Trump’s Plan Will Privatize Infrastructure
a licensing scheme disguised as a jobs program
Trump's Infrastructure Plan Could Be His Biggest Con Yet
Wednesday, April 05, 2017
By Peter Rugh, The Indypendent | Op-Ed
Following up on a campaign pledge, Donald Trump told Congress on Feb. 28 that he plans to send lawmakers a $1 trillion infrastructure bill -- half of what ASCE expects it would cost to fix and modernize everything from our big, sexy bridges to our water systems. But, hey, it's a start. Other recent events have also highlighted the need for some national home improvements, notably the near-hemorrhage at the Oroville Dam in Northern California in February. Trump press secretary and shill Sean Spicer called the threat at Oroville a "textbook example" of the need for infrastructure improvements.
A $1 trillion investment would help make good on Trump's repeated assertions that he will be "the greatest jobs producer that God ever created." But here's where Trump's populist pose (not to mention the habit of raiding public coffers he developed as a real-estate mogul) meets the constant Republican desire to shaft the poor.
First, there's the matter of coming up with the trillion dollars. The White House wants to boost the Pentagon's budget by $54 billion, at the expense of just about every other government department. The proposal, drafted by White House budget director Mick Mulvaney -- who says he sifted through footage of Trump's campaign speeches for guidance rather than consulting with the president directly -- has even proven too harsh for members of Trump's own party.
Economic development commissions that steer millions of dollars to Appalachia, the Midwest and the South are on the chopping block, as are grants from the Department of Housing and Urban Development and a $3.4 billion job training program managed by the Department of Labor-- all of which, it turns out, are dear to the hearts of fiscally conservative red-state governors who rely on the federal assistance. Some of them are complaining loudly. According to The New York Times, the message they've received back from the White House so far is "We'll get back to you on that."
"They're cutting all sorts of infrastructure projects and economic-development projects at the same time that the president is still talking about how much of an investment he's going to put into infrastructure," the nonpartisan Tax Policy Center's Kim Rueben observed.
So where's the infrastructure money going to come from? The answer is: Nowhere. Trump's plan, as it exists, relies entirely on tax incentives to private companies.
"The scheme offers a tax credit to private investors covering 82 percent of their equity investment costs," the Center on Budget and Policy Priorities (CBPP) noted in an analysis of the infrastructure plan Trump's campaign released in October, the most recent to date. "Investors would cover the remaining 18 percent but would receive all the profits, effectively privately owning and operating the projects and charging the public to use them."
Furthermore, as the CBPP report highlights, there is no mandate in the Trump plan to ensure that the tax breaks would actually go toward new infrastructure, instead of subsidizing projects that were already in the works or that would have been undertaken anyway. Nor are there stipulations directing improvements to communities who need them most, or toward sorely needed projects like lead abatement in New Jersey that would not yield high returns on investments.
"The plan," it said, "has no mechanism to ensure that infrastructure projects flow to communities already underserved by infrastructure investment -- to towns that have lost a major employer, rural communities lacking easy access to amenities, and low-income communities that lack basic necessities such as clean water. Instead, the investments likely would flow much more heavily to higher-income, more developed communities where investors are more assured of ongoing income streams."
In short, the plan is a massive giveaway to the rich disguised as a jobs program. It "more closely resembles a licensing scheme, in which the government will try to incentivize companies to build privatized infrastructure, with a shiny Trump seal of approval slapped on the side," as Pat Garofalo put it for US News and World Report.
The deeper problem with Trump's infrastructure plans, according to Gerald Epstein, a liberal economist at the University of Massachusetts, is that it is a method of building upon the proto-fascist social formation that Trump represents. Epstein calls it "Schacht therapy," after Hjalmar Schacht, Adolf Hitler's minister of economics from 1934 to 1937.
Schacht therapy "is a set of economic policies that might result in short-term economic expansion and job creation," Epstein wrote recently, "but are designed to strengthen the power of repressive, authoritarian, racist, misogynist, homophobic, anti-leftist, and nationalistic/militaristic policies. ... It combines repression and authoritarianism with the promotion of those business interests that cooperate with the power system."
Trump's infrastructure scheme, is "going to pay a few crumbs to some workers," Epstein told The Indy, particularly those whose who work in construction. But "Trump's ultimate goal is to get them to support his broader political aims -- throwing immigrants out, dividing one religion from another, expanding the military and increasing militarism."
