Infrastructure and Regulation

January 29, 2018

The other day, the Wall Street Journal looked at the Trump administration’s efforts to reduce the costs of building infrastructure:

The administration is hoping to roll back regulations in place for decades to reduce the period between project approval and construction, limiting environmental reviews and litigation in favor of getting big things built.

The effort is likely to face resistance from environmental groups and their Democratic allies in Congress. But the president’s advisers believe they can alter the permitting process in ways that change how the government builds roads, bridges, rails and pipelines for years to come. “ … I think one of the most important things this administration can do is take permit delivery times from what is now an average of 4.7 years down to two years,” said Alexander Herrgott, the lead infrastructure aide on the White House’s Council on Environmental Quality…”

… Previous presidents have tried to streamline the federal permitting process as a way to jumpstart rebuilding of the nation’s critical infrastructure. That includes President Barack Obama, who signed the FAST Act in 2015, a bipartisan transportation funding package that created a federal permitting improvement council aimed at speeding up the environmental review process.

Mr. Trump and his aides have cited studies suggesting that environmental review can often take a decade, and calling for that period to be reduced to two years. A Government Accountability Office study of the environmental review process in 2014 cited third-party estimates that reviews average 4.6 years.

We will hear more about Trump’s infrastructure approach in his State of the Union message tomorrow night. So far it appears the approach combines:

  1.  government spending increases, as I noted,
  2.  deregulation, as the WSJ noted,
  3.  privatization, as with Trump proposals for air traffic control and federal electricity assets, and
  4.  corporate tax cuts to boost private-sector infrastructure investment.

Approaches 2, 3, and 4 are very positive. Approach 1 is not.

More on permitting here. More on infrastructure policies here. More on privatization here.


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