Rationalize the funding of infrastructure

ISSUE

The importance of infrastructure investment to the U.S. economy is widely recognized. But policy discussions usually focus on the level of spending and ignore the efficiency by which investment is allocated and projects are built and operated. Efficiency and innovation would increase if the federal role were reduced. State and local governments and the private sector are more likely to make sound infrastructure decisions without federal intervention.

 

SOLUTION

Congress should:

  • privatize federally-owned infrastructure, including passenger rail, electric utilities, power dams, and air traffic control;

  • cut federal aid for highways, urban transit, airports, and other infrastructure that is owned by state and local governments;

  • free the states from federal regulations that needlessly raise costs on infrastructure projects;

  • reform federal laws that impede the privatization of state and local infrastructure.

Note: These proposals are based in part on policy analyses developed by the Cato Institute.