As senators prepare to vote on the bipartisan infrastructure bill they negotiated with President Biden, they should be applauded for incorporating several provisions that would help control costs and give taxpayers the most bang for their buck.
One of the reasons infrastructure projects cost significantly more in the United States than similar ones in other countries is our byzantine permitting process. The bill directs permitting agencies to cut average approval times to less than two years for major projects and includes several provisions to help make that happen without sacrificing important social and environmental protections.
For example, a proposal from Sens. Kyrsten Sinema (D-Ariz.), Joe Manchin, (D-W.Va.), and Rob Portman (R-Ohio), included in the bill would strengthen the Federal Permitting Improvement Steering Council that has saved taxpayers over $1 billion and cut permitting approval times for covered infrastructure projects by up to 45 percent since its creation in 2015. The Council, which is currently set to sunset next year, would be made permanent and expanded to cover additional projects. The bill also tasks agencies responsible for conducting reviews under the National Environmental Policy Act (NEPA) to produce one joint environmental impact statement and expands categorical exclusions from NEPA to speed up approval for projects that are unlikely to have a significant environmental impact.
To help steer money toward the most productive and innovative projects, the bill includes over $100 billion for competitive grant programs that use criteria such as benefit-cost analyses to award funds efficiently. Compared to similar programs in the past, the ones in this bill include substantially more funding and flexibility for complex projects, such as those involving multiple modes of transportation. The bill also funds several pilot programs, including some to promote the use of technologies that can improve productivity, and creates an Advanced Research Projects Agency for infrastructure (ARPA-I) to do additional research. These provisions could lead to groundbreaking innovations that help bring U.S. infrastructure costs down to international norms over the long term.
The bill also effectively leverages the power of matching grants. State and local governments that can afford to do so are required to make some contribution to access federal funding in the bill for most projects that benefit their constituents. This matching structure directs federal dollars towards only the projects in which local officials are themselves invested and helps pull in additional resources to supplement the $550 billion in new federal spending included in the bill.
But it could be even better. An amendment introduced by Sens. John Cornyn (R-Texas) and Alex Padilla (D-Calif.) that is slated for a vote on Saturday would allow state and local governments to use up to 30 percent of their federal COVID rescue aid for infrastructure projects, including their contribution towards a federal match for projects offered by the bill.
As these governments experience record budget surpluses bolstered by federal COVID aid far in excess of their needs, many have begun spending the aid on policies that would do little to contain the pandemic or support people struggling from its economic effects, such as paying retroactive bonuses to non-frontline government employees or giving a fourth stimulus check to the vast majority of residents. Allowing state and local governments to spend these funds on productive infrastructure investments would hopefully disincentivize that kind of reckless spending.
But not all the amendments under discussion would improve the bill. One would increase funding for the Pentagon by $50 billion without offsetting the cost, while another would make it easier for people to evade taxes they owe on cryptocurrency transactions. When the bill as written would already add more than $340 billion to the national debt, it would be a mistake to increase that price tag further for anything but the most high-return public investments. But there is one silver lining for disappointed deficit hawks: the bill includes a pilot for a long-overdue national vehicle-miles traveled (VMT) fee that could be tapped to replace falling gas-tax revenue and pay for future infrastructure bills.
The bipartisan infrastructure bill makes a transformative investment in the foundation of our economy and the future of American infrastructure — and does so in a way that gives taxpayers a good bang for their buck. Despite whatever imperfections the final agreement may have, President Biden and Senate negotiators should be commended for this historic accomplishment.
Ben Ritz is the director of the Progressive Policy Institute’s Center for Funding America’s Future.