What’s Good and Bad in the Infrastructure Deal
(Bloomberg Opinion) -- The infrastructure plan advanced by the Senate and White House last week was a rare instance of bipartisan cooperation — something so scarce in Washington these days that it’s tempting to celebrate the proposal, regardless of its content, for that reason alone. Compromise is indeed indispensable for good democratic government. Sadly, this doesn’t change the fact that the proposal is seriously flawed.
The deal provides for $550 billion in new spending — on shoring up roads and bridges, bolstering transit and waterways, and reducing critical maintenance backlogs. It includes new investments in clean energy, climate resilience, high-speed internet and more. Much of this investment is needed. Also to its credit, the plan dispenses with some bad ideas aired earlier during the negotiations, such as a new infrastructure bank.
Nonetheless the package as a whole betrays little sense that its designers are concerned, first and foremost, with securing value for taxpayers’ money. Tens of billions are cast at goal after goal — and the main criterion for judging need appears to be “the more, the better.” The plan includes $39 billion for modernizing mass transit, $66 billion on upgrading railways (“the largest investment in passenger rail since the creation of Amtrak 50 years ago,” says the White House, not pausing to ask whether such a huge investment was needed), $17 billion for ports, $25 billion for airports, $50 billion on infrastructure resilience, and on and on.
To be clear, public investment in infrastructure has been too long neglected. There are serious shortfalls to make up and new needs to be met. But bundling a plan of this size into a single measure, with little thought for balancing costs and benefits and no concern for the challenge of spending such enormous sums effectively, is a mistake. Washington owes the people who’ll be paying for these investments a more careful accounting.
It doesn’t help that the politicians taking the lead can take credit for the initial announcements but have little or no stake in the eventual outcomes, good or bad. With lead times running into many years, the champions of this spending surge are unlikely to be around for the ribbon-cuttings. Spending across countless individual programs — and across multiple federal, state and city agencies — demands strong coordination, and more and better data. Congress could help bridge this management gap by creating an independent office to gather information, establish benchmarks and set priorities for infrastructure projects. As investments move forward they also need to be more thoroughly audited, so that lessons can be learned — a task that the Government Accountability Office should be mandated, and properly equipped, to carry out.
Value for taxpayers’ money also requires a singular focus on cost control. This is mostly absent from the proposal. In fact, many of its supporters intend the plan to cost more than it needs to — by means of “Buy America” provisions, rules on “prevailing wages,” and so forth.
The funding side of the plan compounds the problem. The designers are at pains to show that the proposal is paid for, but the schemes they set out are weak at best. No gimmick has been spared, ranging from the dubious ($6 billion from selling off assets in the Strategic Petroleum Reserve) to the potentially hazardous ($3 billion from “pension smoothing”). By one estimate, these measures would bring in only about half the revenue that the bill’s promoters claim.
Finally, the celebration of compromise might be premature. Many Democrats have pledged not to sign off on this deal unless a second proposal — a “human infrastructure” bill, costing at least $3.5 trillion and including seemingly every policy objective on the progressive wish list — also moves ahead. President Joe Biden has at times has seemed to support this pledge (sort of). In the end, the new bipartisan agreement might be subsumed as one part of a decidedly partisan and vastly bigger expansion of government spending. It’s enough to bring deal-making into disrepute.
Despite everything, that would be a pity: The infrastructure plan is a reminder, at least, of how U.S. politics can and should make progress — a possibility that was in danger of being forgotten. For weeks, senators from both parties set about building coalitions, making concessions, rallying public support and generally engaging in the give-and-take of normal politics, all in pursuit of a mutually beneficial compromise. That is how it should be — and the result, for all its flaws, was a lot better than earlier proposals had led one to expect.
A return to that kind of traditional negotiating is sorely needed. But compromise is not the only thing the country should demand of its government. Smart policy, minute attention to detail, and rigorous fiscal management are vital as well.
Editorials are written by the Bloomberg Opinion editorial board.
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