Today’s Wall Street Journal discusses competing infrastructure spending bills making their may through the House and Senate respectively. After years of infrastructure programs laden with pork and bridges to nowhere coupled with a disastrous “stimulus bill,” which resulted in job loss instead of creation, it is important that investments in our nation’s infrastructure be both pro-growth and fiscally sound. Here are a few ideas on what needs to be included in a pro-growth fiscally sound infrastructure bill.
1. THE GOAL OF AN INFRASTRUCTURE BILL SHOULD NOT BE JOB CREATION.
Too often, the primary purposed of government spending is job creation. However, as with the stimulus bill, billions of dollars are spent creating few — if any — jobs. Instead, Congress’ primary goal in funding infrastructure projects should be to fund projects that promote commerce. For example, as Robert W. Poole pointed out in the Weekly Standard there is no interstate route between the rapidly growing metro areas of Las Vegas and Phoenix. Moreover, infrastructure spending has not reflected demographical shifts in the American population. Therefore, Congress should seek to invest in infrastructure projects that will promote commerce in the parts of the country that have growing populations and centers of commerce and not in areas of the country where population is declining, like the Northeast.
2. REQUIRE OPEN AND FAIR COMPETITION FOR INFRASTRUCTURE FUNDS
Congress should insist that a large number of contractors should be able to compete for infrastructure contracts. This means that Congress must ban Project Labor Agreements from being used on any infrastructure project it funds. Project Labor Agreements are a de facto requirement that the contractors bidding on certain government contracts be union contractors. According to Labor Department statistics, only 14.5% of those employed in the construction industry are members of a union. Therefore, by requiring the use of union labor through Project Labor Agreements an overwhelming majority of those working in the construction industry are denied a chance at employment. Moreover, because union labor is typically more expensive than its non-union counterpart, requiring open and fair competition for infrastructure projects will assure that taxpayers are getting the best price possible for the work that is being performed.
3. TAXPAYERS MUST BE GIVEN VALUE.
Besides not spending money on earmarked pork projects, Congress should insist that infrastructure spending is not used to reward special interests, which artificially inflate costs. Therefore, Congress should scrap any requirement that new infrastructure projects follow the David-Bacon Act, which inflates project costs by requiring that contractors pay their employees a certain hourly wage. While workers should earn a decent wage, Congress should not mandate wages that bear no relation to the market rate wages that would be paid by a private employer for the same work.
Also out should be any “Buy American” provisions. While I am sure taxpayers prefer to buy American made goods, they should not be forced to subsidize American manufacturing, which is declining for a variety of factors and will not be helped through Buy American clauses in infrastructure contracts.
Finally, all “green” requirements should be stripped from infrastructure spending unless it is conclusively shown that it will save the taxpayers’ money. The purpose of infrastructure spending should not be to promote dubious global warming and sustainability causes.
4. FUND SMART PROJECTS
Congress should not fund projects that are obsolete the moment they are completed. The cost of the project should be evaluated over the long term not just at the time of funding. However, taxpayer value and long term costs control cannot be achieved unless projects are constructed to adequately handle future growth.
5. HAVE STATES COMPETE FOR MONEY.
States should be required to compete for infrastructure spending. They should be required to submit plans that show the proposed infrastructure project will meet the criteria set forth above. This will assure that unnecessary pork laden projects that generate little value to the taxpayer do not get funding and growth creating cost effective projects do. Competition for funds will keep costs down and create value. A infrastructure “bank” will not. Over the long term the “bank” will become another government agency hamstrung by special interest rules and in need of a bailout.
Congress can easily accomplish all of these goals in an infrastructure spending bill. It is important to invest in our national infrastructure. Indeed, the Constitution all but mandates it. However, after years of waste, now is the time to get back to investing in infrastructure rather than wasting money on it.