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ThePlumLIneGS whorunsgov plumline
Posted at 12:40 PM ET, 11/02/2011

Ronald Reagan supported tax-funded infrastructure spending to create jobs

In this morning’s speech calling on Congress to pass his new infrastructure and jobs bill, Obama again invoked Ronald Reagan, claiming he supported the same ideas Obama is now championing — and that Republicans are rejecting. Obama pointed to this as proof of today’s GOP extremism:

If you don’t want to take my word for it, take it from one of my predecessors. He said that — and I’m quoting here — “the bridges and highways we fail to repair today will have to be rebuilt tomorrow at many times the cost.” He went on to say that rebuilding our infrastructure is common sense — and an investment in tomorrow that we must make today. That President was Ronald Reagan. Since when do we have Republicans voting against Ronald Reagan’s ideas?

I’ve tracked down the 1982 Reagan speech Obama was referring to, and the historical comparison is actually more interesting than this. The speech is right here. In it, Reagan proposed legislation for a new highway and bridge repair program.

Reagan did not call for any income tax hikes to pay for the proposal, so in this sense the historical comparison doesn’t work. However, he did call for a tax on motorists to pay for it — and he explicitly justified this added tax by arguing that infrastructure spending would stimulate the economy:

The program will not increase the Federal deficit or add to the taxes that you and I pay on April 15th ...Good tax policy decrees that wherever possible a fee for a service should be assessed against those who directly benefit from that service.
So, what we’re proposing is to add the equivalent of five cents per gallon to the existing Federal highway user fee, the gas tax. That hasn’t been increased for the last 23 years. The cost to the average motorist will be small, but the benefit to our transportation system will be immense. The program will also stimulate 170,000 jobs, not in make-work projects but in real, worthwhile work in the hard-hit construction industries, and an additional 150,000 jobs in related industries. It will improve safety on our highways and will make truck transportation more efficient and productive for years to come.

Of course, many Republicans agree that infrastructure spending helps the economy. At least five GOP Senators are already on record saying it. So is Paul Ryan. Republicans (and a handful of Dems) only object to taking this step to help the economy, create much-need jobs, and secure America’s future because of how it’s being paid for — with a 0.7 percent surtax on millionaires.

Reagan argued against raising income taxes to pay for this. But he claimed it was fair to ask those using the highway system to pay a little bit more for a program that would benefit the rest of us, by helping boost the broader economy and creating hundreds of thousands of jobs.

Here’s where Elizabeth Warren’s argument comes in. She argues that it’s fair to ask the wealthy to pay a little more in taxes in order to help keep up the infrastructure that they used in the course of getting rich in the first place: “You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for.” On infrastructure, at least, Ronald Reagan, Elizabeth Warren, and President Obama don’t seem all that far apart.

By  |  12:40 PM ET, 11/02/2011

 
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