Biden’s infrastructure package offers too little bang for the buck

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President Biden called the $1.2 trillion Infrastructure Investment and Jobs Act a “monumental milestone” that will create millions of jobs. Like too much of what he says, this claim is more than an exaggeration – it’s simply untrue.

The country was once capable of period tasks – the Transcontinental Railroad, the Hoover Dam, and the Eisenhower Interstate system, but now it seems more inclined to fulfill social roles than fix roads.

Washington lacks a sense of proportion and purpose.

Last year, the American Society of Civil Engineers estimated the country’s investment gap for improving roads, bridges, airports and the like at $2.7 trillion. The implicit cost imposed by congestion, excessive travel time and other inefficiencies is $500 billion in lost GDP each year.

Although the Biden administration borrowed to spend $1.9 trillion in a single year on the US bailout — much of those simple cash payments to families that spurred inflation — the bipartisan package will only add only $550 billion in fresh money for infrastructure investment.

True, Mr. Biden wanted to spend more and ran into Republican opposition. He could have used reconciliation to achieve most of his original goals, but opted to keep his powder dry for the stillborn Build Back Better program.

Moody’s Analytics estimates that the infrastructure package will increase labor productivity by 0.03% and GDP by $39 billion by 2031 and permanently create 75,000 new jobs.

Much of the money will be spent solving yesterday’s problems and creating new ones.

$7.5 billion is being spent on building a nationwide network of electric vehicle charging stations. Along with stricter mileage standards, this should artificially accelerate the transition from gasoline vehicles.

By pushing electric vehicles onto the road sooner than cost-effective battery technology is ready, Americans will pay thousands more for new cars and trucks. Whether subsidized by tax credits or funded by motorists, these higher prices represent resources that could be devoted to other more productive and inflationary investments.

Electric vehicles have far fewer components and battery technology is more advanced in China and Korea. The shift in sourcing and the reliance on overseas engineering will significantly reduce the 873,000 employees who manufacture automobiles in the United States.

Americans will see new subway stations and some improvements in transit reliability, but not to the extent necessary. Like roads, pipelines, and the power grid, building public transit is often more expensive and less technologically advanced here than it is abroad.

It’s easy to blame the unions – the prevailing Davis-Bacon law contract labor rules and wage requirements add about 20% to the cost of projects. However, this is not enough to explain why a new subway station in New York costs three times what it costs in Paris or London. Or why the $66 billion spent on intercity rail is far too short to adequately upgrade Amtrak’s Northeast Corridor, provide high-speed rail that rivals overseas service, or solve other passenger rail transport across the country.

The infrastructure plan targets the most overloaded bridges that are choke points for the movement of goods – for example, the George Washington Bridge on I-95 and the Horace Wilkinson Bridge in Batton Rouge – but the expansion of these arteries require the displacement of commercial spaces and residents. And it puts a magnifying glass on the country’s woefully abused permitting, zoning, environmental assessment and community engagement systems.

These have legitimate purposes but are often taken out of sequence, stretching out approval processes that should take months to years. But by increasing costs, they often limit the number of affordable upgrades to a few essential facilities.

Gone are the days when federal highway planners could bulldoze neighborhoods, often imposing disproportionate costs on working-class and poorer residents. However, warranties tend to frivolously expand the scope of amenities — oversized platforms, redundant elevators, fancy landscaping, bike lanes, and the like. And because projects are becoming so spaced out, many cities are unable to develop permanent resident expertise in competent project management and design.

An appropriate solution to addressing legitimate environmental and political concerns – and limiting the tools available to outright obstructionists – would be to streamline permitting processes.

Require that all of the above proceedings be settled in a single forum and reviewed by a single court within one year. A federal agency and forum similar to the U.S. International Trade Commission, which has firm timelines, for example, to review intellectual property issues, could be created with the possibility of a single federal court appeal. .

We don’t need to be rigorous like autocratic China, but at the same time, we don’t need to run infrastructure projects like a Gilbert and Sullivan opera house or our wacky universities. Otherwise, the nation simply cannot compete.

• Peter Morici is an economist, professor emeritus of commerce at the University of Maryland and national columnist.

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