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Robert Federle
Professor Susanne Ingram
UWRT-1102-053
17 March 2015
Americans Infrastructure: Are There Any Solutions?
Americans use cars everyday as an easy use of transportation, and
companies use transportation as an affordable way to move inventory. Companies
make most of their money on packaging and shipping, so if there is any traffic on
the roads it is easy to say that time wasted in traffic the more money lost.
Every year Americans pay taxes to the government in exchange in being a
citizen. Every tax payer likes to see that their hard earned money is being put to a
positive impact on society. Whether or not tax payers dollars are being put to good
use depends on the governments ability to budget.
So what do these two topics have in common? They both are direct variables
to the effects of Americas infrastructures. Since the 2008 recession Americans have
struggled to improve are existing infrastructures. The American Society of Civil
Engineers (ASCE) rated Americas roads and bridges a D; and the World Economic
Forum ranked the United States 18th in the world in terms of road quality in 2013,
and estimated it would cost $3.6 trillion by the year 2020 to upgrade Americas
infrastructure (FRBSF). Even though these are appalling rankings, politicians
continue to prioritize their focus elsewhere. Meanwhile, the rest of the world is
surpassing our nations infrastructure and boosting their economies.
Examples of some of Americas deficient infrastructure is the Frederick
Douglass Memorial Bridge in Washington, DC. This bridge is trafficked by over
70,000 cars a day and it is projected that it will cost $900 million to get the bridge

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back up to standards ("America's Infrastructure Is Slowly Falling Apart."). Another
Bridge Considered deficient is the Brent Spence Bridge. It is estimated each year,
1.6 million gallons of fuel and 3.6 million hours are wasted on this bridge, and it was
deemed functionally obsolete in 1998 ("America's Infrastructure Is Slowly Falling
Apart.").
If Americas infrastructure continue to decline in structural integrity, long
term affects can be very consequential. Construction repairs on bridges cause
congestions on major roads and interstates, companies lose lots of money due to
back up in time. In 2011, the Urban Mobility report from the Texas A&M
Transportation Institute estimated that Americans collectively spent 5.5 hours stuck
in traffic; and this is mostly due to roads built for 1950s-era traffic (Repairing our
Infrastructure). The ASCE estimated that the business class would lose $1 trillion in
business sales, causing 3.5 million jobs lost due to outdated infrastructure (Senate
Budget Committee). Also, The ASCE estimated by not establishing the over $1
trillion funding gap between expected and needed funding to maintain our
infrastructure between 2012 and 2020, the average U.S. citizen would lose $3,000
per year in disposable income, amounting to $28,000 per household by 2020
(Repairing our Infrastructure). Already in a rough economy, the last thing Americans
need is money and jobs lost to something that has been argued and addressed for
years.
What about the importance of a human life? Engineering failures such like the
I-35W Bridge in Mississippi collapsed killing 13 people and injuring 145 in 2007; or
even the levees that failed during hurricane Katrina clamming the lives of over 1800
people causing $125 billion in economic damages (Restore and Improve Urban
Infrastructure). Literally people are dying because of deficient infrastructures!

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Engineering failures are not very common but at the rate of declination that
Americas infrastructure is in, one could say that if nothing gets repaired soon, those
chances will continue to rise.
Politicians can argue that there has already been something done about our
infrastructure. The government created The Recovery and Reinvestment act that
was passed in 2009. The main goal of this act was to create jobs for the working
class, the secondary goal was to help fund the associations that had been most
affected by the great recession (transportation, education, etc.). This act provided
48 billion dollars in highway grants, 27 billion was to be spent on roads. (FRBSF)
The Recovery Act is estimated to spend a total of $800 billion in a 10 year span
(FRBSF). However, the real question is has it worked? The recovery Act does not
have any specifications on spending additional funds, most states have used most
of their additional funds paying off debt caused by the recession. As our nations
continue to invest in these types of areas, the underinvestment in our
infrastructures continues. In terms of Gross Domestic Product (GDP), states are now
spending less on Americas infrastructure than at any point in the last 20 years
(Senate Budget Committee); public spending on infrastructure is the lowest its
been since 1947("America's Infrastructure Is Slowly Falling Apart"). This act has
helped fund money for Americas infrastructure, but it has not made a noticeable
impact on the problem.
What can be done to help solve the lack of integrity to Americas
Infrastructure? The biggest problem with government spending on construction is
overruns. Most government funded projects spend over four times estimated cost,
project completion date tends to overrun by months or sometime years, and
companies tend to destroy a lot of the environment around them (Infrastructure

