Everybody Wants an Infrastructure Upgrade: How Can It Happen?

On April 12, 2017 I attended an interesting breakfast discussion on infrastructure policy with the Wall Street Journal’s Washington Executive Editor Gerald F. Seib, Chicago Mayor Rahm Emanuel, Bill Clinton’s first Chief of Staff and DJ Gribbin, Assistant to the President for Infrastructure Policy.

Gribbin said that his team is now engaged in a wide-ranging “policy process” to shape the Administration’s infrastructure initiative. They are reaching out to the “sprawling decision network” of governors, mayors, federal agencies, domestic and international investors, and advocacy groups who share responsibility for the nation’s infrastructure. At this “formative” time, however, he said he couldn’t share specific details such as whether the initiative will be freestanding or packaged as part of tax reform and how it will generate the promised trillion dollars of private and public spending without increasing taxes or federal debt. The timing is fortuitous, he noted, since polls show that infrastructure repair has wide public support.

The main barrier to progress, he believes, is the mountain of regulations that needlessly add years of costly review and uncertainty to the project approval process.

While Mayor Emanuel shares Gribbin’s optimism about public support, he believes that for anything to happen the federal government must add money and resources to the poiicy mix to incentivize private, state, and local partnerships. He dismissed the Administration’s rumored reliance on federal tax credits as “fairy dust.”

Emanuel, who has led Chicago’s recent surge of transit, aviation, and riverfront infrastructure development, agrees with Gribbin that projects too often face duplicative reviews that do not add to project quality. Interestingly, the two also said that environmental regulations were important and reflected appropriate concern about projects’ wider impacts, but that this could be accomplished without generating mountains of paper work. Said Emanuel: in the American federal system everyone has to have a say but this should not take forever. Certainty that a project will be appropriately vetted and completed within a reasonable time frame is key to creative private financing.

While a robust infrastructure can’t be done “on the cheap,” Emanuel argues that people will pay for infrastructure improvements if they see something new that improves the quality of their lives, if the process is transparent and honest about the dollar costs, and if it doesn’t increase profits for investors doing what they might have done without the incentives. He praised recent federal transit programs supportive of diverse experimentation in public private partnerships, especially TIFIA and RRIF, and said these should be strengthened and expanded in a flexible mix of strategies responsive to the diversity of players and resources.

Pressed for more clarity about the Administration’s thinking, Gribbin said that additional federal funds would be committed to the infrastructure program but he could not say at this time in what form and how much.