DALLAS – An additional $500 billion of federal funding for public infrastructure over the next 10 years would stimulate the U.S. economy and create millions of new jobs, the Center for American Progress said in calling for a comprehensive national program.
The proposal from the non-partisan CAP includes a $125 billion national infrastructure investment authority that could provide state and local governments with grants and low- or no-interest loans for utility and transportation infrastructure projects.
The additional infrastructure funding would be provided through new revenues generated by higher fuel taxes, an increase in federal airline passenger fees, and tax reform, CAP said in an 85-page report released on Thursday.
The higher taxes and fees would provide $306 billion of new revenue over 10 years, with another $400 billion of potential revenue from changes in the federal tax code.
The report was developed by Kevin DeGood, director of infrastructure policy at CAP, senior fellow Christian Weller, and research associate Andrew Schwartz.
Substantial policy reforms are needed along with the additional funding, DeGood said.
"All too often, policymakers only focus on infrastructure when something fails," he said. "This reactive, patchwork approach doesn't provide local leaders with the sustained and predictable support necessary to plan and build for the future."
Infrastructure spending boosts economic growth, creates millions of new jobs, lowers the unemployment rate, and substantially increases the economic security of workers and their families, DeGood said.
CAP's infrastructure proposal would create 3.6 million new jobs, he said.
"Investments in infrastructure are investments in the middle class, in our economic security, and in our global competitiveness," DeGood said.
CAP's proposal calls for increasing federal infrastructure funding by an additional $50 billion per year from fiscal 2017 through fiscal 2027 to raise overall economic output by $691 billion.
The $50 billion includes $12.5 billion per year of capitalization for the new infrastructure lending authority.
The 10-year plan includes $260 billion of new federal highway and transit funding, $50 billion for freight and passenger rail, $25.6 billion for airports, $25 billion for water projects, $11 billion for seaports, and $630 million for inland ports.
Many critical infrastructure assets have reached the end of their useful life and must be replaced or rebuilt, the authors said. Robust and efficient roads and utility system must also expand to serve a population expected to grow by another 100 million Americans over the next 50 years.
"Yet, for too long, Congress has failed to provide robust funding to meet our national needs," CAP said in the report. "This has left state and local governments without a strong federal partner."
Expenditures from the Highway Trust Fund in the CAP plan would be $26 billion per year higher than the $53.7 billion provided annually to states through fiscal 2020 by the five-year Fixing America's Surface Transportation Act (PL114-94) enacted in early December.
The additional transportation funding would be supported by raising fuel taxes by 15.25 cents per gallon, resulting in a federal gasoline tax of 33.65 cents and a diesel tax of 39.65 cents. Each additional penny of fuel tax brings in another $1.7 billion per year to the HTF, CAP said.
Congress would have to transfer $70 billion from the general fund to support expenditures from the HTF from fiscal 2021 through 2025 as was required by the FAST Act, CAP said.
The plan also includes an increase in the Federal Transit Administration's New Start grants program to $4 billion per year from the current $4 billion, and boosting the Transportation Investment Generating Economic Recovery (TIGER) grants to $1 billion per year from the current $500 million.
