An Economy Built to Last and a 21st Century Infrastructure

We now face a make-or-break moment for the middle class and those trying to reach it. After decades of eroding middle-class security as those at the very top saw their incomes rise as never before and after a historic recession that plunged our economy into a crisis from which we are still fighting to recover, it is time to construct an economy that is built to last. The President’s 2013 Budget is built around the idea that our country does best when everyone gets a fair shot, does their fair share, and plays by the same rules. We must transform our economy from one focused on speculating, spending, and borrowing to one constructed on the solid foundation of educating, innovating, and building. That begins with putting the Nation on a path to living within our means – by cutting wasteful spending, asking all Americans to shoulder their fair share, and making tough choices on some things we cannot afford, while keeping the investments we need to grow the economy and create jobs. The Budget targets scarce federal resources to the areas critical to growing the economy and restoring middle-class security: education and skills for American workers, innovation and manufacturing, clean energy, and infrastructure. The Budget is a blueprint for how we can rebuild an economy where hard work pays off and responsibility is rewarded.

In today’s global economy, infrastructure is critical to economic growth and competitiveness, and our global competitors are investing much more in infrastructure than we do. To strengthen America’s infrastructure, the 2013 Budget will:

Make an Historic Investment in and Reform of Surface Transportation. To spur job growth today, the Budget includes $50 billion for immediate transportation investments in 2012. Although infrastructure projects take time to get fully underway, these investments would generate hundreds of thousands of jobs in the first few years—and in industries suffering from protracted unemployment. To help these funds flow into our communities without delay, key Federal agencies have been directed find ways to expedite permitting and approvals for infrastructure projects. Because the President recognizes the importance of a modern transportation infrastructure to the growth and competitiveness of the economy, the Budget proposes an historic six-year, $476 billion surface transportation reauthorization package. This proposal would provide $476 billion over six years, which together with the additional $50 billion in 2012, represents an increase of around 80 percent above the previous surface transportation reauthorization, plus annual appropriated funding for passenger rail funding in those years. The proposal also seeks to reform how these Federal transportation dollars are spent so that they are directed to the most effective programs and projects. It will give States and localities added flexibility while holding them accountable for performance and make Federal funding decisions based on more sound and inclusive transportation plans. Finally, transportation programs are reformed to increase accountability and efficiency and deliver cost-effective infrastructure projects. Specifically, the plan will:

  • Invest in Rail. The Administration’s reauthorization provides $47 billion over six years to continue construction of a national high speed and intercity passenger rail network, putting the country on track toward a system that gives 80 percent of Americans access to high-speed rail within 25 years. This proposal will connect communities, reduce travel times and congestion, and create skilled manufacturing jobs that can't be outsourced. And, for the first time, it will place high-speed rail on equal footing with other surface transportation programs.
  • Provide "Transportation Leadership Awards” to Spur Smart Reforms. The Administration’s six-year reauthorization plan would dedicate nearly $20 billion for a competitive grant programs designed to create incentives for State and local partners to adopt critical reforms in variety of areas, including safety, livability, and demand management. Federally-inspired safety reforms such as seat belt and drunk-driving laws saved thousands of American lives and avoided billions in property losses. This initiative will seek to repeat the successes of the past across the complete spectrum of transportation policy priorities. The Department will work with States and localities to set ambitious goals in different areas – for example, passing measures to prevent distracted driving (safety) or modifying transportation plans to include increased transportation options that cut commuting time, ease congestion, reduce oil consumption, lower greenhouse gas emissions, and expand access to job opportunities and housing that is affordable. Funding decisions will also be tied to the adoption of reform.
  • Adopt A “Fix It First” Approach for Highway and Transit Grants. Key elements of the Nation’s surface transportation infrastructure —our highways, bridges, and transit assets —fall short of a state of good repair. This can impact the capacity, performance, and safety of our transportation system. The Administration’s reauthorization proposal will underscore the importance of preserving and improving existing assets, encouraging its government and industry partners to make optimal use of current capacity, and minimizing life-cycle costs through sound asset management principles. Accountability is a key element of this system: States and localities will be required to report on transportation condition and performance measures.
  • Invest In More Livable and Sustainable Communities. The Administration’s six-year reauthorization proposal puts forth a transformational policy shift to achieve more livable and sustainable communities through increased investments in transit, and a $4 billion Livable Communities Program in the Federal Highway Administration and the Federal Transit Administration, which includes a competitive grant program for States and localities to deliver on sound, data-driven, and collaboratively-developed transportation plans. This will be coordinated through the Administration’s multi-agency Partnership for Sustainable Communities.
  • Consolidate Highway Programs. The Administration’s proposal would consolidate over 55 duplicative, often-earmarked highway programs into five streamlined programs. This would give States and localities greater flexibility to direct resources to their highest priorities. In the interest of taxpayer value and accountability, that flexibility will come with reformed requirements on States to establish and meet performance targets tied to national goals and to move towards rigorous cost benefit analyses of major new projects before they are initiated.

