Trump Flips Script on Who’s Paying to Fix Our Crumbling Infrastructure

Last week, I defended the president’s honor and lamented that I probably wouldn’t have a follow-up opportunity for some time. As it turns out, that claim is in no danger of becoming a falsehood. On Tuesday, President Trump told lawmakers he was ditching a key aspect of his planned $1 trillion infrastructure package — namely, who is going to pay for it.

Spoiler alert: its going to be taxpayers.

The White House previously envisioned a strategy where private investors would be lured into rebuilding roadways, bridges, and rail networks with promises of federal backing and a less-daunting approvals process. But now it’s saying partnerships between the private sector and federal government might not work. 

“We spend $6 trillion in the Middle East and we have potholes all over our highways and our roads … so we’re going to take care of that. Infrastructure — we’re going to start spending on infrastructure big,” Trump said in February. “[It’s] not like we have a choice. It’s not like, oh gee, let’s hold it off.”

However, Trump did hold off and details on the plan were delivered piecemeal, lacking specific detail. Some even criticized the president for intentionally stalling on the infrastructure proposal while his administration focused on its repealing the Affordable Care Act. When it finally arrived as part of the proposed 2018 budget in May, the plan existed as a six-page fact sheet that outlined $200 billion in direct federal spending over the next decade. However, it wasn’t particularly coherent on how the money would be spent or where it would be coming from. Four months later and we’re only starting to see a clearer picture.

Reported by The Washington Post, the president is having difficulties envisioning how that $200 billion would be procured via private-sector partnerships. It seems the administration will likely force states and localities to foot most of the bill. However, the proposed tax incentives and streamlined approval policy will remain intact for businesses that want to take advantage of them.

I suppose there isn’t any real reason to be surprised by this turn of events. The administration’s infrastructure plan never had any concrete mechanism for ensuring incentives wouldn’t be used on projects that would have been built without them. In fact, the earliest proposals showed that investors could collect on tax breaks for projects already in existence.

It’s hard not to feel like you’ve been taken for a ride on this one. But assuming private firms would pour money into non-profitable government works projects was probably always a pipe dream. Businesses like to make money and the best we could have hoped for is a plethora of unnecessary toll roads.

One potential idea to circumvent that scenario involved forcing corporations to bring home the $2 trillion in profits secured overseas at a massively discounted tax rate. That money would then be allocated for infrastructure spending. However, the administration has given no indication it will pursue that option in earnest.

Instead, it’s throwing its hands up in the air and saying it’s leaving “all options on the table.” But, according to Bloomberg, Trump specifically stated that infrastructure spending wouldn’t be connected to any plan that would target offshore corporate profits on Tuesday.

While none of this amounts to an official decree, it does indicate there will probably be more pressure on individual states to repair their own crumbling roadways. But local governments don’t really have the kind of money necessary to do this. When the Federal Aid Highway Act was passed, states footed 10 percent of the bill while the remaining 90 was left for the federal government to pay for through taxes on fuel, automobiles, trucks, and tires.

Thankfully, gas prices are pretty low right now.


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