“This food is terrible!”
“I know—and such small portions!”
It’s an old joke, but one that encapsulates the dilemma facing our nation’s infrastructure, as Joshua Schank of the Eno Center noted at TCF’s latest conference, Building the Bridge: Solutions to the Infrastructure Crisis. Simply, we don’t have enough money to invest in the infrastructure we need, and the money we do have is poorly prioritized.
Hosted by TCF’s Bernard L. Schwartz Rediscovering Government Initiative, Building the Bridge brought together leading experts for a full-day conference on April 14 to discuss ways to solve the national infrastructure crisis.
From government to academia and think tanks to the private sector, a diverse group of panelists and speakers tackled this twofold problem. Together, they discussed innovative solutions to the infrastructure revenue issue, as well as ways to improve our infrastructure priorities to make investments more efficient.
TCF fellow Jeff Madrick, who leads the Rediscovering Government Initiative, kicked off the day with a sober appraisal of the infrastructure crisis. He noted that investing in public works has always been a political issue, even when the need for them has been eminently clear.
Following Madrick’s opening remarks, Rep. Earl Blumenauer (D-OR) delivered the conference’s keynote address. He called for an increase in the federal gas tax (which hasn’t been raised since 1993), noting that even conservative darling Ronald Reagan called on Congress to raise it in 1982. Blumenauer also proposed an eventual move away from the gas tax toward a tax on Vehicle Miles Traveled, which would address the increasing fuel efficiency of the cars on our roads. You can watch his entire speech here:
The first panel discussion of the day addressed the twin issues of infrastructure funding and financing. Panelist Aaron Klein of the Bipartisan Policy Center noted that the terms are often confused, but represent two very different conceptions of who should pay for a piece of infrastructure over its lifecycle. Pointing to the declining value of the gas tax and the popularity of low-interest federal loan programs such as TIFIA, Klein remarked that the federal government is moving away from its role as an infrastructure funder and increasing its role as an infrastructure financier, traditionally a responsibility assumed by state and local governments.
Klein also cautioned against the assumption that the ban on Congressional earmarks has benefited infrastructure-spending priorities. Most money that the federal government grants to states, he noted, is now simply earmarked at the state level.
The discussion also focused on public-private partnerships (P3s), in which the private sector assumes a greater responsibility for the risks (and, occasionally, the financing) of a particular project.
While P3s have been touted as a solution to the infrastructure crisis by elected officials and the Obama administration, many have failed to live up to expectations in terms of the quality and cost of the project delivered. Panelist Joe Mysak, a journalist with Bloomberg, argued that the problem is not inherent in P3s, but rather in the asymmetry of expertise between private-sector investors and public-sector officials:
On the funding question, Klein questioned the wisdom of a “user fee,” which politicians often claim is the function of the gas tax. Instead, he suggested the idea of a “beneficiary fee.” Watch video from the first panel here:
Following a discussion on labor’s role in solving the infrastructure crisis, the White House’s Jason Miller–a deputy director on the National Economic Council–delivered an address on the progress made by the Obama administration to date. Noting that infrastructure investment has been a fundamental obligation of the federal government since the country’s founding, Miller encouraged a broad public-policy discussion on the topic and cautioned against falling victim to “the cynicism of the now”:
The second panel, “A New Agenda for Infrastructure,” brought together a binational group of experts to discuss the most promising innovations in infrastructure policy, both stateside and in Canada.
For starters, as panelist Sarah Jo Peterson of the Urban Land Institute noted, any discussion of reforming infrastructure-spending priorities must first recognize that Americans are deeply divided on the kind of environment in which they would like to live–which in turn affects the infrastructure they’d like to use.
Building on Peterson and ULI’s findings, panelist Matti Siemiatycki of the University of Toronto called on experts to engage the public in “meaningful consultations” on the infrastructure they’d like to see built, rather than making decisions from the top down. He noted that infrastructure advocates risk losing the support of citizens if projects aren’t built with the public’s priorities in mind.
Meanwhile, panelist Gabe Klein–the former head of both the D.C. and Chicago transportation departments–suggested that if governments were forced to consider the return on investment for every infrastructure project they build, money would be invested much more efficiently. Watch video from the second panel here:
Schank rounded out the conference proceedings with a lunchtime address that drew on “The Life and Death of the Highway Trust Fund,” a new report from the Eno Center that proposes, among other possible solutions, eliminating the Highway Trust Fund entirely. The Eno study examined how infrastructure is funded in several other developed countries, and Schank noted that most simply rely on their general funds, with no perceptible drop-off in spending. Such reforms, Schank suggested, would make infrastructure spending more accountable and innovative, while eliminating the problems that currently exist due to entrenched stakeholders. Watch Schank’s entire address below: