AGE: Invest in Infrastructure

Posted by Blake Wright on July 24, 2014 at 10:37 AM


By Alyssa Berg
Infrastructure is the essential framework that underpins our stable, modern society. We all rely on functioning roads, waste facilities, waterways, dams, levees, transit, and energy to keep our nation clean, navigable, and ultimately, safe.  

But in 2013, the American Society of Civil Engineers Report gave D grades or lower to each infrastructure category listed above, meaning that across the nation, each sector exhibits substandard conditions that could pose a threat to public safety. Recent sudden bridge collapses in Oklahoma, Minnesota, and Washington state have exemplified these tragic consequences of sub-par and neglected infrastructure.

Weak infrastructure is also a detriment to economic competitiveness. Substandard ground and air transportation systems cost our economy billions in wasted fuel, stalled business, and, as mentioned above, public safety.

But time and time again, investment in infrastructure has been shown to increase both short-term and long-term economic growth for Americans at all echelons of the socioeconomic ladder. Infrastructure projects create opportunities for future productivity gains in the private sector while also improving access to jobs, businesses, supply chains, and affordable transportation across the nation.

Furthermore, infrastructure spending is an investment in the economic stability of America’s working class. In 2014, construction workers were unemployed at a rate of 9.4 percent, which is more than three percent higher than the national unemployment rate. However, nearly two-thirds of the jobs resulting from infrastructure investment would be in the field of construction.

The labor force needed to power infrastructure improvement and expansion is ready and willing. We think investing in infrastructure is essential to the future physical and economic health and safety of our nation. Here’s how we propose to make it happen:

Policy Option 1: Expand initiatives that allow private companies to invest in infrastructure projects, including a National Infrastructure Financing Authority.

Public-private partnerships (PPPs) are a cost-effective way for state and local governments to undertake needed infrastructure projects. Private financing can shift the financial responsibility of investment to a private entity, which will help to improve infrastructure in areas where public partners are unable or unwilling to embrace the debt or risk associated with such projects.

While this is largely an issue for state and local governments, the federal government could open up more opportunities for PPPs. Specifically, Congress could create a National Infrastructure Financing Authority, which would help to grow the number of projects that can be built and upgraded each year. Infrastructure initiatives are crucial to future prosperity, as they will promote job growth and job retention by expanding the pathways through which low-income workers are connected to employment.

Policy Option 2: Expand broadband access in underserved communities with the goal of achieving 100 percent access to high-speed broadband using a suite of the most cost-effective public and private initiatives.

Allocating more federal funds for broadband infrastructure and affordability would expedite the adoption process. Higher broadband saturation also creates hundreds of thousands of new jobs.

By providing tax credits to foster the development of new technologies, allocating larger fund amounts to broadband adoption programs, and creating partnerships with other agencies and corporations, the federal government can help private and public companies bring fast and affordable broadband Internet to every American, regardless of their location.

Policy Option 3: Index the gas tax to inflation to increase funding for the repair of existing roads and systems.

The United States federal tax on gasoline and diesel fuel is used to fund road construction, road maintenance, and sustain public transit through the Highway Trust Fund. The Highway Trust Fund was intended to fully fund federal highway programs, however, in recent years significant offsets from general revenues have been required. Indexing the gas tax to inflation would increase the tax for the first time since 1996, allowing an increase in revenue placed into the Highway Trust Fund for the purpose of repairing and maintaining existing roads.

Several states have already indexed their state gasoline tax to inflation by adjusting the tax based upon the consumer price index (CPI). Using the CPI to determine the gas tax rate would grow revenue from gas taxes in “modest and predictable” increments. Without an increase in the gas tax, the Highway Trust Fund is predicted to be unsustainable. 

Policy Option 4: Promote research and development through increased federal funding, and an expanded and permanent R&D tax credit.

The United States has been a leader in innovation, which has driven economic development. Investing in R&D means investing in the future of our country and ensuring it will continue to lead in technological and economic development. The R&D Tax Credit—formally known as the “research and experimentation tax credit”—is a business tax credit for companies incurring R&D expenses in the United States. The R&D tax credit was originally enacted in the Economic Recovery Act of 1981.

