More than a year after Donald Trump pledged on the campaign trail that his government would spend a trillion dollars rebuilding America’s crumbling infrastructure – roads, bridges, power plants, airports, rail, drinking water, ports, flood control and much more – his administration is finally rushing to reveal its plan for the president’s first State of the Union speech on January 30.
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The investment by the federal government that Trump will propose will not come close to $1 trillion, will involve a massive giveaway of resources to private business, and will dump the burden of saving the crumbling infrastructure to the same states and local governments that just lost a huge amount of their funding under the Republican tax bill passed in December.
As New York Magazine predicted last month, Trump’s plan calls for “as much as $200 billion in federal spending over the next decade, with the rest coming from private investment, state or local funding and cuts to other federal programs.”
States and local governments will have to compete for what money the federal government says it plans to spend. Since the Republicans would never raise taxes – especially in an election year – they have shifted the burden to raise taxes and fees to the states and local governments, or to other sources.
For the same reason, the Republicans won’t raise taxes, there is going to be little Democratic enthusiasm for passing Trump’s infrastructure plan.
“The president’s pitch to (Democratic Minority Leader Senator Chuck) Schumer is,” writes New York Magazine, “ostensibly: Help me pass a bill that rolls back environmental regulations, slashes $200 billion from social spending, and provides a little bit of seed money for state-level infrastructure projects – on the condition states agree to fund the bulk of such projects through state and local taxes (which by the way, affluent blue-state residents will no longer be allowed to deduct from their federal taxes).
“Unfortunately for the president,” adds the publication, “the Senate is about as likely to pass this plan as it is to name a post office after Osama bin Laden.”
The plan Trump is about to announce is still sketchy, but it shares a purpose with plans put forward during his campaign and early in his presidency which were dead on arrival.
Last January, former Labor Secretary and Trump critic Robert Reich accurately called the president’s plan a “giveaway to the rich.”
“Rather than tax the wealthy and using the money to fix our dangerously outdated roads, bridges, airports, water systems,” accurately predicted Reich, “Trump wants to give rich developers and Wall Street investors tax credits to encourage them to do it.”
His soon-to-be-announced plan is even worse because Trump is turning over the actual job of handing out tax credits and creating what the plan calls “public-private partnerships” to the states and local governments, many of which have barely recovered from the great recession that hit America hard beginning in 2008.
For those states, counties, and cities that can afford to access the federal money, Reich warns that only projects that have a big pay off like popular toll roads will be done while smaller, less profitable bridges and water plants will not get fixed.
Trump plans to spend $200 billion to be taken from other places like social programs and stretch it into at least $1.6 trillion in projects and improvements.
The spending breaks down to 50 percent on infrastructure incentives, 10 percent to transformative projects (new improvements called “American Spirit” projects like tunnels and high speed rail), 25 percent to rural infrastructure (roads, broadband, replacing aging lead pipes, etc.), 7 percent to a federal credit program (designed to spur private investment) and 5 percent to finance the federal capital fund.
Local governments would have to “win” the money by coming up with plans that meet the new criteria which is less about the actual project and more about how much money the government can come up with in new revenue by raising taxes, adding fees or making deals with private partners.
“By effectively dangling infrastructure grants to the highest bidder,” wrote CityLab.com in late December, “the White House’s proposal could pressure those same layers of government to corral what few resources they have into paying their share of an infrastructure plan. Cities that never financially recovered from the recession, like Detroit, Cleveland, Stockton, and Memphis, may feel especially limited in their spending option if federal grants are only available for big spenders.”
Senator Bill Nelson (D-FL), the top Democrat on the Commerce Committee, which oversees the Department of Commerce, which under Trump’s plan will be in charge of this whole program, is skeptical that states will be able to pay for necessary infrastructure repairs, upgrades or building plans.
“They’re not going to do that to repair the interstates,” Nelson told Newsweek. “They’re not going to do that to repair the 50,000 bridges that are structurally unsound. They’re not going to do that for the expansion of sewer and water systems and broadband.”
So Republicans want to tap into the private-sector for investment to finance infrastructure projects “to avoid increasing the national debt,” according to Reuters. “Democrats believe that government money is necessary to produce such a large package.”
There is no incentive for Democrats to help make Trump look good going into the November midterm elections even if they agreed with his approach – which they do not. At least some of the plan is likely to require 60 votes in the Senate, which is probably an impossibility, so chances of this passing this year seem poor to nil.
That means Trump’s rich friends and campaign donors who want to grab toll roads that will pay them back for years to come, while avoiding projects like sewers in poor areas that provide human services but promise little payback, will have to wait to see if the Republicans can hold their majority in Congress and whether Trump’s shaky presidency can survive through 2020.
As with health care and a lot of the president’s other legislative pushes last year – infrastructure improvements paid for by cutting even more social services and health care programs for the needy, children, the mentally ill, seniors and others whose rights Trump would be happy to trample – it looks like this will be another exercise in frustration.
It couldn’t happen to a more deserving president.