U.S. Chamber urges infrastructure modernization plan to ensure nation’s long-term economic growth

Despite crushing unemployment of more than 10 million Americans and historic unrest in wake of the insurrection at the U.S. Capitol, the chief executive of the U.S. Chamber of Commerce called the state of American business “resilient” in the wake of the coronavirus pandemic, social unrest and distrust in U.S. institutions.  

“Some may look back at the events of the last week and ask whether that’s possible,” Chamber CEO Thomas J. Donohue said in his 20th “State of American Business” speech, for the first time held virtually. “Let me say unequivocally—violence has no place in our democracy, no matter where it comes from, who perpetrates it, or what motivates it.”

Then, his voice rising, the 80-year-old Donohue reaffirmed the business community’s commitment by saying, “We’ve got work to do, too—and we’re going to keep at it without distraction or deterrence.”

Noting the U.S. won’t restore the jobs, growth, and prosperity that were lost in 2020 until “we eradicate the pandemic and get our economy firing on all cylinders. And for that to happen, our elected officials must pull all the right policy levers—and push back against misguided proposals—in 2021.”

Without mentioning outgoing President Donald Trump by name, Donohue welcomed incoming President Joe Biden and Vice President Kamala Harris. He called their electoral college victory “a clear and lawful election.”

He then predicted the U.S. was on the precipice of what could be a long, sustained economic recovery.

“The pandemic is far from over, but if Congress sufficiently supports the economy with the relief it needs, we could see growth rebound by the third-quarter of this year,” Donohue predicted.

As for the Chamber’s 2021 priorities, the first issue Donohue touched on was the long-delayed and overdue bid to rebuild the nation’s infrastructure. 

“We’ve been working on this for more than 20 years,” said Donohue, sounding a wee exasperated. “Let’s find a way to pay for it, and let’s get moving. This year, there can be no excuses for failure.”

He called a major infrastructure push such as the $1 to $2 trillion Biden has talked about on the campaign “the number one way to raise productivity, create jobs, and drive up incomes in a hurry.

“Our lawmakers should enact a fiscally and environmentally responsible infrastructure package that focuses on urgent needs like roads and bridges, modernizes our critical networks and upgrades and expands technology like broadband,” Donohue added.

“Even in a 50-50 Senate and a House divided by five votes, this can be done—and it might build some goodwill for bipartisan progress on other priorities,” Donohue predicted.

The Chamber long has advocated for a major infrastructure push—dating back to the days of George W. Bush, 2001-2009. Quietly, the Chamber has pushed for a gradual increase in the federal fuels tax of a nickel a year for five years. That would restore the Highway Trust Fund and ensure sufficient dedicated revenue to maintain the long-term solvency of the Highway Trust Fund.

In other infrastructure the Chamber favors, it would like the government to:

  • Enact a long-term infrastructure modernization bill focusing on surface transportation programs and air, sea, rural broadband, energy and water infrastructure.
  • Provide infrastructure project sponsors a toolkit of options for supplemental funding and financing of other critical infrastructure, including through public-private partnerships, dedicated user fees and revolving loan programs.
  • Build upon previous efforts to streamline the federal permitting process, including the use of concurrent reviews and time limits for agency decisions and encourage similar permitting reforms at the state and local levels.
  • Oppose efforts to reregulate transportation.

The Chamber also is highlighting workforce shortages in the infrastructure and transportation sectors and push for regulatory reforms and skills programs to address these shortages. It also wants to ensure that infrastructure modernization provides equal benefits and a better quality of life for all Americans.

“We have people without jobs and massive amounts of jobs without people,” Donohue said, noting shortages in construction, transportation, health care, financial and professional services. The trucking industry alone has an estimated shortage of about 60,000 drivers.

As for infrastructure, timing could hardly be better. With prime interest rates near zero, carrying costs are extremely low now.  The U.S. transportation construction market is expected to shrink 5.5 percent this year, driven primarily by the severe economic recession caused by the coronavirus pandemic, according to the annual forecast released by the American Road & Transportation Builders Association (ARTBA).

Alison Black, ARTBA senior vice president and chief economist, estimated the overall value of the transportation construction market is expected to drop from $294.2 billion in 2020 to $278.1 billion in 2021.

The expected market contraction follows a record year for most transportation sectors in 2020.  While Pennsylvania and Washington state temporarily shut down projects last spring, the rest of the country classified transportation construction as an essential industry.

Black said two major factors will impact transportation construction activity through 2021 and beyond— the broader economic recovery and the passage of successor legislation to the 2015 Fixing America’s Surface Transportation (FAST) Act.  

A one-year funding authorization extension for the FAST Act was passed late last September.  Over the last decade, that federal-aid program has accounted for over 50 percent of annual state highway program spending and more than 66 percent of transit capital outlays.

American Trucking Associations Chief Economist Bob Costello has noted that due to the uneven nature of the recovery, some trucking sectors saw strong 2020 volumes and even posted year-over-year gains for the year. Conversely, some sectors were not only down, but down significantly compared with 2019. Looking ahead, Costello said the mix of freight may change modestly as vaccination grows and social distancing diminishes, trucking activity should be “solid” in 2021. 

Finally, Donohue said the U.S. cannot rebuild a strong and competitive economy without robust national security and sustainable supply chains. “That must include cybersecurity,” he added. The recent widespread breach of the networks of U.S. agencies and companies by foreign actors was “pervasive and sophisticated—and it has the potential to pose a far more sinister threat to our economy and critical infrastructure.”

 So, bottom line: protect the virtual infrastructure of our country and rebuild the physical one, according to the nation’s top business lobbyist.

About the Author

John D. Schulz

John D. Schulz has been a transportation journalist for more than 20 years, specializing in the trucking industry. John is on a first-name basis with scores of top-level trucking executives who are able to give shippers their latest insights on the industry on a regular basis.