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Senate Transportation Bills a Stark Contrast: One is Pro-Jobs, the Other is Pro-Pollution

Deron Lovaas

Posted November 3, 2011 in Moving Beyond Oil

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Today the Senate voted on a $60 billion transportation infrastructure measure -- part of the “American Jobs Act” proposed by President Obama – aimed at creating hundreds of thousands of new jobs by investing in infrastructure. NRDC supports funding public transit projects and repair work on the nation’s roads and bridges, and agrees that doing so is one of the most cost-effective methods of stimulating the economy.

This was a win-win opportunity for America. We need the jobs and we need to fix our crumbling transportation infrastructure. The bill offered today by Senate Democratic Leaders -- which failed narrowly on a Party-line 51-49 vote (in the Senate 60 votes are all-too-often needed to move bills) -- would put $50 billion toward road, bridge, rail and airport projects, along with $10 billion to establish an infrastructure bank that would provide loans or loan guarantees and seek to attract private sector investment for major infrastructure projects.

In contrast, Senate Republican Leaders proposed their own transportation legislation that is decidedly pro-pollution. Halloween may be over but the GOP alternative was a true “house of horrors” bill that would knock out environmental safeguards – including National Environmental Policy Act (NEPA) regulations, Clean Water Act standards, and Clean Air Act protections – while cutting funding for environmentally-friendly transportation funding for non-highway projects. The only good news is that this polluter wish-list legislation didn't pass either, by a wider margin of 47-53 thanks in part to one Republican Senator -- Olympia Snowe of Maine -- who bravely crossed Party lines.

NRDC adamantly opposed the GOP transportation bill and offered a qualified endorsement of the Democratic legislation. The Democratic bill is chock-full of good stuff but was far from perfect. It definitely would have been a lot more cost-effective and environmentally friendly if it included a “fix-it-first” provision, which invest in deferred maintenance and repair before new road-building. And unfortunately a big chunk of the money would be distributed by a simple (dare I say dumb?) formula instead of through competitive, performance-based grants that guarantee a better return on investment.

We also believe the energy infrastructure section of the bill was flawed. For example, the infrastructure bank would have provided 100% of the financing for mature energy generation technologies, like natural gas plants, which already can find financing in the private markets –taking away commercial opportunities from the private sector. The way the bill was written, the bank could also fund nuclear power plants, which, on the other hand, are very difficult to finance in the private market with government loan guarantees because they are still too risky despite decades of being deeply subsidized by the federal government.  A better approach is for an infrastructure bank to require partnership with the private sector financers that have “skin in the game," sharing the risks and the benefits with them. If at least half of the debt for a mature technology financing cannot be obtained from the private markets without a loan guarantee, it probably is not a good deal for the government. 

Additionally, my colleagues who focus on clean water point out that the bill should have better targeted investment to projects such as water efficiency initiatives and green stormwater infrastructure, both of which enhance water quality and supply and have multiple additional benefits.

Despite its shortcomings, the Democratic bill would have been beneficial in beginning to address a critical economic and environmental problem: our nation's crumbling infrastructure. The United States now ranks 23rd of 139 countries in the quality of its infrastructure, according to the World Economic Forum. (We were 7th just a decade ago.) Our deteriorating infrastructure is costing us more than our pride. The U.S. Department of Transportation estimates that losses due to holdups in freight traffic add up to $200 billion annually -- more than one percent of gross domestic product.  Crumbling roads cost Americans $97 billion a year in vehicle repairs, maintenance and other expenses, and another $32 billion in travel delays.

On top of all of this, bad roads and poor public transit options hurt the environment. Congestion and gridlock caused by inadequate and decrepit infrastructure mean more vehicles stalled in traffic, using more gas and emitting more global warming pollution. The good news is that addressing these problems can have a direct and positive effect on our economy. Infrastructure projects are powerful generators of jobs. The Congressional Budget Office (CBO) estimates that a $1 billion investment in infrastructure produces 4,000 to 18,000 new and largely well-paid jobs, for construction workers, designers, engineers and others. Investing in public transit, in particular, has been shown to create more jobs than highway projects.

Overall, a $1 billion investment in infrastructure produces an estimated $1.6 billion boost to GDP, according to the CBO and Moody’s. Infrastructure projects not only reduce the enormous costs imposed by our outdated and poorly maintained transportation system, modernizing our transportation system also would make us more competitive in the global economy. After all, when a business decides where to locate, one of the first things they look at is the quality of local infrastructure. Furthermore, many of our nation's infrastructure needs can be met by “shovel ready” projects that will quickly generate jobs and these projects have long-term, lasting benefits for communities and regions.

We needed this investment to provide jobs now and into the future to sustain our economy, and our environment, in the long run. Let's hope we get another bite at the apple soon.

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Switchboard is the staff blog of the Natural Resources Defense Council, the nation’s most effective environmental group. For more about our work, including in-depth policy documents, action alerts and ways you can contribute, visit NRDC.org.

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