Breathtakingly ambitious: That’s how many observers describe the $2 trillion infrastructure proposal unveiled by President Biden last week. It contains scores of programs aimed at updating America’s obsolete infrastructure and addressing climate change: $213 billion for affordable housing, $174 billion for electric vehicle incentives, $115 billion for roads and bridges, $111 billion for clean water, $100 billion for electric grid and clean energy, $100 billion for high-speed broadband, $85 billion for mass transit, $80 billion for rail, and much more.
New York City could be transformed by such changes:
The new $30 billion Gateway rail tunnel would alleviate rail delays in the Northeast Corridor and avoid “carmaggedon” if one of the two decrepit existing rail tunnels has to ever shut down.
Extending the Second Ave. subway, the No. 4 line in Brooklyn, and the No. 1 line to Red Hook, would speed up the commute of tens of thousands of New Yorkers, and open up new areas for much-needed new housing.
Repairing old bridges and doing long-overdue upkeep on city highways would not only enhance safety, but would eliminate the frustration of driving over cracked and pockmarked pavement, and past crumbled guard rails and graffiti.
Making the shoreline resilient against storm surges would save billions in the future.
Retrofitting public housing would restore dignity and pride to many and enhance the lives of thousands of families.
Building wind farms in the shallow water between Long Island and New Jersey would reduce cost and pollution from fossil power.
New transmission lines would alleviate blackouts in future storms.
Electric buses would glide noiselessly and without fumes along New York’s avenues.
Add it all up, and it seems too good to be true. What’s the catch? Actually, almost all of these projects could be good investments if done properly. Republicans and Democrats alike have been calling for infrastructure funding for years now. For more than a decade, industry groups, economists and members of Congress come together annually for “Infrastructure Week.”
But so far almost nothing has happened, mainly because political leaders focus on goals and have come up with no trusted mechanism to actually implement large-scale infrastructure investment. Distrust about delays, waste and favoritism mean that projects don’t get off the ground.
Biden’s plan has the wind at its back. The public broadly supports climate change initiatives, and business supports projects that will enhance America’s competitiveness. There are two sticking points with the Biden plan.
First, the $2 trillion has to come from somewhere, and Biden says it will come by raising corporate taxes from 21% to 28%. The main industry groups which support new infrastructure, such as the Chamber of Commerce and National Association of Manufacturers, have already declared their opposition to this tax proposal. Many responsible economists believe that the lowering of corporate taxes by the Trump administration to 21% — roughly the same level as other industrial countries — helped bring American businesses back onshore. A more balanced tax plan that spreads the pain is readily achievable in political negotiations. For example, raising the fuel tax by 25 cents per gallon would raise about $400 billion over ten years.
Second, and more fundamentally, Washington has demonstrated in recent decades that it is unable to deliver new infrastructure effectively — even when it has allocated all the funding. Much of the $800 billion stimulus in 2009 was supposed to be used for infrastructure. Five years later, a White House report disclosed that a grand total of 3.6% had been spent on transportation infrastructure. The reason, as President Obama admitted, is that red tape for permitting meant that there was “no such thing as shovel-ready projects.”
Then, when infrastructure projects are finally approved, the waste and inefficiency are notorious. Often the waste is built into featherbedding work rules.
The Second Ave. subway construction in Manhattan cost $2.5 billion per mile. A similar project in Paris, using a similar tunneling machine, cost $450 million per mile, or one-fifth as much. Part of the difference was caused by union work contracts that required twice as many workers to operate the machine as were needed.
The East Side Access tunnel, bringing the Long Island Rail Road into Grand Central Terminal, turned out to have 200 workers on the books who never appeared. They just collected checks.
Another form of waste is diversion of resources to projects that make little sense. Notorious examples include the infamous “Bridge to Nowhere,” a $223 million project to connect a small Alaskan island to the mainland.
The Biden administration’s $2 trillion plan is seen as a Christmas tree, laden with gifts, and has already launched what some observers call a “feeding frenzy.” Thousands of interest groups are lining up to get theirs, and members of Congress are already preparing their wish lists. Indeed, the attraction of the Biden proposal, as former Sen. Heidi Heitkamp said last week, is that it offers something for everybody: “You get a bridge! And you get a bridge!…And you get a hospital! It’s the Oprah of infrastructure.”
