We’re All in on an Infrastructure Investment Package but Details Matter
The president continues to highlight the need for significant investments in infrastructure that will modernize our eroding transportation system, create jobs and boost the economy. Talking about top-line numbers — like $1 trillion — may feel aspirational, but high-profile speeches at themed events aren’t enough.
The types of investments that will create good jobs and leave a lasting impact for working people, communities and businesses will require a serious federal funding strategy and the right policies. The details of an infrastructure package matter, and right now, many of the proposals we’ve seen don’t get us to where we need to be.
The FY18 budget released by the White House earlier this year calls for gutting transit expansion and TIGER grant projects, slashing Amtrak funding, and hollowing out the Maritime Security Program. Over the long term, the budget also looks to cut the already depleted Highway Trust Fund (HTF) by $95 billion, shifting the Trust Fund’s future financial responsibilities to the states. This “devolution” approach favored by anti-government extremists dumps all transportation funding responsibilities on already tight state and city budgets, thereby dampening any hope for a national infrastructure investment strategy focused on real outcomes. Devolution may be appealing to anti-government special interests, but not to anyone on either side of the aisle who actually understands how these investments are done and how our nation’s infrastructure was built in the first place.
Meanwhile, senior officials in the Administration tasked with overseeing an infrastructure plan want to rely on the private sector and public-private partnerships (P3s) to fund infrastructure investment. P3s have been around for years, and they can have a role in financing infrastructure, but experts will tell you that they will not magically produce even a fraction of the $4.6 trillion the nation’s leading civil engineers tell us we need for these investments. P3s are simply tools that can expand the orbit of project financing. Given that the cost of private sector capital is higher (hint: we’ll pay more) and only a sliver of projects are actually viable candidates for P3s, this approach alone is hardly the answer.
Some leading officials are also pushing an idea cleverly branded as “asset recycling.” This program, modeled on a failed experiment in Australia, encourages communities to turn over local public transportation and other assets to private interests, like big banks. The idea is that state and local governments would then use profits from the sales of those assets to fund other infrastructure projects. The problem? Under this program, taxpayers lose — big time. Either through taxes or increased user fees, taxpayers not only foot the bill for infrastructure they’ve already paid for, but their dollars fund a profit stream for investors. Privatizing infrastructure assets in this matter also has real and negative ramifications on labor standards for the workers who will build and operate these projects.
Frankly, all of these ideas are distractions. They distract from the real challenge of finding enough courage to tell voters the truth: Enacting a package that approaches the scale of President Trump’s $1 trillion campaign pledge requires federal investment. That means expanding federal capital and loan programs, relying on user fees, a gas tax, bonds and debt, and using P3s only where they make sense.
Funding the kind of infrastructure investments this country needs will be a challenge to be sure, but 250 members of Congress recently demonstrated that pursuing a long-term fix for the broken HTF may be a good place to start. This group also reminded us that Republicans and Democrats can come together on an approach to fix our nation’s dilapidated infrastructure. Modern, safe and efficient transportation and infrastructure are not red or blue issues. This is something all Americans want, need and deserve. President Trump should be focused on negotiating a deal that, first and foremost, puts the needs and interests of the American people first, and that both Republicans and Democrats can support.
Our view hasn’t changed: the time to act on a large infrastructure package is now. However, let us focus on a balanced, bipartisan initiative that unites the nation, doesn’t undermine working people or taxpayers, and puts millions to work. We’re all in.