Politics & Policy

Trump’s Infrastructure Opportunity

Aerial view of the 10-110 freeway interchange in Los Angeles, Calif. (Reuters photo: Eric Thayer)
The administration’s plan, soon to be released, could unleash private partnerships and reduce Washington’s role.

Editor’s Note: The following piece originally appeared in City Journal. It is reprinted here with permission.

Presidents ritually lament America’s decaying infrastructure and promise to improve it — and they’ve failed every time. But now there’s finally someone in the White House with a workable strategy. The Trump administration really does know how to make infrastructure great again: get the federal government out of the way.

Whether Donald Trump will actually follow this strategy won’t be clear until the White House releases the details of its infrastructure plan, expected in the next several weeks. But if he follows the guiding principles already put forth by his administration — and can somehow persuade Congress to go along — he could start undoing the costly mistakes that have left the country with dilapidated bridges, deteriorating transit systems, and congested highways.

In previews of their infrastructure initiative, administration officials have promised to shift responsibility back where it belongs: to the cities and states that benefit from these projects. The administration has vowed to streamline the federal permitting process, to ease other regulations that have blocked projects, and to change policies discouraging local governments from partnering with the private sector. The goal is to stimulate grassroots creativity along with $1 trillion in spending, as Trump promised during his campaign, with most of the money coming from user fees and local tax dollars, not Washington.

This philosophical shift appalls many members of Congress, especially Democrats who want to go on showering federal largesse on their union supporters, but it’s the only practical way to pay for the necessary work. It’s also the only way to force localities to focus on cost-effective projects, instead of squandering other people’s money on boondoggles like the infamous “bridge to nowhere” in Alaska or the bullet train to nowhere in California.

Making local taxpayers and users pay for their bridges, roads, and transit systems may sound radical, but it was the standard approach during America’s rise as an industrial power in the 19th and early 20th centuries. New York built the Brooklyn Bridge and the subway system on its own, mostly by relying on private companies. Why should it need help from Washington just to maintain them? Why should taxpayers in Texas subsidize the outrageously inflated costs of running and upgrading New York’s subway system? If New York politicians want to reward campaign contributors and union supporters with sweetheart contracts, they should give the bill to their own constituents.

Washington didn’t take on a major infrastructure role until the Great Depression, when both Herbert Hoover and Franklin Roosevelt justified federal programs as a way to combat unemployment and promote economic growth. Those rationales are still used today despite the abundant evidence, most recently from the Obama administration’s stimulus program, of how ineffective such federal spending is. Politicians of both parties like to believe that it takes wise central planners to coordinate a nation’s infrastructure — a myth typically justified by pointing to the interstate highway system, begun by Dwight Eisenhower in the 1950s and lauded by its boosters ever since as “the greatest public-works project in history.”

The interstate system is the most powerful illustration of how a perfectly sound and seemingly simple project can be ruined by central planners.

In reality, though, the interstate system is the most powerful illustration of how a perfectly sound and seemingly simple project can be ruined by central planners. There was no need to nationalize highways, which had traditionally been a state responsibility. Pennsylvania and other states pioneered the expressway era with their own network of turnpikes, which generated plenty of revenue to maintain the roads while repaying the bondholders who financed them. But then Eisenhower and Congress, arguing that a highway network was necessary for national defense, concentrated money, power, and decision-making in Washington.

The new interstate system, financed by gas taxes, seemed to work well at first. Drivers marveled at how they could zoom on open highways without stopping at traffic lights or toll booths. But the interstates were ultimately doomed by the inherent inflexibility and political deal-making of a centralized system. The highways were needlessly expensive, particularly in cities. In order to get urban members of Congress to go along, Washington bribed them with extra money to build highways that obliterated neighborhoods; the projects would never have been built if cities and states had been spending their own money. The damage to cities was compounded by Washington’s one-size-fits-all requirements to build highways with wide lanes and shoulders — an attractive safety feature for an expressway through the prairies of Kansas but one that doesn’t make sense in a dense urban neighborhood. Worst of all, the central planners outlawed tolls on new federally funded highways, thus preventing states from using a financing mechanism that would have ensured proper long-term maintenance and could be used to reduce congestion at peak times.

The result, half a century later: a highway system that no longer works. It’s horribly congested and in bad shape physically. Much of the system needs to be rebuilt because the highways are at the end of their useful life, yet there’s not even enough money to maintain the existing roads. That’s partly because gas taxes haven’t kept up with inflation and partly because Congress has been raiding the highway “trust fund” for non-highway projects like transit systems, museums, bike paths, and trails for snowmobiles and horses.

But that’s also the good news: The shortage of government revenue means that politicians must look for alternative sources. They’ve turned to private companies to maintain and build highways in Virginia, Indiana, Florida, Colorado, Texas, and other states. These public–private partnerships aren’t a panacea for America’s infrastructure problems, but they have remarkable potential. They’re common around the world, where many roads are financed, built, and run by companies that recoup the investments through toll revenues. In America, they’re rarer because of federal policies, but if Trump can persuade Congress to remove these obstacles, investors will be ready to back more American projects.

What’s needed is a new kind of highway system: Interstate 2.0, as Robert Poole of the Reason Foundation calls it, which could ease traffic jams by using congestion pricing at peak times and create separate lanes especially built for huge trucks. Building it requires giving the states freedom to innovate, as Poole and other reformers have been urging for decades — unsuccessfully, for the most part, because Washington has been reluctant to surrender its stranglehold on transportation policy and funding. But now it’s the White House pushing the reforms.

“This is the first time any administration has taken a serious look at rethinking the role of the federal government in infrastructure, especially transportation,” Poole says. “In its first year, the Trump administration has appointed good people and enunciated sound federalist, market-oriented transportation principles. But the acid test will come when we see how much congressional support can be won for the administration’s new infrastructure plan.”

Winning support will be difficult, and not only because so many Democrats are loath to give Trump any kind of legislative victory. Many Democrats still cling to the progressive belief that infrastructure should be managed by central planners, and members of both parties want to go on dispensing federal grants to their districts. Pork-barrel spending is always good politics, especially when the money is going for something that sounds as virtuous as a bridge or transit system. But if Congress really wants to improve America’s infrastructure, it should turn the job over to someone else.

READ MORE:

What Sort of Infrastructure Bill Does the White House Want?

Trump’s Confused Infrastructure Strategy

A Majority of Infrastructure Spending Is Private

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