There’s no commitment to fix anything in Trump's US$1.5 trillion infrastructure plan, DCReport's Terry H. Schwadron argues

There’s no commitment to fix anything in Trump's US$1.5 trillion infrastructure plan, DCReport's Terry H. Schwadron argues

*This article comes from DCReport and is used with permission.

By Terry H. Schwadron, DCReport New York Editor

Not for the first time, Trump leaves me thinking either he or I must be on the wrong planet. Or missing something pretty central to deciding how we address a problem like failing infrastructure, including what to build and how to pay for it.

Almost lost among other events last week, the president, who has talked about the importance of infrastructure projects to address the nation’s failing bridges, roads, services since the campaign, finally came out with the plan: The federal government would incent local projects to be paid for by states, cities and any private companies that would like to participate—for a price, of course.

But there was no list of breaking bridges, or poisoned water systems, or the train collisions we’ve seen increasing. There was no real commitment to fixing anything. In its place were calls for easing reviews for development and construction and an open invitation to companies to end up as owners of needed services, like airports. In his plan, the federal government would put up $200 billion toward what is seen as $1.5 trillion in spending—by someone other than the federal government.

Trump may as well have made it $5 trillion or $25 trillion if he’s not planning to pay into the projects.

Indeed, Trump has been an excellent spokesman for the plight of an aging national infrastructure and the need to reinvest in our basics. He would cut foreign aid to spend more at home, he said, he would think about average Americans and he would pair the need for infrastructure projects to the ever-pressing need for more good-paying jobs.

The problem is this: With Trump and Republican leadership pushing more health, environmental, social welfare costs to the states, states say they don’t have the dough to spend on big infrastructure projects. With tax cuts abounding, corporations will be paying far less in local taxes as well as federal taxes.

There indeed are projects that private contractors may be attracted to as investments. Roads, for example, may make sense because companies can put tolls on them and be repaid for decades.

The White House made clear that projects that will win any such federal incentive money are those that show that local officials have lined up the other 80% of funding, whether from local taxes, bonds or private investment.

In New York City, we’re facing major infrastructure demands from a public transit system that is well beyond aging. I could be wrong, but I haven’t heard that JP Morgan or Macy’s is stepping forward to offer to pay for a new signaling system for the subway or to rebuild track lines. Between New Jersey and New York, plans have risen and fallen multiple times as financing was pulled for an additional Hudson River tunnel to carry overwhelming traffic in and out of Manhattan—all without private financing being mentioned. In Flint, Mich., there are no private companies stepping forward to say they would like to own or co-own the lead-ridden water system.

It seems to me that The Trump Organization is a New York City-based company that has never offered to invest in public projects; indeed, its owner is a guy who prides himself on avoiding as much tax as possible.

Even at LaGuardia Airport, where sprawling construction is underway, the bulk of the money involved is coming from the public Port Authority, with airlines paying for renovations in their individual spaces.

It seems to me the projects that might have allure for private investments are those that can lead to retail or business opportunity. There seems no incentive for private investment in strictly public projects.

Maybe we have a new proposition for the Chinese, South Koreans or others willing to lend America money. They can become partners with U.S. cities to own our roads and electric grids. Oh, maybe there might be a little problem thinking that a foreign entity might own the keys to making America work, but at least it preserves U.S. tax cuts for corporations.

Providing highways literal and figurative always has been the province of government entities. Government responsibilities have been divided for two hundred years among federal, state and local entities. Trump is trying to unilaterally change the equations of who pays what in the intragovernmental agreements.

That may be a good thing in the long run—at least it should be debated—but for those of us trying to take a subway—or use a bridge, drive on a highway, use an airport—a theoretical re-juggling of governmental responsibilities does not make the trains run on time.

As citizens, we pay taxes to all three levels of government. At the end of the day, it doesn’t much matter to me which level is handling the dollars. I care a lot more about the services that should result.

The thinking behind “federalizing” the cost of various non-military social services was fairness, that local rules should not make it so that being poor in New York or Mississippi is a different experience. But the confluence of Trump and Republican majorities in both houses of Congress has advanced the idea of “small government,” because they focus only on the federal level. To them, it is more appropriate for states or cities to handle more responsibility. They skip over the fact that Republican candidates in those areas want to cut taxes and services as well, pushing things, well, to the individual to care for himself or herself.

So, following the logic, I should be fixing the subway and rebuilding airports, fixing dams and bridges. Maybe I can link up with the local library which no longer allows patrons to drink from its water fountains, or the public school where I tutor, which puts students in temporary spaces.

Maybe this could work on another planet.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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5 Comments

Lots of work being done on interstate 5. Lots of middle America has been hollowed out, just shells of their formers selves. Empty rural towns don't justify much spending, the growth is along the coast. Lots of boondoggles going on, are any better, lots of old bridges not designed for the new trucks, lots of traffic backed up, roads like the Manawatu gorge taking 10 years to replace, something that should have been planned 30 years ago.

Trump has a blueprint you just don't recognize it - read his book Art of the Deal. Tax reductions historically have lead to increased tax take eg repatriation of $3 Trillion of US Corporate profits held overseas being repatriated and producing tax/jobs/industries which export of reduce imports and is the policy deliverance promised by Trump pre election. Trump isn't perfect and given a choice of two thank god Hillary was kept out of office pending her move to Gitmo.

Oh I recognise it, he's pillaging the US economy for his own personal profit and profit of his supporters.

In terms of repatriating tax and so what? it is a very specific case. You could even argue that the buoyant state of the US share market is based on the hope of a tax holiday and hence big investor dividends.

Otherwise when you look at tax reductions for the well off in general they do not boost the economy. The specific case of US corporations "hiding" their money off shore to dodge US tax is not in context of " reducing taxes boost economies" if this is what you imply.

In regards to Trump; You can only kid some of the people some of the time not all of the people all of the time. His is running out of time, Muller is on his tail.