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Opinion

Rather than pour trillions into infrastructure funding, the feds should get out of the way of private investment

It’s almost as if the government wants to favor government-owned infrastructure over private sector infrastructure.

“It must be infrastructure week” has become a bit of a joke among political insiders in recent years. It began during the Obama administration, when President Barack Obama seemed to use infrastructure speeches to change the subject when things weren’t going well, but it has become full-on joke during the Trump years, when every time the Trump administration has tried to build momentum for an infrastructure agenda, the president himself has blown up the carefully planned news cycle with some shocking tweet or outrageous comment.

And we have finally gotten to the point during this COVID-19 muted presidential campaign when both candidates have rolled out their big infrastructure plans. President Donald Trump is (once again) talking about a $1 trillion infrastructure plan to stimulate the economy, while Joe Biden’s plan ups the ante to $1.3 trillion.

Seeing these numbers and hearing all this rhetoric, you would be forgiven for thinking that the federal government is in charge of most of the nation’s infrastructure. But you would be wrong.

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In fact, the federal government owns just 3% of the nation’s infrastructure. State and local governments and the private sector own the remaining 97%. So the federal government owns only a tiny bit of the nation’s overall infrastructure stock.

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State and local governments own the majority of the nation’s roads and bridges, and of course government buildings such as schools. But the private sectors owns the vast majority (about 85%) of “critical infrastructure” as defined by the Federal Emergency Management Agency. Critical infrastructure includes roads, pipelines, utilities such as water, gas, electric and waste management, railroads, communications networks and airports.

This decentralized ownership of infrastructure is a strength, not a weakness, in a large nation with a dynamic, free-enterprise economy. But the federal government, while owning just 3% of the nation’s infrastructure, is the tail that wags the infrastructure dog because of its impact on infrastructure projects.

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Federal laws and regulations raise costs and slow construction of infrastructure projects. Many projects cannot be undertaken until receiving permission from federal regulators seemingly intent on stopping development. The average time for the Environmental Protection Agency to complete environmental review for infrastructure projects has risen from 2.2 years in the 1970s to almost 7 years today. That’s years, not weeks or months.

The Davis-Bacon Act, a relic from 1931, requires projects receiving federal funding to pay prevailing union wages, which can increase costs of any infrastructure project touched by the federal government.

And federal funding tends to come with strings attached and new regulations that seem designed to hinder, rather than accelerate, infrastructure development. For instance, the Democrat-controlled House of Representatives recently passed the $1.5 trillion Moving America Forward Act, which provides generous funding for roads and bridges, which are government owned, but would place severe regulatory restrictions on America’s freight rail network, which is privately owned. Among other things, the legislation would mandate larger crews than necessary to suit the demands of unions, effectively ban the transport of liquefied natural gas by rail, and even slap a one-size-fits-all regulation on each of the nation’s 200,000 grade crossings.

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It’s almost as if the government wants to favor government-owned infrastructure over private sector infrastructure.

It’s not just the federal government that gets in the way of infrastructure development. Months and years of local government permitting delays became such an obstacle to the rollout of wireless services that the Federal Communications Commission finally had to impose a 90-day shot clock on local permitting of cellphone towers and improvements.

And here in Texas, the last several legislative sessions have featured ill-advised attempts to make legitimate uses of eminent domain more difficult and expensive, which would make it much harder and more expensive to build the pipelines Texas needs to move oil and gas from the Permian to refineries and export facilities on the gulf.

The vast majority of America’s infrastructure is privately owned and funded through private investment capital. America’s private sector has demonstrated a willingness to build the pipelines, railroads, communications networks and other infrastructure a growing population needs, without reliance on the taxpayer.

But it seems that too often the main role of government in America’s infrastructure is to slow it down, make it more expensive, frustrate efforts by the private sector to keep up with America’s growing population and favor government infrastructure while regulating the private sector.

If we really do want America’s critical infrastructure maintained, modernized and continually expanded, instead of borrowing and spending trillions of dollars on a small portion of our overall infrastructure, the most important thing government at all levels could do is just get out of the way.

Tom Giovanetti is president of the Institute for Policy Innovation. He wrote this column for The Dallas Morning News.