Yahoo Finance America's infrastructure crisis: One step forward, two steps back
New York took a big step forward this week to address America's infrastructure crisis even as Congress took (another) two steps back.
The Empire State stepped up and stepped forward with Gov. Andrew Cuomo announcing plans for a $4 billion project to redesign LaGuardia Airport, featuring a unified terminal which will partially be redeveloped by Delta Air Lines (DAL).
“New York had an aggressive, can-do approach to big infrastructure in the past – and today, we’re moving forward with that attitude once again,” said Gov. Cuomo. “We are transforming LaGuardia into a globally-renowned, 21st century airport that is worthy of the city and state of New York.
Gov. Cuomo was joined at the event by Vice President Joe Biden, who once famously said: "If I took you and blindfolded you and took you to LaGuardia Airport in New York, you'd think, 'I must be in some third-world country.'"
"Third World" might be a stretch, but America's infrastructure certainly isn't first class. The American Society for Civil Engineers (ASCE) gave the U.S. a D+ in its 2013 report on the state of U.S. infrastructure, estimating it would take $3.6 trillion to upgrade the country's roads, bridges, tunnels and dams by 2020.
In related news:
The U.S. ranked #12 globally for infrastructure in 2014, down from #7 in 2003, according to the World Economic Forum.
One out of every nine bridges in America -- more than 70,000 across the country -- is considered deficient.
Almost one-third of the major roads in the U.S. are in poor condition.
Only two of 14 major ports on the eastern seaboard will be able to accommodate the super-sized cargo ships that will soon be coming through the newly expanded Panama Canal.
There are more than 14,000 miles of high-speed rail operating around the world, but none in the United States.
U.S. air travel is the world's most congested, due to "a shortage of airports runways and gates along [with] outmoded air traffic control systems," according to 60 Minutes.
Against that backdrop -- and the recent systemic delays on NJ Transit's rail service into New York -- the LaGuaria news is good news and, potentially, a model for other states and cities. As discussed in the accompanying video, this is certainly not an issue limited to the New York area. From the Circle Interchange in Chicago to the Addicks and Barker Dams near Houston and the Alaskan Way Viaduct in Seattle, there's unfortunately no shortage of projects in dire need of being addressed nationwide.
"You have an ability on the state level to not care about the fact there's this learned helplessness in Washington to finance domestic infrastructure," as my colleague Michael Santoli says. "You also have the fact an airport can be financed with debt [and] with revenue attached to it [so it is] relatively easy to service that debt. This is not a speculative proposition." (The same could be said of toll roads and bridges as well.)
Speaking of the 'learned helplessness in Washington', Congress took two-steps back this week from funding the Highway Trust Fund, which is set to expire on Friday. The Senate passed a six-year, $350 billion bill but the Republican-controlled House is refusing to bring it up for a vote because it also includes an amendment to revive the Export-Import Bank. Earlier this month, the House passed a five-month extension of federal highway programs, which would be the latest in a series of short-term measures.
No matter your view on the Ex-Im Bank, the drama over the Highway Bill once again demonstrates the dysfunctional nature of our national politics. And, yes, this is a bipartisan critique: The federal gas tax, which funds the Highway Trust Fund, hasn't been raised since 1993, meaning Democratic Presidents and Democratic-controlled Congresses failed to act just as badly as GOP-controlled White Houses and Congresses. Most recently, President Obama missed a golden opportunity in 2009 by only allocating about $100 billion of the $831 billion Recovery Act to direct infrastructure projects.
The reality is the only thing stopping the country from addressing our crumbling infrastructure is political leadership. The U.S. government could almost certainly raise $3.6 trillion (or more) by tapping the global bond market and do it a near-historically low rates, as I argued here last year. Plus, the U.S. deficit is at a seven year low and falling, flying in the face of conventional wisdom.
Maybe the silver lining here is state and local governments are going to follow New York's lead and stop waiting on the federal government to act on infrastructure, much as they've done with the minimum wage issue.
Aaron Task is Editor-at-Large of Yahoo Finance. You can follow him on Twitter at @aarontask or email him at atask@yahoo-inc.com.
