What's Crumbling Faster: U.S. Infrastructure Or Political Will To Act?

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Today the American Society of Civil Engineers gives our airports, bridges, dams, water systems, grids, ports, railways, roads, and public transit a collective D+. The society estimates that $4.6 trillion in spending is needed to reverse this — $2 trillion more than it predicts will be spent. Within 10 years, the society forecasts, failing infrastructure will cost our economy almost $4 trillion and 2.5 million jobs. From clogged roads to decaying airports to toxic drinking water, our economic and civic health corrodes.

The management consulting firm McKinsey & Company estimates that every well-spent infrastructure dollar would raise GDP by 20 cents. But systemic, political, and fiscal stagnation breed paralysis. A 2011 Brookings report describes the problems that plague the country’s infrastructure decision-making process: the failure to use cost-benefit analyses in assigning funds; a political system that spreads federal money across jurisdictions regardless of need; multiple governing bodies and regulations that stifle new initiatives.

There is little agreement — or, often, understanding — about how to select, prioritize, and fund the many projects within the rubric of “infrastructure.” One reason for that lack of consensus is that the federal share of infrastructure spending barely exceeds one quarter of the total. The overwhelming proportion is financed by state and local governments; that includes sewers, public transit, drinking water-supply systems, the electrical grid, and most roadways.

Recently, innovative cities like Los Angeles and Detroit have started investing heavily in their transportation network — with public support. Yet voters nationwide tend to think that only the federal government has the money required to address our infrastructure crisis — and many oppose federal spending as inherently wasteful and excessive.

In reality, money for infrastructure can come from several sources and can be raised in different ways. There is direct spending by a federal, state, or local government, allocating money budgeted for infrastructure. There are tax-exempt bonds issued by states and local governmental bodies, allowing them to raise more money. Gas taxes can finance federal and state roadways.

Where those methods are fiscally or politically problematic, in certain circumstances government can resort to public-private partnerships. Here, instead of a public agency engaging different companies to complete aspects of a project, the agency contracts with a consortium to carry out the entire project — saving time and money. In some cases, the private partner will put up the capital needed.

These partnerships are not a panacea, however. Unless the agency involved pledges repayment from public funds, only projects that generate revenues in the form of tolls or other user fees will attract a private partner. Tax breaks by themselves won’t do the trick if investors can’t realize a profit. Still, such partnerships expand the financing options. The only formula for kick-starting a given project should be: whatever works.

Which brings us to our current realities — including the crisis of national leadership. Politically, infrastructure is Donald Trump’s natural turf. But he has squandered the moment on his misbegotten repeal-and-replace health care quest and upper-income tax cuts. So “whatever works” requires the hardest thing of all: a bipartisan program which addresses infrastructure at every level of government in a multifaceted and realistic way.

Prospects are dim. While its details are vague, Trump’s approach seems to rely on private projects that will generate a revenue stream. Senate Majority Leader Mitch McConnell decries “a trillion dollar stimulus.” GOP conservatives oppose any plan that’s not “revenue neutral.”

Much of the Republican Party’s suburban and rural base is indifferent to urban necessities like improving mass transit. Congress fears raising gas taxes to finance federal highways. Even Trump’s budget director opposes increased funding. Thus the prospect of salvaging our infrastructure, while bipartisan in theory, is menaced by polarization and presidential dysfunction.

America needs a massive but flexible initiative. The federal government must play a leading role in funding vital multi-state and local projects. States and localities must have more power to determine and finance urgent needs. Tax credits must be utilized with discernment to encourage private investment.

And, for once, Trump must grasp the details and exercise presidential leadership, mounting a compelling argument for making America’s infrastructure great again.

Richard North Patterson’s column appears regularly in the Boston Globe. His latest book is “Fever Swamp.” Follow him on Twitter @RicPatterson.

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