Fix-It-First in 2013 State of the Union

In the text of the 2013 State of the Union (via MinnPost), transportation gets an important shout-out, with special attention to Fix-It-First:

“America’s energy sector is just one part of an aging infrastructure badly in need of repair. Ask any CEO where they’d rather locate and hire: a country with deteriorating roads and bridges, or one with high-speed rail and internet; high-tech schools and self-healing power grids. The CEO of Siemens America – a company that brought hundreds of new jobs to North Carolina – has said that if we upgrade our infrastructure, they’ll bring even more jobs. And I know that you want these job-creating projects in your districts. I’ve seen you all at the ribbon-cuttings.

A Political Economy of Access: Infrastructure, Networks, Cities, and Institutions by David M. Levinson and David A. King
A Political Economy of Access: Infrastructure, Networks, Cities, and Institutions by David M. Levinson and David A. King

Tonight, I propose a “Fix-It-First” program to put people to work as soon as possible on our most urgent repairs, like the nearly 70,000 structurally deficient bridges across the country. And to make sure taxpayers don’t shoulder the whole burden, I’m also proposing a Partnership to Rebuild America that attracts private capital to upgrade what our businesses need most: modern ports to move our goods; modern pipelines to withstand a storm; modern schools worthy of our children. Let’s prove that there is no better place to do business than the United States of America. And let’s start right away.”


We have talked about Fix-it-first here before. In fact, Matt Kahn and I wrote a white paper on it: Fix It First, Expand It Second, Reward It Third: A New Strategy for America’s Highways for Brookings. For full details, read the report, the abstract is here:

The roads and bridges that make up our nation’s highway infrastructure are in disrepair as a result of insufficient maintenance—a maintenance deficit that increases travel times, damages vehicles, and can lead to accidents that cause injuries or even fatalities. This deficit is in part due to a prioritization of new projects over care for existing infrastructure and contributes to a higher-cost, lower-return system of investment. This paper proposes a reorganization of our national highway infrastructure priorities to “Fix It First, Expand It Second, and Reward It Third.” First, all revenues from the existing federal gasoline tax would be devoted to repair, maintain, rehabilitate, reconstruct, and enhance existing roads and bridges on the National Highway System. Second, funding for states to build new and expand existing roads would come from a newly created Federal Highway Bank, which would require benefit-cost analysis to demonstrate the efficacy of a new build. Third, new and expanded transportation infrastructure that meets or exceeds projected benefits would receive an interest rate subsidy from a Highway Performance Fund to be financed by net revenues from the Federal Highway Bank.

The Federal Highway Bank does not exist in that name, but there is the related, and recently expanded $1 billion per year TIFIA program housed within US DOT, which has similar loan and line-of-credit powers (for all of transportation, not just roads). The claim is that “each dollar of budget authority can leverage approximately $10 in lending capacity, ” since banks can print money in the US. But policy is not as crisp as we would like, loans can be repaid from any approved source, including non-project related revenue (though project revenue is preferred), no Benefit/Cost test is required, and current policy still permits federal grants for new construction. Tanya Snyder at Streetsblog discusses some of the other distinctions between a bank and TIFIA. See Congressional Research Service’s Surface Transportation Funding and Programs Under MAP-21: Moving Ahead for Progress in the 21st Century Act (P.L. 112-141) for an intelligible summary of MAP-21.
Some takes on the President’s call from

Some local news sources got into the act, along the lines of “Deficient Infrastructure: Can it happen here”, which of course it can and does, thus giving a nice local angle to a national speech:

Matt Kahn and I didn’t invent the slogan, it’s been around for a while, though our take is a bit more than a slogan, and more hard core than what was adopted in Map-21 (which does move in the right direction, but not far enough).
Still, not everyone likes the idea, the Public Works Finance, e.g.