这项许可制度改革来得再快也不为过This Permitting Overhaul Can’t Come Fast Enough

This past Monday, the Senate advanced a bill whose purpose sounds relatively mundane: speed up the federal permitting process. Its economic implications are profound, though, because it addresses one of the most insidious impediments to growth. Put simply, it takes too long and costs too much to build big things here.

That the U.S. has a problem building stuff might not be obvious from the latest economic data: Business investment was up 8% in the past year, the fastest in 12 years outside of postpandemic recovery.

The details, though, are less encouraging: AI is booming, not much else is.

Since the first quarter of 2024, what I call AI-adjacent capital spending (the government has no single AI category) is up 55%. All other business investment is up only about 3%.

Non-AI investment could be languishing for lots of reasons. Businesses see no need for more capacity, or perhaps they can’t compete with AI for land, capital and equipment.

But in the background, delays and uncertainty caused by politics, regulation, permitting and litigation almost certainly weigh on investment.

A few statistics make this point. Across numerous industries, the time between when a major project is announced and when it breaks ground has lengthened since 2019, according to Dodge Construction Network. In manufacturing, for example, the lag behind has grown to 12 months from seven. Eric Gaus, the firm’s chief economist, blames policy uncertainty, especially over tariffs.

Yet long before tariffs came along, the U.S. lagged behind its peers when it came to building big things.

Japan built a semiconductor fabrication plant for TSMC in two years, a fraction of how long the U.S. has taken. Just two nuclear reactors started operations in the U.S. in the last decade and they were seven years late and more than 100% over budget. The U.S. builds less long-distance transmission than almost all of its peer countries, and spends more to build a mile of light transit or subway.

No single factor or law explains these delays. Nonetheless, the Senate bill, dubbed the Bipartisan American Affordability and Jobs Act, tackles key federal impediments, starting with the National Environmental Policy Act, or NEPA, which was first passed in 1969.

On his Substack Construction Physics, Brian Potter, senior infrastructure fellow at Institute for Progress, notes the law’s greatest impact comes from what originally seemed like a minor provision: that federal agencies produce a “detailed statement” of the environmental impact of major projects in their jurisdiction.

These environmental impact statements, or EIS, now routinely take “years to complete and are often thousands of pages in length,” Potter wrote. He cited one 8,000-page statement from the 1980s that, once printed and distributed, weighed 221 tons.

The law created ample opportunities for opponents to sue, Potter wrote, often with the expressed hope of creating enough delays to result in cancellation.

In a 2023 study, Michael Bennon and Devon Wilson, both then of Stanford University, found that 28% of major transportation and energy-infrastructure projects requiring an EIS triggered litigation and 89% of those lawsuits claimed a NEPA violation.

NEPA isn’t the only source of delay. In a report last year McKinsey noted that a project can require up to 60 federal permits, including Clean Water Act and Clean Air Act permits; U.S. Coast Guard bridge permits; migratory-bird permits; and Marine Protection, Research and Sanctuaries Act permits. Permitting takes two to three years for manufacturing projects, eight to nine for mining projects.

“We don’t have one single permitting problem, we have many that stack on top of each other,” said Xan Fishman, executive vice president of the Bipartisan Policy Center’s energy program.

To counteract these delays, the Senate bill would: require agencies to consider a project sponsor’s own goals; reduce the grounds for delaying or reissuing permits; expand the list of projects not subject to review; create faster deadlines for agency decisions and court review; standardize comment periods; and narrow the grounds for who can sue.

Proposed changes to power transmission line permitting could be particularly significant, shrinking the role of the Energy Department. If a state is delaying a line, the Federal Energy Regulatory Commission can take over. This could shrink the approval process from 10 years to three, said Fishman.

McKinsey estimates permitting delays add 24% to 30% to the cost of a project through inflation and delays of materials. Eliminating such delays would be a textbook free lunch, boosting the volume and lowering the price of infrastructure, power plants, buildings and factories at no cost to the taxpayer.

Quantifying its precise impact is next to impossible, but real-world experience is encouraging. Zachary Liscow of Yale University, Heidi Williams of Dartmouth College and Joseph Shapiro of the University of California, Berkeley looked at a 1947 legal change that gave federally approved gas pipelines, but not oil pipelines, the power to acquire rights of way via eminent domain. Growth in gas pipeline mileage then rose sixfold while new oil pipeline mileage held steady, their study found, suggesting the Senate bill could have a similar effect on interstate transmission.

There is no guarantee the bill will be a breakthrough. State and local governments could continue to block projects. Newly elected Democratic governors campaigned on slowing or halting data centers, where construction times are already lengthening. Agencies may not implement the law as intended, and opponents may find new ways to sue. Prior changes in 2015 and 2023 had underwhelming results.

And the bill isn’t home free yet. Republicans and President Trump back the bill, and many Senate Democrats voted in favor this week. But opposition among progressive Democrats in the House is growing. They worry about weaker environmental protection, compromised tribal sovereignty and the boost to fossil fuels. Some don’t trust Trump, who says he still intends to block wind projects.

The opposition might be shortsighted. The law would actually make it harder for a president to revoke an already-issued permit, Fishman said. Renewables stand to benefit far more than fossil fuels because transmission lines, solar farms and wind projects so often touch federal jurisdiction, he said. “You can get a better economy and better environmental policy from the same policy change.”Get insights from Greg Ip on the intersection of economics, markets and politics in your inbox twice a week. .