President Obama’s four-year, $302 billion new transportation proposal that he touted in St. Paul late last month is touted by the White House as a “vision for 21st century infrastructure.” Certainly such a vision is necessary. After all, every American wants to feel confident they can travel safely on roads, bridges, buses, and rails. Sadly, the president’s proposal is nothing more than a stale attempt to provide short-term federal relief to long-term infrastructure problems. A real vision for a 21st century infrastructure would return transportation funding back to state governments and privatize services that can be more efficiently provided by entrepreneurs.
Federal funding of transportation projects opens the door to special interests. Industry lobbies and politically connected companies vie for contracts to pork projects that lack necessity. The bloated federal budget provides examples of such chronic fiscal mismanagement and waste. One highlighted by Senator Tom Coburn’s 2013 “Wastebook” is a $500,000 grant for a portion of a small-town Kansas road spanning a mere 1/10 of a mile. Others include $1 million for a bus stop in Arlington, Virginia, $50 million for a parking lot in Maryland, $8 million for a conference center in South Carolina (aptly named after a Congressman), and $368,000 for an electric golf cart. Despite being funded by taxpayers supposedly for the public good, these projects only benefit an extreme minority and do nothing to actually fix U.S. infrastructure problems.
As Chris Edwards of the Cato Institute writes, these grants “give politicians photo ops and generate positive news stories” where federal, state, and local politicians can brag to voters about the money they brought back to the district, regardless of its viability or usefulness. The politics behind the grants corrupts the process and does not lead to adequate funding of projects that truly need it. The American Society of Civil Engineers’ 2013 “Report Card for America’s Infrastructure” estimates that one in nine U.S. bridges is structurally deficient. It’s clear the federal government is not serious about improving U.S. infrastructure if they continue investing in pork projects as political favors.
President Obama’s plan only continues this type of mismanagement, with nearly $15 billion allocated to grants that have a sordid history of waste. Instead of continuing this broken tradition of bloated handouts to firms with friends on Capitol Hill, a 21st century transportation policy should allow state governments to appropriate their own funding for projects they seem fit. Private companies would provide investments in many of these projects if the never-ending spout of federal money was not flowing so freely.
Indeed, a worldwide trend towards privatization of infrastructure and transportation is already underway. According to William Megginson at the University of Oklahoma, 2012 was the third-best year on record for global privatization, as measured by dollars of assets. While the full 2013 report is not yet completed, Megginson notes early estimates suggests last year may have been better with upwards of $200 billion in total privatization. The Economist notes that 11 of the 20 largest IPOs between 2005 and 2013 were sales of minority stakes by state-owned enterprises. Revenue for privatized airports represented 45 percent of total revenue for the 100 largest airports in the world. Australia, Canada, Germany, and many others have privatized their air-traffic control systems as well.
The president is right that the U.S. should implement a vision for 21st century American infrastructure. Unfortunately, his vision is the same as other failed federal attempts at past policies, and rejects the international move towards infrastructure privatization. Until he will allow state and local governments to control infrastructure and privatize parts of U.S. infrastructure including trains, airports, and air-traffic control, the president’s plan will fail travelers and taxpayers alike.
Matthew La Corte is a Young Voices Advocate studying political science and economics at Hofstra University in New York City. Matthew also serves as a member of the North American Executive Board of the international nonprofit Students For Liberty.