Treasury Notes

 Creating Jobs and Boosting the Economy: The Case for Rebuilding our Transportation Infrastructure

By: Aaron Klein

Today, the Senate begins its consideration of the Rebuild America Jobs Act, which would put hundreds of thousands of construction workers back on the job and modernize America’s crumbling infrastructure.  The President proposed this measure to Congress as part of the American Jobs Act as a way to create jobs and improve the Nation’s long-term economic competitiveness by allowing goods and services to more efficiently reach domestic and global markets.  The White House also released a report today that provides examples of recent infrastructure projects which have produced significant economic benefits.

Our economy is as interconnected as our infrastructure, and well-targeted infrastructure investments create immediate and long-term economic benefits to both local communities and those further away.  As the report highlights, when travel times are shortened, such as when the Hoover Dam bypass was built, the businesses and consumers who rely on goods which travel that route are the ultimate beneficiaries. As Secretary Geithner said when he visited the UPS Worldport Facility in Louisville, Kentucky recently, “If you do a better job of repairing roads and bridges, highways, airports, railways, it makes companies more competitive. It lowers their costs. It’s like a tax cut.”  Simply put, wise investments in infrastructure save companies and consumers both time and money.

In addition to laying the foundation for stronger economic growth, we must also work to address a crucial problem facing our economy today - unemployment.  Investments in infrastructure today will put Americans back to work.  And with over 1 million construction workers currently unemployed, now is the right time to invest in infrastructure.  Eighty percent of jobs created by investing in infrastructure will likely be created in three occupations - construction, manufacturing, and retail trade - which are among the hardest hit from the recession. Treasury Department analysis shows that these sectors pay middle-class wages, so employment in these sectors bolsters middle-class jobs.

However, the answer is not just that we need to invest more; it is also that we need to invest more wisely.  That’s why the President has included in the American Jobs Act, and in his budget every year since taking office, the creation of a National Infrastructure Bank (NIB).  The NIB, which promotes merit-based investment based on rigorous analysis, will draw private capital to invest in American infrastructure so that we can better leverage scarce taxpayer dollars.

The legislation before the Senate today includes a National Infrastructure Bank based on the bipartisan model introduced by Senators John Kerry (D-MA) and Kay Bailey Hutchinson (R-TX).  This will support transportation, water, and energy projects that produce significant returns on our investment, allow Americans more choices in their modes of transportation, and improve the interconnectedness of our existing infrastructure networks.

Targeted infrastructure investments are necessary to create the middle-class jobs we need right now to strengthen our foundation for future economic growth.  The Senate should quickly pass this legislation so that we can begin to lay a better foundation for our future while putting Americans back to work today.

Aaron Klein is the Deputy Assistant Secretary for Economic Policy Coordination.

Posted in:  American Jobs Act, Infrastructure
Bookmark and Share