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For Infrastructure, Spend Sensibly to Make a Difference, and Avoid Mistakes

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For Infrastructure, Spend Sensibly to Make a Difference, and Avoid Mistakes

New York Times Room for Debate December 20, 2016
Urban PolicyInfrastructure & Transportation

Pick a few marquee projects to make models for others, and small projects for quick results. Don't overpay workers but don't look for profits.

President-elect Donald J. Trump said in his victory speech that “we are going to … rebuild our highways, bridges, tunnels, airports, schools, hospitals. We're going to rebuild our infrastructure.” He had already announced a plan to spend $1 trillion over 10 years. But if he’s not careful, he’ll be using it to pay for critical mistakes.

Back in 2009, newly elected President Obama deliberately kept his own stimulus plan to $832 billion, including $50 billion for infrastructure, partly to avoid the backlash from fiscal conservatives on breaking the 13-figure mark.

Trump is saying he wants to create “thousands of new jobs.” Obama was more cautious at a time when the country was in the midst of hemorrhaging nearly 9 million jobs, unemployment would top 10 percent that fall.

Though recovery has been slow, we've regained all our lost jobs and then some. Unemployment is now at 4.6 percent. It is a mark of deep change that a Republican presidential candidate could have bragged about such a trillion-dollar spending plan at such a time.

But consider: Last December, Obama signed a transportation-infrastructure bill to spend $305 billion over five years, or $61 billion a year. Spread out over 10 years, Trump's trillion dollars would increase spending by just $39 billion a year. That $39 billion would be spread over 50 states, many of which already have tens of billions of dollars in infrastructure backlogs after a near-decade of infrastructure austerity.

Trump's surrogates have also mentioned spending on commercial projects like shipyards and pipelines. Making those kinds of investments with taxpayer money would reduce the effect the trillion dollars would have on public infrastructure.

And while helping states catch up with regular road maintenance is a good thing, it would put Trump in the same position Obama faced after his own stimulus: voters perceived little change after a supposedly historic investment.

How can Trump make sure taxpayer money goes far?

• Focus on the projects, not jobs. The fact that infrastructure investment creates jobs is a good thing, but that is not the purpose of the investment. Workers should be paid well, but paying them too well -- a New York City construction worker can make $79.63 an hour, including benefits -- means building less.

• Pick out a few projects of national importance and create a commission that, in say, three months, could figure out how to cut red tape and speed their completion. One marquee project could be a new tunnel under the Hudson River, as part of higher-speed rail service on the northeast corridor. States and regions could compete for consideration of these multibillion-dollar projects.

• Don't focus on profits. Trump mentioned bridges, tunnels and airports in his speech – all of which can generally pay for themselves. In New York, Gov. Andrew Cuomo's LaGuardia airport rebuilding project will be funded, indirectly, by airline passenger fees. New York's bridges and tunnels collectively throw off hundreds of millions in dollars in profit a year, money that goes to subsidize mass transit. Likewise, pipeline, electricity and water projects can usually pay for themselves. Washington should pay for projects that can't pay for themselves, including transit projects in some of the densest areas of the country, and in parts of the country whose residents would like to become denser.

• Help state and local governments -- which get most federal infrastructure money -- spend their money more wisely. Over and over, they have proven that they cannot keep projects on time or on budget: consider the Big Dig in Boston, or the seismic retrofitting of the Bay Bridge in San Francisco. The Trump administration should create a national clearinghouse, with transparent reports from federal auditors, so that states and cities can learn from each other what goes right on projects, and what doesn't. State and local governments that can sign labor agreements that improve productivity and that can design management structures to deliver projects efficiently should be rewarded with bonus funding for future projects.

• Don't be afraid to think small. Small federal grants – in the millions or tens of millions of dollars each – can help states, cities and towns start or improve bus service, build sidewalks and bike lanes, and otherwise give people more choices on how to get around in addition to the automobile. Such investments are good for poorer people, who must spend more of their money, as a percentage of income, on transportation.

Smaller projects have another benefit, as well: Trump is up for re-election in four years, and people will want to see quick results.

This piece originally appeared in The New York Times Room for Debate

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Nicole Gelinas is a senior fellow at the Manhattan Institute and contributing editor at City Journal. Follow her on Twitter here.

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