Last night Mark Levin made a strong case AGAINST federally-funded infrastructure spending, correctly pointing out that such programs are paid for with dollars confiscated from the private sector. Yet it is undeniably true that our nation needs to repair or replace roads, bridges, airports, school buildings etc etc across the board — and since these are facilities that benefit the general public, the public should bear the cost.
So how should president Trump fund his “Rebuild America” efforts? Are we in for another round of “you didn’t build that”? Steven Mufson at the L.A. Times (yeah, I know, the L.A. Times sucks) took a look yesterday at how Trump’s pitch is making Democrats and crony capitalists drool:
by Steven Mufson, 11/18/2016, L.A. Times: Gone are the days when federal infrastructure spending was measured in highways, bridges, and ports. As President-elect Donald Trump considers a massive new spending plan on public works, policy experts, lawmakers and companies are racing to make the case that infrastructure could include projects such as fast Internet networks, electric-vehicle charging stations, power transmission lines and drinking water systems.
At the same event, Richard Lukas, director of federal grants and program development at the Trust for Public Land, was worrying about the fate of federal grants used to fund a riverside park in Newark, N.J., a three-mile park along an abandoned rail line in Chicago, and a trail and bike system in Cleveland.
D.C. Mayor Muriel E. Bowser, a Democrat, had her own suggestion: “I would like us to think about affordable housing as part of our critical infrastructure.”
The varied proposals highlight a chief challenge in drawing up any plan: One person’s critical infrastructure is another person’s bridge to nowhere.
“Infrastructure doesn’t just mean roads and bridges. Infrastructure means a lot of different things to a lot of different people,” said Jason Grumet, president of the Bipartisan Policy Center. “We have to be confident that we’re investing in things with common benefits, not like digging holes. The outcomes have to be consistent with our national priorities.”
How that will be decided is anyone’s guess. Trump hasn’t said how he will stimulate infrastructure spending or how much will be public vs. private funding.
Two of his advisors, private-equity investor Wilbur Ross and UC Irvine business professor Peter Navarro, have floated the idea that a federal tax credit could cover 82% of the private equity needed for big projects. They say that rather than setting national priorities, the Trump administration should use the tax credit to let the private market decide which projects to undertake.
“It would link increases in spending to reforms that streamline permitting and approvals, improve the project delivery system, and cut wasteful spending on boondoggle bridges and highways to nowhere,” they said in an Oct. 27 paper.
Ross and Navarro did not describe any limits on who would qualify for the tax credit, but they estimate that the federal government will hand out $137 billion worth of credits.
There is no shortage of volunteers.
IBM Corp. Chief Executive Ginni Rometty recently wrote to Trump with her ideas for infrastructure. “As we build big, let’s also build smart,” she wrote. “The country should focus on infrastructure investments that incorporate Internet of Things (IoT) technology and artificial intelligence to improve performance.”
“And as infrastructure gets smarter, it also increases the need for cybersecurity, so that vital networks cannot be compromised,” Rometty added. “We recommend that your infrastructure package include incentives for states and localities to build intelligent — and secure — roads, bridges, buildings and other public facilities.”
Many of the companies arguing for infrastructure are hawking their own products. IBM provides equipment and services for the Internet of Things just as Verizon provides LED networking technology, part of a company called Sensity that Verizon bought in September.
Other companies and workers imagine other things when they hear the word “infrastructure.”
The American Society of Civil Engineers gave the United States a D-plus in its 2013 report card on U.S. infrastructure. It considered a wide variety of infrastructure areas, including energy, schools, parks, rail, bridges, solid waste facilities, dams, aviation, ports and drinking water.
And while Trump has said he will curtail U.S. spending on climate change, the civil engineers group supports projects, such as flood control systems, that would promote resilience to changing conditions.
For now, oil pipelines seem higher on Trump’s priority list. “It’s a huge opportunity,” said American Petroleum Institute President Jack Gerard, “that doesn’t cost taxpayers money.”
“We’re going to build some more pipelines that make sense, that are done with a workforce that is the most highly trained, safest in world, with 20th century technologies, and get some of those dangerous rail cars and trucks off the road,” said Sean McGarvey, president of North America’s Building Trades Unions, half of whose members spend part of each year working on energy projects.
In addition, McGarvey said, workers could “refurbish the existing pipeline system.”
Trump is also likely to pursue plans to bolster fossil fuels such as coal. By contrast, the Obama administration had viewed renewable projects as infrastructure projects. In July, the White House announced $4.5 billion in loan guarantees for electric-vehicle charging stations. During her presidential campaign, Hillary Clinton said that the installation of more solar panels would fall under infrastructure spending.
Many state and city officials still have lists with traditional needs.
Oklahoma City Mayor Mick Cornett, a Republican who is also president of the U.S. Conference of Mayors, favors things such as fixing aging water projects and leaking pipes “that won’t get loans” and where attracting private money is “not realistic.” Schools also fall into that category. And Oklahoma City, recognizing that the quality of life affects its residents’ health, has redesigned streets to make them more pedestrian and bike friendly.
“I don’t have much of an affordable housing issue,” Cornett said regarding D.C. Mayor Bowser’s comment. “Our market rate in Oklahoma City is affordable housing in Washington, D.C.”
Cornett, who has requested a meeting between Trump and the mayors, argued that old infrastructure could be used in new ways and require new investments. One example, he said: “The advent of the autonomous vehicle is probably going to have more to do with change in the built environment and infrastructure than anything we’ve encountered in our lifetimes.”