Finance

Infrastructure gap reaches $5.6 trillion: Trade group

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America’s infrastructure gap has reached to $5.6 trillion, according to the trade group American Society of Civil Engineers (ASCE). 

The group said the gap is a problem that, unaddressed, could lead to the loss of 3 million jobs over two decades.

“When we fail to invest in our infrastructure, we pay the price,” said ASCE Executive Director Tom Smith.

The group in its annual report card outlined how much infrastructure investment is falling behind. Of the $13 trillion in investment the country needs, only $7.3 trillion is expected, leaving a $5.6 trillion gap. There was a $100 billion increase in the gap of surface transport investment alone over the past four years.

Rundown infrastructure, the report says, costs the average household $3,300 a year in everything from hitting potholes to power outages and lost productivity due to traffic.

By 2039, the group warns, lacking infrastructure would lead to $10 trillion in lost gross domestic product, $23 trillion in lost business productivity, and a $626 billion spike in the trade deficit.

The report’s main message is likely to find an amenable audience in Washington. President-elect Joe Biden is expected to roll out a legislative outline for both COVID-19 relief and a major infrastructure package Thursday.

During his campaign, Biden proposed a $2 trillion infrastructure plan, which included many of his climate change goals.

The need for infrastructure investment has long been an area of bipartisan agreement, though the parties differ considerably when it comes to questions of scale, funding and ownership.

Many expected infrastructure to be an area for cooperation during President Trump’s term, but little advanced amid fierce disagreements, tensions and regular scandals that boiled over into policy discussions.

ASCE is not alone in calling for improved infrastructure. 

Many economists say such investments could help spur significant growth, especially during an economic downturn when jobs are scarce and the interest rates for borrowing are low.

An analysis by S&P Global found that a $2.1 trillion infrastructure plan along the lines of Biden’s proposal could add as much as $5.7 trillion to the economy over the course of a decade.

“That’s 10 times what was lost during the recession,” said S&P Global U.S. Chief Economist Beth Ann Bovino.

Updated at 11:11 a.m.

Tags coronavirus recession Donald Trump Infrastructure investment in infrastructure Joe Biden

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