Issues & Insights

Infrastructure Needs Greater Private Investment, Not More Taxpayer Funding

Tyler Simmons

 

The debate over “infrastructure” is seemingly never-ending. Lawmakers and pundits cannot even agree what the word means, and some would stretch the definition to include well … pretty much everything. Perhaps the most contentious issue is how to properly fund America’s transportation priorities and ensure a stable financing system that persists long into the future.

Any new legislation is poised to break the bank, and even a “bipartisan” compromise being floated would cost taxpayers more than $1 trillion over eight years. Policymakers can keep deficits under control by identifying low-cost transportation systems that rely on private innovation, rather than government funding, to move forward. Many private systems such as freight rail lines could save governments a fortune while ensuring that innovation stays on the move. America can be home to world-class infrastructure that does not saddle future generations with trillions of dollars in red ink.

Lawmakers are busily trying to identify “core” infrastructure spending priorities in order to lower the price-tag on any spending bill to gain bipartisan support. In winnowing down the spending, though, they face the unfortunate reality that America’s sprawling network of roads and bridges are in lackluster shape and expensive to maintain. It is estimated that around $500 billion will be needed to fix some of the most pressing problems keeping drivers and goods from reaching their destination.

These expensive problems can be mitigated by considering multiple modes of transportation instead of just a handful. For example, America’s 140,000-mile network of freight railroads moves a wide array of commercial and consumer goods across the country without the need for massive taxpayer subsidies. When the Obama administration approved $600 million in taxpayer funds for America’s railroads, it was considered a “significant” federal infusion into freight rail. But that $600 million pales in comparison to the tens of billions of dollars annually spent on virtually all other methods of transportation.  

Instead of using taxpayer dollars, lawmakers need to think long and hard about how to turbocharge investments into these privately funded rail systems. Regulations can derail even the most promising infrastructure plan and make investors wary before pouring dollars into these ventures. Unfortunately, some House lawmakers appear to be headed in the wrong direction with onerous new rail regulations such as proposed crew size requirements. This requirement would significantly increase the cost of rail infrastructure in the U.S. without any real evidence that the measure would improve safety. In fact, when the Federal Railroad Administration proposed a (now pulled) rule that would mandate two-member crews, it admitted it “cannot provide reliable or conclusive statistical data to suggest whether one-person crew operations are generally safer or less safe than multiple-person crew operations.” 

Evidence to date shows that equipment and track improvements, as well as automation, are far more important to rail safety than crew size. Mercatus Center senior research fellow Patrick McLaughlin and Regulatory Studies Center research professor Jerry Ellig concluded in a 2016 analysis that the decline in freight accidents since the 1970s is due to deregulation that has allowed companies to invest in key capital improvements. Crew size mandates and similarly narrow provisions would actually hinder the House’s own stated goals to “create millions of good-paying jobs, restore our global competitive edge, reduce carbon pollution that drives the climate crisis, and make our communities safer, more equitable, and better connected.”

By now, the theme should be a familiar one. Getting the government out of the infrastructure business is a far better approach to maintaining and improving America’s transportation system. Embracing this low-cost approach is more important than ever, given the surging national debt. Taxpayers now owe the government more than $28 trillion, a gargantuan bill that amounts to more than $215,000 for each and every household. If policymakers cannot get our nation’s infrastructure on firmer fiscal footing, there’s little hope that Washington, D.C., can tackle even larger issues such as out-of-control defense and entitlement spending.

Now’s the time to embrace an affordable approach to infrastructure spending that empowers private investment rather than overstretching taxpayer dollars.

Ross Marchand is a senior fellow for the Taxpayers Protection Alliance.

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