Last week, Congress agreed to temporarily fund highway and transit projects through May 2015. The Highway Trust Fund was projected to reach insolvency. Without action, a lapse in highway funding would have occurred, putting many transportation projects on standby, increasing congestion, disrupting supply chains, and threatening the jobs of up to 700,000 workers.
Preventing a Highway Crisis
The highway bill passed the Senate with bipartisan support, in an 81 to 13 vote. The bill passed the House two weeks ago by a 367 to 55 margin, and President Obama has indicated he will sign it.
Senator Angus King (I-ME) called the legislation a mix of good news and bad news. “The good news is, we did something. The bad news is, it was the 11th punt in the last six years and showed an inability to face a real problem and deal with it.”
The Need for a Long-Term Solution
Averting a near-time crisis was the greatest priority. But the temporary bill creates uncertainty about what Congress will do next May, right at the beginning of construction season. The Highway Trust Fund was created to provide an independent revenue source for highway funding, which in turn, can help facilitate long-term planning. As a result, Congress has traditionally passed highway spending bills that authorize projects for four to six years. The longer -timeline allows planners to make strategic decisions about resources and undertake larger infrastructure projects.
But without a lasting solution for financing the Highway Trust Fund, lawmakers are likely to continue passing short-term highway bills that limit decision-making. Since 2009, Congress has approved 10 short-term authorizations. On such a short timeline, officials will face difficulty planning and financing the dynamic infrastructure investments that foster economic development.
Now is the Right Time to Reinvest in Roads
In the meantime, highways have become increasingly congested, which businesses often experience through supply chains operations. An estimated 65 percent of our nation’s roads are rated in poor condition. Highway bottlenecks cause more than 243 million hours of delays for the trucking industry every year, costing $7.8 billion and raising delivery prices.
At the same time, improving the country’s infrastructure has never been cheaper. Highway construction costs have declined by 20 percent since the recession. Interest rates are at historic lows. But as the economy recovers, prices will rise.