Establish a National Infrastructure Bank. To direct Federal resources for infrastructure to projects that demonstrate the most merit and may be difficult to fund under the current patchwork of Federal programs, the President has called for the creation of an independent, non-partisan National Infrastructure Bank (NIB), led by infrastructure and financial experts. The NIB would offer broad eligibility and unbiased selection for large-scale ($100 million minimum) transportation, water, and energy infrastructure projects. Projects would have a clear public benefit, meet rigorous economic, technical and environmental standards, and be backed by a dedicated revenue stream. Geographic, sector, and size considerations would also be taken into account. In addition, the NIB would be required to achieve an average overall portfolio rating of not less than investment grade after 5 years of operation. Loans issued by the NIB could be extended up to 35 years, giving the NIB the ability to be a “patient” partner side-by-side with State, local, and private co-investors. To maximize leverage from Federal investments, the NIB would finance no more than 50 percent of the total costs of any project.

Modernize the Aviation System. The Budget provides over $1billion for the Next Generation Air Transportation System, the Federal Aviation Administration’s multi-year effort to improve the efficiency, safety, and capacity of the aviation system. This will help the country move from a national, ground-based radar surveillance system to a more accurate satellite-based one which will result in the development of more efficient routes through airspace. This, in turn, would allow more planes to fly, reduce delays, save fuel, and improve overall safety.

Bring Next-Generation, Wireless Broadband to All Parts of the Country. The advances in wireless technology and the adoption of and reliance on wireless devices in daily commercial and personal life have been dramatic. High-speed, wireless broadband is fast becoming a critical component of business operations and economic growth. The United States needs to lead the world in providing broad access to the fastest networks possible. Doing that requires freeing up underutilized spectrum currently dedicated to other private and Federal uses. To that end, the Budget proposes legislation to provide authority for “voluntary incentive auctions” that will enable spectrum licensees to auction the rights to use their spectrum in return for a share of the proceeds. This step is critical both for reallocating spectrum and re-purposing it over the coming decade to greatly facilitate access for smart phones, portable computers, and innovative technologies that are on the horizon. Voluntary incentive auctions, along with other measures to enable more efficient spectrum management, will provide funds that will enable us to:

  • Provide $7 billion to build an interoperable wireless broadband network for public safety that would allow for seamless use by first responders across the country and reserve additional spectrum that is valued at over $3 billion for public safety use.
  • Establish a $300 million Wireless Innovation Fund as part of funding for the public safety broadband network to accelerate the research and development of cutting-edge wireless technologies and applications in support of a nationwide public safety network.

Taken together, these investments will give more Americans access to the data networks that will be central to future economic growth and job creation. And nearly $21 billion of the funds generated from spectrum reallocation and more efficient management will be used for deficit reduction.

Invest in Modern Electricity Delivery Infrastructure. The Budget continues to support the modernization of the Nation’s electrical grid by investing in research, development, and the demonstration of smart-grid technologies that will spur the transition to a smarter, more efficient, secure and reliable electrical system. The end result will promote energy- and cost-saving choices for consumers, reduce emissions, and foster the growth of renewable energy sources like wind and solar. In addition, the Budget supports the Power Marketing Administrations to reliably operate, maintain, and rehabilitate the Federal hydropower and transmission systems.

Invest in Water Infrastructure. The Budget provides funding of $1.5 billion for the Corps construction program and an additional $99 million in funds for construction from the Mississippi River and Tributaries account, totaling $1.6 billion for projects with high economic returns, dam safety work, projects that address public safety needs, and those that restore significant aquatic ecosystems. The Budget also supports increases in receipts to help pay for additional investments in the inland waterways. The Budget reflects an Administration emphasis on reliability and safety of existing Federal water resources infrastructure, and gives priority to the operation and maintenance of key projects that contribute to our national economy, such as the inland waterways with the most commercial use and the major coastal harbors and their channels. Further, ongoing work to modernize the Principles and Guidelines for planning water resource development will also help improve sustainability of investments in the nation’s water infrastructure. The Budget provides funds for the Bureau of Reclamation to advance water conservation activities and efforts to bring reliable water supplies in Western States. The Budget also provides $2 billion total for the Environmental Protection Agency’s (EPA) Clean Water and Drinking Water State Revolving Funds (SRFs). At the level requested in the President’s Budget, the SRFs will be able to finance over $6 billion in water infrastructure projects annually. Additionally, EPA will work to target assistance to small and underserved communities with limited ability to repay loans. For the Department of Agriculture’s water and wastewater grants and loans, the Budget proposes a $1.4 billion program level to maintain assistance for water infrastructure in rural America.