What Did the Founders Say About Federal Money for Roads and Infrastructure?

by Burt on October 24, 2011

“We need to spend federal dollars on roads and bridges. Our infrastructure is crumbling.” What should we make of this popular argument? Answer: We should be skeptical, and we should be constitutional. First, as economist Don Boudreaux and others have noted, federal spending for infrastructure has actually been relatively high during the last three years. Second, so much of this spending is using tax dollars to pay back various unions and city machines. We have no guarantee that federal funds will be used wisely.

So where does that get us? We all agree that our nation’s highways must be safe and well built. Do we have to yield to the many politicians who ask, “How can we use road building to gain votes?” or the better question, “Which roads need to be built or improved in the national interest?” No, we don’t. Let’s start with first principles: What does the Constitution say about road building, and how did the Founders approach the early roads, canals, and railroads that tied our young Union together?

The Constitution does not grant Congress the right to appropriate funds for infrastructure. Therefore, the Founders usually argued that states or private companies should do the work; neither good government nor just results occurred when the people in Georgia could be taxed to pave a road or build a canal in New York. The problem was, of course, that some congressmen, then as now, wanted to bring federal funds to their state. The congressmen from New York, for example, had incentives in 1817 to attract federal dollars to their state to build the ambitious Erie Canal—the longest proposed canal in the world. That canal would indeed prove to be a success and a money-maker, but President James Madison vetoed the 1817 bill to spend federal money to build the Erie Canal, and other improvements. He knew the roads were needed, but he wanted New York to build its own canal, and Georgia to pave its own roads. Article 1, Section 8 of the Constitution did not make road building a federal function, and Madison wanted to go with the Constitution. “I am constrained,” Madison said, “by the insuperable difficulty I feel in reconciling the bill with the Constitution.” Hence the veto.

Madison admitted the bill would probably help the U.S. economy, but just because something was good didn’t mean we should violate the Constitution to get it. States and private companies could do the job and when they did, that would not add to the national debt.

The promoters of the 1817 bill in Congress had argued that building roads and improving rivers at federal expense would “render more easy and less expensive the means and provisions for the common defense.” And since national defense was a federal function, therefore the proposed road building was constitutional. But Madison retorted, “Such a view of the Constitution would have the effect of giving to Congress a general power of legislation instead of the defined and limited one hitherto understood to belong to them.” Those words from Madison carry great weight because he was a chief architect of the U.S. Constitution at the Philadelphia convention in 1787.

What were the results of Madison’s veto? First, no harm was done to the nation. The state of New York built the Erie Canal and the profits from it went to the state government. Perhaps, New Yorkers built that canal more carefully because they knew they were accountable if the canal lost money. Second, Madison’s concern with balancing the federal budget and avoiding unconstitutional spending paid off less than twenty years later when the U.S. retired its national debt completely and began to run surpluses. Sticking to the Constitution led to stronger national finances.

If states today (or maybe even private companies) built the highways, the politicians would have strong incentives to build carefully and cheaply. And the states, instead of looking to Washington, could work together to build interstate highways and major bridges. Finally, with less power in Washington we would have a smaller Department of Transportation in Washington, and less federal debt to lay on our children and grandchildren. Almost 200 years ago, James Madison showed us the way.

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