Commentary: Trump’s Infrastructure Plan Is a Scam

February 12, 2018, 10:01 PM UTC

President Donald Trump claims that a $200 billion investment by the federal government will lead to nearly $1.5 trillion in new infrastructure spending—when it’s leveraged in the private sector over 10 years. That’s the gist of the long-promised “plan” he released on Feb. 12.

But as we’ve seen before, when the president makes big plans and claims that someone else will pay, he’s scamming us.

Trump’s infrastructure plan hinges on a $100 billion matching grant program for states and cities to launch their own projects, with additional funds coming from a $50 billion rural investment program, along with a few other line items. That’s supposed to entice private companies to come out of the woodwork and rebuild America to the tune of $1.5 trillion.

Just like Mexico won’t pay for a border wall, private investors won’t pay for roads, bridges, and energy infrastructure just because the president says they will. Kicking federal obligations to private companies doesn’t work that way.

For one thing, the plan spreads those investments out over 10 years. At just $20 billion a year, that’s just a quarter of the $80 billion raise for next year’s Pentagon budget that Congress passed just last week. It’s nowhere near enough.

Private investors care about only one thing, and that’s maximizing profit. They won’t be drawn to projects that won’t make them enough money, no matter how badly needed the projects are.

And even for projects that do materialize, private investors’ need for profit means the costs of building new infrastructure are often passed along in the form of road tolls or other fees—sometimes, these can be exorbitant. This dispels the commonly held myth that privately financed projects are always a better deal for taxpayers. As another corporate giveaway, the plan would encourage putting major public infrastructure (like, say, Ronald Reagan Washington National Airport) up for sale, and would loosen environmental rules designed to protect local communities.

The infrastructure proposal doesn’t even exist on its own. It came as part of a budget package that would also cut $48 billion in federal funding for other programs and services that won’t be matched by a paltry $20 billion per year in infrastructure investments. Among other things, the president once again called for the total elimination of the Community Development Block Grant program, and major cuts to Amtrak, Superfund environmental cleanups, and other programs. You better believe that Americans would suffer under this plan.

By comparison, last year’s proposed budget from the Congressional Progressive Caucus called for 10 times as much infrastructure investment—$2 trillion in public investment over 10 years—and would have reduced the deficit to boot.

One initiative under that plan would set aside $350 billion for drinking water pipes to ensure we don’t have another Flint, Michigan-style water crisis in a few years. This single initiative offered more public funds than the entire infrastructure plan Trump just rolled out.

The secret? The progressive plan raises the funds to invest in America and tamp down the deficit at the same time by raising taxes on billionaires and closing corporate tax loopholes—the exact opposite approach of the Trump tax plan (which, at a cost of $1.5 trillion or more, would have been enough to fund his entire infrastructure plan directly).

It’s a shame that the president and Congress aren’t willing to make these simple choices to fund real infrastructure investments. It’s probably a fantasy that private investors will step up to the tune of well over $1 trillion to make all of our lives better. And even in the cases where they do, we’ll be the ones ultimately paying for their profits.

So remember: If the president offers to take you out to dinner, don’t accept unless you’re ready to either go hungry or foot the bill.

Lindsay Koshgarian directs the National Priorities Project at the Institute for Policy Studies.

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