Business group calls for more infrastructure investment

The recovery of the U.S. economy could hinge on America's ability to rehabilitate its infrastructure, the Organization for International Investment (OFII) said Tuesday as it launched a campaign to pressure lawmakers to increase spending in that area.

“Historically, America’s infrastructure has provided the U.S. with a competitive advantage that has helped to attract worldwide investment to this country,” OFII President Nancy McLernon said in a statement announcing the release of a new report, titled "Building Competitiveness — American Jobs, American Infrastructure, American Global Competitiveness."

OFII is a Washington-based business group that represents foreign companies that have subsidiaries in the U.S. OFII uses the term "insourcing" to describe the impact of those subsidiaries on the U.S. economy and job growth. 

"Despite the current fiscal constraints the U.S. faces, we must ensure America has a world-class infrastructure," McLernon said. "The U.S. subsidiaries of global companies have a strong interest in an efficient, modernized infrastructure to maintain their success in this country and enable them to continue as a source of American job creation into the future.”

The group's report suggests using public-private partnerships to fund infrastructure projects and applying "best practices" from other countries that OFII says have lapped America in that area.

"America's infrastructure crisis contrasts starkly with the dramatic infrastructure improvements being made in so many other countries," the report says. "America today spends approximately 2 percent of (gross domestic product) on infrastructure. … This amount is down 50 percent from U.S. levels in the 1960s and it is low compared to many other major countries."

The United States will be competing with countries that are spending big on infrastructure as it pulls itself out of the recession, noted Dartmouth College professor Matthew Slaughter, who wrote the OFII report.

“America’s recovery from the financial crisis and recession is very welcome, but it remains tenuous,” Slaughter said.  

“Rebuilding America’s infrastructure can play a role in not just creating American jobs but also boosting the productivity of American companies — which in turn supports rising incomes for workers and their families.”

The full report can be read here.