Monday, September 19, 2011

Business lobby toils to win infrastructure debate

Businesses ranging from Caterpillar to BASF, the chemicals group, are pressing Republicans in the House of Representatives to increase spending to address the US’s growing infrastructure crisis or risk stifling America’s economy.

For the US Chamber of Commerce and other business lobby groups, a campaign to convince lawmakers – who were elected on a pledge to cut the size of government and the deficit – not only to maintain spending on transport and other infrastructure but increase investment, has been an uphill struggle. “It’s all rooted in the challenge of explaining that there are certain roles that the government does indeed have,” says Janet Kavinoky, the executive director of the chamber’s transportation and infrastructure group.

“We have to take the time to help them understand that with reform and additional funding you can really add to the economy. And you have to make that fit with the bigger message of smaller government and debt reduction and that is a hard message to craft.”

Corporate America has largely been aligned with efforts by conservative and Tea Party Republicans on issues ranging from taxation to deficit reduction. But business lobbyists say there is a disconnect when it comes to the need for more spending on infrastructure, with many Republicans suggesting that the private sector, not the federal government, ought to pick up the bill to improve roads, bridges, ports and aviation infrastructure. A letter to freshmen lawmakers from Organization for International Investment, a group that lobbies on behalf of US subsidiaries of multinationals, says the US cannot “defer” addressing infrastructure if it is to remain the world’s most powerful economy and most attractive place to do business.

The issue has been complicated by a ban on so-called earmarks, funds, allocated by the federal government in spending bills for what was often seen as lawmakers’ own pet projects. While earmarks have become an object of scorn among freshmen Republicans because they have funded allegedly wasteful projects such as Alaska’s $398m “bridge to nowhere”, they were often used for infrastructure. The issue has rankled some Republicans, such as Lindsey Graham, South Carolina senator.

His efforts to get the federal government to fund a study by the Army Corp on the expansion of the port of Charleston, which the lawmaker’s office says directly and indirectly accounts for one in five jobs in the state, has been blocked, partly by fellow Republicans who felt the proposal sounded “earmarky”.

The port must be expanded to accommodate the far bigger container ships that will reach the east coast from Asia after the expanded Panama Canal opens in 2014.

The competition to decide which east coast ports will be expanded will be fierce. The study will cost several million to complete, but Mr Graham was seeking only $40,000 in this year’s budget.

Senator Jim DeMint, of South Carolina, a leader in the Tea Party movement, is one of two lawmakers from the state who did not sign off on the request by the congressional delegation last year.

“It’s an ideological issue for them. What we keep talking about is that ideology cannot get in the way of practical results that is in the best interest of the country,” says Otis Rawl, president of the South Carolina Chamber of Commerce.

Boeing, BMW – whose US plant is based in South Carolina – and Michelin are three companies pushing for the study.

In nearby Tennessee, Tate & Lyle, the UK food ingredients company, is grappling with severely reduced capabilities of the lock and dam system on the Tennessee River. The traffic from its Tennessee plant has fallen from about 300 barges a year to near zero because the Chickamauga Lock is unreliable, the company says, forcing it to rely on truck and rail transport that is more expensive and less environmentally sound. “If we are looking at achieving goals and improving the economy and being environmentally friendly and reducing our dependence on oil, it seems that support for the lock and dam should have a higher priority,” says Chris Olsen of Tate & Lyle.

No comments: