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bill the house is voting for a three year $8 billion ban band-aid, why? because to re finance the export import bank, congress is playing politics with the nation's highways and the house is start being its summer recess tomorrow meaning a longer term transportation solution will not be debated until the fall. that is textbook kicking the can. now here is why this matters. america's infrastructure rates a d plus, power communication water power more, they get no more than a d-plus grade on a report card, put out by the american society of civil engineers. america needs to spend $3.6 trillion by 2020, and not only are we doing enough to modernize

our infrastructure, we're barely maintaining what we have now. it used to be the envy, now we're following behind the rest of the world. down from seivet i seventh in 23. in case you're wondering, hong kong, singapore and the united arab emirates took the top three places last year. hong kong, that joe biden said had an airport so great, you would think it belonged in modern america , meantime, la guardia looks like it belongs in the a third world country. exhibit a in why all the games congress is playing with infrastructure risk putting the country on the road to ruin. akiko fujita has the story from los angeles.

>> you'll see as soon as we get on the highway it's wild traffic. >> his commute begins long before sunrise. >> there's a whole bunch of us that have to wake up in the middle of the night to make it to the office at 8:00. >> his office is in orange county 70 miles from his home in los angeles but the drive is a slow crawl. more than two hours each way over bumpy roads and gridlocked highways. >> you would think with all the tax money and contributions we make as citizens the roads would be a lot better than they are. >> it's a fru fridays traition many. more than half of the of california's roads are in poor condition and need help. a gas tax pays for roads and bridge projects but that highway trust fund is set to go broke friday. the senate and house haven't

reached any agreement on extension and that means all this construction could come to a halt during the busiest months. >> in l.a. we are still looking at more than $2 billion of construction going on. >> patrick is a foreman for the department of transportation. he says delay in funding would be a huge blow to the state. >> how bad are these roads? >> we prierd 600,000 potholes and in the past two years california has received the same level of funding. >> reporter: and california isn't alone, according the one study, more than a quarter of the nation's highways are in poor condition. that rough ride, meant big bucks in maintenance repairs. it is a familiar story. the federal gas tax hasn't been raised in two decades while the cost of road projects has only gone up.

arcongress hasn't come up with a long term fix in ten years. >> increase the budget, get better roads for us i think and let's do something to get people to work on time under safer conditions that's what i think. >> a message he hopes gridlocked law makeers here. akiko fujita, al jazeera, los angeles. >> voters just want their roads paved, their garbage picked up. you would think if there would be one issue that would unite congress it would be the highway bill. congress only comes one patch work solutions. kevin, good to see you. >> it's great to be back ali. >> kevin in 2005 you did a study on the economic impact of public investment in infrastructure, back then the government spent

$185 billion to build and maintain the transportation system and a study showed it generated more than $790 billion a year in net economic benefits. this sounds like a no brainer. why are republicans not supporting this? >> well first of all listening to your great intro, the only thing i wouldn't disagree with? band aids are great products, i use them all the time, i'm glad i got a band-aid, the bill is worse than that. the fact that i think one, spending money on infrastructure wisely is something that is not controversial. but two, something you talk about on your program all the time, if we give money to congress to spend, it's not necessarily going to be spent wisely. you drive often in the new england area, how often are you caught in traffic? >> often.

>> when we have a highway bill congress is going to allocate the money across the states according to formulas and before you know it, have you driven around west virginia, the bridges are astonishing because they get a huge share of the money. thinking how to spend it wisely is smart but the second thing is, why the roads in california stink, california has one of the biggest state expenditures of any state, why does california have to spend, why do we tax people in mches fo massachusetts to fix the roads in california? it doesn't make sense. >> it's not the rider, the driver, the user, doesn't particularly care which pot of money it comes out of, whose government -- it's taxpayer money, it's all coming from us in the end anyway. but you will agree because it was your study and i believe in

it that the economic benefit of having proper infrastructure is clear. >> oh absolutely. one of the things i 30 we ought to do is address -- i think we ought to do is address the problem head on. infrastructure spending where we've got a bunch of neutral people, maybe a number of the civil engineers society, i read it religiously, it's a good study. >> they have a dog in the fight. they like $3 trillion. >> it's -- yes, i mean their salaries would go up but the point is they're making a valid point and the problem is it's hard to get the money through to infrastructure because congress can't be trusted to spend the money wisely. perhaps we should get someone like a fed to spend the money. >> stick right there, how do we expect lawmakers to find the money for the next decade, my

conversation with kevin hasset continues in two minutes.

