Welcome to What We’re Reading in Infrastructure. The Bipartisan Policy Center (BPC) launched the Executive Council on Infrastructure earlier this month. We wanted to share with you some recent publications, speeches and testimony we consider relevant to our work. We circulate these items to provide a view of cutting edge ideas, reactions and positions. The views expressed in these pieces do not necessarily represent the views of the council, its co-chairs, members, advisors or BPC.
Financing U.S. Transportation Infrastructure in the 21st Century
Roger C. Altman, Aaron Klein, and Alan Krueger – The Hamilton Project
“The nation’s transportation infrastructure, it is widely agreed, is eroding and in need of investment. Most policymakers recognize the merits of investing in the system, such as gains in productivity, global competitiveness, and job creation. Low public borrowing rates have also created an attractive climate for increased public investment. However, government leaders have failed to agree on which investments to make and how to pay for them. In order to break this logjam, this paper proposes two tracks of solutions, some of which can be implemented quickly, and others can be executed over the longer term.” Read the full report here. Read the policy brief here.
The Public and the Private Intersection of Infrastructure Investment
S&P Capital IQ’s Market Intelligence Unit
“Although infrastructure has historically been driven by publicly funded resources, that dynamic is changing. Reflecting significant regulatory developments, constant technological innovation, and record-low interest rates around the world, private investment in infrastructure is becoming an increasingly powerful force.” Read the full report here.
“Senate Finance Committee Ranking Member Ron Wyden, D-Ore., and Senator John Hoeven, R-N.D., today introduced legislation that would bring billions of dollars of investment to state and local government to help grow and repair America’s aging infrastructure. The bill, the Move America Act of 2015, would expand tax-exempt private activity bonds and create a new infrastructure tax credit, giving states significant flexibility to pursue infrastructure projects that are badly needed across the country.” Read a section-by-section summary here. Read the full text here.
Expanding the Market for Infrastructure Public-Private Partnerships: Alternative Risk and Profit Sharing Approaches to Align Sponsor and Investor Needs
U.S. Department of Treasury, Office of Economic Policy
“PPPs have typically used the basic user fee or availability payments models to allocate all demand risk and (therefore revenue risk) to either the private partner or the government, limiting the number of PPP deals that investors and project sponsors may find attractive. However, recent deals have migrated away from the basic user fee arrangement after several prominent PPPs using it encountered financial difficulty. This paper presents three alternative incentive structures for PPP contracts that can potentially benefit both public sector sponsors, by delivering higher quality per dollar, and private investors, by generating attractive returns.” Read the full report here. Read the summary here.
Senate panel to discuss 22 infrastructure proposals for broader bill
Energy & Environment Publishing
“The Senate Energy and Natural Resources Committee this week will continue its work on a bipartisan energy bill with a hearing to consider nearly two dozen proposals aimed at promoting natural gas pipelines, rooftop solar panels, ‘smart grid’ technology and related energy infrastructure needs.” Read the full article here. Read the full testimony here.
“To be certain, the aging and inadequate transportation infrastructure is an issue for Americans up and down the economic ladder. Throughout the country highways are crumbling, bridges are in need of repair, and railways remain inadequate. Improvement to public transportation—buses, trains, and safer routes for bicycles—is something that just about everyone who lives in a major metropolitan area has on their wish list. But there’s a difference between preference and necessity: ‘Public transportation is desired by many but is even more important for lower-income people who can’t afford cars,’ says Rosabeth Moss Kanter, a professor at Harvard University and author of a new book Move: Putting America’s Infrastructure Back in the Lead.” Read the full article here.
Economic Research: U.S. Infrastructure Investment: A Chance To Recap More Than We Sow
S&P Ratings Services, Ratings Direct
“Most think government spending on infrastructure gives short-term benefits to jobs and aggregate demand. However, investment in infrastructure yields long-term benefits as well, which is often overlooked when determining a project’s benefits…
- A $1.3 billion investment in real terms in 2015 would likely add 29,000 jobs to the construction sector and will add even more jobs to other infrastructure-related industries.
- That investment would also likely add $2.0 billion to real economic growth and reduce the federal deficit by $200 million (constant dollars) for that year.
- After an initial increase in aggregate demand, the economy’s productive capacity and output typically increase once the infrastructure is built and absorbed into the economy. That means increased growth and more job gains long after the project ended.”
“Landing at an American airport is a bit like time-traveling into the past. Outdated design, outdated technology, and outdated regulations are crippling many U.S. air hubs.
“Aviation was born in the U.S., and very quickly, American airplanes and American-trained pilots formed the backbone of global aviation. North America remains the world’s largest aviation market today, yet U.S. air transport is no longer the envy of other nations.
“America ranks a mediocre number 30 in the world for quality of air infrastructure, as measured by a survey of executives—and 127 in ticket taxes and airport charges (meaning they’re too high). The country ranks an even lower (131) in carbon dioxide emissions per capita.” Read the full article here.
Remarks from Vice President Joe Biden and Transportation Secretary Anthony Foxx at America on the Move Forum
Bloomberg Government in partnership with the Infrastructure Week Steering Committee
“’These kinds of infrastructure jobs create a virtuous cycle,’ Biden said. ‘First of all, they attract and retain business. Secondly — and these are good, middle-class paying jobs, you actually can raise a family on them — it creates and supports millions of jobs. And it’s not just the job at the construction site. It’s the job at the steel mill. It’s the job at the asphalt plant… in addition to that, it also creates jobs because these guys and women are able to go out and buy new cars, they’re able to go out and stop at the diner, have lunch while they’re working on the site.’” Watch the full remarks here. Read Secretary Foxx’s press briefing here.
Hearing: Exploring Opportunities for Private Investment in Public Infrastructure
Committee on Banking, Housing, And Urban Affairs – Subcommittee on Housing, Transportation, and Community Development
- Ms. Jane Garvey [view testimony]
North America Chairman, Meridiam Infrastructure
- Ms. Colleen Campbell [view testimony]
Board Member, Infrastructure Ontario
- Mr. Cal Hollis [view testimony]
Managing Executive Officer for Countywide Planning and Development, Los Angeles County Metropolitan Authority
Expanding Opportunity through Infrastructure Jobs
Joseph Kane and Robert Puentes – Brookings Institution
“The need to invest in U.S. infrastructure has never been clearer, making it all the more critical to take a fresh look at infrastructure’s importance to the labor market, both to drive long-lasting growth and to expand economic opportunity across the entire workforce—two elements often missing from the current narrative on infrastructure and jobs.” Read the full report here.
New BPC Executive Council Discusses Ways to Promote Private Investment in Infrastructure
Katie Golden – Bipartisan Policy Center
“Despite recent bipartisan efforts in Congress, there is still no path in sight to meet America’s current or future infrastructure needs. ‘Because of our politics right now nationally, in Washington, we don’t have the decency to maintain the assets and infrastructure that our parents and grandparents had the decency to build for us, much less the decency to build the infrastructure that our children are going to need, that our grandchildren are going to need in the 21st century,’ noted Senator Michael Bennet (D-CO) at a May 7 launch event for the Bipartisan Policy Center’s new Executive Council on Infrastructure.” Read the full post here.