Article

Consequences of Disinvestment?

Scott Lilly explains how the White House can avoid greater economic and personal costs by supporting Congress’ budget additions now.

We do not yet know for sure why the Interstate 35W bridge in Minneapolis collapsed last week. We do know that it was one of more than 70,000 bridges nation-wide that are rated by the U.S. Department of Transportation as being “structurally deficient.” We also know that as recently as last winter the Minnesota Department of Transportation explored a plan to bolt steel plates to the bridge to prevent fatigued areas from developing further cracks.

Most importantly, this disaster has refocused media and public attention on the condition of the nation’s infrastructure—a debate that was already intensifying before the Minneapolis Bridge fell into the Mississippi.

The House Appropriations Committee only two weeks before the disaster reported on legislation that would fund the nation’s highway system and explained why they had included $631 million above the amounts requested by President Bush:

"It is well documented that our nation’s transportation infrastructure is aging and, as noted above, the investment needs of our nation’s highway and transit systems are significant… Without additional revenues for transportation investment, the nation will be unable to reduce congestion, maintain aging bridges and highways, or expand capacity."

 

The White House a few days later issued a stern veto threat against the bill, stating, “The administration strongly objects to increasing funds for the Federal Aid Highway program…”

The confrontation between the Congress and the White House on the Transportation Appropriation bill is only a small part of the larger fight between the two branches over declining levels of federal investment in domestic priorities. For the fiscal year that will begin in October, the White House has proposed a $60 billion increase in federal discretionary spending but all of that money would go to defense, foreign assistance veterans, and homeland security programs, while leaving the domestic side of the budget frozen.

Some programs do better than others within the president’s proposed domestic budget, but few programs, including highways, receive sufficient funding to offset inflation. We would therefore be able to build or repair fewer miles of our interstate system in the coming year than is possible in the current year despite the fact that the number of vehicles using our highways has been increasing by 4 million, or 2 percent, a year. That growth is heavily concentrated in urban areas and is the reason why the Interstate 35W bridge has, over time, had to accommodate a far greater volume of traffic than it was designed to handle.

The American Society of Civil Engineers releases a biennial report focusing on the long-term consequences of withholding needed investments from our transportation system and other forms of infrastructure. In their most recent report, ASCE affirmed the assessment by the U.S. Department of Transportation that about 25 percent of the nation’s nearly 600,000 bridges are either structurally deficient or functionally obsolete. ASCE estimates that the cost of maintaining and replacing obsolete or deteriorating bridges at about $7.4 billion a year. This is the cost of staying even and not allowing the overall quality of our bridges to deteriorate further. That compares to the slightly less than $4 billion contained in this year’s appropriation.

But the most distressing aspect of the nation’s infrastructure problem is that bridges and highways, according to ASCE assessments, are not even among our nation’s most pressing infrastructure needs. On a standard five-point grading scale, ASCE gave our bridge infrastructure a “C,” but both Wastewater Treatment and Drinking Water received a rating of “D-.”

ASCE had this to say about our drinking water:

"The nation’s 54,000 drinking water systems face staggering public investment needs over the next 20 years. Although America spends billions on infrastructure each year, drinking water faces an annual shortfall of at least $11 billion to replace aging facilities that are near the end of their useful life and to comply with existing and future federal water regulations. The shortfall does not account for any growth in the demand for drinking water over the next 20 years."

With respect the wastewater treatment ASCE stated:

"Many systems have reached the end of their useful design lives. Older systems are plagued by chronic overflows during major rain storms and heavy snowmelt and, intentionally or not, are bringing about the discharge of raw sewage into U.S. surface waters. The U.S. Environmental Protection Agency estimated in August 2004 that the volume of combined sewer overflows discharged nationwide is 850 billion gallons per year. Sanitary sewer overflows, caused by blocked or broken pipes, result in the release of as much as 10 billion gallons of raw sewage yearly, according to the EPA."

Analysis by the General Accountability Office indicates that the nation now has more than 800,000 miles of drinking water pipes and 600,000 miles of sewage pipes. Both types of pipe are often located under city streets in proximity of one another, and according to the EPA, the majority of these pipes were laid after World War II and are nearing the end of their useful life. According to the Congressional Budget Office, many water systems are already losing 20 percent of the water they pump through leaking pipes.

The ASCE has estimated that the annual cost of making needed replacements to drinking water systems is approximately $11 billion above current spending levels. Studies into the cost of meeting annual needs for wastewater treatment facility replacement and expansion exceed $12 billion.

Again, this infrastructure problem is part of the budget battle already underway over spending levels for the coming fiscal year. In June, the House rejected the president’s proposal to cut funding for water infrastructure spending by 20 percent. They instead proposed a $186 million increase, raising federal expenditures to slightly less than $2.1 billion. That is 9.6 percent more than appropriated in the current year, but it leaves the program well below levels of only a few years ago after accounting for inflation. The report accompanying the legislation reasoned:

"The Committee recognizes the growing need to not only build new, but also repair and replace existing, water and wastewater infrastructure. Given the documented need, the Committee is concerned by the continued downward trend in the president’s request for infrastructure assistance."

The White House, however, remained unconvinced. A Statement of Administration Policy released in response to the bill stated its strong opposition to the legislation, arguing that “it includes an irresponsible and excessive level of spending and includes other objectionable provisions.” Detailing specific objections, the White House stated:

"The administration opposes the Committee’s increase in the total funding for EPA by $887 million above the President’s Budget Request. In particular, the $437 million increase for the Clean Water State Revolving Fund would exceed by 63 percent the level requested by the administration to meet the commitment made in the 2004 Budget to provide $6.8 billion in capitalization grants between 2004 and 2011 and meet the long-term revolving level goal of $3.4 billion."

In other words, the White House is opposing not only this year’s proposed increase but also supports significant cuts below current levels of federal support for water infrastructure during fiscal 2008 and the three succeeding years, as well.

The failure to meet water infrastructure needs may not produce the dramatic television images generated by the collapse of the Minneapolis bridge, but the intermingling of sewage and drinking water in our nation’s water systems can be equally deadly.

There is no question that we will eventually address these shortfalls in bridge and water infrastructure investment just as we are now proceeding in all haste to replace the fallen bridge. The question is whether we are going to make the necessary investments in a measured and disciplined way by providing annually for repairs and replacement before disaster strikes or whether we are going to respond with huge and undisciplined outlays in the wake of a catastrophe that could have been foreseen and prevented.

Ignoring the nation’s infrastructure needs is ultimately nothing but another budget gimmick that makes tax breaks and foreign adventures seem more affordable. The estimated costs of dealing with our infrastructure needs already seem enormous. But altogether they would require only a fraction of what we are currently spending in Iraq. Each year they are deferred, the cost will become greater, as will the prospect of catastrophic failures that will claim human life and inhibit economic growth.

The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here. American Progress would like to acknowledge the many generous supporters who make our work possible.

Authors

Scott Lilly

Senior Fellow

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