The Volokh Conspiracy - Whatever Happened to the Last Big Infrastructure Bill?

These days, we are repeatedly told that we have to pass a massive new infrastructure spending bill in order to fix our "crumbling" roads and bridges. Everyone seems to have forgotten that just three years ago, in August 2005, Congress enacted the biggest federal public works program in American history, spending a massive $286.4 billion on the 2005 highway bill. At that time, President Bush and congressional leaders from both parties told us that the new highway bill was needed to fix our infrastructure problems.

Before passing a new and potentially even bigger infrastructure spending bill, I would just like to know what happened to all that money Congress appropriated for the same purpose back in 2005? If that act succeeded in its purpose, it's not clear why we need another huge federal infrastructure bill now, less than four years later. If it failed, we need to know why.

One reason why the 2005 bill may have failed is that much of the money was spent on various porkbarrel projects, such as the notorious "Bridge to Nowhere," which is the only thing most people now remember from that bill. It's certainly possible that the 2005 money was largely wasted because most of it went to politically connected interest groups and districts rather than genuinely valid infrastructure priorities. But if the 2005 bill indeed failed for that reason, why would we expect a different result this time around? You have to be a very committed partisan to believe that today's Democratic Congressmen and senators are any less committed to lining the pockets of their favored interest groups than their Republican predecessors were in 2005. Certainly, Democrats such as Barney Frank have been more than willing to do that with the funds allocated in the bailout bill. Whether Congress is controlled by Democrats or Republicans, it is almost inevitable that much of the money appropriated in in large spending bills will be allocated on the basis of political power rather than economic rationality. Congressmen who refuse to channel money to politically influential constituents are unlikely to hold onto power long.

I know, of course, that many argue that we need an infrastructure bill today in order to provide economic stimulus. Economists actually disagree among themselves over the question of whether a stimulus bill would do more harm than good. I personally lack sufficient expertise on macroeconomics to adjudicate this debate intelligently. But even if we assume that stimulus is necessary, there are lots of ways to provide it without enacting a massive infrastructure bill where much of the money is likely to be diverted to pork and other inefficient projects that consume more wealth than they produce. My George Mason colleague Alex Tabarrok has a good summary of the alternatives.

I'm not categorically opposed to all federal highway spending. But before we enact a massive new infrastructure bill, we need a clear explanation of why the 2005 highway bill wasn't enough, and why if it wasn't we should expect better results this time around. So far, these questions have hardly been asked, much less answered.

UPDATE: For clarification, it should be noted that the current draft of the Obama stimulus bill contains much less infrastructure spending than the 2005 highway bill. However, state and local governments, and many commentators are advocating much higher levels of new infrastructure spending. It is unlikely that the current bill will be the end of the issue.

	[Ilya Somin, January 27, 2009 at 3:34pm] Trackbacks Whatever Happened to the Last Big Infrastructure Bill? These days, we are repeatedly told that we have to pass a massive new infrastructure spending bill in order to fix our "crumbling" roads and bridges. Everyone seems to have forgotten that just three years ago, in August 2005, Congress enacted the biggest federal public works program in American history, spending a massive $286.4 billion on the 2005 highway bill. At that time, President Bush and congressional leaders from both parties told us that the new highway bill was needed to fix our infrastructure problems. Before passing a new and potentially even bigger infrastructure spending bill, I would just like to know what happened to all that money Congress appropriated for the same purpose back in 2005? If that act succeeded in its purpose, it's not clear why we need another huge federal infrastructure bill now, less than four years later. If it failed, we need to know why. One reason why the 2005 bill may have failed is that much of the money was spent on various porkbarrel projects, such as the notorious "Bridge to Nowhere," which is the only thing most people now remember from that bill. It's certainly possible that the 2005 money was largely wasted because most of it went to politically connected interest groups and districts rather than genuinely valid infrastructure priorities. But if the 2005 bill indeed failed for that reason, why would we expect a different result this time around? You have to be a very committed partisan to believe that today's Democratic Congressmen and senators are any less committed to lining the pockets of their favored interest groups than their Republican predecessors were in 2005. Certainly, Democrats such as Barney Frank have been more than willing to do that with the funds allocated in the bailout bill. Whether Congress is controlled by Democrats or Republicans, it is almost inevitable that much of the money appropriated in in large spending bills will be allocated on the basis of political power rather than economic rationality. Congressmen who refuse to channel money to politically influential constituents are unlikely to hold onto power long. I know, of course, that many argue that we need an infrastructure bill today in order to provide economic stimulus. Economists actually disagree among themselves over the question of whether a stimulus bill would do more harm than good. I personally lack sufficient expertise on macroeconomics to adjudicate this debate intelligently. But even if we assume that stimulus is necessary, there are lots of ways to provide it without enacting a massive infrastructure bill where much of the money is likely to be diverted to pork and other inefficient projects that consume more wealth than they produce. My George Mason colleague Alex Tabarrok has a good summary of the alternatives. I'm not categorically opposed to all federal highway spending. But before we enact a massive new infrastructure bill, we need a clear explanation of why the 2005 highway bill wasn't enough, and why if it wasn't we should expect better results this time around. So far, these questions have hardly been asked, much less answered. UPDATE: For clarification, it should be noted that the current draft of the Obama stimulus bill contains much less infrastructure spending than the 2005 highway bill. However, state and local governments, and many commentators are advocating much higher levels of new infrastructure spending. It is unlikely that the current bill will be the end of the issue.