Promising something for nothing is not a winning strategy, however. American voters won’t tolerate the waste of contracts that cost five times what they should, or diversion to projects that don’t advance the public good.
What’s needed is a trusted mechanism to make sure the money isn’t wasted. Without such a mechanism, all the hogs rushing to the trough will ultimately cause the plan to falter. The stench will be too great to allow passage of any significant plan.
The best model to instill trust and confidence in infrastructure spending would be a nonpartisan National Infrastructure Board, comparable to base-closing commissions that make recommendations to Congress on the closing of unnecessary military bases. Australia and other developed countries have created similar bodies to avoid distrust of backroom deals for huge infrastructure investments.
A National Infrastructure Board could bring order and reliability to the rebuilding of America’s infrastructure. It should have three key responsibilities:
One, set priorities. The National Infrastructure Board would decide which types of infrastructure spending are most needed for the nation. Not every project can happen at once, and some projects are especially urgent.
In the New York region, for example, the most urgent project is the new Gateway rail tunnel under the Hudson River. The two existing tunnels are more than 100 years old and have been in precarious shape since Superstorm Sandy. Should one close down, train capacity into Penn Station would be reduced by 75% and gridlock extends 25 miles. The entire regional economy — about 20% of national GDP — depends in large part on avoiding breakdowns in any segment of the transportation grid.
Moreover, the Gateway project is “shovel-ready.” With great effort, all the environmental studies were completed three years ago. But the Trump administration refused to sign the final “Record of Decision” in an effort to strongarm Sens. Chuck Schumer and Corey Booker to fund Trump’s border wall.
By declaring Gateway a top national priority, a National Infrastructure Board would not only move it to the top of the list, but would also make it difficult for political leaders to use it as a pawn in unrelated political negotiations. Similarly, by putting a project like the “Bridge to Nowhere” near the bottom of the list, the National Infrastructure Board would invite public scrutiny and ridicule to it and other pork barrel projects.
A National Infrastructure Board’s second charge would be to avoid permitting delays. In the 2015 Common Good report “Two Years, Not Ten Years,” I found that a six-year delay in permitting large projects more than doubles the cost of a project. I also found that lengthy environmental reviews were usually harmful to the environment, by prolonging polluting bottlenecks.
The main cause of the delays is that no official has authority to enforce deadlines. Any group that objects to a project can throw a legal monkey wrench into the schedule by demanding one more study.
The National Infrastructure Board could be the prime stakeholder in expediting permitting. It could articulate the main areas of potential environmental concern, and also articulate the dangers and costs of further delay. Today, bureaucrats don’t get in trouble by doing nothing. The National Infrastructure Board would help stiffen their backbones to move projects along.
The Board’s third job would be to avoid wasteful contracting. Most infrastructure projects are executed by state and local governments. They’re where the rubber meets the road. Federal officials typically look the other way at wasteful labor practices, such as the featherbedding on the Second Ave. subway. These giveaways are now so notorious that they threaten the viability of any major federal infrastructure initiative.
A National Infrastructure Board could save billions even as we spend trillions.
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The Interstate Highway System was authorized in a 29-page law enacted in 1956, and, 10 years later, more than 20,000 miles had been built. Officials back then had the authority to plan and procure a road system that remains the backbone of the American economy.
The Biden proposal includes scores of different initiatives, not one highway system. Each of these must run a bureaucratic gauntlet for permits, and then be built with convoluted procurement mandates that guarantee prodigious waste and inefficiency. The opportunities for abuse are already visible.
The United States needs much of what Joe Biden is asking for; the American people know it. But the plan may stall unless there’s a trusted mechanism to make sure the projects are planned and built responsibly. Let’s create a reliable infrastructure authority first if we’re serious about rebuilding America.
Howard is founder of Common Good and author of “Try Common Sense: Replacing the Failed Ideologies of Right and Left.”