This column, published in conjunction with the release of the Business Roundtable report, The Road to Growth, originally appeared on CNBC.com.
By Doug Oberhelman
Chairman and CEO of Caterpillar Inc. and chair of the Business Roundtable Infrastructure Initiative.
Last summer, when the Highway Trust Fund was weeks away from expiration, I wrote an op-ed urging Congress to address that near-term crisis. I also urged them to enact a multi-year transportation authorization bill to support and grow the U.S. economy.
More than one year later we're still lacking a long term solution. To quote Yogi Berra, it's déjà vu all over again. Yet I could argue it's even worse now. States and local communities have paid the price of another year of short-term funding uncertainty. U.S. companies have spent another year managing around delays caused by aging and insufficient infrastructure. And U.S. workers have spent another year sitting in traffic, wasting precious time.
All of this threatens our nation's future growth and prosperity.
Infrastructure is a key component of any competitiveness measure, and by any measure the United States is falling far behind. The Road to Growth, a report issued by the Business Roundtable (BRT) on Wednesday, includes these sobering facts:
- America is not number 1, number 2 or even number 10. We rank 16th in the world in overall infrastructure quality, behind Germany, France and Japan, and even Iceland, Hong Kong and Spain.
- Congestion costs the U.S. economy and consumers tens of billions of dollars. Aviation congestion and delays cost our economy $24 billion in 2012; urban highway congestion cost our economy more than $120 billion in 2011; and lock delays, port congestion and lack of facilities for larger ships added $33 billion to the cost of U.S. products in 2010.
- U.S. transit and highway infrastructure is subpar. Only 25 percent of transit rail station infrastructure is rated good or excellent; 50 percent of U.S. urban public buses are rated marginal or poor; and nearly one in four bridges in the national highway system is structurally deficient or functionally obsolete.
Because we know the increasing economic cost of lack of infrastructure investment, BRT is urging lawmakers to act, adding our voices to those already calling for a long-term, sustainable solution.
Together, BRT companies employ nearly 16 million people across all 50 states. Together, these millions of employees help BRT companies earn $7.2 trillion of revenues annually – that's about twice the total U.S. government outlay in fiscal year 2014. Our employees' contributions to the U.S. economy are invaluable. We want to help them be even more productive and prosperous, yet the poor condition of U.S. infrastructure is holding all of us back.
As the BRT report states, in the mid-20th century there was a strong U.S. public commitment to invest in world-class physical infrastructure. That helped propel the United States to become the world's strongest economy. Since then, investment has tapered off or flat lined, while demand for high-performing, high capacity systems has grown.
Meanwhile, many other countries have figured out that infrastructure is a gateway to economic superiority and they're replicating our success as fast as they can. Yet, while they're moving forward we are stuck, threatening our future growth and prosperity.
It's incredible to expect higher sustained growth when multi-year, multi-million dollar projects are funded for only six to twelve months at a time. A University of Maryland study concluded that an $83 billion infrastructure investment would create 1.7 million jobs in the first three years.
It's incredible to expect greater prosperity when we are losing ground to overseas competitors benefiting from their countries' infrastructure investments. Competitiveness describes the factors that make countries productive. Higher productivity leads to higher wages and higher returns on capital -- and prosperity is the welcome, final result.
As leaders of the largest U.S. companies, BRT members constantly pull multiple levers to stay competitive. When we get it right, we employ more people, buy more supplies from more suppliers, and create prosperity for families and communities. BRT companies currently generate more than $470 billion in annual sales for small and medium-sized businesses.
We don't know what our competitors will do or what unexpected world event will come at us. We put forward our very best products and services to win business. The market judges our leadership based on our ability to manage what's within our control. What we can't control is the state of the public infrastructure supporting our people and our shipments.
That's an investment only Congress can and must make before another year passes and the United States falls even further behind.
Commentary by Doug Oberhelman, chairman and CEO of Caterpillar Inc. and chair of the Business Roundtable Infrastructure Initiative.