“It will be as exciting as the 1930s.”
That is what Donald Trump's chief strategist Stephen K. Bannon said about the incoming administration’s $1 trillion infrastructure plan. “With negative interest rates throughout the world,” he argued, “it’s the greatest opportunity to rebuild everything” from “shipyards” to “iron works” and just “throw it up against the wall and see if it sticks.”
He has a point. Well, not about the 1930s being particularly exhilarating or the need for new iron works per se. But it is a good time to invest in infrastructure. These are things we’re going to have to spend money on eventually, so why not spend on them when our borrowing costs are as low as can be? That would actually save money in the long-term. Which is why President Obama has been trying to get Congress to pass his own infrastructure bank for five years now. Republicans, though, have said no.
Would they say yes to Trump? Maybe. For the last 35 years, Republicans haven't worried about deficits when they've been in power—in fact, former vice president Dick Cheney said that “Reagan proved” they “don't matter"—and treated them like the greatest threat to the republic when they've been out of it. So the fact that this would add a lot of red ink wouldn't be a dealbreaker. Republicans are going to resume not caring about the deficit the moment the calendar flips to Jan. 20, 2017. What might make them a little hesitant, though, is that Republican Keynesianism has traditionally been about tax cuts for the rich and increased defense spending. Infrastructure hasn't been high on their list. But if they think this is the price they have to pay for Trump's support for the rest of their agenda, it isn't hard to imagine them at least letting it come up for a vote.
And like that, rebuilding our roads, bridges, schools, airports, water systems, and electrical grids will go from being Obama’s unaffordable socialism to Trump's prudent conservatism.
But even then, Trump still might need some Democratic votes to make his FDR dreams come true. Votes that he might not get. Now, that might seem surprising when Democrats have been calling for some kind of public works program for five years now. But it isn't when you consider that they haven’t been calling for this kind of public works program. Trump, you see, doesn’t want the government to spend $1 trillion on infrastructure. Instead, he wants the government to give corporations $187 billion worth of tax breaks to try to get them to spend $1 trillion on infrastructure. The problem with that, as former Obama and Clinton official Ronald Klain points out, is that there’s no guarantee these tax breaks would get companies to build infrastructure they weren’t already going to build, and no way to get them to build infrastructure where it’s needed the most but isn’t the most profitable. Places like Flint, Mich., where lead-free water pipes are a necessity people might not be able to afford if a utility boosted their rates even more.
In other words, Trump's plan might mostly help rich investors make money off infrastructure, and rich communities get infrastructure they were already going to. It’s no wonder, then, that Senate Minority Leader Charles E. Schumer (D-N.Y.) is signaling that he would only support a bill that has “real expenditures” and is not “just tax credits.” It’s possible this is just the prelude to a deal—presumably a great one—but it’s also possible that it’s not. That Republicans would only tepidly support an infrastructure program provided it's all tax breaks, and Democrats wouldn't support one at all unless it's all spending. That the conflict between ideology and self-interest might leave Washington where it's been for six years now: gridlock.
Not quite as exciting as the 1930s. Although that’s not necessarily a bad thing.