News that the U.S. economy grew at an anemic 0.2 percent (GDP) during the first quarter of 2015 should trigger a reaction by policymakers in Washington. President Obama has already taken the first step by proposing a $478 billion initiative designed to modernize the nation's infrastructure. Now it is time for Congress to figure out how it choses to pay for such an initiative. Unfortunately, while the White House and Congress continue to disagree over the best way to fund a major component of the domestic economy, manufacturers, infrastructure developers and organizations involved in homeland security wait and hope that the economy does not contract, or even worse, that a tragedy does not occur. In Manufacturing and Infrastructure: Not Just About Economics - Our Own Security Depends on It, the case was made for the inextricability of manufacturing, infrastructure and domestic security. In order to avoid the inevitable finger pointing that goes on after an abdication of responsibilities by elected officials it is critically important that action be taken now.
The reality is that America's manufacturing and construction related industries have grown increasingly concerned that the economic gains the U.S. has made over the last few years will be stifled by the uncertainty coming out of Washington. In the wake of continued calls by manufacturers, Congress has yet to extend the charter of the Export Import Bank (Ex-Im Bank), a charter that is set to expire on June 30th. Failure to extend the life of the Ex-Im Bank will hurt small and mid-sized manufacturers by removing a financial tool that enables the exportation of goods manufactured in the U.S. It is clear that a contributing factor of the poor numbers seen during the first quarter of 2015 is our significant trade deficit. If the Ex-Im Bank is allowed to expire we will surely see a worsening of that deficit. Additionally, the continued unheeded calls imploring Congress to act and provide a permanent solution to the nation's decaying infrastructure now has us once again poised for another temporary short-term extension of the Highway Trust Fund. Unfortunately another temporary extension would represent the 33rd time Congress has taken such a step in the last six years. The results of our inability to act boldly to address two of the main drivers of our economic prosperity has been the continued caution by America's manufacturers and infrastructure developers. One can hardly blame our nation's private sector when government has not provided the level of predictability needed to engage in effective business planning, which among other things would include the expansion of a full-time employee base.
While our elected officials continue debating over the Ex-Im Bank and the best way to modernize our national infrastructure, our largest economic competitor is actively taking aggressive steps towards developing a 21st century infrastructure complex. The Chinese government has recently committed more than $1 trillion in infrastructure spending. They have figured out that infrastructure spending accomplishes several objectives: the two most notable are an expansion of the employment market and the facilitation of transporting manufactured goods expeditiously throughout the country. Standing in stark contrast to our largest competitor in the world, the U.S. is seeing a suspension of infrastructure projects across the country. Arkansas, Delaware, Georgia, Mississippi, Tennessee and Wyoming have already halted numerous infrastructure projects because it is unclear whether Congress will ensure that there will be available funding for the much-needed projects. The ripple effect of such uncertainty can be felt throughout countless sectors in our domestic economy. Most notably, manufacturers, construction companies and organizations involved in domestic security at levels must prepare to face challenges that are not always evident, but are no less real.
One would think that experience has taught us that bad policies often arise because of an overreaction by policymakers when responding to an event they did not address before it was forced upon them. National leaders now have the opportunity to prepare the country by modernizing our infrastructure, promoting domestic manufacturing and hardening our national security. If they fail to do so before another economic slowdown or a national catastrophe then we must be prepared to endure more onerous policies and reactionary spending that the nation can ill-afford.