Who’s Really Winning? A Look at Trump’s Infrastructure Initiative
August 25, 2017
By Michelle Asamoah
In Trump’s first address, he promised that American infrastructure would become “second to none.” He committed to investing in urban centers, rebuilding highways and bridges, and improving schools. Yet, the administration’s infrastructure initiative released in May doesn’t make good on this promise. Though this initiative is currently scant in details, the administration champions infrastructure investment as a top policy priority with promises to release a more-detailed proposal in early fall.
Regardless, what the administration has revealed so far shines light on the kind of plan they intend to pursue. Trump’s infrastructure initiative will likely put large corporations at the forefront amid slashed funding for state and local government infrastructure, cuts to programs that help rural and underserved communities, and the leveraging of public-private partnerships that aren’t in the interest of the general public and also undermine revenue generation. The plan in its current form does not go far enough to achieve the inclusive economic growth and prosperity the U.S. economy desperately needs — and the public deserves. An inclusive infrastructure agenda would invest in rural and underserved communities, universal broadband, and green energy.
Trump’s Infrastructure Initiative—Corporate America the Biggest Winner
The administration’s plan has two components that result in reducing Federal programs while helping corporate America: financing this initiative through tax breaks and privatizing key services.
- First, Trump’s $1 trillion infrastructure initiative aims to create $800 billion in private investment by executing $200 billion in tax breaks for corporations over ten years. Ultimately, the administration hopes to create public-private partnerships to fund infrastructure projects across the country. These tax breaks, used to incentivize private infrastructure investment, would allow corporations to pay lower taxes— the tax breaks, however, do not guarantee $800 billion in private investment. The only thing we know for certain is that $200 billion of government revenue will be lost.
- Second, corporations will benefit from the administration’s plan to privatize key public services. For instance, the plan proposes to privatize air traffic control. This initiative would give commercial airlines greater price-setting control that would allow them to easily increase prices. In addition, the tolling deregulation proposed in the administration’s plan would not only allow private companies to increase prices to gain higher revenue from highway tolls, but would also allow new tolls to be created. These elements of privatization only work to ensure that corporate America gains more revenue at the expense of Americans having to pay higher user fees.
Who Will Lose?
There are three clear losers: Americans in rural areas and underserved communities, especially those of color; states and local governments; and the general public.
Americans in rural and underserved communities will be the biggest losers because of the cuts to crucial programs. For example, one program at risk of cuts is the Appalachian Regional Commission (ARC)—a federal-state partnership that invests in rural Appalachia to create self-sustainable economic growth. Besides creating and retaining 18,702 jobs in 2016 alone, one key ARC project in Kentucky helped combat unemployment by retraining individuals and finding tech jobs for ex-coal workers and the unemployed. Over the next three years, the program aims to train 200 workers in Kentucky, but funding cuts threaten its future. One of Trump’s biggest supporters in the 2016 election were rural Americans, so it is unfortunate that they are one of the first groups to be left behind. Another program facing cuts is the $3 billion-a-year Community Development Block Grant (CDBG). CDBG builds local infrastructure improvements in low-income communities of color. In Albany, Georgia—a predominantly Black city—56,930 people benefitted from CDBG services in 2015 through job creation, affordable housing, employment training, and more.
Another important set of losers from the Trump plan are state and local governments that will lose federal infrastructure funding. President Trump claims his approach is to “encourage” state and local governments to stop “waiting for Washington to come to the rescue.” Trump’s move to “encourage” state and local funding will instead be a huge challenge, according to the Bipartisan Policy Center. Many communities are already struggling to fund infrastructure projects, so additional pressure on localities would jeopardize attempts to improve ailing roads, bridges, and other infrastructure.
Finally, the public will lose from the administration’s plan to encourage more public-private partnerships. When governments pay upfront in exchange for long-term concessions, these agreements can cost the public more. These deals give the private sector the ability to collect tolls for decades, while the public loses out on future revenue. Chicago is a cautionary tale. To address budget issues, Mayor Richard M. Daley in 2008 leased the city’s parking meters to Morgan Stanley, which then increased parking tickets up to 800% and was on its way to lose nearly $1 billion, though renegotiation of the 99-year deal saved a fraction of the sum.
There’s a Better Path Forward—What an Infrastructure Initiative Should Look Like
A good infrastructure plan needs to do more than rebuild roads and bridges. To achieve sustainable and inclusive infrastructure investments, we should tackle climate change, invest in quality schools for rural and underserved communities of color, and fund universal broadband.
First, we should tackle climate change in order to secure new jobs and invest in sustainable and inclusive growth. A Roosevelt report estimates that, at current rates, rising sea levels alone will result in a loss of $238 to $507 billion worth of coastal property damage by 2100. We need to invest in green technology for sustainable growth and the safety for Americans.
Second, we should combat inequality and foster more-inclusive infrastructure investments by providing quality schools for underserved children in rural and inner-city communities. One-fourth of American schoolchildren attend rural or small-town schools, making it imperative that we invest in their success. Investment in education is one of the leading ways to uplift rural communities. Unfortunately, the lack of investment in inner-city education, for example, has limited opportunity for low-income students of color in these areas as these students are less likely to enroll in high-scoring elementary and middle schools. With only 72% of Black adults aged 25 and above having received a high school diploma in comparison to 86% of white adults, the numbers make evident that we need to do better in providing good education to Black communities. Closing achievement gaps for underserved communities, both in the rural and urban settings, is necessary for inclusive growth.
Finally, we need to encourage innovation and labor participation from rural and underserved communities of color by funding universal broadband. The internet is a pillar in our economy, and we should do better to supply it. As mentioned in a Roosevelt report, universal broadband would allow millions more of Americans to have access to education, jobs, and information—a key building block of an inclusive economy. This would foster innovation and general labor participation, as well. Currently, about 39% of rural Americans do not have access to the FCC’s sufficient Internet benchmark. There is broad space for improvement.
On the campaign trail, Trump reassured the public that his infrastructure initiative would make America a leading nation in infrastructure; instead, he has prioritized the private sector at the expense of inclusive economic growth. Our country’s infrastructure is too important in the fight for a more equitable economy for us to not hold him accountable. As more details of his initiative continue to emerge in the coming months, we must ask ourselves: Who’s really winning?