Trump’s Infrastructure ‘Plan’ Is Really Just A Privatization Scam

Dave Johnson

In a democracy We the People pitch in and build public infrastructure that We the People all get to use equally.

So when people talk about our country’s infrastructure, they usually mean our public roads, bridges, mass transit, water and sewer systems. All of these are good for all of us and our economy. We share in the investment and we share in the return on that investment.

Likewise, when people think of infrastructure projects, they think of government projects hiring people, purchasing supplies and building or maintaining something. They think of lots of good, union jobs with good benefits and lots of good, local American construction companies and American suppliers getting contracts.

This is what Republicans have obstructed since they got enough votes in the senate to obstruct with. A few examples:

● 2011, Republicans filibuster Obama infrastructure bill
● 2013, Bipartisan Transportation and Housing Bill Filibustered
● 2015, $478B Infrastructure Bill Blocked by Senate GOP

Public Dollars, Private Profits

So now Donald Trump is proposing a “$1 trillion infrastructure plan.” Sounds great, right? Yum, infrastructure.

The Hill has the story, in “Five things to know about Trump’s infrastructure plan:”

A 10-page white paper posted on Trump’s campaign website last month makes private financing the cornerstone of his infrastructure plan.

The proposal would offer $137 billion in federal tax credits to private investors who want to back transportation projects, which the blueprint says would unleash up to $1 trillion worth of infrastructure investment over 10 years.

Trump’s plan does not call for public investment in public infrastructure, nor does it call for hiring local construction companies using American suppliers and creating jobs for American union workers. Trump’ plan is for the government to spend money giving tax breaks to giant, multinational corporations and calling it infrastructure investment. Any actual infrastructure investment that does occur will bring a return on that investment of taxpayer money to a few 1%-ers and not to We the People.

Ronald A. Klain oversaw the team implementing Obama’s 2009 American Recovery and Renewal Act, known as the “Stimulus.” Klain wrote an op-ed appearing in the Washington Post, titled “Trump’s big infrastructure plan? It’s a trap.” Klain explained that the plan isn’t even really even about infrastructure:

First, Trump’s plan is not really an infrastructure plan. It’s a tax-cut plan for utility-industry and construction-sector investors, and a massive corporate welfare plan for contractors. The Trump plan doesn’t directly fund new roads, bridges, water systems or airports, as did Hillary Clinton’s 2016 infrastructure proposal. Instead, Trump’s plan provides tax breaks to private-sector investors who back profitable construction projects. These projects (such as electrical grid modernization or energy pipeline expansion) might already be planned or even underway. There’s no requirement that the tax breaks be used for incremental or otherwise expanded construction efforts; they could all go just to fatten the pockets of investors in previously planned projects.

And the jobs? Nope:

Second, as a result of the above, Trump’s plan isn’t really a jobs plan, either. Because the plan subsidizes investors, not projects; because it funds tax breaks, not bridges; because there’s no requirement that the projects be otherwise unfunded, there is simply no guarantee that the plan will produce any net new hiring. Investors may simply shift capital from unsubsidized projects to subsidized ones and pocket the tax breaks on projects they would have funded anyway. Contractors have no obligation to hire new workers, or expand workers’ hours, to collect their $85 billion.

And even if there are jobs, will they be union jobs with benefits? Or will the employees be called “contractors’ who get minimum wage and no benefits, like so many other new jobs today?

Buried inside the plan will be provisions to weaken prevailing wage protections on construction projects, undermining unions and ultimately eroding workers’ earnings. Environmental rules are almost certain to be gutted in the name of accelerating projects.

What about the return on investment from that spending of taxpayer dollars? Trump is proposing “public-private partnerships.” Pay attention to that word, “private” here. Politico explains, in “Trump’s $1 trillion plan hits D.C. speed bumps,” what that means, “In one version, the investors would get tax credits to build a project and could recoup their money by charging fees for its use, such as tolls.” WE pay for the roads with tax credits, the companies get the return on that investment.

Infrastructure privatization doesn’t even work. A few examples include, Fox News, 2014, Failed toll road privatization leaves Indiana in driver’s seat. Or Bloomberg, 2913, Private Toll Road Investors Shift Revenue Risk to States:

The first private road in modern years, called the Dulles Greenway, opened in 1995 in the Virginia suburbs of Washington. Initial traffic on the 14-mile Greenway was less than forecast, forcing a refinancing in 1999.

Other privately backed roads in California, Colorado Illinois, Indiana, South Carolina, Virginia and Texas have had bankruptcies, restructurings, credit downgrades or less traffic than projected. In some cases, anticipated development near the roads didn’t materialize.

What Trump’s plan will do is push taxpayer dollars to profit-making “infrastructure” projects that companies are planning to do anyway. Oil pipelines, for example.

But Wait, There’s More Scams

Not only does Trump’s plan shuffle billions – maybe hundreds of billions – to corporations to pay for investment that they collect the return from, it doesn’t bring about the kind of infrastructure investment the country needs right now.

The Hill’s report explains:

Critics of Trump’s private financing plan, however, say that private investors would only fund projects that have tolls or user fees that can recoup investment costs.

Therefore, critical infrastructure needs like repairing aging pipes, deepening ports or fixing existing roads and bridges without tolls may go neglected under Trump’s plan.

Public-private partnerships (PPPs) “only work on projects that create revenues,” said Rep. Peter DeFazio (D-Ore.), ranking member on the Transportation and Infrastructure Committee. “The vast majority of the national highway system, and our bridge problems and all our transit problems, do not generate revenues. It will not help them.”

Learn To Look For The Con

Our country cut back on maintaining our infrastructure after the Reagan tax cuts for the rich forced cutbacks in the things government does to make our lives better. What is needed now is fixes for roads and bridges that are breaking down around the country.

Trump’s infrastructure-privatization plan does nothing to help fix the roads in our neighborhoods, the bridges in our cities or the highways in our states. Giant corporations aren’t going to take the tax break to do that because it doesn’t make them a profit. Cities like Flint need their water systems upgraded and giant multinational companies aren’t going to take a tax break to do that, either.

Giant, multinational companies are going to take Trump’s infrastructure tax breaks to do things they are already planning on doing anyway. And that’s not about making We the People’s lives better — not by a long shot.

The moral of the story is: Don’t just be for something because it’s called “infrastructure.” What the country needs is actual public investment in actual infrastructure like actual water and sewage systems and actual roads and actual bridges that fixes problems the actual public actually has, and that the actual public can actually all use without having to pay private companies to do so. And we need to tax the rich and giant corporations to get that done. Trump’s plan is exactly the opposite. It’s nothing more than another con.

The lesson to be learned is: If Donald Trump and Republicans are proposing something that sounds good on the surface, we all need to look deeper and figure out what con game they are running this time. It’s a good idea to learn this lesson now because it is going to be a long four years of con games, gimmicks, tricks, fraud and outright dishonest frauds.

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