Insuring the Rebuilding of America: What’s in the $1.2 Trillion Infrastructure Law? What Will It Mean for the U.S. Economy?

Wednesdays with Woodward® webinar series

December 15, 2021

Wednesday 1:00 p.m.-2:00 p.m. ET

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Ready to roll! The newly signed historic infrastructure law will launch shovel ready projects in every state to improve roads, bridges, public transit, airports, broadband access and safe drinking water. This installment of Wednesdays with Woodward featured two experts who took us inside the law’s fine print: American Trucking Associations’ President and CEO Chris Spear and the U.S. Chamber of Commerce’s Ed Mortimer. They told us what to watch for next with the implementation of the new law. With thousands of construction projects being generated, what will that mean for the economy and for business? Travelers’ surety expert Bob Raney joined us to talk about the opportunities ahead in rebuilding America.

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Summary

What did we learn? Here are the top takeaways from Insuring the Rebuilding of America.

The new infrastructure bill is a “game changer.” Ed Mortimer, Vice President of Transportation Infrastructure at the U.S. Chamber of Commerce, called it “a once in a generation investment to secure long-term economic growth into the 21st century.” With an investment of $110 billion to make roads and bridges safer and less congested, freight and public transportation systems more accessible and efficient, and ecosystems and water supplies cleaner and more resilient – all while incentivizing alternative energy and creating jobs – “this bill is going to fund projects that are shovel-worthy, that are substantially going to improve lives,” he said. Bob Raney, SVP of Construction Surety at Travelers, agreed. While larger, federal-level projects may steal the limelight, he noted that “most infrastructure dollars are actually spent on local projects – resurfacing roads, widening local roads, running local water lines, expanding a local water treatment plant. That’s all vital infrastructure.”

Bipartisan support for this landmark legislation comes at the right time, for the right reasons. “Roads and bridges aren’t political theater – they’re our shop floor,” said Chris Spear, who, as President and CEO of the American Trucking Associations, advocates for the nearly 8 million Americans in the trucking industry – a workforce that has moved 70% of the nation’s goods during the pandemic alone. “It’s an issue that embodies real people who are out there getting the job done when it matters most,” he remarked. Spear believes that after a 10-year decline in infrastructure spending, Congress has finally “put the country ahead of themselves” in making a “historic and impactful decision that directly addresses our nation’s ailing supply chain.”

A streamlined permitting process means more projects will get funded. Modernization of the permit application workflow, coupled with a two-year time limit on approvals, is a “huge victory that doesn’t get a lot of press,” noted Mortimer. Provisions in the bill such as Fast 41, a digital dashboard that helps ensure transparency and accountability throughout the permitting process, will allow more projects to get through the system more quickly. “Dollars are always important, but too much of the cost of these projects ends up in the permitting process,“ Mortimer asserted. “The permitting provisions actually make more of a long-term impact.”

The U.S. Department of Transportation will ultimately decide which projects get funded. “U.S. Transportation Secretary Pete Buttigieg now has a tremendous amount of discretion and authority to decide where these pots of money are going to go,” noted Spear. He then remarked how state departments of transportation, which are responsible for submitting projects and meeting criteria within the new laws, also hold a great deal of power.

Getting the right projects funded can fuel American prosperity – but will take teamwork. “We view infrastructure as the backbone of our economy,” said Mortimer. “It’s the circulatory system of how we’re able to move, how we’re able to grow, and how we can be in the world.” He stressed that projects with the greatest potential to holistically improve the system should be prioritized – and then encouraged business, community and elected leaders to work together to ensure that those projects get funded. Doing so, he believes, will better position America to “compete in the global marketplace and improve the quality of life of all our citizens.”

Labor shortages and supply chain issues could present implementation challenges. In this time of unprecedented strain on American industry, increased availability of funding is starkly contrasted by decreased availability of the physical and human resources required to get projects done. All three panelists agreed that the pandemic has only exacerbated what was already, as Spear noted, “pressure to deliver more with fewer people and less equipment.” Add extraordinarily slow returns on investment driving inflation into the mix and it’s easy to lose hope in the promise of progress the bill offers. Mortimer, however, remains optimistic. He sees the bill as “counterinflationary,” a long-term investment that “the American people will benefit from 50 to 75 years to come.”

Contractors and insurers are prepared to meet the challenge. Historically strong balance sheets for middle-market civil contractors is a good sign, noted Raney. “The industry is very strong going into a robust infrastructure program,” he noted. As projects ramp up, Raney believes agents and brokers will be valuable partners, advising clients on how to resource this work, helping them strategize and supporting their efforts to maintain financial strength. Bond surety will play an important role, too. “We will see a big uptick in the need for surety bonds for all these new projects going forward,” said Raney. Mortimer agreed, adding that this uptick may turn out to be “the greatest legacy of this legislation moving forward.”

Presented by the Travelers Institute, American Property Casualty Insurance Association (APCIA), the Risk and Uncertainty Management Center at the University of South Carolina’s Darla Moore School of Business, the American Trucking Associations and the MetroHartford Alliance.

Speakers

Ed Mortimer
Ed Mortimer
Vice President, Transportation Infrastructure, U.S. Chamber of Commerce

Chris Spear
Chris Spear
President and CEO, American Trucking Associations

Bob Raney
Bob Raney
Senior Vice President, Construction Surety, Travelers

Host

Joan Woodward headshot
Joan Woodward
President, Travelers Institute; Executive Vice President, Public Policy, Travelers


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