No Money, No Sense: On the Infrastructure Bank
This morning, the House Transportation and Infrastructure Committee’s Subcommittee on Highways and Transit held a hearing on the President Obama’s infrastructure bank proposal. In September, the president announced this solution as part of his plan to get America’s economy back on track.
Though not an entirely novel concept, the idea is that by funding massive projects to improve our national highways, water systems and energy infrastructure, jobs will be created and the economy will rebound. This $10 billion project would be overseen by a new bureaucratic entity, the American Infrastructure Financing Authority (AIFA).
Defenders of the proposal claim the bank is necessary to put Americans back to work. The president, in calling for Congress to pass his American Jobs Act and the infrastructure bank plan included within it, proclaimed it is time to “build an economy that lasts.”
But as my colleague Wayne Crews observed, the infrastructure bank idea is fruitless idea:
Government money is a trap, with labor and environmental strings attached. It promises to crowd out, reduce and degrade American infrastructure.
America does desperately need “infrastructure wealth”; we need it just as we need financial wealth, real estate wealth, manufacturing and service wealth, and health-care wealth. But like all wealth creation, the root is enterprise and property rights.
Indeed, the course necessary to move the country out of the economic doldrums does not involve a new federal infrastructure bank, but instead lies in removing obstacles to infrastructure development and wealth creation by:
Liberaliz[ing] network and infrastructure industry regulation generally; Our great infrastructure firms are artificially segregated into regulatory silos (telephone, electricity, water, sewer, cable, railroad, airline, air traffic control). They could collaborate on new power lines, fiber to the home, roads, bridges, airports, satellite systems, toll roads and more to bring capitalism and infrastructure wealth creation to an unprecedented level.
Gary Ridley, secretary of the Oklahoma Department of Transportation, observed that regulatory reform is critical to accelerating project delivery and putting the construction industry back to work. Such reform, he noted, would speed up infrastructure projects considerably. Fortunately, some ideas are under consideration in Congress to do precisely that.
One example is Rep. Calvert’s (R-Calif.) Reducing Environmental Barriers to Unified Infrastructure and Land Development Act of 2011, or REBUILD Act. This legislation would allow states to assume responsibility for ensuring compliance with NEPA environmental requirements in the approval process for infrastructure projects. Such an arrangement could cut significant amounts of time off the review process thereby saving resources and ensuring more rapid construction of these projects.
Congress should heed the advice of Mr. Ridley and others and focus on removing regulatory roadblocks to infrastructure build out and job creation.