The Carnegie Endowment for International Peace hosted the “American Job Creation and Infrastructure Forum” on Thursday, October 9. The event featured a panel consisting of members of congress, think tanks, and experts. It also featured three keynote speakers: Mayor Rahm Emanuel, Senator Elizabeth Warren, and Vice-President Joe Biden.
Mayor Emanuel of Chicago started the event by discussing the importance of infrastructure investment in local communities. “We cannot have a 21st century economy running on 20th century infrastructure,” he declared. With this philosophy in mind, he explained his platform on infrastructure.
First, Mr. Emanuel attributed Chicago’s ranking as the #1 city for business relocation to improvements in infrastructure. Replacing 100 year old water projects, adding parks/playgrounds, modernizing schools, expanding roads and bike lanes, and more has led to billions in foreign investment.
The mayor then explained the role of the federal government in these projects. He expressed his belief that congress should not cut TIFIA funding – a U.S. infrastructure bank that promotes investment. He also noted that the RIFF account has $35 billion in inaccessible funds; these funds could further assist local governments in investment.
After the first keynote speech, the panel began discussing the issue of “Confronting the Infrastructure Challenge.” One idea raised involved the issue of lack of revenue funds; the U.S. ranks 32/34 on the OECD rankings. To make matters worse, the government runs the risk of cutting even more funding. This problem arises from a few sources: mentality that treats all funding the same, being it regular spending or investment; and the focus on short-term policy.
Another point concerned the lack of involvement of young people in the discussion. This becomes exacerbated by the lack of journalistic coverage on the issue. A way to “make infrastructure sexy,” the panel suggested, could include discussions about internet speeds and traffic – issues that people deal with on a daily basis.
The second panel started “Defining the Infrastructure Opportunity” immediately after the conclusion of the first one. Panelists discussed the importance of transportation, especially with regards to social mobility. They also noted the popularity of infrastructure funding among voters, and the need to involve energy in the discussion.
A few suggestions came about during this panel. One involved increasing the gas tax, an arguably feasible option considering the fact that the population faced a higher proportional gas tax 50 years ago. In addition, the government needs to enable or incentivize local governments and private businesses to promote reform. One panelist suggested we digitalize infrastructure through mechanisms such as phone apps, as well as follow the Texan and Floridian models of tolls.
Following the second panel, Elizabeth Warren gave the second keynote address. Her short, 15 minute speech reiterated many of the points regarding the importance of infrastructure funding.
Vice-President Joe Biden gave the third keynote address following Warren. He identified two key actions needed to continue our economic resurgence: having the best trained workforce in the world, and having an infrastructure complacent with 21st century needs. This led him to state, “Infrastructure is a national security issue, not just economic.”
Biden then mentioned the bipartisan support infrastructure investment used to have, with the debate revolving around funding; however, the debate has now shifted to whether or not such investments remain necessary. This mentality can lead us to a competitive disadvantage and security disadvantage, he argued.
Investments in infrastructure can also lead to social mobility, as individuals will move to places with accessible jobs (i.e. “job sprawl). Biden used Detroit as an example of a city desperately needing investments. The administration helped the residents by investing in street lights and busses. The Vice-President reiterated the need to do this across the country.
One way to do this comes from the Grow America Act – a 6 year, $317 billion plan for the U.S. highway system. The act also cuts red tape to speed up the process. Biden suggested we pay for this by levying a one time, 14% tax on the two trillion dollars on corporate profits overseas. He suggested a tax break could bring back a great deal of revenue.
The third and final panel followed Biden’s address. Members discussed how to “Navigate Success through the Political Maze.” The suggestion to raise the gas tax came up again. A panelist noted that the low gas prices today can provide an opportunity. However, politicians cannot reallocate these funds.
To make the deal bipartisan and passable, one panelist suggested paring the gas tax with an international tax deal. Americans will need to see such a plan as necessary for economic growth in order for it to succeed.
The day concluded by summing up the various viewpoints of the panelists. Disagreements naturally occurred regarding funding and the role of the federal government in investment. However, all panelists agreed on one thing: investment in infrastructure remains crucial to our nation’s economic wellbeing.