-London and Beijing-to-Shanghai have become easier and more accessible, ferrying passengers at more than 200 miles per hour. And promising developments in maglev technology, which could propel trains to top speeds of 373 miles per hour, would further extend the reach of rapid rail travel.
Compare that to the rail system in the United States: On the fastest service in the country-the Acela route in the northeast-it’s not uncommon to see auto traffic outpace locomotives on stretches that run parallel to highways.
America’s infrastructure woes don’t end with rail systems, as anybody who has tried to navigate the New York subway system or fly into JFK airport recently would tell you. The most recent Infrastructure Report Card from the American Society of Civil Engineers said that due to deferred maintenance and poor investment, the country would need to spend $3.6 trillion to repair our country’s crumbling roads, rails, pipes, power grids. And without urgent action, these vital systems are set to get worse across the board.
According to Henry Cisneros, a former San Antonio Mayor, former Secretary of Housing and Urban Development, and a partner in an investment and financial firm, we’re not just behind, but in danger. And he believes the only true solution to the crisis is an elusive bipartisan plan.
“The clock may be ticking on what may be called true emergencies,” he said. “That is to say, people will die, or be hurt. Productivity will be lost. Cargo and transactions will be slowed and delayed. Man hours of personal time will be lost in congestion, by the millions of hours. It’s absolutely imperative that we act.”
To say the Trump Administration’s expected unveiling of its $1 trillion infrastructure plan later this month (or next) is long-awaited would be an understatement. Infrastructure spending and reform, a signature campaign issue delayed by debates about health care and taxes, is now imperative, say many state and local officials seeking guidance, funding, and a future roadmap for overdue repairs and renovations.
Jennifer Cohan, secretary of the Delaware Department of Transportation, said the Trump plan needs to offer direction and stability. During a panel with other state transportation leaders earlier this month, she bluntly said “The biggest thing is: Make up your frickin’ mind. We need sustainability. We need to know what it’s going to be and what it’s going to look like.”
Cisneros believes that a bipartisan, broad-based plan can and should be advanced, despite current divides. Arguments over whether Trump should have acted earlier are moot: “We are where we are, here and now.”
Cisneros says any plan needs to focus on those repairs and investments that help meet what he described as a matrix of needs, since with so many projects seeking support and funding, it’s important to push for a balanced, multifaceted approach. Investments should focus on projects that will contribute the most to U.S. competitiveness and economic growth.
High priority should be given to projects that will impact life and safety, such as bridge repair. Choosing projects that are regional in scope is important to make sure rural areas get fair, adequate, and needed support.
The plan should also recognize that we’re at an inflection point, where changing technology offers a chance to invest in new systems, instead of simply expanding what already exists. Better broadband, smarter roadways, a more intelligent and sustainable power grid, and infrastructure focused on conservation and resiliency can all add to competitiveness and growth.
But to make this a reality, the Trump administration needs to secure bipartisan support, and make sure both parties, as well as cities and states, are politically invested in his infrastructure initiative. Cisneros sees a few key questions determining if such a compromise is possible in a divided Washington.
The trickiest needle to thread may be the overall funding levels. Since Democrats will argue for more than the $200 billion federal investment the Trump administration is hinting at, and Republicans will be wary of the deficit (especially after increasing it with their tax bill), Cisneros feels the key will be adding set-asides for rural and poor areas, to make sure every region shares in the investment.
With the right balance of private investment potential and federal investment, the pot of federal funds can be expanded. These are the criteria on which the question of generating bipartisan support will turn.
Another key sticking point may be the state and local contributions to any programs. Many state and local officials feel that, with potential funding losses due to the tax reform package, specifically the SALT deduction change, it’ll be harder to create additional revenue sources for transportation projects.
Many states have raised their gas taxes as a means to help fund infrastructure projects, and some are turning to tolls, since they’ve already raised sales taxes and bond measures to fund additional projects. State and local leaders are already “facing blowback for what their taxpayers will allow,” according to a Brookings Report. If they’re asked to raise additional funds on top of what they’ve already recently done, they may struggle to come up with the matching dollars needed.
The tricky math being faced by states (almost half have a budget shortfall) reinforces why so many are pinning their hopes on a plan from the White House. All eyes will be on the President and the administration as they try to secure this difficult, but all-important, deal.