In this Update, we cover Infrastructure, can-kicking, benefit-cost-ratios, and a fresh face at the Assistant Secretary’s office. Plus new grant opportunities.
The “I-word” makes its reappearance
Now that the tax bill is just a giant step from being finished, the buzz about a major infrastructure initiative is getting new life. As much as the Nation needs a major redo of its infrastructure, here’s a couple of things to keep in mind –
- Congress can’t solve the government funding crisis (see Kick the Can, below), so it’s not likely that they will get behind an infrastructure program that costs big taxpayer dollars.
- Both Congress and the public have not grasped that water is infrastructure. Oh, they know about drinking water, but they haven’t invested the same level of dollars in ports, inland waterways, and coastal risk reduction as they have in highways and aviation.
- We can use investment in new resilience and environmental initiatives along each of our coasts, but so far I have seen no private sector interest in funding any big infrastructure initiative that doesn’t have toll booths attached to it.
There’s time to awaken key Members of Congress to the nation’s water resources needs, but I want to temper your expectations that whatever may come from Washington next year in the form of an infrastructure package is going to have big bucks for water. In addition, a Bloomberg Politics report says that the Administration will release “a detailed document of principles, rather than a drafted bill”, which leaves it up to Congress to fill in the details. In a mid-term election year like 2018, there’s hope for a bipartisan program to be developed by Congress.
Kick the Can – Again and Again
Congress has extended the temporary funding measure for the Federal government until Dec. 22nd as we reported last week. I still believe they will kick it one or two more times until they hit some time in mid to late January.
RDJ gets a 2nd Hearing
That’s R.D. James, the President’s nominee for Assistant Secretary of the Army for Civil Works had a second hearing this week, this time before the Senate Environment & Public Works Committee. Sen. Joni Ernst (R-IA) issued a press release post hearing that claimed she received “commitments” from James in open session to improve the way the Benefit-Cost-Ratio is used as a litmus test to determine which projects are more competitive in the chase for scarce Corps funding. The only way to “improve” the BCR is to drop it as a factor in determining funding. Under law, projects are not planned to maximize their BCR, but to achieve the most National Economic Development benefits. OMB uses the BCR as an arbitrary criterion that is totally inappropriate. Along the coast, the higher, closer and denser the properties in the first three rows of structures, the higher the BCR. There hasn’t been a new “shore protection” project constructed since the mid-1990’s (except for expedited projects built post-Sandy) and there won’t be any because OMB decided that a BCR of 2.5 to 1 or higher was the cut-off point for new construction. What’s more, economists, MBA’s and like-minded folks take note. Although the law says the BCR should be based on a discount rate of 4% or less, OMB uses a less advantageous 7% because they say that’s the rate the private sector would use. Despite what some would like to believe, the government provides public services as a non-profit which means it has vastly different objectives from my business and every other private sector business.
Sen. Whitehouse (D-RI) pressed James on his belief in the validity of climate science, and also reminded James that he has conceded a lack of experience on coastal matters. Whitehouse expressed concern at estimates that the nation will face $5 trillion worth of coastal losses by the end of the century due to sea level rise and worsening storms, and that the FY18 budget shows that the Corps is not focused on the coasts. The Senator twice expressed his desire that RD James install a coastal expert in his ASA office. Note to subscribers: There is absolutely no one at Corps HQ whose experience let alone job duties makes him or her the lead proponent of coastal water resource needs. Excluding coastal ports, that portion of the Corps program accounts for less than $100 million a year out of a $6 billion budget. Ranking Democrat Tom Carper (D-DE) also focused on the coasts and how his colleagues in Congress do not provide enough money to the Corps to address coastal needs.
I hear that Mark Mazzanti will be returning to DC from the Southwest Division. He has a 4-month stint in the Assistant Secretary’s office as the Deputy in charge of budgetary matters, replacing the recently departed Eric Hansen. He joins Dave Leach who has recently been assigned to be the Deputy ASA in charge of programs. These two experienced people know how the Corps can make progress, and Mark carries bruises from his past battles with OMB. Is it too much to hope that James, Leach and Mazzanti (along with Principal Deputy ASA Ryan Fisher) will be advocates for the Corps with the “Department of No” at OMB?
Looking for Money?
We don’t have anything to help with your holiday shopping, but these Federal grant opportunities may boost your seasonal spirits.
Finally, my quip about taxes and deficits in last week’s update elicited some comments from a few subscribers. Thanks for taking the time to write. What upsets me most is that, whichever party has been In charge of Congress in the last few years, that party has chosen to prepare major pieces of legislation like health care and tax reform, behind closed doors and try to ram-it-and-jam-it through Congress on party-line votes. There’s a reason Congress has committees, public hearings, public committee business meetings and the like. It’s deliberative and it’s transparent. Progress is achieved on major issues by building bipartisan consensus. Working in the dark of night and making changes that are handwritten in the margins and not understood by the officials voting on the measure is a bad way to make policy. I’d like to know what you think.