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January 29, 2018

Cutting Red Tape Key to Trump’s Infrastructure Push

President Trump is widely expected to make infrastructure a major focus of his upcoming State of the Union address and a legislative priority in 2018. He has good reason to do so: the nation’s roads, bridges, waterways, and airports are in dire condition, there is broad bipartisan support to fix them and infrastructure investments generally pay off handsomely.

But if the U.S. government wants to get the most bang for its buck, economists, businesses, unions, and politicians on both sides of the aisle are increasingly in agreement that regulatory reform needs to be part of the deal. Doing so will cut down unnecessary bureaucratic delays to ensure these infrastructure projects are done quickly, efficiently, and cost effectively.

A recent report from the American Council for Capital Formation (ACCF) highlighted rampant regulatory hurdles to President Barack Obama’s own infrastructure-heavy stimulus package, the 2009 American Recovery and Reinvestment Act, which was hamstrung from the start by a web of redundant and excessive permitting requirements.

These issues were highlighted by Cass Sunstein, Administrator of the White House Office of Information and Regulatory Affairs during the Obama Administration, who described the regulatory status quo as “The Blob.” Obama himself famously said “there’s no such thing as shovel ready projects.”

Unfortunately, he was right.

This web of decades old regulatory buildup, confusing and conflicting agency authority, and state and local replication of rules means that large infrastructure projects in the U.S. normally require 6 to 10 years of battling through a costly and unnecessarily labyrinthine authorization process while battling expensive lawsuits.

One of the major problems is that there is no single entity in charge of project approval.  Rather, the process involves as many as a dozen agencies on the federal, state, and local levels who have the authority to delay projects, politicize permit approvals, and value short term PR boosts over the long term greater good.

Compare that entangled mess to a streamlined two-year process in Germany and Canada which allows those countries to build and maintain projects for a fraction of the costs shouldered by American taxpayers, according to a study from Common Good.

Environmental reviews alone have expanded so much that they now take 6.6 years on average for each project, according to a study by the Federal Highway Administration, and the resulting impact statements run to hundreds of pages.

The incentives for agencies and local activists to drag out these reviews have grown steadily over the years, to the point that approvals of wildlife habitat restoration and green energy projects have been slowed to a crawl, ironically increasing emissions and diverting funds from worthwhile projects into jumping through legal hoops.

Meanwhile, our infrastructure is failing fast enough to receive a C rating or below in all but one category in the American Society of Civil Engineers’ 2017 Infrastructure Report Card.

President Trump has promised to make American infrastructure great again. But increasing funding alone won’t get the job done. Our nation’s need for new and upgraded infrastructure is vast and that means every dollar needs to be well spent.

The Administration’s draft infrastructure platform recently published by Axios this includes a bold and necessary first step: expanding the use of permit fast tracking under an Obama-era law. But a top down overhaul is necessary if President Trump is going to avoid the pitfalls that doomed previous efforts and follow through on his promises to undue decades of regulatory pileup.

An infrastructure bill like this provides a once-in-a-generation opportunity to reform a broken regulatory system into one that serves the common good in a transparent, accountable way based on solid reproducible science.

We need to take a hard look at why our infrastructure lags behind the rest of the developed world and ensure that a new infrastructure bill doesn’t fall victim to that same broken system.