In­fra­struc­ture plan doomed with­out re­form of reg­u­la­tions first.

It may fail spec­tac­u­larly if en­vi­ron­men­tal reg­u­la­tions aren’t re­formed first

The Washington Times Daily - - FRONT PAGE - By John Si­tilides John Si­tilides, prin­ci­pal at Tril­ogy Ad­vi­sors LLC in Wash­ing­ton, spe­cial­izes in fed­eral reg­u­la­tory af­fairs and global risk anal­y­sis.

Pres­i­dent-elect Don­ald J. Trump has pro­posed as one of his leg­isla­tive pri­or­i­ties a $1 tril­lion na­tional in­fra­struc­ture pro­gram (“Trump’s in­fra­struc­ture pro­gram,” Nov. 28). His goal of up­grad­ing and mod­ern­iz­ing Amer­ica’s high­ways, air­ports, har­bors, in­land wa­ter­ways, rail­ways, elec­tric trans­mis­sion lines and wa­ter pipes and treat­ment plants — cre­at­ing two mil­lion jobs in the process — is re­ceiv­ing broad bi­par­ti­san sup­port. But it may fail as spec­tac­u­larly as Pres­i­dent Obama’s 2009 eco­nomic stim­u­lus if the in­com­ing Trump ad­min­is­tra­tion and con­gres­sional lead­ers don’t first re­form fed­eral en­vi­ron­men­tal reg­u­la­tions.

Much of the in­fra­struc­ture de­bate fo­cuses on how to pay for the projects. Mr. Trump’s eco­nomic ad­vi­sors Wil­bur Ross and Peter Navarro pro­pose to pri­vately fi­nance most of the projects us­ing debt fi­nanc­ing, tax cred­its and fu­ture us­age fees, such as road tolls. Trump crit­ics con­sider the debt­fi­nanced pri­vate in­vest­ment plan a be­trayal of the pub­lic in­ter­est, forc­ing re­gres­sive user fees on poorer Amer­i­cans and by­pass­ing press­ing needs if they are less prof­itable to pri­vate com­pa­nies.

Mr. Trump may well achieve a leg­isla­tive bal­ance that ad­dresses both fi­nanc­ing and im­pact is­sues. But cur­rent fed­eral en­vi­ron­men­tal reg­u­la­tions ren­der nearly im­pos­si­ble the abil­ity to even break ground on any new project, per­haps not un­til af­ter the end of Mr. Trump’s term.

The White House Coun­cil on En­vi­ron­men­tal Qual­ity was es­tab­lished un­der the fed­eral Na­tional En­vi­ron­men­tal Pol­icy Act (NEPA) to over­see the in­ter­a­gency process for as­sess­ing the en­vi­ron­men­tal ef­fects of pro­posed ac­tions, and achiev­ing a bal­ance be­tween pub­lic needs and re­source use, prior to mak­ing de­ci­sions. NEPA re­quires an en­vi­ron­men­tal im­pact state­ment be­fore any ma­jor road, tun­nel, bridge or another project can pro­ceed. The Govern­ment Ac­count­abil­ity Of­fice stated in 2014 that the av­er­age time to com­plete an en­vi­ron­men­tal im­pact state­ment is more than four years. Fed­eral High­way Ad­min­is­tra­tion data from 2013 show that the me­dian time to com­plete a high­way project state­ment was more than seven years.

Rais­ing the Bay­onne Bridge road­way, a project with vir­tu­ally no en­vi­ron­men­tal im­pact, re­quired a 10,000-page en­vi­ron­men­tal assess­ment and another 10,000 pages of per­mit­ting and reg­u­la­tory ma­te­ri­als. The dredg­ing project at the Port of Sa­van­nah, Ge­or­gia stalled for al­most 30 years, with an en­vi­ron­men­tal re­view that con­sumed 14 years. A San Diego de­sali­na­tion plant re­quired 12 years to battle back 14 le­gal chal­lenges be­fore de­liv­er­ing a drop of fresh wa­ter to res­i­dents.