On January 1, 2014, Congress allowed the credit to expire, letting firms across the United States lose out on an estimated $8 billion in tax credits during 2014. Increasing the credit and making it permanent would provide greater certainty for U.S. companies to invest in R&D, and would help spur innovation, protect job-creators, and keep high-paying R&D jobs in the United States.

Policy Option 5: Expand basic and applied R&D into future sources of renewable energy, such as hydrogen fuel and nuclear fusion, while expanding funding to scale and improve existing technology, such as next-generation solar energy; carbon capture and storage technology; cost-effective, efficient batteries; and unconventional hydrocarbon production, to make current energy consumption more secure, efficient, and affordable.

Our overall commitment to expanding R&D includes a particular focus on expanding basic and applied research into future sources of renewable energy and the improvement of existing sources of energy to make current energy consumption more secure, efficient, and affordable. As a nation, we must incentivize the development and commercialization of cleaner and more efficient energy technologies in order to fuel growth through lower prices, increased access, and market stability.

R&D investments can ultimately drive new energy production and lower energy prices. These lower prices benefit consumers through lower living costs and benefit businesses through lower operations costs. By expanding basic and applied R&D in diverse energy sources, the United States can continue to keep energy affordable while also making our economy more secure.

Policy Option 6: Encourage all federally funded initiatives, projects, and development efforts to reveal all reasonably appropriate data freely and widely available in a usable, query-able format.

In October 2012, the Department of Commerce and several other agencies launched FOIAonline, a “new shared-services model that allows the public to search through the FOIA inquiries of participating federal agencies by date, keyword and other parameters.” Not all government agencies participate in the FOIAonline shared-service model. Congressional legislation requiring federal agencies to develop and maintain public-access policies would allow public access to all agencies’ federally funded initiatives. This legislation should require most federal agencies to release their non-classified research to the public.

It should require all researchers who receive federal funds to submit electronic manuscripts of their final reports to the agencies from which the funds were collected in a timely manner, and it should ensure that the manuscripts are preserved in digital repositories that permit free public access as well. By promoting transparency and accountability, we foster trust between the government and American taxpayers. Private institutions and researchers would also be able utilize publicly funded research, promoting further private R&D across countless sectors of the economy.

Policy Option 7: Increase the number of H-1B visas issued to high-skilled immigrants and streamline the application process.

The H-1B program allows businesses to employ highly skilled immigrants in specialty occupations. For many foreign graduates of U.S. universities, including those educated in STEM (science, technology, engineering, and math) fields, this is the best chance to remain in the United States. Because demand regularly exceeds this cap, many talented foreign students cannot remain in the United States after graduation. Increasing the number of visas issued to eligible immigrants would help U.S. companies meet their labor needs, which would grow the economy and drive innovation in STEM fields.

According to one estimate, by 2018, the United States will face a shortfall of more than 200,000 STEM workers with advanced degrees. Allowing high-skilled immigrants to work in the United States would take a step toward investing in America’s readiness to compete in tomorrow’s economy. On the other hand, if U.S. companies cannot fill their labor needs, the jobs of tomorrow—and the innovators who will create them—will be located in other countries. In addition to increasing the number of workers available, Congress should streamline the broken, inefficient, and complicated H-1B petition process.

Policy Option 8: Offer green cards to doctoral-level international students and remove per-country quotas.

As described above, employers seeking to hire international students as full-time workers often use the H-1B visa program, which provides only six years of authorized work instead of a more permanent green card. Further, the limited green cards available for work reasons are subject to strict per-country quotas, which mandate that no country can take more than 7 percent of the total green cards each year.

The uncertainty about if, or how long, immigrants will be able to stay in the United States creates significant uncertainty for both employers and workers, hindering both groups from maximizing their potential. The United States can no longer afford to take for granted its advantage in attracting highly skilled immigrants. Creating a more straightforward path to permanent residence for doctoral-level international students would enable the United States to attract and retain more talented young immigrants from around the world. This would support research and growth in the economic sectors that will power the future, including sustainable energy and other STEM fields.