
By Harold Meyerson
Editor-at-Large, The American Prospect
Who will rebuild America? Despite the indisputable decay of our roads, bridges, ports, airports and schools, no one has come forward to patch them up, much less build their more efficient and attractive successors.
“Prior to 1975,” says Bernard Schwartz, the former CEO of defense and aerospace manufacturer Loral Corp., who has taken the rebuilding of our infrastructure as a personal crusade, “we spent 3 percent of our GDP on infrastructure. Since then, we’ve spent 2 percent. If you add up that difference over the years, it comes to about $2 trillion, which is the amount that the American Society of Civil Engineers says would be required to bring our infrastructure up to par.”
What happened in 1975? It’s roughly the midpoint between the federal government’s enactment of Medicare and the indexing of Social Security, which greatly diminished poverty among U.S. seniors, and the Howard Jarvis/Ronald Reagan tax revolt, which greatly diminished government revenues. That left fewer funds for public construction projects, but at the time, our infrastructure was still pretty spiffy — the interstate highway system had only recently been completed, and the jet-age airports in major U.S. cities were still relatively new.
Today they’re sagging, and dragging the country down with them. But government, hamstrung by austerity-obsessed centrists and the anti-government radical right, is not stepping up to rebuild them. A bill to establish a federal infrastructure bank has been introduced in the Senate by Massachusetts Democrat John Kerry and Texas Republican Kay Bailey Hutchison, but it’s hard to imagine the do-nothing House Republicans supporting such a measure.
Which leaves — whom? U.S. banks and corporations are sitting on trillions of dollars, but there’s scant indication they want to invest it in America. A recent column in the Wall Street Journal called on U.S. billionaires to put their money into public projects in return for tax benefits and naming rights. (The Rupert Murdoch Sewage Treatment Plant? Has a ring to it.) I’m not aware of any takers who’ve come forth, however, to answer this plea.
But there are other pots of money in the United States — most prominently, our pension funds. And one group of pension funds has already begun to pony up the bucks to rebuild the nation: those controlled (at least in part) by America’s unions.
The retirement set-asides for unionized public employees and construction workers go into funds that their unions and their employers jointly control. In June, AFL-CIO President Richard Trumka announced that his organization’s unions’ funds would invest $10 billion over the next five years in infrastructure projects. Since then, the federation’s construction-worker division has put $200 million of pension money into to retrofitting buildings, while the retirement funds of California teachers and other public employees have committed between $1.1 billion and $1.4 billion to infrastructure projects in the state. (Bound by their fiduciary responsibility to the retirees, the funds’ trustees must be confident that the projects will generate revenues, through tolls, fees, and the economic growth that such projects engender.) (more…)