Executive Summary
The U.S. was a production giant in the twentieth century, whose industrial capacity exceeded that of every other participant in World War II. Despite this power, the nation decided to offshore much of its manufacturing might. As a result, China now leads the U.S. in manufacturing output. There is a massive dependency on China for many necessary items, such as consumer goods, pharmaceutical inputs, and rare earth metals. The downstream effect of this is an inability to react to conflicts across the globe for fear of upsetting China and being cut off from goods on which there is such a dependence. The U.S. needs to reindustrialize.
There are barriers to reviving domestic manufacturing. The National Environmental Policy Act (NEPA) has put up roadblocks to any industrial buildout, with permitting processes that take years to complete, and environmental remedies that are egregious. California’s High-Speed Rail project, first approved by voters in 2008, has yet to lay any operational track. NEPA has done considerably more harm than good for the outlook of the environment, delaying clean energy projects by years while environmental impact statements are prepared.
There is a solution to these maladies. The interstate compact, a tool originating from the earliest days of the U.S., may provide the answer to reindustrializing quickly and efficiently. States can enter into operational agreements that allow cooperation over certain issues. Compacts were further empowered by a 2015 law, the Fixing America’s Surface Transportation (FAST) Act. In a provision titled FAST-41, the “consent of Congress is given for 3 or more contiguous States to enter into an interstate compact establishing regional infrastructure development agencies to facilitate authorization and review of covered projects, under State law or in the exercise of delegated permitting authority described under section 41006, that will advance infrastructure development, production, and generation within the States that are parties to the compact.”
Effectively, three or more contiguous states have congressional consent to set up interstate compacts to deal with facets of reindustrialization, superseding any federal regulations in the permitting process, so long as the interstate compact deals with advancing infrastructure development, production, and generation. This blanket consent is a solution for state-level policymakers and manufacturing companies who want to turn the tide against the consequences of offshoring U.S. industrial might.
