As money and power are increasingly concentrated in Washington, the line of supplicants stretches all the way to Monticello. That has created a “barbarians at the gate” mentality among the congressional conservatives and budget experts who guard the Treasury. Infrastructure advocates claim great benefits from public investment. But so do many others.
Pete Ruane, a veteran of the infrastructure funding wars, calls Washington a “fact-free zone.” The firewall that for 56 years has protected the federal highway trust fund from being used for deficit reduction is in grave danger of being breached. “We’re going to be fighting for every penny from this point on,” he says.
If not direct federal investment then what about tax credits and other leveraging tools? Advocates for these programs have been pulling their hair out for years over how tax credits are scored for infrastructure programs. There is no acknowledgement of the federal revenue upside created by public investment in mobility, safe water, etc. That’s not going to change easily because those scoring rules are embedded in the federal budget bureaucracy.
Because so much is political, members of the elite infrastructure technocracy in the U.S. too often are forced to bow to the politicians who dispense the subsidies. Compliance with unending regulations is seen as a cost of doing business, but taxpayers, not contractors, pay the full price.
U.S. construction companies are carrying a much heavier regulatory burden under the Obama administration than ever before. The Environmental Protection Agency is an untethered driver of regulations. Owners, public and private, are as likely to find themselves in court as under construction.
Enforcement actions under the various federal set-aside programs are up by 10 times in the past three years. Labor Department audits are up by 25 times.
“There is a huge new regulatory component to our work and more political impact,” says Bruce Grewcock, chief executive of Kiewit Corp., whose managers generate 50 million man-hours of craft labor a year. “The Obama administration is listening to a different audience,” he says.
Powerful advocates for smaller government charge that the federal public works budget is so skewed toward political ends and insiders that any increase in public investment from taxes or user fees should be opposed as wasteful. They have a large and growing audience of believers because they are partly correct.
Consider this from the director of a major U.S. infrastructure investment fund: “Every big transportation project in America is political now. It has very little to do with delivering infrastructure projects when there’s big money involved.”
He continues: “Lobbyists have found out that the money is at the project level, not in Washington. They add a political tone to everything, and they’ve convinced local governments that they need political influence to get anything done.” As a result, he says, too little gets built because too few decisions are made on the merits of a project.
We are at a crossroads. No amount of “needs” surveys will spur voters or politicians to support a major commitment to meet future demands for transportation, water, public buildings and other critical infrastructure services.
That will come when the public and private planners, designers, builders and operators of these facilities convince a skeptical public that they are getting the services they pay for at a fair price and without political favoritism. To do that, the infrastructure technocrats must take back their industry from the political operatives who promise subsidies but deliver mainly invoices.