Strategy Page

AT: only transportation

As expected, the request for overall spending on the two largest federal ground transportation programs, highways and transit, remained relatively constant from the previous year. The federal highway program would receive a $200 million bump to $41.3 billion, and transit investment would climb roughly $70 million to $10.8 billion.

Obama requested $4 billion to launch the bank, $2.6 billion of which would be handed out in grants or loans during fiscal 2011. Roughly $270 million would be used for administrative, planning and project analysis costs, with the remaining carried over to the next year.

Obama requested $5 billion to launch the bank last year, but appropriators balked at providing the cash until Congress first passed legislation that would officially create the bank. During his presidential campaign in the summer of 2008, Obama called for a total of $60 billion over 10 years for the bank.

A number of transportation advocates -- including Pennsylvania Gov. Ed Rendell (D), the Center for National Policy and the American Association of State Highway and Transportation Officials -- have pushed lawmakers to launch the infrastructure fund. Senate Banking Chairman Chris Dodd (D-Conn.) has said that creating it will be one of his top priorities this year, his last before he retires from the Senate (E&ENews PM, Jan. 20).

**INHERENCY**

Investment low

WASHINGTON (MarketWatch) – When I was growing up in the 1960s and 1970s, the legacy of the Great Depression was everywhere: Dams, bridges, roads, airports, courthouses and even picnic areas and hiking trails. Leaders of that dire time — Democrats and Republicans — took advantage of the Depression to put millions of Americans back to work, building the infrastructure that we still rely on today.

They had lemons, and they made lemonade.

This time, however, we’re not so fortunate. Instead of picking up the shovel and getting to work, we’ve thrown the shovel aside, complaining that we just can’t afford to repair what Hoover, FDR, Eisenhower, and LBJ built, much less invest in the infrastructure than our grandchildren will need.

The fact is, we’re investing less than we were before the recession hit more than four years ago, not just in government money but in private money, as well.

Here are the facts, according to the Bureau of Economic Analysis: Government investments (in structures and in equipment) ramped up between 2007 and 2010, only to fall back to 2005 levels by early 2012. The trajectory for private-sector investments was the opposite — a collapse followed by a modest rebound — but they arrived in the same place: back at 2005 levels, some 6% lower than when the recession began.

Looking just at investments in structures (such as buildings, roads, mines, utilities and factories), private companies are investing no more today (in inflation-adjusted terms) than they were in late 1978, according to data from the BEA.

All together, public- and private-sector investments in structures are down about 20% compared with 2007, in inflation-adjusted terms. In 2007, we spent $684 billion on structures; in 2011, we spent $550 billion.

Even before the recession arrived, we were underinvesting. Investments in infrastructure as a share of the economy had declined by 20% compared with 1960, according to a study by the Congressional Research Service. One widely cited estimate from civil engineers put the infrastructure gap at more than $2 trillion.