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Investment). However, private companies have used this method very productively.
Private companies in 2013 spent four times as much money on their infrastructures
then the government had. These infrastructures including factories, warehouses,
freight rails, and pipelines. I believe that the government needs to take advantage
of the abilities of private sectors to help solve the structural integrity of Americas
infrastructure. This is because private sectors have had success planning
construction projects, estimating exact cost of a project, and estimating a date of
completion.
The Private sector are one of the biggest investors on American
infrastructures. Most of Americas infrastructure is provided by private sectors, not
our government. In 2012 the private sector invested $2 trillion on facilities, while
the government had only invested $472 billion (Infrastructure Investment). Why are
these numbers so different? The reason these two investment costs are so different
is because of mismanagement. The governments initiative in completing a project
is not as highly regarded to than a businesses. This is because supply and demand
are not balanced by market prices (Infrastructure Investment). But more
importantly, the main problem with repairing our infrastructure is our governments
ability to budget our money. For example, The Big Dig project in Boston was twothirds funded by the federal government, the final cost of the project was five times
more than estimated cost (infrastructure Investment).
Some countries have had success with partly privatizing infrastructure
through Public-Private Partnerships (infrastructure investment). The difference
between public private partnerships (PPPs) and government contracting is
financing, management, and risks that are taken (Infrastructure Investment). Now
more states rely PPPs to cut the cost of new projects, and as well as finding new

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ways such as tolling to receive nontax revenues to fund investments (Encouraging
U.S. Infrastructure Investment). According to Public Works Financing, only one of the
top 38 firms doing transportation in PPPs around the world are American; and out of
700 transportation projects listed in this letter, only 28 projects were in the united
states (infrastructure investment).
So having all this information, why is the government not already utilizing the
private sector to help them with rebuilding Americas infrastructure? One big reason
why the government has not utilized this idea is because of project cost. When state
and local government receive money for building infrastructures, the interest on the
debt is tax-free under the federal income tax (infrastructure investment). What this
means is that it cost less for the government to finance Americas infrastructures
than other companies and businesses. Another problem with privatization is federal
regulations. This issue being that states assisted by federal aid for their facilities
have been required to repay the past aid if their facilities are privatized
(Infrastructure Investment). Also, Government facilities dont pay income taxes on
government owned facilities (Infrastructure Investment). So if some of our
infrastructures was privatizing and companies were made to pay taxes, this would
be a great way to expand funding for Americas infrastructure.
Another way that the government can raise funding for Americas
infrastructure is by raising the gas tax. The gas tax in America has not been raised
since 1993 (Infrastructure, Energy, and Natural Resources). The gas tax has stayed
at 18.3 cents a gallon for gas, and 24.3 a gallon for diesel (Infrastructure, Energy,
and Natural Resources).However, set gas taxes vary from each state. In Alaska it 8
cent a gallon, and in New York its 49 cent per gallon; this value comes from the
states asking less from those using their roads (Rebuild Americas crumbling

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infrastructure). With Americas infrastructure being so obsolete, raising the gas
taxes to help fund money for infrastructure repairs does not sound like a bad idea.
For our existing infrastructure to be repaired, Americas government would
have to fund $3.6 trillion dollars by the year 2020. With our government in 2012
only spending $472 billion, its hard to say if this problem will ever be truly solved.
However, what we do know is this; the government has trouble with budgeting and
completing infrastructure projects efficiently. With all the research given, I believe
that utilizing the private sector is the best step forward in rebuild Americas
infrastructure. This is because private companies have had success efficiently
budgeting construction projects as well finishing close to estimated date. I also
believe by raising the gas tax in each state, the highway trust funds will be able to
fund more money for more projects. This is because the gas tax has not been raised
since 1993, and by modernizing the tax, this will create more funding as well as
more jobs created.

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Resources
1. Aidinoff, Marc. "Encouraging the Private Sector to Invest in America's
Infrastructure." The White House. 12 Jan. 2015. Web. 15 Feb. 2015.
2. Bradley, Bill. "America's Infrastructure Is Slowly Falling Apart." VICE. 2 Feb.
2015. Web. 9 Mar. 2015.
3. Deshpande, Manasi, and Douglas Elmendorf. "An Economic Strategy for
Investing in Americas Infrastructure." The Hamilton Project. The Brookings
Institute, 1 July 2008. Web. 2 Apr. 2015.
4. Edward, Chris. "Infrastructure Investment: A State, Local, and Private
Responsibility." Downsizing Government.org. Cato Institute. Web. 10 Feb.
2015.
5. "House and Economic Recovery Act of 2008." 30 July 2008. Web. 17 Feb.
2015.
6. "Infrastructure, Energy, and Natural Resources." The United States Senate
Committee on Finance. Web. 15 Feb. 2015.
7. Leduc, Sylvain and Wilson, Dan. "Federal Reserve Bank of San Francisco."
Economic Research. Web. 25 August 2014 10 Feb. 2015.
8. "Rebuild Americas Crumbling Infrastructure." Center for American Progress
Action Fund. Web. 21 Mar. 2015.
9. "Restore and Improve Urban Infrastructure." News Rss. Web. 1 Apr. 2015.
10.Sanders, Bernie. "Senate Budget Committee Bernie Sanders, Ranking
Member." Repairing Our Infrastructure. Web. 10 Feb. 2015.
11.Thomasson, Scott. "Encouraging U.S. Infrastructure Investment." Council on
Foreign Relations. Council on Foreign Relations, 1 Apr. 2012. Web. 1 Apr.
2015.