Federal Infrastructure Proposal Unveiled; What It Means for Indiana

On Monday, the Trump administration released its long anticipated $1.5 trillion plan for public works and infrastructure. The plan is based on $200 billion in direct federal spending to leverage $1.3 trillion in state, local and private infrastructure investment. (See https://www.whitehouse.gov/wpcontent/uploads/2018/02/INFRASTRUCTURE-211.pdf.)

With many of our nation’s roads, bridges, airports and other infrastructure in need of upgrading and building out for the future, this plan relies heavily on additional investment from the states and the private sector. The base of the plan has $100 billion in incentives in the form of grants to state and locals that includes $50 billion for rural projects, $30 billion for revolving federal credit and capital funds, as well as $20 billion for innovative projects that may not be ripe for private investment.

Indiana was one of several states that passed a bold, long-range infrastructure plan last year. (In fact, more than half of the states have raised their gas tax over the past five years.) So we should be well positioned to take advantage of this plan, as we have already taken the needed step to enhance our state and local road infrastructure funding.

Water infrastructure is a big issue for Indiana and this plan also proposes to leverage local investment with up to $40 in local and private money for every $1 in federal investment.

Additionally, the plan also proposes to cut federal permitting and approval times to two years, down from five to 10 years. This could be a big benefit for many projects.

Presently, this plan does not lay out specific funding for the proposal and puts that issue before Congress to solve. That could prove more difficult with concerns that the recently passed federal tax plan will raise the nation’s deficit. One option: the U.S. Chamber of Commerce recently proposed raising the federal gas tax, which has not been raised since 1993. No doubt, this will be a tough discussion in Congress.

There is usually an economic multiplier effect with infrastructure investment. America’s infrastructure is in dire need of modernization. Indiana has taken big steps to take care of its own and will hopefully benefit from this package. As details develop, we will continue to see how this plan evolves and impacts Indiana infrastructure.

Turning the Tables on Higher Ed Grades

The grades are in — for Indiana’s public colleges and universities. The "teacher" in this case is the U.S. Chamber’s Institute for a Competitive Workforce. Its Leaders & Laggards report evaluates states in 11 categories.

Derek Redelman, Indiana Chamber vice president of education and workforce policy, says there are few surprises in the report. The "A" grade for overall policy environment, he adds, is a "nice affirmation that the U.S. Chamber likes what we’re doing with education policy in Indiana." The other "A" comes in the overall category of innovation in online learning.

The third overall category was innovation in openness to providers. Indiana received a "C." The other eight grades were divided between four areas for both four-year and two-year institutions. Those marks were:

  • Student access and success: C (four-year) and D (two-year)
  • Efficiency and cost effectiveness: D and B, respectively
  • Meeting labor market demand: B and C, respectively
  • Transparency and accountability: C and C

Check out the overall report and the Indiana analysis.

Washington Threatening the “Free” in Free Enterprise

Indiana Gov. Mitch Daniels, the U.S. Chamber of Commerce, the Indiana Chamber and others participating in a roundtable discussion earlier today on economic growth and job creation in the Hoosier state all easily agreed on one principle: It’s not about government creating jobs, but government creating an atmosphere for the private sector to create jobs.

Indiana receives a leading grade in that category; Washington does not.

Indiana Chamber President Kevin Brinegar was among the discussion participants. He noted that member companies and others in the Hoosier state "could expand their businesses further, hire even more employees or even re-open facilities but they’re not doing so until they have a better handle on their future costs as imposed by the federal government and the economic direction of our country."

Various business leaders gave examples of growth as a result of Indiana’s entrepreneur-friendly policies and practices, as well as how national actions are threatening their companies and others.

The campaign — American Free Enterprise. Dream Big. — says business leaders understand the challenge, but that those serving in government sometimes do not. It is posing five questions to ask candidates to determine if they are free enterprise friendly:

  • Do you believe our free enterprise system is currently threatened?
  • Do you believe that tax increases hurt job creation?
  • Do you believe that the growth of government at all levels and the deficits that follow negatively impact job creation?
  • Would you deal with the debt and deficit issues through increasing government revenue or decreasing government spending?
  • Do you believe that the uncertainy resulting from pending tax increases, higher government deficits and more government regulations will hurt the economy?

Good questions; ones that deserve honest answers. 

Health Care Messaging: They’re Buying; Are You Watching?

Tired of hearing health care messages during breaks in your favorite TV shows. Maybe that’s because more than $1 million dollars a day is being spent on such commercials.

According to the Campaign Media Analysis Group, overall TV spending reached $110 million on Sunday. The breakdown is $47 million in favor of a health care overhaul, $32 million opposed to the reform efforts and the rest focused on general health care discussion.

Who’s spending the most? The U.S. Chamber of Commerce (there is no official relationship between the U.S. and Indiana chambers; in fact, we support some of the principles offered by the national organization but are opposed to others) and AARP are at the top of the list.

With the debate continuing in Congress and President Obama making this his signature issue, expect the dollar outlays, the commercials (and just maybe the TiVo usage) to continue at high levels.

Cap & Trade: A Really Difficult 932-page Read

Not sure you understand this whole climate change, cap and trade debate in Congress? You’re not alone. But when it is declared as the biggest economic threat to Indiana’s future, it’s clear we should be paying a little more attention.

The House Energy and Commerce Committee will be attempting a markup of legislation this week that would impact all businesses and consumers (in the form of higher prices). Indiana’s heavy reliance on coal makes those impacts significantly deeper here than in other areas.

The minority Republicans will try to offer a wide range of amendments. They may also try to slow the process, and hope sanity eventually prevails, by requiring the committee clerk to read the entire 932-page bill.

Back to learning more. Try this U.S. Chamber of Commerce fact sheet for starters; for Indiana Chamber members, participate in our June 5 policy conference call.  Invest a little time now to try and save a whole lot of pain later.

U.S. Chamber Praises Obama’s Economic Team

It’s early on in the Cabinet building process, but thus far the U.S. Chamber of Commerce is actually supportive of President-elect Obama’s economic team — or at least a few of the appointments. Only time will tell if Obama’s policies will reflect this apparent centricism (centristness? centricity? centristocity?) or if it will span his entire term. But for the time being, Thomas J. Donohue, president/CEO of the nation’s largest business advocate, isn’t hating the guy:

This team brings a wealth of knowledge to Washington and an understanding that any sustainable economic recovery will involve the business sector.

Tim Geithner has a deep understanding of our capital markets and the experience and credibility to tackle our nation’s biggest challenge—restoring our economy and rebuilding our financial markets.  He has been directly engaged in all the steps taken so far to address this unprecedented crisis and is well qualified to lead the Treasury Department.

Larry Summers’ knowledge of economic issues and past experience as Treasury secretary will serve President Obama well.  Likewise, Christina Romer and Melody Barnes will bring an understanding that any sustainable economic recovery will involve the business sector.