Trump Is Threatening Our Drinking Water
The latest infrastructure plan is a scam. Here’s why we fight back.
by Mary Grant
Updated 2/9/18
We’ve already seen Trump’s infrastructure plan, and it paints a frightening picture. At its best, Trump’s infrastructure plan is a scam. At its worst, it endangers our families, communities and the planet. Here are five reasons we need Congress to stop Trump’s infrastructure scam:
1. Trump’s scheme is a Wall Street giveaway.
The infrastructure plan from the Trump administration provides a blueprint for handing over our public land and public water to Wall Street. It seeks to privatize our local water systems and other critical public services, prioritizing limited federal dollars to projects controlled by Wall Street and corporations. He wants corporations to make a profit off of our infrastructure — and for the public to pay the costs.
Specifically, the plan points to new programs to incentivize privatization of water and other projects by prioritizing funding to communities that secure “new, non-federal revenue” (read: rate hikes) and use new “project delivery approaches” (read: privatization). It gives big subsidies to privatized projects by lifting the cap on private activity bonds and allowing corporations to keep existing low-cost government debt when leasing public services and systems — something water corporations have been requesting for years. The plan also calls for selling off federal real property, including perhaps public lands or water assets like the Washington Aqueduct.
Many of our nation’s water systems were built over a century ago and desperately need repairs and upgrades. Inadequate federal investment in public water and sewer systems has led to unaffordable rates for water service, and in some places, tap water that’s unsafe to drink. But selling our roads, bridges and water systems off to the highest bidder is no answer to our infrastructure problems.
This vision will ensure more of the same problems we’ve come to expect from privatization schemes: price increases, a lack of public accountability and a loss of jobs.
2. Trump’s scheme will lead to unaffordable water rate hikes.
The bulk of his infrastructure agenda is about passing the buck to states and localities to raise new revenue through rate hikes and privatization. Water bills would need to skyrocket to allow Wall Street to profit, leading to unaffordable bills and more water shutoffs. Food & Water Watch has researched the price of privatization: privately owned water systems charge 59% more than publicly owned systems.
Worse, at the same time that Trump’s infrastructure plan calls for more state and local government funding of infrastructure, his tax changes will impair ability of state and local governments to pay for infrastructure projects. The tax changes make local and state financing more expensive. Municipal bonds are the primary source of financing for water systems, and Trump’s tax bill is going to make them more expensive. It is going cut into the relative tax benefit of tax-exempt municipal bonds, and governments are going to have pay higher interest rates on those bonds to attract buyers.
Meanwhile, tax changes impair the ability of state governments to raise revenue to support water projects because it caps state and local tax write-offs. This will hurt states like New York especially and their ability to raise tax revenue to help pay for local water projects. Together, this means higher water rates to pay for necessary improvements to keep our water safe and clean.
Already, more than one in ten people nationally are struggling to pay their water bills, and without urgent federal action, a water affordability crisis is on the horizon across the country. When people can’t afford to pay their water bills, the consequences can be dire. Water service can be shut off for nonpayment, leaving families without running water for drinking, cooking, cleaning, bathing, flushing toilets and washing hands. People can even lose their homes through eviction or tax sales and foreclosures because of unpaid water bills. Trump is setting our communities up for worsening public health and housing crises.
3. Trump’s scheme is an attack on poor people and communities of color.
Trump’s infrastructure plan will worsen wealth inequality. It will transfer wealth to rich, typically whiter, communities. His infrastructure incentives initiative would cap federal support at one-fifth of the project costs, and these limited federal dollars would be awarded to communities that can best pay for the remaining amount. This means that federal assistance would not go to places that need the support, but instead, it would be prioritized to wealthier municipalities that can already pay for infrastructure projects.
More, Trump’s infrastructure agenda relies on hiking user fees like water rates, which are very regressive, disproportionately burdening low-income and working families. A study of Michigan found that communities of color already pay higher average household water bills than communities with lower percentages of racial minorities. Similarly, in the Chicago-area, low-income towns and communities of color pay higher water rates than their wealthier, whiter neighbors. And even within a community, the harm is not felt equally. Water shutoffs disportionately affect people of color in places like Boston and Detroit.
