Infrastructure Spending and the Charleston Seaport

September 23, 2016

George Will’s oped the other day argued that Congress should hurry up and fund an expansion in the Charleston, South Carolina, seaport. But his piece revealed why the federal government should reduce its intervention in the nation’s infrastructure, not increase it, as Clinton and Trump are proposing.

The Charleston seaport has become crucial to South Carolina’s economy. Will notes that “1 of every 11 South Carolina jobs — and $53 billion in economic output are directly or indirectly related to Charleston’s port.”

There is a problem, however. The Charleston seaport:

needs further dredging in order to handle more of the biggest ships, which is where Congress enters the picture: Unless it authorizes the project and appropriates the federal portion of the $509 million cost to augment South Carolina’s already committed $300 million, the project will be delayed a year. The deepening project is only 14 percent of the $2.2 billion South Carolina is investing in its port facilities and related access.

The biggest ships pay more than $1 million to transit the [Panama] canal; if they miss their transit time, their fee is doubled. Until the port is deepened, too few can be handled here simultaneously, and they can enter and leave the port only at high tide.

Right. It is crucial to South Carolina’s economy to expand the seaport right now without delay. So one would think that state politicians and port-dependent businesses would be springing into action and funding the full port expansion themselves. But they don’t because they are waiting for federal subsidies. Federal intervention into the seaport industry is apparently slowing progress, not speeding it up.

Will says:

There is no controversy in Congress about this project. But unless Congress acts on it before the end of the year, the deepening will not be in the president’s 2018 budget and will be delayed, with radiating costs — inefficiencies and lost opportunities. This a mundane matter of Congress managing its legislative traffic, moving consensus measures through deliberation to action. It will illustrate whether Congress can still efficiently provide public works to enhance private-sector efficiency.

I’m surprised that the astute and pro-market Will missed the obvious solution to the problem he laid out. The federal government is in deep gridlock, and probably will be for years to come. It cannot “efficiently provide public works,” and it rarely has in the past. There never was a golden era of federal efficiency. Army Corps of Engineers infrastructure investment, for example, has been pork barrel for more than a century. And today, we see similar investment-delay problems with numerous areas of federal infrastructure involvement, such as air traffic control.

The solution to the inefficiency that Will rightly criticizes is devolution of infrastructure spending and control out of Washington, optimally to the private sector. Margaret Thatcher privatized most British seaports, and Tony Blair privatized British air traffic control. Privatization is a good way to meet America’s infrastructure challenges as well. Charleston’s seaport is “booming” according to Will, and thus it should have no problem attracting private financing for expansion.

For more on privatization, see here.


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