January 26, 2017
Column | outbound

Not like Ike

Barack Obama and Congress had the chance to chart transport infrastructure's course for the next 60 years as Eisenhower did for the last 60. It didn't happen.

By Mitch Mac Donald

It is early February 2009. Confronting a damaged financial system and an economy hemorrhaging nearly a million jobs a month, President Barack Obama takes unprecedented action. He proposes an 88-month, $2 trillion stimulus package, the centerpiece being a $1.5 trillion program to modernize the nation's infrastructure. Funding will come from tax credits provided to U.S. companies for repatriating, at a 10-percent tax rate, nearly $2 trillion of overseas profits. Congress approves the package. Work commences within a year, creating millions of jobs in construction and ancillary industries. Symbolically, the last disbursement occurs on June 29, 2016, the 60th anniversary of President Dwight D. Eisenhower's signing of the Federal Highway-Aid Act, which created the Interstate Highway System, into law.

It's a great story, replete with pomp and substance. And totally fictitious. What is all too real, however, is the missed opportunity to raise the nation's transport infrastructure to levels where it is seen as an asset, not a liability. In 2013, the American Society of Civil Engineers (ASCE) gave the nation's roads a "D" on its report card, meaning they were in poor condition. The next report card is slated to be issued March 9. By then, all of this becomes President Trump's problem.

Since everything is about money, let's start with the actual 2009 stimulus package, which allocated less than $30 billion of the $787 billion total for transport infrastructure. The meager funding put transport quickly behind the curve. So-called shovel-ready projects primed for launch were found not to be shovel-ready at all. The term became one of the biggest misnomers of the past eight years.

The failure to develop a sustainable funding source would become an overarching narrative. It took the administration, in the person of Treasury Secretary Jacob L. Lew, two years to publicly support an innovative proposal from a member of his own party, Rep. John K. Delaney (D-Md.), to leverage up to $2 trillion of repatriated foreign earnings of U.S. corporations to pay for infrastructure projects. By the time the White House stepped up, Senate Majority Leader Mitch McConnell (R-Ky.) had killed the proposal, saying such initiatives would be best left for discussion within the framework of broad tax reform.

Other efforts to create funding programs went nowhere. The idea of a national infrastructure bank was floated a number of times, and remained stillborn. A 2010 proposal by the president to strip the U.S. oil and gas industry of two tax breaks and use the proceeds to pay for infrastructure never saw the light of day. Meanwhile, in a reflection of political timidity at both ends of Pennsylvania Avenue, a simple and logical stopgap measure—raising the federal motor fuels tax (for the first time in more than two decades) and index its rise to the inflation rate—was never pushed aggressively, despite broad-based support from virtually every business group. Taking matters into their own hands, 17 states have raised gas taxes since 2013.

Obama shouldn't shoulder all the blame. Congressional Republicans were hell-bent on thwarting all of his plans and seemed unwilling to commit to the truly massive investments everyone says the system needs to bring it up to speed and position it for the surge in traffic expected over the next 30 years. Yet Eisenhower also faced severe political opposition to building an interstate network. Told in 1955 he'd never get a bill through a Democratic Congress heading into a presidential election year, he did what many thought to be impossible. And the country would be transformed.

If there's one thing that can be said about the past eight years, it's that it was not like Ike.

About the Author

Mitch Mac Donald
Group Editorial Director
Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.

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