A White House announcement today made it clear that progressives will be on their own in the battle to boost public investment in our public assets.
The White House today announced the creation of an infrastructure bonds program designed to attract private financing for transportation projects, from bride repairs to airport construction. The administration also dispatched Vice President Joe Biden to a wastewater project in the Anacostia section of Washington, D.C., to announce a national program to help states and municipalities finance water and sewer repairs and expansion.
These are workarounds for the combination of cowardice and obstructionism that has kept the federal government from doing what it used to do reasonably well and what it must learn how to do even better today: fund infrastructure in a way that serves the public interest, supports a growing economy and puts people back to work at good-paying jobs.
Leading the obstruction, of course, is conservatives in Congress, some of whom go beyond saying we can’t afford the additional $1 trillion we should be spending on our transportation, water and electrical networks between now and 2020 to saying we shouldn’t spend those dollars at the federal level even if we could afford it – that the main task of improving our infrastructure should be left to states, localities and the private sector.
But, although there are exceptions, Democrats have not been profiles in courage, either. Take the federal gasoline tax, the primary source of money placed in the Highway Trust Fund for roads, bridges and public transportation. The gas tax hasn’t increased since 1993, and not only has inflation eroded the buying power of that tax, but more fuel-efficient vehicles mean less gasoline sold to be taxed. Yet the Obama administration has rejected the idea of a gasoline tax increase, and few Democrats push it.
Instead, President Obama sent an alarming signal last year when he suggested openness to striking a tax bargain that would give corporations a break on the taxes due on profits they are holding overseas to avoid taxation, in exchange for their using some of their capital to finance infrastructure projects. This is a win for corporations, which in effect get something of a pardon for their tax-evasion schemes. But it is not really a winner for the public.
“Public-private partnerships” may be the hot buzz phrase inside the Beltway right now, but the reality, as municipal bond expert Cate Long wrote a year ago, “the momentum is shifting away from privatization deals for infrastructure.” Partnership enthusiasts invariably oversell the financial prospects to potential investors, and when the projects don’t deliver on their financial promises, either the investor loses or the public ends up footing a larger bill.
President Obama would be doing a real service if in his State of the Union address he not only laid out the critical need for infrastructure investment but also used his rhetorical gifts to explain that there are no voodoo economics and no free lunches when it comes to paying for it. The good news is that an investment in infrastructure is an investment in ourselves – it means more jobs and a stronger, more efficient and more competitive economy. It’s worth it for President Obama to use his political capital to make the case, but if he won’t, progressives need to step up to lead the debate.