By Eli Lehrer & Pete Sepp
July 23, 2020 at 5:00 am ET
One of the most enduring political narratives of the past four years is that Democrats and Republicans agree on the need to spend more on the nation’s infrastructure. The COVID-19 crisis has intensified this ethos, as President Donald Trump called for a package of up to $2 trillion, while House Democrats just raised a $1.5 trillion gambit of their own. Senate Republicans have so far been skeptical of both approaches. They should be. Spending vastly more on infrastructure, even as a recovery mechanism, will likely not be good for taxpayers or the country as a whole. Much of America’s infrastructure is in decent shape, spending a lot on it won’t necessarily cure economic problems and regulatory reform, not money, will go furthest in fixing the most important problems.
Facts first: The widespread perception of a massive infrastructure crisis does not have as solid a basis as many would believe. Americans have the shortest commute to work of any G-7 country as well as the fastest broadband internet in that group of wealthy countries. Americans take more airplane flights per capita than residents of any other sizable country and have, by far, the world’s most productive and efficient freight railroads. Among the G-7, only Germany and Japan — both far denser than the United States — do better on the infrastructure component of the World Bank’s logistics performance index.
In many of the places where U.S. infrastructure is clearly worse than that of peer countries, it’s because of deliberate choice and realities of geography: Distances are simply too vast for passenger rail to work in much of the United States, for example. Some widely cited statistics about infrastructure use malleable language, such as “structurally deficient.” In reality, the number of “structurally deficient” bridges is actually declining and, in any case, “structural deficiency” is simply a label applied to a bridge where any major part needs careful inspection — not a sign that the bridge is about to collapse.
Infrastructure isn’t the medicine the economy needs to emerge from a recession. Major projects take years of planning and are never truly “shovel ready.” The massive 2009 stimulus, the Federal Reserve Bank of St. Louis found, largely served as an excuse for states to move funds they would have otherwise spent on highways to other purposes.
This doesn’t mean that Congress should just sit back. Certain areas of infrastructure do need repair and, targeted correctly, building new bridges, airline terminals, freight rail lines and communications grids could do good. But the way to get them probably isn’t to spend massive amounts of new money; instead, it’s to sweep away a morass of barriers that repel private investment and stop them from being built. This, however, is not just a matter of rewriting a few simple regulations. The Trump administration is already trying to do that, as did every previous administration for the past 50 years.
Instead, the process for streamlining infrastructure reform involves thinking of fundamentally new ways to do things. For a variety of reasons, some of them worthy (environmental protection) others of them not (protection of construction interests), it’s simply too hard and costly to build infrastructure in America.
Many of the biggest barriers to building efficiently are embedded in statutes such as the Davis-Bacon Act, which requires “prevailing” (often union-level) wages on all federal projects. Others like “Buy American” mandates and local laws restricting selections of materials similarly drive up costs. And centrally planned efforts that seek to “target” money toward politically preferred causes like solar power, roads in politically favored areas, passenger rail and the like are almost never the most efficient in meeting local needs. In some cases, the best steps in paying bills involve finding new ways to leverage private capital via partnership agreements and efforts to open projects to competitive bidding. More ambitious structures — like the national framework that helped spread public private partnerships all around Canada — also deserve exploration. And other more radical steps may be in order: selling certain government assets ranging from unused buildings to unneeded land isn’t a good way to pay for ongoing operations, but when it comes to one-time projects like a bridge or sewer system, it may fit the bill perfectly.
The politics of these reforms may not nearly be as good as spending trillions to build roads — such moves do have political support. But politically difficult reforms, most of which wouldn’t cost taxpayers anything, would arguably do more to prepare America’s infrastructure for the future than would trillions in new government spending. And, unlike massive spending, it wouldn’t soak taxpayers in the end.
Eli Lehrer is president of the R Street Institute. Pete Sepp is president of the National Taxpayers Union.
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