By Sen. Mark Warner (D-Va.) - 02/06/14 06:00 AM EST
The primary source of all road and highway funding in this country, the Highway Trust Fund, is projected to run dry by the end of September.
Americans who use our outdated roads, bridges, trains, and airports know that our infrastructure is already facing serious challenges. American businesses know it too: Our economy loses $80 billion annually because of traffic congestion and blackouts on outdated grid infrastructure.
The American Society of Civil Engineers estimated last year that to get our infrastructure into shape, we would need to invest $3.6 trillion by 2020. For roads, bridges and transit, that represents a $112 billion annual discrepancy between what we are currently spending and what we should be.
None of this is news. These are old, familiar stats that infrastructure advocates dust off for speeches and opinion pieces like this one to tell of the need for increased funding.
And yet, we look around the world and see an entirely different situation. Where the United States is now only spending roughly 2 percent of its GDP on infrastructure, places like Europe, India and China are spending 5, 7 or even 10 percent of their GDP on infrastructure.
We also see the private sector investing in infrastructure in other countries at levels far above where we see private sector infrastructure investment here in the U.S. For example, pension funds love putting money in infrastructure projects because they are generally long-term, reliable investments with a steady rate of return. Some of those pension funds in the U.S. — like the Virginia Retirement System for Virginia’s public sector employees — are investing their money to build infrastructure projects abroad.
The U.S. Treasury Department even has an office dedicated to providing advice and assistance to public-private infrastructure partnerships in foreign countries, including advising those looking to invest in those projects. We have no comparable resource for our pension funds and others who might want to invest in infrastructure here at home.
However, our bipartisan BRIDGE Act would change that.
I was proud to recently stand with Sen. Roy Blunt (R-Mo.) to lead a group of 10 senators, five Democrats and five Republicans, in introducing legislation that will help address our growing U.S. infrastructure crisis.
The BRIDGE Act will establish a new infrastructure financing authority that complements existing programs currently scattered across several agencies. The legislation will allow us to consolidate expertise and talent in infrastructure financing and program management. This new authority could help states and localities go toe-to-toe in negotiations with private sector partners, ensuring that taxpayers get a good return while helping to identify and build out a pipeline of viable projects.
Paid for through consolidation and disposal of unused federal property, and at no additional cost to taxpayers, the BRIDGE Act would provide $10 billion to create the financing authority, which would provide loans and loan guarantees to projects in the transportation, water and energy sectors.
The BRIDGE Act wouldn’t add a dime to the federal deficit, and experts say this modest initial investment ultimately could unlock $300 billion or more in total infrastructure investment in the first 10 years.
The Financing Authority is structured to be self-sufficient over time, continuing its infrastructure investments over decades to come, but without requiring additional federal money.
This bipartisan legislation does not create a silver bullet to magically fix America’s infrastructure gap. Instead, our proposal creates a targeted new tool to help states and localities access billions of additional dollars in private-sector capital that remains parked on the financial sidelines despite today’s extremely favorable interest rates.
Even more importantly, the BRIDGE Act represents a welcome bipartisan initiative from Washington that could actually expand trade and tourism, make our nation’s businesses more competitive and create new jobs here at home.
Warner is Virginia’s senior senator, serving since 2009. He sits on the Banking, Housing and Urban Affairs; the Budget; the Commerce, Science and Transportation; the Intelligence; and the Rules and Administration committees. He was governor of Virginia from 2002 to 2006.