Treasury Report: Now is the Key Time to Invest in Infrastructure
March 23, 2012 WASHINGTON DC - A new report released today by the U.S. Department of Treasury with the Council of Economic Advisers finds that now is the key time to invest in infrastructure to create middle-class jobs, increase our long-term competiveness, and support a more secure energy future. The President's all-of-the-above strategy for American energy and his FY2013 Budget proposes a bold plan to renew and expand America's infrastructure. The plan includes a $50 billion up-front investment connected to a $476 billion six-year reauthorization of the surface transportation program and the creation of a National Infrastructure Bank.
"This report highlights the need for critical investments in transportation to help ease the burden on middle-class families trying to make ends meet, create jobs where workers would especially benefit, and also strengthen our competitiveness and support business infrastructure over the long term," said Assistant Secretary for Economic Policy Jan Eberly.
As the report's analysis reflects, investment in infrastructure supports middle-class families in a range of ways. In the short-term, investments in transportation create middle-class jobs - 80 percent of the jobs created are in the construction sector, the manufacturing sector and the retail and wholesale trade sectors - where nearly 90 percent of the jobs have middle-class wages.
In the long-term, transportation choices, including public transit and high-speed rail, deliver benefits to families burdened by fluctuating global oil markets, congested automobile travel, and a lack of transportation options. The average American family spends more than $7,600 a year on transportation, which is more than they spend on food and more than twice what they spend on out-of-pocket health care costs. For 90 percent of Americans, transportation costs absorb one out of every seven dollars of income. Multi-modal transportation investments are critical to making sure that American families can travel without wasting time and money stuck in traffic.
Additionally, a more efficient transportation infrastructure system reduces our dependence on foreign oil, while saving families time and money. Traffic congestion on our roads results in 1.9 billion gallons of gas wasted per year, and costs drivers more than $100 billion in wasted fuel and lost time. More efficient air traffic control systems would save three billion gallons of jet fuel a year, translating into lower costs for consumers. Finally, new research indicates that Americans who were able to live in "location efficient" housing were able to save $200 per month in lower costs, including paying less at the pump, over the past decade.
Key Findings of the Report Include:
- This economic activity and job creation is especially timely as there is currently a high level of underutilized resources that can be used to improve and expand our infrastructure:
- Among those who gain employment as a result of additional infrastructure investment, the unemployment rate has averaged approximately 13 percent over the past twelve months.
- Construction costs and other costs associated with building projects are especially low in the current environment.
- Middle-class Americans would benefit disproportionately from this investment through both the creation of middle-class jobs and by lowering transportation costs for American households:
- Nearly 90 percent of the jobs in the sectors that benefit most from infrastructure spending are middle-class jobs.
- Traffic congestion on our roads results in 1.9 billion gallons of gas wasted per year, and costs drivers more than $100 billion in wasted fuel and lost time.
- There is strong demand by the public and businesses for additional transportation infrastructure capacity:
- The United States ranks 15th out of 32 Organization for Economic Co-operation and Development (OECD) nations with respect to our satisfaction with our roads and highways.
- One study found that almost 19 out of 20 Americans are concerned about America's infrastructure and 84 percent support greater investment to address infrastructure problems.
You can read the full report here.