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September 12, 2011

Irene Lesson #2: Nothing in America is Shovel Ready – Until It Has to Be

"There's no such thing as shovel-ready projects," President Obama told the New York Times last year, reflecting on why the Stimulus Act didn't do what he had hoped it would do.

Less than two weeks after Tropical Storm Irene carved 166 gaps in the Vermont highway system and closed 450 mile of road to travel, there were only 33 closures and 340 miles had been reopened according to Transportation Secretary Brian Searles. More than twenty towns were initially cut off from the rest of the state; all were reconnected in less than a week. Rivers were wrestled back into their old channels – or into new ones. Temporary bridges were built immediately where the permanent ones couldn't be repaired. Miles of washed away roads were either rebuilt in place or newly carved higher up on the cliffs. Of course much of this work will have to be redone before winter sets in; more will be redone in the years ahead. When the construction is truly finished, we'll have a better and more flood-resistant highway and railroad system than we did before.

When we have an emergency, we get shovel-ready in a hurry. The new Guidelines for Instream Work from the website of the Agency of Natural Resources say that the agency "recognizes that recovery from this state-wide flood disaster will require extensive in-stream work… Conditions that existed prior to the flood may, in cases, not be desirable or even possible to recreate." In normal times it can take years to get permission to work in the water; it is almost impossible to get permits to relocate a stream. Now permission can be given on the phone if necessary. In another common sense move, the agency suspended limitations on operating hours for gravel pits and allowed closed pits to reopen. We need the fill.

From my experience as Vermont's Chief Recover Officer (Stimulus Czar), nothing is shovel-ready during ordinary times – just as the President said he learned. Like other states, we spent most of our allocation of highway funds repaving roads and making minor repairs that were in the existing right of way and didn't require permits. It takes more than 20 years to get approvals and fight your way through appeals, restraining orders, injunctions, and other delaying tactics before anything substantial can be built with either public or private money. If Congress appropriates more stimulus infrastructure money, as the President just asked, only states like Vermont with an ongoing emergency will be able to spend it on projects of any significance. The rest of the states are in danger of having to repave the same roads that they already repaved with the money from Stimulus #1.

All over the country there is infrastructure which needs to be built or rebuilt. You don't have to be a Keynesian to see that it makes sense for government to concentrate its construction spending during periods of unemployment, both to get better prices and to put people to work. You don't have to be an economist to understand that it is OK for government to borrow to build a new asset which will pay back the debt by improving the economy and that it is not OK for government to go into the hole to perform routine maintenance. So the President isn't wrong to propose more infrastructure spending; but he seems to have completely forgotten what he told the New York Times – we're not shovel-ready; we can't ramp up our infrastructure build during the current malaise; we're in our own way. The money he is asking for, if appropriated, will NOT get spent on long term projects. It will NOT generate the return necessary to pay the further debt the federal government will take on.

The President approvingly discussed Lincoln's support for the transcontinental railroad and the economic growth that came from knitting our resources together. He's right about that. But he didn't mention that, if the railroad has been proposed in more recent times, we'd still be fighting off appeals from the Pony Express whose business the railroads did destroy, from adjoining landowners who never thought that other people would be able to get to where they located, and from Luddites who believed that the pounding of locomotives would cause the earth to split and release Hellfire (I'm not making that up!).

There was a token mention of regulatory reform in the President's speech: "We're cutting the red tape that prevents some of these projects from getting started as quickly as possible." But he doesn't say how we'll do that. There is no mention of expediting projects in the fact sheet the White House supplied to go with the speech. The President can act on his own to reform the federal permission process and speed up projects and cut red tape. He could have announced some executive action without waiting for Congress; he didn't.

But Congress – including Republicans – should take him at his word. They should pass permitting reform as part of any appropriation for infrastructure. If we could cut approval of projects from more than twenty years to two; if we could stem the ability of anyone who doesn't like a project for almost any reason to impose almost indefinite delay on a project, we would have a major infrastructure building from both the public and the private sector beginning almost immediately. That would happen even without an appropriation. But an appropriation without breaking the permitting logjam and reforming the appeals process will neither create long term jobs and an improved economy nor justify even more debt. We can protect the environment just as well in two years of hearings as we can in twenty

This is, after all, a jobs emergency. We need a happy medium between the necessary rush and chaos of repairing emergency damage and the now nearly endless process of appeasing and fighting special interests to build anything at all. We can do that. We can be shovel-ready when we want to.

Related posts:

Jobs Rx: Make America Shovel Ready

Stimulus Interviews on NPR and Fox Business

America's Industrial Revival

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