At tonight’s State of the Union address, President Trump is going to outline an infrastructure plan, something he has been saying he has wanted to do since the presidential campaign. Which might sound like a good thing, because there’s widespread agreement that our roads, bridges, water systems, sewage systems, electrical grid, public transit and other parts of the nation’s physical plant are woefully in need of upgrading.
But the Trump plan is a scam.
Last week, Axios obtained a draft of the proposal, which a variety of analysts have used, along with what the White House has said over the past year about what it wants to do, to determine what this plan actually consists of. Let’s count the ways it isn’t what the administration would have us believe — and isn’t what the country needs:
Misleading numbers: Trump and his aides are going to throw around “$1.5 trillion” a lot, but that number is misleading. The White House is proposing an expenditure of only $200 billion over 10 years, which is supposed to translate into $1.5 trillion of total “investment,” with the rest of the money to be spent by states, localities and private investors.
Interestingly enough, in June the administration briefly touted what looks like essentially the same proposal, but back then they said the $200 billion in federal spending would translate into $1 trillion in total investment, a figure that has magically increased by 50 percent. Amazing!
Not only that, the administration is simultaneously proposing a series of cuts to federal infrastructure spending, which could amount to as much or more than the $200 billion it wants to spend on this new plan.
Putting corporate profits over the needs of the public: As a new report from the Democratic group Democracy Forward explains, the administration’s plan was developed with the help of an advisory board headed by two New York real estate magnates who just happen to be personal friends of the president. Not surprisingly, the plan maximizes opportunities for private profits:
On the rubric for judging infrastructure grant applicants under the President’s proposal, 70 percent of a project’s score would be based upon the availability of non-federal revenue, compared to 5 percent for a project’s “economic and social returns.” At the same time, the plan limits federal funding to 20 percent of a project’s overall cost. This formula will favor projects that can more easily generate revenue for private financiers, as states will need to attract investors to fill in the federal funding gap.
Let’s be clear on what this kind of public-private partnership isn’t. In normal circumstances, the government decides it needs a new bridge, so it hires Joe’s Construction to build it. But the bridge still belongs to the government; we just have to pay maintenance costs. In the kind of “partnership” the Trump administration wants more of, the government decides it needs a new bridge, so it gives PriveCo Equity Partners a gigantic tax incentive to build the bridge, which the company now owns — and which will charge tolls on in perpetuity. Taxpayers could shell out nearly as much in tax incentives to the private company as we would have spent to just build the bridge, and then on top of that you’ll have to pay tolls to cross it — forever. As long as the bridge stands, people are paying extra so PriveCo Equity Partners can make a profit.
Environmental and safety problems: Something else Trump will reportedly stress in tonight’s speech is his desire to accelerate the construction of these projects by eliminating “red tape” that delays projects by years. Which sounds good, as long as you accept the Republican assumption that regulations never have any purpose behind them other than causing problems for noble job-creators.
Of course, that isn’t true. The Center for American Progress explains what kind of “red tape” the administration wants to cast aside:
As detailed in the leaked proposal, the Trump administration’s plan would require fundamental changes to no fewer than 10 bedrock environmental laws that protect the nation’s clean air, clean water, wildlife, and national parks. The plan would hollow out the National Environmental Policy Act (NEPA), the law that requires federal project sponsors to consult with stakeholders who would be affected by new projects and identify ways to reduce their impact on the environment, public health, and cultural resources. The Endangered Species Act is also in the crosshairs, as several provisions would prioritize new development over the protection of wildlife that is on the brink of extinction. The Trump administration proposes significant changes to the Clean Air Act and Clean Water Act to make it easier for corporations to break ground and avoid inconvenient air and water quality protections. The proposal even includes some mystifying provisions, such as one to give Secretary of the Interior Ryan Zinke unilateral authority to site natural gas pipelines in national parks.
That’s not to say it would be impossible to streamline the approval process for infrastructure projects, but the devil is in the details. If by “streamline,” you mean “ignore the health and safety of the communities where projects are placed,” that’s not the kind of bargain we should want to make.
The wrong projects: This is an inevitable problem when the fundamental principle of your plan is that somebody other than the federal government should pay the bulk of the cost for these infrastructure projects. If states and localities have to put together the money, what happens when they just don’t have it? Can Flint, Mich., afford to apply for an infrastructure grant if the federal government is only going to put up 20 percent of the funds? The focus on private investment, furthermore, will naturally privilege projects that can generate a profit for private companies, which probably won’t be the most sorely needed upgrades.
Trump often complains that other countries are laughing at us. He’s usually wrong, but infrastructure is one area where we really are far behind our peer countries. It affects every sector of the economy; according to the American Society of Civil Engineers, “If this investment gap is not addressed throughout the nation’s infrastructure sectors by 2025, the economy is expected to lose almost $4 trillion in GDP, resulting in a loss of 2.5 million jobs in 2025.”
So we need a federal infrastructure bill. The problem with this one is that it’s being sold as something it isn’t, it makes it harder for states and localities to afford infrastructure projects, it prioritizes private profits over public needs, and in the end if it passes we’d wind up paying more and getting less. In other words, it’s just about what you’d expect from this president.