Elizabeth Warren - Rebuild Now Plan

No one knows what the next great business will be. No one knows who will build the next great business. But we’re all pretty sure that the next great business will need to plug in. The next great business will need roads, rail, and transit for its employees to get to work. The next great business will need clean water and a dependable sewage system and access to a communications network. 

The creative men and women who come up with great business ideas and who work hard and take risks create the magic in our economic system, but the magic works because all of us invest in the infrastructure – roads, bridges, ports, mass transit, rail, water and sewer systems, the power grid, and communication systems – that helps create the conditions for businesses to succeed. 

In the 19th century, ports, canals, and railroads allowed goods to be transported all across the country, creating economic opportunities from the Atlantic to the Pacific. In the 20th century, air travel, mass transit and commuter rail, and road programs like the national highway system made it easier for companies to get their goods to markets – and for employees to get to work. Over the decades, improvements in water and sewage systems, modern school buildings, communication infrastructure, and transportation have made it cheaper and easier for businesses to locate wherever they like. These investments have made it possible for our communities to flourish. When Congress reauthorized surface transportation programs earlier this year, it recognized the importance of infrastructure.

Infrastructure is necessary to keep this country running. It helps businesses succeed, and when businesses succeed, they create more jobs and more opportunities for everyone. Infrastructure is an investment in our future.

Around the world, other countries are investing heavily in upgrading their roads, bridges, water and sewer systems, electricity grids, and other infrastructure. India will spend $1 trillion on infrastructure between 2012 and 2017. China spends 9% of its GDP on infrastructure, and will also spend $1 trillion on infrastructure over the next 5 years. Those countries are investing in their future, making their businesses more competitive and creating more opportunities for their people. 

For years now, the U.S. has invested only about 2.4% of GDP on infrastructure. At 2.4%, we can’t maintain the infrastructure we have right now, let alone build for the future. In fact, the American Society of Civil Engineers has recognized the impact of underinvestment, giving the United States a grade of “D” for infrastructure.

Here in Massachusetts, we have serious infrastructure needs. As of 2009, according to the American Society of Civil Engineers, 56% of our bridges were structurally deficient or functionally obsolete, 41% of major roads were in poor or mediocre condition, and our drinking water infrastructure needs about $8 billion in investment over the next 20 years. While there have been significant improvements in recent years and the Patrick Administration is to be commended for its work – including creating the Accelerated Bridge Program and innovations such as the Fast 14 bridge repair work from last summer – we all know that there is still more to do.

Infrastructure and Jobs

Over the long-run, infrastructure creates jobs. When infrastructure is sound, businesses have a better foundation to build upon, and their success translates into jobs right here in America.

But infrastructure can also support jobs in the short run. The work of repairing our current infrastructure can create jobs right now. We have bridges, roads, water and sewers in need of repair, and workers in need of jobs – now is the time to make that match.

Rebuilding our infrastructure will support thousands of jobs – jobs for construction workers who will repair and rebuild our infrastructure will help put a hard-hit industry back on its feet.  Here in Massachusetts, we’ve lost 6.6% of construction jobs in the last year. Supporting jobs in construction will produce paychecks that will be spent with local businesses – retailers, restaurants, and others. That means more demand, and more jobs in those businesses. A strong push to rebuild infrastructure can help move our economy forward. 

Paying for Infrastructure

The Rebuild Now Plan provides seven action items to start tackling our infrastructure needs. It doesn’t address everything we need in our infrastructure, including the power grid and other infrastructure better addressed through an energy policy. But it is a strong first step to put us on the right path toward investing in our future.

The Plan is fully paid for – and it still reduces the national debt. The Rebuild Now Plan works because it re-focuses our priorities. Instead of spending billions of dollars of tax money on oil subsidies, for example, the Rebuild Now Plan would spend that money on rebuilding our roads, bridges, and mass transit. Instead of giving special tax breaks to billionaires, for example, the Rebuild Now Plan would ask them to pay a fair share toward helping finance water and sewer repairs for our cities and towns. 

