From William Galston’s Wall St. Journal column, “Making Our Roads ‘Shovel-Ready’: Hillary Clinton offers a valuable proposal for an overdue upgrade of U.S. infrastructure.”:
On Sunday, with less national fanfare than the announcement deserved, Hillary Clinton released a major proposal to boost infrastructure investment by $500 billion, much of this over the next five years. The plan includes three principal financing mechanisms: direct public investments, subsidies to reduce interest costs on taxable infrastructure bonds, and a national infrastructure bank that would leverage $25 billion in public seed capital that would support up to an additional $225 billion in direct loans, guarantees and other forms of credit enhancement.
You can almost hear the conservative knee-jerk response, “So who is going to pay for all of this?” Galston has an answer. But first he explains that all Americans are going to pay, and pay dearly if we continue to do nothing about our crumbling infrastructure, a point that should always be underscored. The opportunity costs of infrastructure repair have become untenable:
The case for action is clear. Over the past three decades, America has systematically underinvested in infrastructure by about 1% of GDP each year, resulting in a shortfall of trillions of dollars. The nation’s roads, highways, bridges and dams are aging, imposing extra costs (an estimated $377 annually per driver) to operate a motor vehicle while exposing everyone to increased risk. Many ports and the transportation networks that support them are becoming impediments to the efficient flow of trade. Anyone who has traveled outside the U.S. knows that many American airports are far from world class…Each year of delay raises project costs substantially.
Further, adds Galston,”In the most recent Global Competitiveness Rankings issued annually by the World Economic Forum, the U.S. stood…only 13th for infrastructure quality as a whole, 14th for roads, 15th for railways and 16th for electrical-supply systems.”
As for financing the needed infrastructure upgrades, Galston notes that “The principal source of funding for surface transportation, the 18.4 cents per gallon gas tax, has not been raised since 1993, and resistance to any further increase is intense, especially in rural areas and small towns whose residents typically drive long distances for work, shopping and medical services.” He argues for exploring “new strategies, including the more leveraged use of scarce public funds to reduce interest rates on taxable bonds and attract private capital for infrastructure” and “routing more project choices through an infrastructure bank with an independent board and skilled technical experts.”
“Western democracies such as Germany and Canada generally grant permits,” Galston points out, “including environmental reviews–for major infrastructure projects in two years or less,” He applauds Clinton’s plan’s to “cut red tape” and “streamline permitting,” which is “in sharp contrast to the fragmented U.S. system wherein an aggrieved group can thwart decisions for years.”
Gaston warns, however, that by tying up proposed projects in ‘regulatory knots,’ the U.S. has become irrationally timid about fixing broken-down public facilities that serve all Americans. Meanwhile “other democracies can plan, fund and execute projects in less time than it takes in the U.S. to complete the required environmental-impact statements.”
It may be that the time is fast approaching when a coalition of Democrats and a handful of Republicans who are fed up with their party’s knee-jerk obstruction of urgent public works projects, can help the nation achieve the needed upgrades. But Galston believes there must also be a consensus “to strike a better balance between parochial concerns and the public interest.”
Galston is surely right that Clinton’s plan is the most detailed, credible set of infrastructure improvement proposals yet presented. Forging the consensus needed to move forward will likely require an electoral spanking for infrastructure obstructionists, parochial and otherwise.