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Transportation

Reports foresee trillion-dollar spending gap for U.S. infrastructure

By Ashley Halsey III,January 15, 2013

The aging Frederick Douglass bridge in D.C., pictured Dec. 12, 2012, is… (Nikki Kahn/The Washington…)

This week’s bold warning on infrastructure comes weighted with the sort of price tag that seems abstract to many taxpayers in a nation where a financial bailout costs $500 billion, a war is $113 billion a year, the annual deficit runs to $1 trillion and recent spending cuts amount to $110 billion.

The cost of deficit reduction became real when people got their first paycheck this year and realized the payroll tax holiday was over. But experts said the reality of a failure to invest $1.1 trillion more in infrastructure by 2020 will creep up on them.

“Infrastructure is the most important thing you never think about,” said Jim Hoecker, former chairman of the Federal Energy Regulatory Commission. “Infrastructure is a collection of critically important strategic assets, and we generally take them for granted.”

If the problem is not addressed, power outages will become more frequent, prices at the supermarket and department store will inch up, traffic will detour around bad bridges, household incomes will drop and millions of people will lose their jobs.

The challenge of rebuilding a post-World War II infrastructure at the end of its natural life — roads, bridges, the electrical grid, water and sewer systems, ports — has been well documented by myriad experts. One of the most meticulous accounts has come in a series of reports by the American Society of Civil Engineers (ASCE), which delved into each failing system to calculate not just the cost of restoration but the economic and personal price of doing too little or nothing at all.

The exclamation point on the “Failure to Act” reports came Tuesday in an ASCE paper: An investment of $2.7 trillion is needed by 2020; likely funding available, $1.6 trillion. The Congressional Budget Office says combined federal, state and local spending for roads and bridges now amounts to about $160 billion.

“Job losses will mount annually, and by 2020 it is predicted that there will be 3.5 million fewer jobs throughout the country,” the paper said. “The expected impact for every household in the U.S. will be an average loss of more than $3,000 per year through 2020 in disposable personal income . . . due to job cutbacks and declining business productivity.”

After that, it gets worse: “Expected loss of disposable personal income is estimated to exceed $6,000 annually from 2021 to 2040.”

“Unless we increase overall funding for infrastructure, all we’re doing is fighting over the placement of the deck chairs on the Titanic,” said Janet F. Kavinoky, who directs infrastructure initiatives for the U.S. Chamber of Commerce.

The ASCE reports, produced by economists and engineers, have distilled the costs with the assumption that most Americans are capable of connecting the dots that lead to them. For example, the latest paper says bars and restaurants will lose $55 billion by 2020 if infrastructure needs are not met. Retailers will lose $95 billion.

Such huge numbers played out in microcosm four days before Christmas in Anne Arundel County. An explosion at an electrical-power switching station just before 9 p.m. shut down the county’s two major malls. It left normally busy bars and restaurants in downtown Annapolis in darkness. Customers went home, sales were lost and employees on hourly wages lost income. One of the busiest retail evenings of the year was a bust.

An ASCE paper makes those links. If ports aren’t improved, the import-export market on which many U.S. jobs rely suffers. If the roads and bridges that support those ports and domestic manufacturing cease to provide efficient, uncongested routes that get goods to store shelves, prices will go up. Time is money for shippers, and diesel fuel is expensive.