The Highway Trust Fund, which currently finances about 112,000 road projects across the United States, will run out of money next month unless Congress and the White House find a way forward.
I met with senior administration officials this week and told them the same thing we are telling members of Congress: The cost of gridlock that starts in Washington, D.C. and then spreads across our nation’s roads is just too high.
I also pointed out this isn’t the first time policy differences have put essential infrastructure investments, and U.S. competitive advantage, in peril. The trust fund’s very creation was the result of negotiations and bipartisan compromise between Republican President Dwight D. Eisenhower and a Democrat-controlled Congress.
They found a solution, and in 1956 one of the greatest construction and economic growth projects in history – the National System of Interstate and Defense Highways - began. A few years later, President Kennedy also had to overcome resistance and convince his own party, which still controlled Congress, to renew funding.
With the trust fund running out of money within weeks, the stakes are just as high and the need for a stable and permanent solution just as great now as they were then. Our aging infrastructure slows down our nation. It takes longer to drive across town, to commute, and to ship and deliver goods.
Our leaders must find a solution to address the near-term crisis. They must also address long- term funding needs and return to multi-year reauthorization bills, so states and industries can plan capital investments and projects. We need the political will of Eisenhower and the 84th Congress – leaders who kept talking until they agreed on a solution.
Caterpillar stands ready again, as we were in 1956, to build and improve the roads, bridges, runways and railways that American families and businesses rely on. The first interstate highway system in the world was conservatively estimated to return six dollars in economic productivity for every dollar it cost to build; we would all benefit from that level of productivity now.
Caterpillar is the world’s leading manufacturer of construction equipment, so of course we want contractors to choose our equipment for projects. But our immediate concern is that Caterpillar, and all U.S. manufacturers, need modernized infrastructure to deliver our products, which are made in America by American workers, to American businesses. And we need infrastructure to support exports so we remain on at least equal footing with our competitors overseas.
Caterpillar is on the front line of global competition, every day, and we see how temporary measures and inaction are causing America’s competitive advantage to slip away.
It slips away when we can’t move parts and finished products quickly due to highway congestion. These delays cost our economy an estimated $101 billion each year, and waste 1.9 billion gallons of gasoline each year – equal to total U.S. gas consumption for five days. That much waste is not only foolish, it’s simply unsustainable.
The U.S. competitive advantage slips away when just-in-time inventory is late because of aging airport facilities. Caterpillar ships about 70 million pounds of mission critical service parts from the Chicago O’Hare airport annually. In 2013, overall airport on time arrival was about 75 percent. That means about one in four flights, and therefore deliveries we and our customers were counting on, were late.
The competitive advantage slips away when manufacturers divert shipments because U.S. ports are too shallow or lack capacity. Our ports need to be deepened and modernized to handle today’s large container ships. We want to ship our U.S.-made machines out of U.S. ports.
The competitive advantage slips away when trucks have to detour around aging bridges because they can’t accommodate modern truck sizes or weights. A Caterpillar 797 off-highway truck chassis can’t move in a straight line from our Decatur, IL plant to a port of exit because of a patchwork of state-imposed weight restrictions. Either we take a longer, inefficient route, or we disassemble and then reassemble the chassis. In either case, we waste time and money.
American companies implement just-in-time inventory and on-demand supply chains. We produce vehicles and machines with greater fuel efficiency and lower carbon emissions. We lead the world in innovation, inventing better products and better processes.
We unleash all this creativity, and then are constrained by inefficient infrastructure, much of which was built when cars still drove with leaded gas.
Imagine if we didn’t have such inefficiency. Imagine if we didn’t have congestion delays, indirect routes and the higher costs they bring. Imagine if the United States planned and implemented a 21st century transportation system that creates jobs and growth, and ensures the United States remains the economic envy of the world. A similar vision motivated the White House and Congress to find a solution in the 20th Century, and should be enough to motivate them again now.
Oberhelman is the chairman and CEO of Caterpillar Inc., and chairman of the National Association of Manufacturers. Caterpillar is a founding member of the Alliance for American Competitiveness.