Adding to the reg­u­la­tory bur­den, Pres­i­dent Obama in 2014 re­leased draft guid­ance that all fed­eral de­part­ments and agen­cies con­sider the ef­fects of green­house gas emis­sions and “cli­mate change” in their re­views, fur­ther ex­tend­ing the time re­quired to com­plete the req­ui­site state­ments.

In the in­fra­struc­ture in­vest­ment sec­tor, the U.S. lags be­hind Sin­ga­pore, Qatar, United Arab Emi­rates, Canada, Malaysia, Nor­way and Swe­den. Much of the prob­lem lies with the end­lessly re­dun­dant fed­eral en­vi­ron­men­tal reg­u­la­tions im­posed on al­most ev­ery in­fra­struc­ture project. Even the lib­eral Pro­gres­sive Pol­icy In­sti­tute stated in May that “an ac­cu­mu­la­tion of laws and reg­u­la­tions” largely de­signed to pro­tect the en­vi­ron­ment is thwart­ing an ar­ray of nec­es­sary trans­porta­tion projects — and re­sult­ing in en­vi­ron­ment harm.

The non-par­ti­san in­sti­tute Com­mon Good is­sued a 2015 re­port not­ing that “a six-year de­lay in start­ing con­struc­tion on pub­lic projects costs the na­tion over $3.7 tril­lion, in­clud­ing the costs of pro­longed in­ef­fi­cien­cies and un­nec­es­sary pol­lu­tion,” more than dou­ble the cost of the ac­tual projects. Many projects re­quire as many as 10 years of en­vi­ron­men­tal re­view just to be ap­proved, let along be­gun and com­pleted.

Even coun­tries such as Ger­many and Canada, with far more statist reg­u­la­tory poli­cies, com­plete in­fra­struc­ture projects more rapidly, with ap­proval pro­cesses that en­sure new in­fra­struc­ture per­mits can be is­sued in less than two years, even while fully achiev­ing strin­gent en­vi­ron­men­tal con­ser­va­tion ob­jec­tives. “They have clear lines of au­thor­ity, with con­sol­i­dated de­ci­sion-mak­ing on both en­vi­ron­men­tal re­view and per­mit­ting. Law­suits must be brought and re­solved quickly, with ju­ris­dic­tion lim­ited to le­gal vi­o­la­tions, not pol­icy de­ci­sions,” per the 2015 re­port. Aus­tralia is now fol­low­ing that lead.

As Mr. Obama learned about “shovel-ready projects,” only $30 bil­lion of the $800 bil­lion pack­age was spent on trans­porta­tion in­fra­struc­ture pre­cisely be­cause of the multi-agency ap­proval re­quire­ments. His own Na­tional Eco­nomic Coun­cil con­ceded in 2014 that the per­mit ap­proval process takes any­where from five to 10 years.

Congress can act im­me­di­ately to re­form the process. Un­der a bi­par­ti­san ef­fort led by Sen. Rob Port­man, Ohio Repub­li­can and Sen. Claire McCaskill, Missouri Demo­crat, the Fed­eral Per­mit­ting Im­prove­ment Act would lower the statute of lim­i­ta­tions from six years to 150 days for all ma­jor projects across all sec­tors. The bill, sup­ported by Pres­i­dent Obama, en­vi­ron­men­tal or­ga­ni­za­tions and busi­ness groups, of­fers a peek into new reg­u­la­tory pos­si­bil­i­ties in the next ses­sion of Congress, in con­junc­tion with Pres­i­dent-elect Trump’s stated pri­or­i­ties.

Here’s the bot­tom line: Even if Pres­i­dent Trump suc­cess­fully per­suades Congress to im­me­di­ately pass a $1 tril­lion in­fra­struc­ture-bill, he will be frustrated by the re­al­ity that the first project wouldn’t be­gin, and the first job wouldn’t be cre­ated, un­til 2021. The real first step to a na­tional in­fra­struc­ture and job-cre­ation so­lu­tion is re­quir­ing all en­vi­ron­men­tal im­pact state­ments be com­pleted in a 12-months “one-stop” per­mit­ting process. Only then will the Trump in­fra­struc­ture plan have a chance to suc­ceed in mak­ing Amer­ica great again.


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