"I'm sure he's going to disappoint in terms of what he's going to deliver, in terms of real economic benefits over the longer term," said Epstein. "There could be a short-term increase in economic growth which looks like it's working if he has this big military build-up, this big tax-cut program. It will seem to some people, including his base, that perhaps all this is working great. But it's all going to come crashing down, because it's not based on dealing with the real needs of the US economy or of his base. It's just going to deliver massive amounts of wealth to his cronies."
In New Jersey, Gov. Chris Christie, a staunch Trump ally, initially downplayed the state's drinking-water crisis, but caved to public pressure and offered $20 million toward a fix. The money will revitalize an abatement fund originally established to address lead contamination in paint, one that the governor has raided over the years.
There are a number of solutions that could address the contamination, according to Clean Water Action's David Pringle: installing filters on pipes (and, as Newark failed to do, maintaining them) or adding chemical solvents to the water to dilute the lead. Yet there is only one long-term solution: Removing the source of the contamination by replacing old pipes.
"There's no reason to think Newark is going to come up with the money on their own to fund this," said Pringle.
Some Republicans are attempting to paper over the lack of actual funding for infrastructure in Trump's budget by turning their drive to eliminate government regulations up a notch.
"It's not going to be $1 trillion coming out of Washington, DC," Rep. Bill Shuster (R-Pa.), who chairs the House Transportation and Infrastructure Committee, told the Associated Press on Mar. 1. "There are billions and billions of dollars out there today, private-sector dollars, that are going to be spent."
Rep. Shuster cited the Constitution and Atlantic Sunrise pipelines, which, respectively, will carry natural gas fracked in Pennsylvania's Marcellus Shale region to New York State and to a new export terminal at Cove Point in Maryland. Both have been delayed due to hurdles obtaining water permits from environmental regulators and the Army Corps of Engineers.
"If the Corps signs off, and we get a couple of other people in agreement, we're talking about $4 billion just in Pennsylvania and a couple of other states that can be done," he claimed.
Robert Bea, professor emeritus of civil engineering at the University of California at Berkeley, a former Shell Oil executive and one of the world's leading experts on catastrophic-risk management, worries that Trump's proposed federal budget is dangerously shortsighted when it comes to guarding US infrastructure against future environmental risks. It's not just the EPA that's on the chopping block. The budget would also eliminate the US Chemical Safety Board, impose steep cuts to the National Oceanic and Atmospheric Administration and allocate nothing for the National Science Foundation.
"He's effectively erasing the advanced ways we have to determine what needs to be changed for public safety," Bea told The Indy. Climate change "should factor in directly" with all infrastructure investments. "If you build infrastructure systems that eventually or quickly degrade the natural environment, you've got a big problem."
He compares Trump to Lord John Brown, who ran BP prior to the 2010 Deepwater Horizon disaster. Blinded by his drive to increase profits, Brown failed to heed concerns raised by Bea and his colleagues about the safety of the company's offshore oil-drilling operations in the Gulf of Mexico in the years leading up to the Deepwater Horizon blowout that killed 11 workers and released hundreds of millions of gallons of crude oil into the ocean . "I looked at him and said, 'You're screwed,'" said Bea, recalling a meeting in 2000 with the BP executive.
The full scope of Trump's infrastructure hoax might not be fully felt until long after Trump retires, loses continence and is being spoon-fed his meals by a big-chested nurse. The effect of human-induced global warming is already upon us, but flooding, droughts and superstorms will only intensify in the decades ahead. The tragic irony is that addressing the problem now with direct government investment would be far more effective than throwing tax incentives at private companies in the hopes of spurring a building orgy.
"There have been lots of studies that show there is no tradeoff between generating jobs and fighting climate change," said UMass's Gerald Epstein. "The best way to generate jobs is by investing in renewable energy. It could generate millions of jobs. If we don't do that, we're threatening livelihoods. We saw that in New York City with Hurricane Sandy, to say nothing of what will happen in other major cities and communities all over the world. The real way to make the US economy get going again is to have a massive investment plan for renewable energy."
In the meantime, parents and their kids in Newark and across New Jersey would settle for a clean glass of water.