By Scott Beyer, April 7, 2014
This past February, while declaring that infrastructure shouldn't be
politicized, President Obama underscored its increasingly ideological
nature in the United States. "Infrastructure shouldn't be a partisan
issue," he said
in front of a recently renovated St. Paul, Minnesota, train station.
"Unfortunately, there have been some Republicans in Congress who refuse
to act on common sense proposals."
In theory, infrastructure is not partisan, since both parties agree
that it is highly necessary, and severely under-maintained. The divide
is over which level of government should operate it. Since 1956, when
the federal highway fund was formed, building transportation
infrastructure, in particular, has been mostly a federal task, funded at
80 percent levels by the federal gas tax. But recent estimates suggest
that the fund could soon run out, prompting the President that day to propose a new $300 billion plan.
Republicans, however, have long wanted to reduce Washington's role in transportation, most recently through a bill that would nearly repeal the gas tax.
They argue that by collecting this revenue and redistributing it to the
states, the federal government now functions as a wasteful bureaucratic
top layer, and that if states could just keep the revenue, more would
go towards actual construction. A closer look at existing federal policy
strengthens their point.
In 2005, the Cato Institute published Gabriel Roth's paper "Liberating the Roads,"
which detailed some of the federal government's inefficiencies. It
included a statement by former Federal Highway Administration head
Robert Farris, who estimated that Washington's role in transportation
adds 30 percent to costs. This figure is remarkable, since roughly $40
billion is spent annually from the highway fund, suggesting billions in
waste. By Farris' tenure in the late 1980s, Washington was already
imposing expensive transportation regulations, and many have since been
strengthened by Obama. Here are some particularly costly ones:
1. Davis-Bacon Laws: Passed in 1931,
the Davis-Bacon Act mandates that laborers for federal public works
projects receive local prevailing wages. Meant to elevate the pay of
carpenters and mechanics, the law today dubiously elevates costs. The
Labor Department determines these wages not through comprehensive Bureau
of Labor Statistics data, but a special bureaucracy called the Wage and
Hour Division. It is known for conducting byzantine local pay studies
that delay construction, and favor union wage scales. Thus it has,
according to a study from the conservative Heartland Institute, calculated prevailing wages at 22 percent above BLS figures, forcing higher prices.
2. Project Labor Agreements: In 2009, President Obama
signed an executive order mandating that contractors for federal
projects exceeding $25 million sign Project Labor Agreements, which
guarantee the hiring of union workers. These prearranged deals are meant
to quell labor disputes, but in practice can act more as a solution in
search of a problem. According to a National University System Institute study, their use on school projects has raised construction costs by 13 to 15 percent.
3. 'Buy America' Provision: For decades, this provision has discouraged projects from being built with manufactured goods made outside the U.S. Obama strengthened
it in the 2009 stimulus package to include projects besides just
highways. One condition for ignoring the provision is if it increases
costs by 25 percent—suggesting that its inefficiencies were already
recognized, but that it was passed anyway out of political favoritism.
4. Lengthy Environmental Reviews: The National
Environmental Policy Act, signed by President Nixon in 1970, requires
environmental impact reviews for federal projects. While these reviews
address important factors like runoff and pollution, they can also be
used by NIMBYs to encourage delay and litigation. NEPA studies are also
sometimes redundant in light of state-level reviews, causing the
approval process for some projects to extend 10 to 15 years. Last year, President Obama bypassed Congress to strengthen NEPA through executive order.
5. Transportation Alternatives Program: Everyone
can agree that walking trails, complete streets, historic renovations,
landscaping, and bike lanes are public goods, but should they be paid
for with highway fund money? This is the current policy of the FHWA,
which funds trails and bike lanes through its Transportation Alternatives Program,
often making these sorts of projects conditions for approving larger
projects. Reasonable people might disagree about whether or not this
violates local autonomy, or strays from the fund's original mission of
enhancing mobility through roads and rail. But, by accounting for 2
percent of fund revenues, TAP undoubtedly raises expenses.
6. Administrative Costs: Currently, U.S.
transportation revenue is like a boomerang, going from the states to
Washington and back. Naturally, this process adds bureaucratic costs.
For example the FHWA, which is partly funded by the gas tax, spends over
$400 million annually on
administration. This is despite the fact that, by prioritizing for the
Department of Transportation which projects need funding, the agency
somewhat duplicates the tasks of state DOTs.
Roth estimated that
since 1956, the percentage of transportation revenue spent on
"administration and research" has nearly tripled, something he
attributed to a stronger federal role.
7. Toll Bans: Although tolls exist along some stretches of interstate, they are generally not permitted
by the federal government. This has diverted infrastructure costs away
from actual users of roads, making them more widely distributed. It has
also stripped the government of a key revenue source that could be used
for repairs, and for cheaper borrowing.
What these policies show is that federal transportation priorities
aren't solely about transportation. They address a variety of other
goals, from elevating wages to increasing unionization to encouraging
alternatives to lowering costs-of-living for the poor. But even those
who support such goals must acknowledge that funding them through
transportation policy can come at the expense of actually building or
properly maintaining infrastructure.