make a decision as to where that money is best spent. are we talking about something

similar? >> yes, that's exactly right. exactly how to design it is something you and i would have to sit down over a bottle of wine and work out, right? i'm sure we would have different opinions about how much we could trust their own judgment how much we so trust the private sector. i would encourage states to auction off their roads to private companies who could maintained them better with tolls. the congress should recognize that the fundamental problem is that their current elaboration of infrastructure spending makes no sense, so it makes infrastructure spending which should be a no brainer unpopular. >> let's talk about the export import bank, maybe my viewers have been out of this discussion for a while but it's a federal institution that by the way does make money for the taxpayer. by loaning out or guaranteeing

loans that make it easier for american companies to export. it will finance the buyer of a product. why do conservatives have such an issue with this? >> well, i mean basically it's old fashioned mercantilism basically. the idea that we should dump our products on people abroad so we can have higher exports and more jobs at home is really adam smith refuted the logic of that. i would love it if bmw would like to dump 800 series cars in the u.s., so we could buy them cheap and we would be better off and sure they would get some jobs in germany but they are giving resources to us if they do that. what we've done with the export, import bank, if somebody is going to grow money in order to buy a boeing plane then we give them a subsidized interest rate.

you mention they make money but you of all people who were covering the financial crisis when it was going on, to make low market rates to risky people, sure you make money until you don't, right? it is not making money if you do an all end calculus. they're not making money if you calculate it economically correctly. >> as we agree that infrastructure is good maybe our financing mechanism isn't good and you and i are going to wind up with a bottle of wine in a discussion of maybe how the fix that but we agree that exporting is good for american business? >> right but a warning now you and i are on our second bottle of wine so we're going to have to be careful. so i agree, what's going to happen is that exports are going to, in the basic analysis, but we shouldn't be subsidizing exports at all. and if somebody wants to dump we

should let them dump. the export-import bank is really crony capitalism. the exports of maybe a few big companies and it is understandably unpopular. the two big arguments for it that i can think of are one, we can use it to sort of bribe the bad guy, i don't know who you think is a bad guy, let's say vaughn a bad country, they won't help us in africa but they agree to help us in africa if we throw a lot of money at them through export-import bank. not a foreign policy thing but a finance thing. suppose we think about airplanes, suppose airbus dumps airbus planes on the u.s., maybe america doesn't have a defense aircraft industry anymore, and we still have an industry that could be turned into a war

industry if we need to so we have to subsidize that but that's really not what folks are saying when they try to defend that. if that was where they were going to go i guess would i say well then it's a foreign policy issue so as a economist i should shut up. >> where allows competitors in other countries to buy boeing planes inexpensively but doesn't subsidize delta in doing the same thing. there are complexities in doing it. we have a slightly different situation today because you and i have had the same level of agreement or disagreement on it than we have in the past but now we have a stronger u.s. dollar that is now making it difficult for american companies to exports, particularly in europe economically. this is an incentive to at least keep what we've got. your argument is exports should exisexits on merits that a good price but now you've got head

winds that you didn't have before. >> the dollar is stronger than the european economy, you wouldn't argue that we should make the dollar weak if we copy the greek economy are you? >> no. >> delta buys a boeing plane they don't get a subsidy from the u.s., if luft han d lufthansa buys a boeing plane, that happens with ever kind of obscure market. >> kevin always a pleasure having you. where thank you for joining us. >> coming up next, rebuilding la guardia airport, finally off the ground. happening with private funds. are we heading towards privatization? stay with us.

>> what did you see when you went outside last year? >> there was a dead body in the middle of the street... for 5 hours. >> there's a lot of work to be done. >> they need to quite talking about what should be done and do it. >> t

wisdom, that goes where

nobody else goes. my name is imran garda, i'm the host of "third rail" - and you can find it on al jazeera america. >> protestors are gathering... >> there's an air of tension right now... >> the crowd chanting for democracy... >> this is another significant development... >> we have an exclusive story tonight, and we go live... sometime. joe biden rude about last year teased in this video by new york's governor. >> a famous person once said, if i blind folded you and took you to la guardia airport in new york, you must think, i'm in some third world country.

