Iain Murray of the Competitive Enterprise Institute makes a critical point about infrastructure serving as economic stimulus. From NRO’s The Corner:
Re: Obama and the Keynesian Revival [Iain Murray]
One important thing to bear in mind amongst all the talk of massive new infrastructure projects is that existing Federal regulation actually threatens to block or greatly delay many of them. That’s why Gov. Schwarzenegger recently wrote to the President-elect asking him, among other things, to “[w]aive or greatly streamline National Environmental Protection Act (NEPA) requirements.” Environmental groups reacted with horror, of course, saying that, “If such safeguards are removed at federal and state levels, billions of dollars of new, polluting projects could receive federal funding priority over approved clean projects that are designed to protect public health and natural resources.” One of the silver linings of the recession is that it is revealing quite how much of a burden environmental regulations are on the economy, something that tends to be masked in good times. Something, either environmental regulation or infrastructure spending, has to give here. Obama’s reaction to the letter will reveal which it is.
There is good reason to fear that any significant project that promotes both quick economic investment and long-term competitiveness — say, modernizing and expanding the nation’s electrical grid — will immediately be hit by litigation lasting years and years and years. In which case the only thing being stimulated is the fundraising drives of alarmist, anti-growth environmental groups.
Governor Schwarzenegger’s letter to President-elect Obama is available here. His specific requests:
- Waive or greatly streamline National Environmental Protection Act (NEPA) requirements consistent with our statutory proposals to modify the California Environment Quality Act (CEQA) for transportation projects
- Increase funding for the Federal Emergency Management Agency’s Flood Mitigation Assistance Program and modify the program’s rules to fund major levee evaluations, repairs and rehabilitation. Regulatory streamlining should accompany this funding to allow CEQA to satisfy NEPA requirements for all levee projects that receive federal funding
- Shorten federal permitting turnaround times and allow negotiations with permitting agencies over mitigation to occur during construction
- Structure funding for infrastructure projects in a way that encourages design-build approaches
- Encourage more public-private partnerships to attract more capital to these projects, improve efficiencies and lower costs.
