Canadian Shipper


State of the Union address highlights infrastructure, need for transport assessment

WASHINGTON, D.C.– In part of his State of the Union address Tuesday, President Barack Obama pushed the issues of infrastructure and trade.

Most infrastructure in the US is reaching the end of its design life and experts estimate the nation must invest hundreds of billions of dollars to bring the highway system to a state of good repair, reported American Shipper.

One in nine bridges are rated as structurally deficient and 32 percent of roads are in poor or mediocre condition, according to the American Society of Civil Engineers.

Obama said infrastructure serves as a building block for the economy, and urged Congress to pass a surface transportation reauthorization bill that provides funding to reinvest in roads and bridges.

“Twenty-first century businesses need 21st century infrastructure – modern ports, and stronger bridges, faster trains and the fastest Internet. Democrats and Republicans used to agree on this. So let’s set our sights higher than a single oil pipeline. Let’s pass a bipartisan infrastructure plan that could create more than 30 times as many jobs per year, and make this country stronger for decades to come,” he said in the address.

Obama has opposed raising the gasoline and diesel taxes, saying to do so would provide economic hardship to low-and-middle income Americans during times of economic uncertainty. The motor fuel taxes have remained the same 18.4 and 24.4 cents per gallon, respectively, since 1993. The business community has long expressed willingness to see user fees rise as long as the money goes to improve the roads and is not diverted for frivolous projects. Some Republican senators have recently said they are willing to consider a gas tax hike, at least as a temporary funding bridge until some new revenue streams can be developed.

On Friday, the White House announced a plan for qualified infrastructure bonds to attract private investment to help spur large infrastructure projects, the first steps to implement last July’s Build America Investment Initiative, aimed at facilitating partnerships with private investors, states and local governments.

The idea is to use executive branch tools – accelerated credit assistance, expedited permitting and targeted grants for projects with non-federal partners – to improve project delivery while waiting for Congress to follow up with a adequately funded multi-year surface transportation authorization bill. Officials say they want to supplement, not replace, public money with private investment where it makes sense.

In his State of the Union speech, Obama also urged Congress to pass legislation giving him Trade Promotion Authority as the administration negotiates key multilateral free trade agreements in the Pacific and Europe. TPA is a tool designed to give presidents more bargaining power negotiating trade deals because Congress must vote up-or-down on the final agreement, without the ability to rewrite any of the terms. TPA expired in 2007.

Concluding a Trans-Pacific Partnership Agreement would set the bar for trade rules in the Asia-Pacific region, rather than giving China a clear path to set trade terms with lower standards, Obama said.

“Look, I’m the first one to admit that past trade deals haven’t always lived up to the hype, and that’s why we’ve gone after countries that break the rules at our expense,” Obama said. “But 95 percent of the world’s customers live outside our borders.  We can’t close ourselves off from those opportunities. More than half of manufacturing executives have said they’re actively looking to bring jobs back from China.  So let’s give them one more reason to get it done.”

Business groups praised the President’s comments on infrastructure and trade, but were less supportive of other parts of his agenda, including taxes, said the report.

Julia Kuzeljevich

Julia Kuzeljevich

Julia Kuzeljevich is Editor of Canadian Shipper. She has been writing about transportation and logistics issues since 1999.
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