Want that pothole on your street fixed? What about the rusty bridge you cross every day on the way to work? Want the subway to run on time? Then we need to talk infrastructure.
Specifically, we need to talk about how we pay for it. Word is Trump is weeks away from pushing his so-called “$1 trillion” infrastructure plan to rebuild America, so it’s crucial to get some facts straight before the dog and pony show begins.
First, it very likely won’t actually be $1 trillion. The administration says they’ll offer up $200 billion in federal funding to, as they put it, “leverage” the rest from other sources. What they really mean is cities, counties, and states will have to make up the $800 billion difference. This will make a dire situation even worse, as decades of tax cuts have drained public budgets. One telling example: more than half of all the country’s schools are in desperate need of repairs or modernization, yet 31 states spend less on school construction now than they did before the Great Recession.
In fact, when all is said and done, there could be a net loss in federal infrastructure spending. Trump’s proposed budget cuts tens of billions of dollars from existing infrastructure programs, and the new GOP tax cut increases the cost to finance infrastructure for states and local governments. That means less new infrastructure and fewer jobs.
Essentially, Trump is telling most Americans to do more with even less.
Second, the plan will all but force states and local governments to privatize or even sell off infrastructure. Tax cuts have slowly opened the door to Wall Street, construction giants, and global water companies, who see enormous potential for profits. Some states and local governments have turned to expensive private financing, a.k.a., “public-private partnerships,” and learned the hard way. Private financing often means higher tolls, parking rates, or water fees, lower labor standards, and less public control over decision-making once a project is up and running.
Either way, private financing does nothing to solve our infrastructure problems. It’s not financing that we lack. What we need more of is sustainable, dedicated funding to pay for what we need and pay back what we borrow. Direct federal funding is crucial to helping communities decide to take the plunge into building a new public road, bridge, or transit line.
Third, nearly all decisions about infrastructure—what gets built, how to build it—are already made at the state and local level. The Trump administration will likely argue that the plan gives states and local governments more control and “flexibility.” But that’s already true. The federal government can use tax breaks, loans and loan guarantees, interest rate subsidies, and cash grants, but in the end they are just a bank—a bank that would be much more stingy if Trump gets his way.
Higher tolls. Fewer jobs. Less money to fix things and build new infrastructure. Add it all up and Trump’s plan would leave more Americans behind.