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Finding infrastructure solutions, big and small

Congress’s inability to maintain stable infrastructure investment is a national embarrassment. The last six-year highway bill expired in 2009, and Congress has been unable to agree on a new bill since then. The Senate managed to pass a new bill in March that provides only two years of funding, but efforts in the House to pass a longer-term bill have nearly collapsed. The continuing impasse forced Congress to pass its ninth temporary extension of the old law—this time for 90 days—at the eleventh hour before heading home for a two-week recess. Transportation secretary Ray LaHood said in February that he does not expect a bill to pass before the election, a view many experts share.

{mosads}The stalled highway bill is further proof that “go big” approaches to solving big problems are destined to fail in the current political environment. But our infrastructure needs only get more expensive when we put off paying for them. In cases where modest reforms can make more creative financing solutions possible, good ideas should not be held hostage to “grand bargains” on big legislation like the highway bill.

Congress and President Obama should think beyond the highway bill alone and look to politically viable proposals that stand a chance of passing both houses this year—incremental steps that can unlock billions of dollars in additional investments without large federal costs.

For example, Congress should give states more flexibility to supplement federal funding by pursuing alternative financing sources—public-private partnerships, tolling and user fees, and low-cost borrowing through innovative credit and bond programs. Billions of dollars to finance new infrastructure could be raised every year from private-sector capital and untapped revenue sources like tolls and user fees. Neither is a free lunch, but they are potential alternatives to unpopular gas tax increases and deficit spending.

At the federal level, Congress and the president should improve federal financing programs and streamline regulatory approvals to accelerate planned projects that are waiting to move forward. As a modest but viable alternative to the president’s infrastructure bank proposal, he should make the most of existing financing resources by coordinating the many loan programs for infrastructure that are already spread across various federal agencies and departments. The president already issued a new executive order last month to cut red tape for infrastructure projects, but the order is short on substance and long on studies and steering committees. A bolder step would be directly eliminating duplicative reviews by ordering agencies to work together in single-track proceedings wherever possible, without needing to wait for congressional approval or new steering committee plans.

There is no silver bullet for meeting our infrastructure needs. Passing a highway bill is one of many steps that must be taken, and we must continue to pressure House leaders to finish the job that the Senate started for them. But big legislative successes may be hard to come by before the 2012 election. In the meantime, small victories are better than none.

With pragmatic solutions that do not carry big federal price tags, Congress and President Obama can offer some relief to the states and local governments who know firsthand that the country cannot afford to wait any longer to make these investments.

Scott Thomasson is president of NewBuild Strategies LLC and has testified before Congress as an
expert in infrastructure finance and pending legislative proposals. More details on his proposals here can be found in a policy paper written for the Council on Foreign Relations.


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