Americans spend too much and get too little.
The U.S. government spends way more on health care than most other industrialized countries do and has little to show for it. (U.S. life expectancies are shorter than those in most other developed economies.) Likewise, we spend a lot on education and on public safety per capita, yet have outcomes that are either no better or in some respects considerably worse than those abroad.
On infrastructure, the United States fares especially poorly compared to its peers — a fact that has received curiously short shrift in Washington’s ongoing negotiations. So far, White House offers and Republican counteroffers have primarily focused on how much to spend, rather than how to make sure that money is spent well.
The price tag matters, yes. So does getting a good bang for our buck.
The United States is notoriously bad at this. We pay much more per unit of subway track or road tunnel, for instance, than other developed countries. Five of the world’s six most expensive subway lines are in New York City, according to the Transit Costs Project database maintained by New York University’s Marron Institute of Urban Management.
Likewise, a new tunnel in Seattle cost around $1.6 billion per mile, more than three times the per-mile cost of a recent tunnel in Paris and more than seven times that of one in Madrid, according to institute fellow Alon Levy.
Construction costs for the U.S. interstate highway system have also risen dramatically since the mid-20th century, according to a study from scholars at George Washington University and Yale. These patterns are not readily explained by labor or materials prices.
Analyses suggest no correlation between a country’s gross domestic product per capita and subway construction costs. Nor does it seem likely that European countries are keeping costs down because they care less about labor or environmental standards than we do. Rather, for reasons that have proven difficult to untangle — including poor planning, complicated procurement processes, our multilayered federalist system, NIMBYism and risks of litigation — we’re just worse at this than other countries.
The United States also funds projects that add little value, perhaps because of political pressures to distribute infrastructure dollars to every constituency, regardless of need or population density.
“Historically, since the Obama administration, we’ve seen a proliferation of pretty dubious projects on the transit side,” says Eric Goldwyn, a program director and professor at the Marron Institute. “So it’s a bit of a double whammy, where you’re building bad projects, but you’re also paying a lot to build bad projects.”
Asked about infrastructure cost issues, Biden administration officials have acknowledged the problem. But they haven’t really explained how they plan to deal with it as part of the president’s proposed American Jobs Plan, whose very name shows the emphasis on maximizing new employment, rather than wringing maximum productivity from every penny. One official told me that the plan was not intended to be a “make-work” proposal but that the administration was willing to tolerate a little more expense if it helped created more meaningful jobs. (Of course, because infrastructure projects are capital-intensive, higher costs don’t necessarily mean extra spending goes to workers.)
Transportation Secretary Pete Buttigieg said recently that the cost issue does matter, that it’s a bit of a “head-scratcher,” and that he wants to “stand up more capabilities” to assess how our dollars could go further. Which sounds promising, but it doesn’t seem like a priority based on administration proposals so far.
In fact, some White House policies would make federally funded infrastructure projects more costly.
These include more stringent requirements for goods and materials to be “made in America and shipped on U.S.-flag, U.S.-crewed vessels” (that is, even if American suppliers are not pricing competitively). So far, President Biden has also maintained President Donald Trump’s steel and aluminum tariffs, and officials appear poised to raise existing lumber tariffs.
Republicans have long branded themselves as the government-skeptic party, casting themselves in opposition to Democrats’ supposed love of bloated bureaucracy. Well, here’s an opportunity for GOP lawmakers to prove their mettle, by actually adding value to the ongoing infrastructure negotiations.
Rather than conspiring to drown government in a bathtub — as they’ve tried, and failed, to do since the Reagan era — Republicans could seek ways to ensure necessary government functions operate more efficiently.
That might mean pressuring the White House to change its cost-benefit analysis of prospective infrastructure priorities. Or attaching more strings to project grants to incentivize states to streamline land-use and environmental review regulations. Or demanding more waivers for buy-American provisions and a repeal of tariffs.
Of course, Biden could make such changes on his own (and he’s shown openness to some of them). But if Republicans want to prove their fiscal-responsibility bona fides, focusing on efficiency — rather than haggling over the price tag — would be a good place to start.
Catherine Rampell’s email address is firstname.lastname@example.org. Follow her on Twitter, @crampell