By Robert Reich
At a round table
discussion with state transportation officials on June 9, Donald Trump said
America’s aging roads, bridges, railways, and water systems were being “scoffed
at and laughed” at. He pledged that they “will once again be the envy of the
world.”
This seems to be a
core theme for Trump: America’s greatness depends on others envying us rather
than scoffing and laughing at us.
He said much the same
thing when he announced his decision to withdraw from the Paris
climate agreement. “At what point does America get demeaned? At what point do
they start laughing at us, as a country? We don’t want other leaders and other
countries laughing at us anymore. And they won’t be. They won’t be.”
To be sure, America is
in dire need of massive investments in infrastructure. The nation suffers from
overflowing sewage drains, crumbling bridges, rusting railroad tracks, outworn
roads, and public transportation systems rivaling those of third-world nations.
The American Society
of Civil Engineers, giving America’s over-all infrastructure a grade of D-plus,
says we would need to spend $3.6 trillion by 2020 to bring it up to par.
The problem isn’t that
we’re being laughed at. It’s that we’re spending hours in traffic jams,
disrupted flights, and slow-moving trains. And we’re sacrificing billions in
lost productivity, avoidable public health problems, and increased carbon
emissions.
But what Donald Trump
is proposing won’t help. It’s nothing but a huge and unnecessary tax
giveaway to the rich.
And it’s hardly a
plan. It’s not much more than a page of talking points.
Worse, its underlying
principle is deeply flawed. It boils down to a giant public subsidy to
developers and investors, who would receive tax generous tax credits in
return for taking on the job.
Which means the rest
of us would have to pay higher taxes or get fewer services in order to make up
for the taxes the developers and investors would no longer pay.
For example (in one
version of the plan I’ve come across), for every dollar developers put into a
project, they’d actually pay only 18 cents – after tax credits – and taxpayers
would contribute the other 82 cents through their tax dollars.
No one should be
surprised at this scheme. It’s what Trump knows best. After all, he was a
developer who made billions, often off sweeteners like generous tax credits and
other subsidies.
The public would also
pay a second time. The developers would own the roads and bridges and other
pieces of infrastructure they finance. They’d then charge members of the public
tolls and fees to use them.
In place of public
roads and bridges, we’d have private roads and bridges. Think
of America turning into giant, horizontal-like Trump Tower wherever you looked.
These tolls and fees
won’t come cheap. They’d have to be set high in order to satisfy the profit
margins demanded by the developers and the investors who back them.
Worst of all, we’d get
the wrong kind of infrastructure. Projects that will be most attractive to
developers and investors are those whose tolls and fees bring in the biggest
bucks – giant mega-projects like major new throughways and new bridges.
Developers and
investors won’t be interested in the thousands of smaller bridges, airports,
pipes, and water treatment facilities across the country that are most in need
of repair.
They’re not likely to
respond to the needs of rural communities and smaller cities and towns that are
too small to generate the tolls and other user fees equity developers and
investors seek.
They won’t be
attracted to the most important first priority for our nation’s infrastructure:
Better maintenance of what we already have. With improved maintenance, it
wouldn’t be necessary to completely rebuild.
But investors and
developers want to build anew. They can’t reap big rewards from maintenance.
Nor will they want to
put their efforts and money into projects that don’t yet have proven financial
track records, like many clean energy innovations – which, not incidentally,
might have enabled us to meet our targets under the Paris climate accords, were
we still part of the Paris accords.
We shouldn’t have to
pay twice over for the wrong infrastructure.
To really make America
great again we need the correct infrastructure in the right places – infrastructure
that’s for the public, not for big developers and investors.
Sorry, Donald. The
only way we get this is if big corporations and the wealthy pay their fair
share of taxes to support it.
ROBERT B. REICH is Chancellor's Professor of Public Policy at
the University of California at Berkeley and Senior Fellow at the Blum Center
for Developing Economies. He served as Secretary of Labor in the Clinton
administration, for which Time Magazine named him one of the ten most effective
cabinet secretaries of the twentieth century. He has written fourteen books,
including the best sellers "Aftershock", "The Work of
Nations," and "Beyond Outrage," and, his most recent,
"Saving Capitalism." He is also a founding editor of the American
Prospect magazine, chairman of Common Cause, a member of the American Academy
of Arts and Sciences, and co-creator of the award-winning documentary,
INEQUALITY FOR ALL.