Infrastructure in Divided Congress Must Include Regulatory, Permitting Reforms

Even before the results were in, the election-night talking heads were speculating on what, if anything, congressional Democrats and Republicans can agree on and get done. Several offered up infrastructure as one example. No doubt, a bipartisan 2019 infrastructure bill is entirely possible, but there are philosophical differences on how to go about it that need to be addressed before any real progress is made.

For most Democrats, the approach to infrastructure is straightforward—dole out federal tax dollars to support popular projects favoring particular states or districts. More than enough Republicans will likely go along with such an approach—as long as they get their cut—to make an infrastructure bill possible.

But for other Republicans, the solution to infrastructure has less to do with federal spending and more to do with removing regulatory and permitting barriers to privately-funded infrastructure projects. They argue that tax dollars often aren’t needed, but rather a reduction in red tape to stop discouraging for-profit builders. For its part, the Trump administration has taken steps to reduce the regulatory burden and has proposed a number of important permitting reforms.

For example, the Obama-era Environmental Protection Agency decided to unilaterally block two mining projects, the Pebble Mine in Alaska and the Spruce Mine in West Virginia. What made this so objectionable is that these projects already must go through a lengthy and difficult federal permitting process under the National Environmental Policy Act (NEPA). Rather than participate in the NEPA process, the EPA decided to set up its own independent review and rejected both projects.

Fortunately, the Trump administration took notice of these and other redundancies that strangle major projects, and proposed reforms requiring “one federal decision” on project approvals. And the Trump EPA has promised regulations to stop any repeat offenses by the agency.

However, only certain regulatory and permitting reforms can be imposed administratively. Others have to happen through legislation, and that is why any infrastructure package should include them.

One contentious roadblock is the insistence by some that any proposed infrastructure project must be reviewed for its potential impact on climate change. For example, coal export terminals and natural gas pipelines have been blocked by green-leaning governors for this reason. This additional layer of red tape, if not reined in, will greatly discourage infrastructure development over the long term, and probably more so than any spending spree can encourage it.

Simply throwing more public money at infrastructure is not enough. Republicans should insist that any infrastructure package include substantive regulatory and permitting reforms as well.