The American Jobs Act: a Bridge to Somewhere! - Metropolitan Planning Council

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The American Jobs Act: a Bridge to Somewhere!

MPC Research Assistant Kevin Cooper-Fenske authored this post.

Perhaps with the combination of the Bureau of Labor Statistic’s August jobs report showing no change in the 9.1 percent unemployment rate, and the tremors from last month’s Virginia Earthquake, Washington will finally give our nation’s failing infrastructure the attention it desperately needs, and our economy the confidence necessary for long-term growth. 

The American Society of Civil Engineers gave U.S. infrastructure a whopping “D” all the way back in 2009. Since then, Congress had passed seven stop-gap funding extensions to the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), without creating a long-term transportation solution. As the last extension was set to expire this month, Congress braced itself for yet another last-minute, legislative showdown. But, without much to-do, on Sept. 16 Congress simply passed another temporary extension of SAFETEA-LU

While not the long-term solution needed to address the structural funding issues plaguing the nation’s infrastructure, at least we temporarily avoided the 30 percent investment cuts envisioned in the recent House Committee on Transportation and Infrastructure proposal, which was estimated to cost 36,000 jobs in Illinois alone over the next six years. But, this lull in theatrics on the Hill appears to have been in preparation for a much larger play. 

On Sept. 8, the Obama administration laid out a bold, $447 billion proposal to finally drive our economy away from stagnation and toward confidence. While recommending $253 billion in tax cuts and incentives, primarily in employee payroll taxes, the plan seeks $50 billion in additional surface transportation investments over the next year and $10 billion for a long-awaited national infrastructure bank. Specifically, the American Jobs Act, (AJA) as the proposal is fondly named, calls for investments of $27 billion in highway safety and efficiency, $9 billion in transit, $2 billion in intercity passenger rail, $2 billion in airports, $4 billion in high-speed passenger rail, $1 billion in NexGen air traffic modernization, and $5 billion in the innovative TIFIA and TIGER programs. For Ilinois, the President’s plan will make immediate investments of at least $1.5 billion  that could support an estimated minimum of 20,700 local jobs, while benefitting 260,000 firms with the payroll tax reduction alone. 

One of the more innovative and potentially effective elements in the AJA is the creation of a National Infrastructure Bank, a permanent financing vehicle for the most critical projects of national priority. There are at least three good reasons to think that this bank will be a clear improvement on the current federal patchwork, stopgap infrastructure provision: 

  • First, it will be an independent agency, led by financial and industry experts not politicians.
  • Second, it will use a criteria-based selection process and broadly support transportation, water and energy infrastructure development to maximize infrastructure dollars.
  • Third, it will leverage partnerships with local government and private entities, investing no more than 50 percent of the total costs of a project. 

Digging a bit deeper into AJA, Mark Zandi, chief economist at Moody’s Analytics, offers a baseline estimate that AJA will add 2 percent to U.S. GDP in 2012, and contribute 1.9 million jobs, reducing the unemployment rate by about 1 percent relative to currently fiscal policy. Splitting this analysis open a bit more, the estimated “bang for the buck” (additional GDP per tax dollar) on infrastructure spending is $1.44 per $1 spent. No other set of measures appears quite as politically salient or fundamental to the long-term growth of our national economy than infrastructure investments. 

The Metropolitan Planning Council identifies, develops and advocates for policy tools that deliver criteria-based, impact-oriented results – something all parties can agree on. As President Obama indicated, both the U.S. Chamber of Commerce and AFL-CIO, the largest business lobby and union in the U.S., endorse the American Jobs Act. The claim that some parts of this act have had previous bipartisan support is undeniably true (notice the BUILD Act, AIIF Act, or Bridge to Work), but it remains to be seen how much of AJA our current political class will approve. 

For his part, President Obama appears open to passing whatever parts of the act arrive at his desk. Thus, even if piece-meal progress is the most our political system can achieve this year, we ought to target our attention on our best, substantive policies options. So, join us in calling on our national leaders to act now by, at minimum, adopting the infrastructure investments set forth in the American Jobs Act. It is without a doubt time to start building a bridge to somewhere!  


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