Trump’s privatization agenda will only deepen these disparities. Private investors will not put money into replacing water lines in low-income cities or rural communities. They can cherry-pick service areas to avoid cash-strapped neighborhoods where households can’t afford to pay the cost of privatized service. Even the proposed rural infrastructure program would incentivize privatization, despite criticism of this approach from members of Trump’s own party. As Wyoming Senator John Barrasso said, public-private partnerships “do not work for rural areas.”
Trump’s priorities are wrong. His plan provides no money dedicated to communities that need it most. It includes no provision that prioritizes communities with affordability or public health challenges. Trump’s agenda will not help low-income cities like Flint, rural communities like Martin County, Kentucky, or other struggling communities address their water crises.
4. Trump’s scheme will cut federal funding for public water.
Trump is not going to increase federal funding for infrastructure; instead, his scheme relies on smoke and mirrors. DJ Gribbin, his infrastructure advisor, said the infrastructure plan would “repurpose” existing federal assistance for transportation and other projects. That means, Trump’s $1 trillion infrastructure plan is actually a zero-sum game. It will provide no new support for infrastructure. His agenda will merely move around existing federal funds to make it easier for Wall Street to profit.
Trump provides no additional funding to the State Revolving Funds, USDA’s rural water fund or any of the existing programs that provide dedicated funding for water projects or technical assistance to struggling water systems.
Federal funding for water infrastructure is at its lowest point in decades. Instead of reversing the decline, Trump’s plan provides zero dollars to the highly successful Drinking Water and Clean Water State Revolving Fund programs, which are the main source of federal support for our local water and sewer systems. Despite not increasing support to these funds, Trump seeks to open up the clean water fund to private entities. This amounts to taking away existing federal money from our local governments to give to big water corporations. That’s not all. Trump intends to allow private companies to use federally subsidized WIFIA water loans to lease and outright buy public water and sewer systems. He also wants to open up this loan program to non-water projects.
More broadly, Trump will likely cut services and public infrastructure investments to pay for his corporate tax giveaway. We can expect his budget to have massive cuts to EPA and federal water funding. Last year, Trump’s budget proposed completely eliminating USDA’s rural water program.
5. Trump’s scheme will lead to environmental destruction.
The leaked infrastructure plan includes provisions that will benefit the fossil fuel industry over people. It points to a new “Public Lands Infrastructure Fund” that would raise revenue from mineral and energy development on federal lands and waters — that would include fracking in our national parks and offshore oil drilling. It also will provide new federal subsidies for potentially high-risk oil and gas projects through a new “transformative projects” program run by the Department of Commerce. One-tenth of Trump’s federal infrastructure agenda would go to these projects that are too high risk to be commercially sound.
And Trump thinks he can turn $200 billion into $1 trillion — or $1.7 trillion, depending on apparently his mood — by green lighting and fast tracking big infrastructure and pipeline projects. He wants to gut environmental protections to rush them through the permitting process. This regulatory rollback does not create new projects or jobs; it just makes existing plans riskier and more dangerous for the health of our communities, workers and the planet.
Trump’s plans include sweeping deregulation and fast-tracking of infrastructure projects, including oil and gas pipelines. They would speed up and rush reviews removing opportunities for public input. Worse, they allow corporations to pay the federal government to prioritize their permit applications, creating and embedding new financial conflicts of interest into the review process. The last thing we need is to expedite pipelines that endanger our water, communities and climate. It would perpetuate our reliance on oil and gas at a time when we must do an about face towards clean energy solutions.
Trump’s infrastructure plan is essentially a giveaway to corporations at the expense of the American people and our planet. Communities deserve a say in how their water systems are managed, and decisions about shared essential resources such as water should be made with the public’s interest in mind, not the potential profit margins of Trump’s Wall Street cronies.
We need a just and equitable infrastructure plan that dedicates federal funding for public water and wastewater systems, makes corporations pay their fair share instead of burdening working and middle class families, and prioritizes vulnerable communities with the greatest affordability and public health needs. But to get to a real solution, we must resist Trump’s infrastructure scam.