now who did you think said that? >> reporter: joe biden of course but biden wasn't alone of thinking about that about the airport. >> dirty. >> cramped. >> hot. >> delayed. the seating area is pretty small. >> it makes you think twice about flying in and out of la guardia. >> this is my first trip to la guardia and probably my last. >> governor quomo says the old la guardia can be torn down and rebuilt. >> this is what new york deserves and has deserved for a long time. >> talking about delay, highlighting the many issues on the country's biggest rail corridor which carries some 750,000 passengers each day. in may of this year, infrastructure

inadequacies were brought with the death of eight passengers, when braking systems weren't snrawld. in the aftermath of the 2007 financial collapse, president obama announced billions in stimulus. >> the first steps to set our economy on a firmer foundation. >> partly through infrastructure spending, some of those projects got off the ground, others fell by the way side. with federal funds stretched to the limit future infrastructure projects might be funded at the state level. >> we're going to see the use of more technology. more automated tollings, more congestion toll deployments, more large scale tolling schemes as a way of raising revenue particularly for local projects and that will allow the federal government to pull back a little bit to a more appropriate roll. >> but right now, in the future, right now la guardia and the

people who use it can expect five years of upheaval as the work is completed. >> that's al jazeera's john terret. little debate infrastructure is needed. but who fits bill the 800 pound gorilla in the room. director of tax policy studies at the cato institute in washington. chris good to see you. i just figured out as i was watching that story about la guardia, members of congress fly through on their way to work. we should get them to supply that way and their support will go through the roof. >> two great models, london's heathrow for example has been privatized as a for profit corporation.

you fly into canada, all major canadian airports are for profit private corporations. while we're at it, i'd privatize air traffic control, both canada and britain have privatized air traffic control. there are a lot of reforms we can do. >> as i go around the world and look at infrastructure, it's always strange to people why america doesn't have more in the way of public-private partnerships. airports are i in fact one of or closest examples, private enterprises have concessions and all that, but why not go all the way.they do seem to work almost everywhere else in the world. >> you want to know why that is? it is because there is a tax exemption for municipal bonds in the united states on federal income tax.

a state or city if they are thinking about a municipal airport, they go for financing cheaper. in canada and britain there is no advantage to government debt financing. that's why britain has done a huge amount of finance in airports highways and sea ports. most british sea ports are privatized, margaret thatcher reform. it's worked well. i look at this as a great opportunity. let's get entrepreneurs s involved i in our infrastructure. it's not just the accounting that's better it's the innovation that entrepreneurs bring. >> here's the problem. how do you get there from here? i just had a conversation with kevin

hasset, he referred to the federal reserve as of infrastructure, these are often federal and get stuck in congress and there are better ways but we don't get there. you say federal funding is not the way to go on most of these things but what's the answer, how do we move from here where we've got an infrastructure bill that's not going anywhere into a world you're talking about? >> well we are moving in the right direction. there is direction on public-private partnerships halfway to privatization. the capital beltway in washington, that was a $2 billion project funded by a private company, came in on time on budget. virginia, florida, texas, other u.s. states. so the federal government can do a lot to encourage that. one thing the federal government can do is there is a ban on tolling of federal highways.

so states even if they are going to upgrade and expand their intraints, they are not -- intr stateinterstates they are not ad to. >> i get the universal i don't want the federal government involved in infrastructure stuff and the fact is most end users don't care, right? they just want the roads working or the port or the internet. what role is there for the federal government? what part should the federal government be involved in, in terms ever infrastructure? >> well, i think that the federal government you know should have a role in the interstate, basic interstate system. but one quarter of federal money is spent on other things only highways. light rail and bus, for example. i don't think that's a proper responsibility, i think states

should fund that themselves. and federal highway money a lot of it goes to small rather than federal roads. i don't think the be federal government should fund that also. i would cut out these things that are not truly national and interstate in scope. there's no reason we should go to a federal gas tax. any state can raise their gas tax. and. >> no state wants to tack 10 cents on to the gas. >> right. that's one reason i favor going to some of these privatization ideas. but you know, again it should be up to state legislatures and i'd like to see the states you know go in different ways and innovate and experiment and they could learn from each other which they are doing today. i mean some states like virginia have done a ready great job with these public-private partnerships and i think it's a model for other states to copy. >> it's a good way to look at it.

chris edwards, always a pleasure to have you with us. a economist with the cato institute. we will continue to, it's something this country needs badly and theseks we've had today about innovation stand way to fund the infrastructure gap is a topic that i'm close to and we'll stay on top for. that is our show for today, i'm ali velshi, thank you for joining us. bl

>> up confirmed reports, the verdict of three journal i haves have been delayed. we'll have the latest. hello. welcome to al jazeera. also to come on the program, israel passes a law allowing force feeding. taliban won't confirm if its spiritual leader is dead. it's not agreed to peace talks with thefg