As our colleague David Boaz notes in a recent blog post, it’s good to see the New York Times catch on to the longstanding systemic problems plaguing U.S. infrastructure projects – problems that an additional $1.2 trillion are unlikely to solve (and may even exacerbate). The article is a welcome (albeit late) overview of American infrastructure woes, but it only scratches the surface of the various local, state, and federal policies that burden these projects.
For example, domestic steel prices are mentioned among the ballooning U.S. infrastructure construction costs (something we’ve highlighted at length), but the article neglects to mention how U.S. tariffs and “Buy America” requirements restrict supply, increase prices, and even lower quality. Indeed, while steel prices have generally increased around the world since last summer, these policies have helped make the United States a uniquely costly locale. And prices have continued to climb here in recent months – recently surpassing $2,000 per metric ton of hot-rolled steel – while they’ve stagnated or even declined abroad.
Unfortunately, this problem isn’t unique to steel (though it’s probably the biggest offender). In fact, as we’ve previously discussed, the United States currently imposes tariffs on numerous imported construction materials – tariffs that, as recent research from Lydia Cox of Harvard shows, can impose long-term economic harms for industrial consumers even if the measures are quickly repealed. And the new infrastructure law contains several Buy America restrictions sure to inflate the prices of these and other critical materials even more.
The Times also mentions how labor shortages affect domestic infrastructure projects but fails to note that, pandemic notwithstanding, federal “prevailing wage” requirements (aka Davis-Bacon Act) already restrict the supply of available workers for federal infrastructure projects, thus increasing costs. Additional regulations – such as inflexible trucking rules, shipping restrictions like the Jones Act, and immigration restrictions – also increase costs and complicate federal projects.
On the other hand, the Times deserves credit for highlighting how byzantine National Environmental Protection Act (NEPA) reviews can put projects “on hold for years, while agencies review voluminous documents…, in part to defend against inevitable lawsuits.” In fact, Environmental Impact Statement (EIS) reviews in the U.S. take an average of 4.5 years to complete, and one quarter take over six years. I and several of my colleagues at Cato have long warned of the problems surrounding NEPA reviews, which significantly delay projects as all work and dissemination of funds must be halted while a review is ongoing. And while it is true that the recently signed infrastructure package includes a few NEPA reforms, it’s unclear how effective the reforms will be because most of them aren’t mandatory.
In sum, it’s good to see a major publication like the Times highlight NEPA and some of the other systemic problems plaguing American infrastructure projects, and we hope they’ll dig into some of the other ones soon. It’s just a shame that, echoing Boaz, this scrutiny didn’t begin before the latest infrastructure bill was passed.