A few days after print publication, Knight's syndicated newspaper column, which moves twice a week, will be posted. The most recent will appear at the top.

Thursday, December 15, 2016

Infrastructure needs work, Trump’s plan doesn’t deliver

Bill Knight column for Mon., Tues. or Wed., Dec. 12, 13 or 14, 2016

“Infrastructure” is a buzzword meaning almost anything to almost anyone.

To everyday people, the word means the systems that keep society going: roads and bridges, seaports and airports, mass transit and dams, sewers and waterworks, etc. To workers and their unions, it’s publicly funded jobs to build and maintain projects, from levees to the electric grid. To businesses, it’s government contracting projects, buying materials, and so on. To politicians, it’s providing what people need, but may not be profitable (like electrifying rural America in the 1930s). To politicians, it’s an issue so vital, the debate isn’t whether to fix the infrastructure, but how.

There’s a need for government to address deteriorating infrastructure, which earned a D+ grade from the American Society of Civil Engineers (ASCE). (It examined energy, transit, ports, aviation, levees, dams, schools, roads, waterways, wastewater systems, hazardous waste, public parks, rail, bridges, solid waste and drinking water.) Illinois’ infrastructure isn’t much better – a C-, ASCE said, with nothing gauged better than mediocre. The state has 15 percent of its public roads in poor condition, 9 percent of bridges structurally deficient, $17.5 billion in wastewater-system improvements needed by 2036, and $19 billion in upgrades to drinking-water systems in the next 20 years.

The question is: What can be done?

President-Elect Donald Trump for months has talked about repairing the nation’s run-down infrastructure. The billionaire pledged to submit a $1 trillion infrastructure package in his first 100 days in the Oval Office, but few details are specific. For instance, there’s no mention of public investment in these public assets, using local workers, preferences for veterans, good union wages, or Prevailing Wage requirements. Instead, its driving force is giving tax money to Business.

Although vague, Trump’s plan is has been spelled out enough to reveal that it depends on private financing, not public investment. An estimated $137 billion in federal tax credits would go to big, multinational corporations who’d “invest” in infrastructure projects – corporate welfare disguised as public works. His mostly ambiguous idea doesn’t directly fund infrastructure projects, essentially moving money from new but unfunded work to investment opportunities at previously planned projects. Those companies could take the difference in the tax-credit incentives and projected revenues from user fees such as tolls and deposit the gains.

Illinois is one of the few states with a major private road, the Chicago Skyway, an 8-mile stretch of elevated highway carrying about 47,000 vehicles daily. Mayor Daley in 2004 arranged leasing the skyway to a Spanish/Australian joint venture for 99 years for $1.8 billion. A Canadian group bought them, so a foreign partnership still keeps all revenues.

Trump would have taxpayers fund the tax credits, but let private interests keep the proceeds. Since taxpayers are covering the expense but investors would own the projects, public assets would basically become private enterprises.

Such public-private partnerships “only work on projects that create revenues,” said U.S. Rep. Peter DeFazio (D-Ore.) “The vast majority of the national highway system, and our bridge problems and all our transit problems, do not generate revenues. It will not help them.”

The Economic Policy Institute last week issued a report noting, “Governments – federal, state and local – have been financing infrastructure for decades, and it works.”

In contrast, take a 2016 study by the American Road & Transportation Builders Association that showed 60,000 U.S. bridges being structurally deficient. Will Trump’s notion result in 60,000 new toll bridges? Would tolls help decaying sewage systems, hazardous-waste sites, schools or parks?

DeFazio has proposed funding public investment by raising the gas tax (which hasn’t changed for 26 years) and indexing it to inflation, and by imposing a per-barrel tax on oil.

In the Senate, Bernie Sanders (I-Vt.) said discussing infrastructure development is sensible, but Trump’s plan “gives massive tax breaks to large companies and billionaires on Wall Street who are already doing phenomenally well.”

Sanders said he plans to revive his 2015 Rebuild America bill to not only invest in the public’s assets, but to create 13 million decent jobs.

Another consequence to Trump’s vague idea would its adding some $10 trillion to the national debt, critics from both sides of the aisle say. Also, his vow to reduce the debt to zero would be impossible unless brutal cuts to other government spending programs would happen.

Republican Senator Sen. Shelley Capito of West Virginia has expressed doubts. Replying to a question about the likelihood of a GOP Congress approving Trump’s plan, she said, “Not if it’s not paid for.”

Ronald Klain, the assistant to President Obama who supervised the American Recovery and Renewal Act from 2009-2011 said, “Every dollar spent on the Trump tax scheme to enrich construction investors and contractors is a dollar that will later be cut from schools, hospitals and seniors.”

[PICTURED: U.S. infrstructure "GPA," from the American Society of Civil Engineers.]

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