The first four items of the plan are paid for by items identified in Elizabeth’s broader economic and deficit reduction plans, which is available here. The Boston Globe submitted both Elizabeth’s economic plans and the proposals of Senator Scott Brown to the independent analysis of the Committee for a Responsible Federal Budget. They found that Elizabeth’s plan would reduce the debt by $1 trillion over 10 years, and that it is 67% more effective at reducing the national debt than Senator Scott Brown’s plans. The remaining items of the Rebuild Now Plan will be paid for by ending special tax breaks for corporate jets and ending public investment in the oil and gas research and development program.

The Rebuild Now Plan

  1. Invest in Air and Surface Transportation. Our highway, transit, rail, and aviation infrastructure is critical to the functioning of our economy. By transporting goods and workers, this infrastructure allows businesses to succeed. Rebuilding this infrastructure, including supporting airport and air traffic improvements and competitive infrastructure grant and financing programs, is critical. This effort will lead to Massachusetts receiving at least $850 million and would support about 11,000 jobs here in the Commonwealth.

  2. Fix America’s Schools. No child should be forced to attend a school that is crumbling and that doesn’t have the basic science and computer technology to teach the skills that are necessary for a competitive global economy. We should modernize 35,000 public schools, from making emergency repairs to improving energy efficiency, removing asbestos, and upgrading technology. Facilities for community colleges should also be modernized so these schools can offer better job training. Under this plan, Massachusetts would receive $378 million for school modernization that could support 4,900 jobs. In addition, Massachusetts would receive an additional $68 million to support community colleges.

  3. Make Wireless Broadband Available. In an increasingly connected economy, high-speed wireless service is essential to the functioning of business – and of everyday life. It has become a basic necessity, just like roads are. We can invest in a plan that will deploy high-speed wireless to 98% of Americans. Building on the MassBroadband 123 initiative will help ensure affordable, quality access to high speed Internet across our state, including in Western Massachusetts.

  4. Create a National Infrastructure Bank. To leverage public and private sector dollars to finance important infrastructure investments, a National Infrastructure Bank should be developed, capitalized at $10 billion. This bank would be able to invest in a range of infrastructure projects, without fear of political favor. Here in Massachusetts, where water pipes and sewer systems are often generations old, a national infrastructure bank can assist cities and towns in financing smart plans to repair and rebuild these basic services.

  5. Support the Partnership for Sustainable Communities. The Partnership is a joint effort of the Department of Transportation, EPA, and Department of Housing and Urban Development that is designed to help communities improve transportation choices and affordable housing, in a way that is environmentally sustainable. In Massachusetts, the Partnership has helped support new stations and renovation of existing stations on the Fairmount Commuter Rail line. The result will be better transportation options for Roxbury, Dorchester, and Mattapan, in addition to new housing units in the area, and redeveloping more than 30 contaminated “brownfield” sites. The President has requested $100 million for the Partnership, which could be paid for by repealing the oil and gas R&D program, which has mandatory funding under the 2005 Energy Policy Act until 2014. Repealing this program would save $150 million over a decade.

  6. Give States More Flexibility to use Highway Funds for Transit Projects. Right now, Congress allows about 20% of revenue in the Highway Trust Fund to be spent on transit, with about 80% devoted to highways. For states like Massachusetts, mass transit, rail, and buses can sometimes be a better investment than adding another lane of highway. Yet some Republicans have attempted to dictate the direction of transportation development, proposing to remove transit funding from the Highway Trust Fund. We need a more comprehensive approach that breaks down barriers and silos to encourage efficient spending on transportation. We should work to revise transportation programs so states like Massachusetts have the flexibility to best allocate funding for our transportation needs – not cripple states’ ability to invest in transit. Because these changes will create flexibility in current funding, rather than add new funding, they will be cost neutral.

  7. Reinstate Tax Breaks for Commuters. Last year, employer-provided transit benefits were tax free up to $230 per month, the same amount that drivers were allowed for parking expenses. The transit benefit dropped to $125 per month at the beginning of this year. The tax code should not favor drivers over transit commuters, thereby incentivizing congestion and demand for gasoline. Rather, the transit and parking benefits should be the same. Making this change permanent is estimated to cost between $1.4 and $1.8 billion, and will be fully paid for by ending the special tax break for corporate jets, which will raise $2 billion over 10 years.

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