A Bipartisan Solution on Infrastructure: More Funding and a Faster Process
By Courtney Geduldig and Sarah Kline
As the momentum for an infrastructure package has increased in recent weeks, new fault lines are appearing which threaten to undermine the potential for bipartisan agreement. In a speech at the Department of Transportation’s 50th anniversary celebration, Sec. Elaine Chao alluded to the president’s goal of unleashing private investment in U.S. infrastructure, noting, “Investors say there is ample capital available, waiting to invest in infrastructure projects. So the problem is not money. It’s the delays caused by government permitting processes that hold up projects for years, even decades, making them risky investments.”
Two leading Democrats on the House Transportation and Infrastructure Committee, Ranking Member Rep. Peter DeFazio (D-OR) and Highways and Transit Subcommittee Ranking Member Rep. Eleanor Holmes Norton (D-DC), quickly responded with a letter to Chao expressing dismay at her focus on “streamlining” rather than “a lack of public funding”.
In fact, both parties are right. Infrastructure needs in the U.S. require us to embrace a variety of solutions: more private investment, faster permitting, and yes, more federal funding. That is why the Coalition to Modernize America’s Infrastructure, which includes BPC’s Executive Council on Infrastructure as well as such diverse groups as the U.S. Chamber of Commerce, the National Governors Association, and North America’s Building Trades Unions, has adopted principles that call for robust, reliable, long-term federal funding as well as policy reforms to deliver infrastructure more quickly and at less cost. The key question for infrastructure policymakers is not whether we need permitting improvements or more funding; it is how to develop an infrastructure package that provides both.
As we have noted previously, there is more to be done to improve the federal permitting process. Much can be done administratively by Chao’s department and others, but further steps by Congress to expedite permitting should be considered as well. While Reps. DeFazio and Norton are correct in pointing out that a relatively small proportion of infrastructure projects are subject to the most time-consuming reviews, those projects tend to be larger and more complex, and tend to have an outsized impact on economic growth, productivity, jobs, and the public’s general welfare. They are also the types of projects for which private investment is most critical to getting them done, which makes them most at risk from permitting delays as private investors are understandably reluctant to commit resources to a project that may languish for years in the approval process.
While permitting is not the only barrier to private investment — we have previously written about other policy reforms that are also needed to attract private capital on a broader scale — it plays a significant role in raising costs and increasing risk. And new models for P3s are continuing to prove that private capital can a solution for more of our infrastructure needs than previously understood, for example with the bundling of 558 structurally deficient bridges across Pennsylvania.
At the same time, an infrastructure package that does not provide robust federal funding would fall short of what is needed, and cause federal commitments to fall further and further behind. The federal gasoline tax has not been raised since 1993, leaving the Highway Trust Fund unable to sustain even current spending levels without special transfers from the government’s general funds. If this situation is not addressed, federal transportation programs will be slashed starting in 2021, when the general fund transfers included in the FAST Act run out. The need for more investment does not appear to have escaped the many states, cities, and counties that have increased their contributions to infrastructure. Since 2012, 24 states have adopted plans to raise revenue for transportation and 71 percent of local ballot measures for transportation passed in 2016.
To place responsibility for fixing America’s infrastructure on only one sector — public or private — would be a grave mistake. Addressing permitting delays will make for a more efficient process that both attracts additional private capital and stretches existing funding further. More robust federal funding — not just for transportation, but for water, wastewater, and other infrastructure needs — is also an essential part of the solution. America needs an “all of the above” approach, one that welcomes private investment, rewards innovation and efficiency, and eliminates unnecessary delays, all while maintaining the strong funding commitment of the federal government. An infrastructure package that reflects all of these elements has the best chance of achieving bipartisan consensus and legislative success.
