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U.S. Treasury Secretary calls for long-term infrastructure funding legislation

10 September 2014 00:17 (UTC +04:00)

Baku-APA.The U.S. Treasury Secretary Jacob Lew on Tuesday summoned the Congress to fashion long-term legislation to pay for mass-transit systems and repairs to bridges and highways, as lack of stable funding has hampered the upgrading of the country's dilapidated transportation facilities which held up economic activities, APA reports quoting local media.

Speaking at the Infrastructure Investment Summit, Lew called for the adoption of a four-year Highway Trust Fund re- authorization bill, which pays for highway and mass-transit projects for longer period of time. He also called on private investors to join infrastructure development in an innovative way.

The fund nearly exhausted its reserves prior to August, because taxes on gasoline and other fuel haven't kept up with spending. The Congress passed a bill at the end of July to keep the fund solvent through next May, but this is only a short-term solution.

"We need a comprehensive approach that rebuilds America, creates construction and manufacturing jobs, tackles our most urgent repairs as soon as possible, and gets transformative projects underway that will improve our global competitiveness," Lew told government officials, private developers and bankers.

He said America faces a funding gap of 1 trillion U.S. dollars in transportation, water, and electricity needs between now and 2020. One out of nine bridges in the U.S. is structurally deficient. Roughly two-thirds of the roads are in less than good condition, and many ports are not deep enough to receive the next generation of supertankers.

"Our infrastructure deficiencies hinder economic growth, undermine business productivity, and hurt family budgets... And inadequate infrastructure costs Americans as much as 120 billion U. S. dollars a year in extra fuel and lost time," he said. "There is no question we need to make infrastructure investments a priority, " he added.

He called on the private investors to work with public sector to come up with fresh and innovative ways to unlock capital and get more projects underway.

To avert a funding crisis that would have forced the shutdown of tens of thousands of under-repair transportation projects, the Congress decided to transfer 10.8 billion U.S. dollars into the Highway Trust Fund in July. The cost is offset in large part through a budget maneuver known as pension smoothing, which allows companies to contribute less to their pension plans.

The tactics raises revenue for the government, because companies lose out on the tax deduction associated with pension contributions. But lawmakers on both sides of the aisle want to avoid using this budget-gimmick funding way.