Nobody ever got their party’s nomination for president because they had the best policy ideas. You can say that’s because in their boundless wisdom voters understand that character is deeply important in a president, or it’s because our democracy is, generally speaking, a garbage fire where trivia and “gaffes” are more important than substance.
Nevertheless, since Democrats are the party that believes in government, their candidates feel obligated to put out serious proposals for initiatives they’ll undertake should they become president.
These proposals really do matter, even if they don’t get nearly the attention of a candidate mispronouncing the name of some remote Iowa town or failing to eat some food in the proper manner, because presidents keep most of the promises they make on the campaign trail. So today I’d like to take a look at the latest big policy proposal, which surprisingly does not come from Elizabeth Warren (who has been churning them out at an almost alarming clip).
Amy Klobuchar just released an infrastructure proposal, which as far as I can tell is the first such plan from any of the candidates. And it demonstrates just how different are the approaches the two parties take to this kind of problem.
It is, to be clear, an enormous problem. Compared with other highly developed countries in Europe or Asia, our infrastructure — roads, bridges, sewers, the electrical grid — is pathetic. For years we’ve been starving our infrastructure of needed repairs and upgrades, causing a drag on our economy and public health.
As the American Society of Civil Engineers wrote in 2016, the country was on track to spend $1.4 trillion less than what it should to meet our needs: “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.”
No one who knows even the slightest bit about this topic thinks this isn't an urgent need. So here are the basics of Klobuchar's plan:
- Focuses on road, highway and bridge repair; flood protection and upgrades to airports and seaports; expanding public transit and repairs rail infrastructure; rebuilding schools; connecting every American home to the Internet; spurring green development; and ensuring clean water.
- Spends $650 billion in direct federal funds.
- Establishes an infrastructure bank to guarantee loans for states and localities.
- Pays for the investments by increasing the corporate tax rate from 21 to 25 percent and closing loopholes.
As of now, none of the other Democratic candidates have put out a comprehensive infrastructure plan, though many of them are on record talking about how critical the issue is (see here or here or here). Bernie Sanders introduced a bill in 2015 that is similar in many ways to what Klobuchar is proposing, but he hasn't yet updated it for this campaign.
Nevertheless, don’t be surprised if what the other candidates come up with pretty much follows these contours.
If you were to sum up the basic Democratic approach, it would be to spend a lot of federal money directly on addressing infrastructure needs, and then spend a substantial but relatively smaller amount on helping states and localities raise their own money, and a yet smaller amount that encourages private investments in infrastructure projects.
The Republican approach turns that upside-down, putting the emphasis on encouraging private investment through tax breaks. This was the essence of a plan the Trump administration put out in January 2018 but never actually did anything about. It was touted as a "$1.5 trillion plan," but in fact proposed to spend only $200 billion on infrastructure, with most of the rest coming in the form of tax incentives for corporations that would supposedly produce a total of $1.5 trillion in spending, a prediction that seemed absurdly optimistic.
At the time, I explained the basic problem with this approach:
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 it 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.
There were lots of other problems with the Trump proposal, like the fact that it wanted to suspend environmental protections in the name of “streamlining” these investments, but this emphasis on using taxpayer funds as enticements for private investment was the heart of it.
It’s not that there are no circumstances in which private funding of infrastructure can be a good thing, but the need for such projects to be profitable biases them in directions that might not be in the public interest. The nice thing about the government making those decisions itself is that you don’t have to dangle tax incentives and wait for a corporation to decide that it can make money replacing the water pipes in Flint, Mich. If it’s important to do, we just do it.
This is one area where Republicans and Democrats supposedly agree on the problem but have different ideas about the solution. But if Republicans actually cared about it, they would have done something about it when they had complete control of Washington for two years. They didn’t. So it’s obviously going to be up to the next Democratic president.