When he finally unveiled his infrastructure plan on Monday, President Donald Trump offered cities and states negative $40 billion. Most media accounts have described it as a $1.5 trillion deal, but the plan’s proposed $200 billion spending must be weighed against the $240 billion in cuts to infrastructure laid out in Trump’s proposed budget, which was also released Monday, including $178 billion in cuts to transportation spending alone.
President Trump tried to sell this “deal” of taking away federal money for infrastructure by stressing how unimportant the issue is to him. “What was very important to me was the military,” Trump said during the announcement Monday. “What was very important to me was the tax cuts. And what was very important to me was regulation. This is of great importance, but it’s not nearly in that category.”
The halfhearted approach to infrastructure definitely shows. In fact, this is one area Democrats feared Trump would force them to make a hard choice between good policy and partisanship. But that dilemma never materialized, because it turns out that the Trump administration and Republicans in Congress don’t care enough about it to construct anything but a shell game.
Let’s explain what a good infrastructure policy might look like—something that Democrats would have to seriously consider. While interest rates have risen, they still remain low enough over the long term to make borrowing to rebuild our woefully outdated highways, mass transit, airports, energy grid, and broadband lines more than worthwhile. The long-term gains from such investments are incredibly strong, with a high “bang for the buck.” We blew the opportunity to get started on this while unemployment was relatively high, combining job creation with long-term improvements. But it’s still a good idea. And I’m told that the president likes to put his name on construction projects, so it would even appeal to his vanity.
Yet these initiatives cost money. And while Republicans clearly have no problem spending money when there isn’t a Democrat in the White House, they prefer to spend it on the right kind of people, like the obscenely rich or corporate donors. Creating tangible benefits for the country doesn’t help out any of those people, unless you cut private investors in on the deal.
No investor would put money into infrastructure without expecting a return. They get that now through the municipal-bond market, by earning interest on government borrowing. And investors already seem pretty happy with it—the bond market has grown tenfold since 1981. Trump wants to increase that investment through tax cuts, but private investors enjoy large tax breaks from municipal bonds. It’s unclear why they would move off something already working for them. Indeed, bankers have been thoroughly uninterested in the concept thus far.