Yes, fiscal conservatives, our Republican president and Republican Congress will pass a huge infrastructure bill at some point. And it will not be anything you want to claim as your own.
But President Trump campaigned on it, members of both parties have expressed support for it and the American people agree there is a significant need for it.
{mosads}And although we can expect Obama-era frivolities such as dark parks and modern art displays to be eliminated this time around, there are some questions about how the money will be divvied up.
We need a lot of things — airports upgraded, highways built, water and sewer facilities expanded. But if the American people are to maximize the economic benefits of these investments, rehabilitation of our ports is a must.
Yet, early reports of the Trump administration’s plans suggest airports, rail and roads and bridges all have taken priority over ports. A long list of proposed projects included only one related to ports.
But in 2016, the expansion of the Panama Call, dubbed “Panamax,” was completed. It enables larger ships to travel to more American ports. By 2030, Panamax-size ships will comprise more than half the world’s shipping capacity. The expansion will facilitate what is expected to be a 45 percent increase in freight by 2030. If American ports are not ready to handle the larger ships and excess capacity, they are subject to being bypassed by others.
It’s not just that ports are often neglected when transportation money is doled out. The federal Harbor Maintenance Trust Fund collects $1.25 per $1,000 of imported cargo to maintain harbors, which means it has a regular source of money, although Congress must approve all projects it funds.
And Congress has appropriated only 60 percent of funding available, even though the U.S. Army Corps of Engineers says full navigation channels at the 59 busiest U.S. ports are available less than 35 percent of the time and that if all maintenance money were allocated, it would be sufficient.
But the Harbor Maintenance Trust Fund doesn’t even cover the kind of deepening and widening projects American ports need to meet the challenges of Panamax. They are being done with public-private partnerships and a lot of state involvement, which means states such as Florida, that commit funds for these purposes, will move ahead of others that don’t.
There is a lot on the line. More than 70 percent of all imports and 75 percent of all exports flow through America’s ports. Ports support more than 23 million American jobs, and seaport activity generates $4.6 trillion in economic activity per year — more than a quarter of the U.S. economy.
They pay $321 billion in federal, state and local taxes. The manufacturing, mining, agriculture, energy and other essential industries depend on ports for their survival.
Yet, they account for only 2.4 percent of all federal water and transportation spending, and federal spending accounts for just 43 percent of spending on ports themselves, with the rest coming from states, port authorities and public-private partnerships.
Private investment in port infrastructure stood at about $27 billion from the years 2012 through 2016. Over the next four years – 2016-2020 – it will amount to more than $132 billion.
President Trump, who is familiar with financing big projects, embraces the public-private partnership concept, and ports already are taking advantage.
The port of Long Beach, Calif., is going through a $4.5 billion upgrade. The port authority provided $1.2 billion of upfront costs, and the Orient Overseas Container Line is providing another $500 million and has entered into a 40-year lease to operate the port and maintain the harbor.
In Newark, N.J., the Port Authority of New York and New Jersey restructured its lease with the Port Network Container Terminal back in 2011. The PNCT contributed $500 million for improvements and signed a lease extension through 2050, and the Port Authority threw in $150 million in improvements.
The extra cash has enabled the Port Newark Container Terminal to double its dock rail capacity, purchase three post-Panamax ship-to-shore cranes and make other improvements that have enabled the port to put up record numbers in terms of cargo and become the largest East Coast port.
Upgrading ports is popular — a U.S. Chamber of Commerce poll found 54 percent of Americans say investing in shipping ports and canals is important. It’s needed — not upgrading to handle the Panamax-enabled volume will lead to $9 billion per year in trade losses. And the various partners — business, port authorities, state and local governments — mean federal dollars get maximum value.
That’s the kind of winning the president promised on the campaign trail and the American people want to see from the infrastructure deal. And the economic growth it would generate might even please those reluctant conservatives.
Brian McNicoll is a former director of communications for the House Committee on Oversight and Government Reform and a former senior writer for the conservative Heritage Foundation.