An outlay true to Reagan

After the recent electoral rout, we conservatives must redefine ourselves in a world that has changed since Reagan. One new reality is the imperative that government modernize America's aging energy, water and transportation infrastructure.

Many conservatives are uneasy with such talk - clinging to the notion that government investment or oversight is anathema to core conservative beliefs. They fear the creation of another permanent bureaucracy, foresee a strain on the budget at a time of extreme economic distress, and argue that such spending is an ineffective stimulus. These are all legitimate worries, but they miss the bigger point: Our infrastructure needs are at a critical juncture.

Like the maintenance of a strong military, investment in key infrastructure is consistent with Reagan principles. Such "expansion" promotes several conservative goals: economic growth, energy independence, national security and U.S. competitiveness.

A dramatic change in the national political climate favors such investment. Leaders in both major parties are giving voice to historically underemphasized concerns, such as the impact on productivity of airport, seaport and roadway congestion; the dangers of aging water and wastewater systems; and the need for an expanded, reliable transmission grid to enhance competition among power suppliers. Barack Obama has indicated his intention to make infrastructure spending a central tenet of his economic plan, and he may even promote establishing a stand-alone agency in the form of a National Infrastructure Bank.

The Bush administration had little taste for such expansions, but I don't fault its reasoning. Its priority was securing critical infrastructure because that was the hand it was dealt - a nation at risk. Today, we have new priorities, and the private sector alone cannot handle the job. Meanwhile, the states are not appropriate venues for much of the prioritization that must occur.

Economic conservatives recognize the difference between spending and investment. We view sound economic growth as the best way to promote prosperity and protect economic freedom. Infrastructure expenditures are capital investment for future growth. By investing in the reduction of congestion and improving the reliability of our power supply, we will increase productivity and foster competitiveness.

Conservatives are also protectors and defenders of private enterprise. Companies invest today so they can grow tomorrow. A manufacturing CEO understands that he is not behaving responsibly if his company's capital expenditures fall below annual depreciation for a sustained period, or if the firm invests less than competitors do.

But this is exactly the scenario today: The average age of our water pipes is 40 years. Many U.S. power plants were built in the 1950s. China is building the equivalent of one new world-scale (1,000-megawatt) power plant per week. Our transmission grid, with more than 180,000 miles of active high-voltage wire, is an outdated, balkanized patchwork of regional systems. U.S. investment in infrastructure has fallen 50 percent since 1960, to 2 percent of gross domestic product. By contrast, China and Europe are budgeting 9 percent and 5 percent of GDP, respectively.

We have reached an environmental tipping point in a new world order. Energy independence, national security and U.S. competitiveness are inextricably linked to infrastructure. Renewable energy will be key in our future; electric transmission lines must be built or upgraded for it. We cannot tolerate isolated equipment failures that translate into systemwide chaos, as happened during Katrina's early hours and the Northeast blackout of 2003. Investment in public transit, energy-efficient buildings, renewable energy, and congestion-pricing systems will reduce demand for oil.

Conservatives know that the private sector is better than the government at designing, building, operating and financing infrastructure. This, combined with the magnitude of spending required, means government will have to tap private capital and expertise. Conservatives can supply leadership in private-sector participation, encourage public-private partnerships, and help ensure that central planning and priorities are rooted in cost-benefit analysis, not politics.

Conservatives should stay true to the Reagan legacy in the coming infrastructure debate. Unimaginative adherence to a historical orthodoxy that ignores economic realities and global competition may only extend the Republican stroll in the wilderness.