After ‘Infrastructure Week,’ Legislative Spadework Must Begin

Last month the White House kicked off a series of ambitious policy proposals designed to improve the nation’s infrastructure, without having to spend a trillion in precious tax dollars. Starting with a vital plan to create a nongovernmental user-funded entity for air traffic control, and concluding with reforms to onerous permitting, over the course of a week the administration sketched a blueprint that rightfully relies on private-sector ingenuity, rather than public largesse to strengthen our economic backbone. But now, when Congress comes back after July 4 recess, the hard work begins — translating these smart ideas into legislation capable of making a speedy trip to the president’s desk.

Fortunately, neither President Donald Trump’s team nor members of Congress have to travel on a completely unpaved path here. Dozens of countries, including Canada and the United Kingdom, have successfully transformed their air traffic control systems to organizations responsive to customers rather than mired in bureaucracy. The House has already marked up a bill with these principles. Meanwhile, states such as Arizona, Iowa and Virginia are showing how to clear tax and regulatory obstacles to the next big leap in telecommunications infrastructure — 5G wireless. Equally important lessons, however, can be learned from long-standing infrastructure success stories, among them freight rail.

The Staggers Act of 1980, which among other steps provided greater latitude for railroads and their customers to negotiate freight-hauling rates, was along with airline and trucking regulatory reform, a sweeping effort to remove government’s stranglehold on infrastructure innovation.

The ability of private actors rather than public agencies to set most service prices has been, and remains key to freight rail’s vitality. As Brian Slack wrote in the 2017 edition of “The Geography of Transport Systems”:

With the release of regulatory control over rates, the railroads could begin charging market rates, and because they were allowed to enter into confidential contracts they had greater flexibility in negotiating with large volume shippers. This introduced more competition between the modes and led to lower rates overall. … [as well as] a revitalization of the general freight business.

But even as taxpayer advocates continue to press forward on long overdue changes to numerous areas of infrastructure, they can’t neglect to maintain the sound foundation upon which freight rail has been rebuilt. Recently the U.S. Surface Transportation Board proposed several regulations that could reverse the progress of the past four decades. One example among these would be requiring under certain circumstances (and at the government’s behest) an incumbent railroad to serve a rival’s customers on its own facilities with the non-incumbent railroad paying compensation. This would represent a major expansion of reciprocal switching, a practice that generally occurs through private market negotiations.

Government regulations must of course adapt to evolving circumstances, but a new spate of rulemaking, including from the Federal Railroad Administration, could create unforeseen headaches. Indeed, as a recent analysis from the Information Technology and Innovation Foundation pointed out, shortsighted federal policies that seem fearful of developments such as Positive Train Control (which integrates information technology to help operate trains) tend to overlook “evidence that the combination of PTC and one-person crews may be able to deliver reduced costs and potentially enhanced safety.”

Earlier this year, House and Senate hearings on infrastructure explored many sectors, but a standout was the regulatory framework articulated by the freight rail industry that ought to apply to all rulemakings — whether from the FAA, EPA, IRS, or any of the agencies in the federal “alphabet soup.” Elements include:

  • New rules must respond to a carefully defined need that is grounded in hard evidence of harms rather than ill-defined “risks.”
  • Cost-benefit analysis, including the interaction with other existing or proposed regulations, should be a prerequisite to any rulemaking.
  • Transparency and opportunities for public comment must be augmented and encouraged.
  • Articulating an end result, rather than the methods to achieve that result, can encourage innovative private-sector responses to problems identified by the public sector.

That last point is the primary aim of legislation introduced by Rep. Mark Meadows (R-N.C.). His bill, the Revamping American Infrastructure Act (HR 2714), would create a process at the Department of Transportation to identify more opportunities for converting “prescriptive” federal dictates into outcome-based rules. This is precisely the kind of nimble approach to regulation that serves everyone better.

Much more spadework from the legislative and executive branches will be necessary to modernize our nation’s infrastructure affordably and sustainably. But with bills like HR 2714 leading the way, all modes of transportation, communications, and shipment can benefit, in the process putting policy to work for a brighter economic future.

Pete Sepp is the president of the National Taxpayers Union, a nonpartisan citizen group founded in 1969 to work for efficient, limited government that is accountable to those who must pay for it.

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