Senate Democrats call Trump’s bluff on infrastructure with a new $1 trillion plan - Vox

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infrastructure, finance, economy, policy, energy

> http://www.vox.com/policy-and-politics/2017/1/24/14369666/democrats-infrastructure-plan-trump <http://www.vox.com/policy-and-politics/2017/1/24/14369666/democrats-infrastructure-plan-trump>
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> Senate Democrats call Trump’s bluff on infrastructure with a new $1 trillion plan
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> Donald Trump keeps talking about how he wants to rebuild America’s roads, bridges, and other infrastructure. Now Senate Democrats are signaling that they’d be happy to work with him on this — only they have very different ideas on how to go about it.
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> On Tuesday, Democrats led by Sen. Chuck Schumer (D-NY) unveiled a proposal to spend $1 trillion over the next 10 years to repair old bridges and roads, expand bus and rail systems, modernize ports, highways, airports, schools, grids, and much, much more. Unlike Trump’s plan, this would be accomplished through direct federal spending. The exact funding mechanisms are still unspecified, though in recent years, Democrats have rallied around corporate tax reform to pay for infrastructure <http://www.vox.com/2015/12/1/9826668/clinton-infrastructure-plan-explained>.
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> Trump’s own infrastructure plan is rather different — during the campaign, he released a proposal <http://www.vox.com/policy-and-politics/2016/11/16/13628382/donald-trump-infrastructure-plan> to offer $137 billion in tax breaks to private investors who want to finance toll roads, toll bridges, or other projects that generate their own revenue streams. Experts argued that this plan was fairly narrow <http://www.vox.com/policy-and-politics/2016/11/16/13628382/donald-trump-infrastructure-plan>, mainly focused on projects with a large private finance component that can pay for themselves. Right now, very few roads in America meet that criteria.
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> “[Trump’s plan] is unlikely to do much for road and bridge maintenance,” Harvard economist Edward Glaeser said <http://www.vox.com/policy-and-politics/2016/11/16/13628382/donald-trump-infrastructure-plan> when I interviewed him about the proposal last November. “And [economists] have long believed that the highest returns are for fixing existing infrastructure.” Glaeser also noted that Trump’s plan was unlikely to do much for key infrastructure items like bus service for poorer communities.
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> The Democratic proposal is more old-fashioned — the federal government would mostly send money directly to states for public works. The biggest concern with a plan like this, Glaeser told me last fall <http://www.vox.com/policy-and-politics/2016/10/4/13121058/trump-clinton-infrastructure-economics-glaeser>, is that in the past, a lot of federal spending on infrastructure has been wasted on unnecessary new roads (or white elephant transit projects) rather than upgrading aging but valuable infrastructure.
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> The proposal — backed by Democratic Sens. Schumer, Tom Carper, Sherrod Brown, Bernie Sanders, Bill Nelson, Maria Cantwell, and Ron Wyden — steers away from new road construction and focuses more on repairing existing roads. It also has billions for transit, ports, the electric grid, and other projects. Here’s a more precise breakdown:
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> $210 billion to “repair crumbling roads and bridges.” This would include an expansion of the Obama administration’s TIGER grants <https://en.wikipedia.org/wiki/Transportation_Investment_Generating_Economic_Recovery>, which offered money to cities trying to solve key environmental issues via transportation.
> $110 billion to upgrade local water and sewer systems by providing local communities and taxpayers with federal grants, rather than loans.
> $180 billion to replace and expand existing rail and bus systems.
> $75 billion to rebuild schools (these projects are typically financed through local property taxes).
> $70 billion to “modernize America’s Ports, Airports, & Waterways.”
> $20 billion to expand high-speed broadband in unserved and underserved areas.
> $100 billion in new funding for energy infrastructure and grid modernization. This would also include reforming tax incentives for renewable energy. Also: “A permanent incentive would be given for electricity generation, transportation fuels, and energy efficiency improvements.”
> $200 billion for “a new Vital Infrastructure Projects program that will direct major federal investments to the most critical national projects.”
> $20 billion in funding to “address critical infrastructure backlogs on Public Lands and in Indian country.”
> $10 billion to “construct new Veterans Administration Hospitals & Extended Care Facilities for our nation's heroes, and upgrade Army National Guard Readiness Centers.”
> $10 billion to “support the creation of New Innovative Financing tools aimed at unlocking private pools of capital and increasing infrastructure investment.”
> It proposes the creation of a new infrastructure finance entity (“I-Bank”) that would unlock private pools of capital to provide low-cost loans or loan guarantees for infrastructure projects across a broad range of sectors, including transportation, energy, affordable housing, and water infrastructure.
> One of the major obstacles here is that Republicans in Congress have flatly opposed massive new federal spending on infrastructure. Senate Majority Leader Mitch McConnell (R-KY) has called it “not a top priority.” <http://www.npr.org/2016/11/09/501451368/here-is-what-donald-trump-wants-to-do-in-his-first-100-days> That means the only way this plan goes anywhere is if Donald Trump gets behind the idea and somehow convinces conservatives go to along.
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> Democrats, for their part, are urging him to do just that. “During his campaign, President Trump talked often about a big and bold infrastructure package,” Schumer said in his remarks today. “Well, this is one of the most comprehensive overhaul proposals in a generation, and we’re challenging President Trump to work with us on this broad plan that will sustain our positive economic growth, create millions of jobs, and build a modern economy.”
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> Schumer also said that Democrats “will not support tax credits for developers." In other words, they’re happy to work with Trump — but on their terms, not his.
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> Further reading
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> Jonathan Chait argues <http://nymag.com/daily/intelligencer/pages/ciybty8kj00k1t2y68ujvp27d.html> that Democrats are making a terrible political mistake by trying to work with Trump and give him a major policy win. Chait’s calculus: “Democrats’ success in the next two elections will be determined by Trump’s approval ratings. The lower his ratings, the better Democrats will do. Voters are not going to reward Democrats for proving they can get stuff done with Trump.”
> Here’s a look at Donald Trump’s infrastructure plan <http://www.vox.com/policy-and-politics/2016/11/16/13628382/donald-trump-infrastructure-plan>, which relies mostly on private finance. And Ed Glaeser explains <http://www.vox.com/policy-and-politics/2016/10/4/13121058/trump-clinton-infrastructure-economics-glaeser> how too much of infrastructure spending in the past has been wasted.