Infrastructure for the 1 percent
Source Dave Anderson
Date 17/06/16/00:20

Infrastructure for the 1 percent
By Dave Anderson

The American Society of Civil Engineers grades our national
infrastructure a D-plus. We desperately need to modernize our roads,
bridges, schoolhouses, railways, airports and water systems.

Donald Trump has made big, bold but vague promises of rebuilding
America’s infrastructure. However, Trump’s proposed federal budget
actually cuts infrastructure spending by $55 billion, according to an
analysis by the University of Pennsylvania’s Wharton Budget Model, a
nonpartisan research organization.

CNN reports that his proposed budget also seriously maims or
eliminates several important federal infrastructure programs. An
organization representing water utilities in rural areas condemned
Trump’s proposal to eliminate a $500-million-per-year program that
helps rural communities build and improve water, sewer, trash and
street-drainage systems.

Trump also wants to eliminate the decades-old $3-billion-per-year
Community Development Block Grant program, which has provided about
$280 million per year to local infrastructure improvement projects in
low-income neighborhoods.

Richard White, president of the American Public Transportation
Association — which represents transit systems — said Trump’s proposed
cuts would jeopardize 56 public-transit projects in early development
stages. “It’s been a long time since we started a budget process where
there was a major scale back or retreat from a federal role” in
supporting transit infrastructure, White said.

The White House assures critics concerned about these infrastructure
cuts that everything will be much better once the Trump administration
rolls out its infrastructure bill. However, all indications are that
Trump’s plan is really a hoax. As Congressman Jamie Raskin
(D-Maryland) said, it is “just a private money-making operation for
the big-business buddies of the president.”

Economist Robert Reich said Trump’s plan is essentially “a giant
public subsidy to developers and investors, who would receive generous
tax credits in return for taking on the job.”

Reich notes that in one version of the plan that he saw, “for every
dollar developers put into a project, they’d actually pay only 18
cents — after tax credits — and taxpayers would contribute the other
82 cents through their tax dollars.

“No one should be surprised at this scheme. It’s what Trump knows
best. After all, he was a developer who made billions, often off
sweeteners like generous tax credits and other subsidies.

“The public would also pay a second time. The developers would own the
roads and bridges and other pieces of infrastructure they finance.
They’d then charge members of the public tolls and fees to use them.

“In place of public roads and bridges, we’d have private roads and
bridges. Think of America turning into giant, horizontal-like Trump
Tower wherever you looked.”

As the ranking member of the Senate Budget Committee, Bernie Sanders
released a report on Trump’s infrastructure package. Sanders says that
under Trump’s plan, “billionaires on Wall Street, wealthy campaign
contributors and even foreign governments would receive hundreds of
billions in tax breaks to purchase our highways, airports and water
treatment plants.”

He goes on: “Trump’s plan to rebuild America relies heavily on the use
of public-private partnerships to finance infrastructure projects with
private equity capital. Such financing, whether through private equity
or traditional tax-exempt municipal bonds, is repaid by ordinary
citizens through a combination of taxes and user fees. Private equity
financing is markedly more expensive than traditional government
financing, however — by as much as three to six times. Considering the
scale of infrastructure development under consideration, that
difference could be enormous. For example: The charge for a $100
million investment using traditional government bond financing (at 3
percent, over 30 years) is about $90 million. For private equity
capital, at a 15 percent return, the total skyrockets to $450

Sanders lists 10 failed public-private partnerships. For example, the
City of Chicago in 2008 sold the right to manage the city’s parking
meters for 75 years to a private investor group led by Morgan Stanley.
>From 2009-13, parking rates in Chicago increased by as much as 800
percent. The city has to pay Morgan Stanley $31 million to cover their
lost revenue each time streets are closed in Chicago.

The Center on Budget and Policy Priorities (CBPP) provided an analysis
of the infrastructure plan Trump’s campaign released last October. The
group noted that there isn’t any mandate in the Trump plan to
guarantee that the tax breaks would actually go toward new
infrastructure, instead of subsidizing projects that were already
going to happen or that would have been undertaken anyway.

The CBPP report said, “The plan 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 conclusion, the Trump plan is a cruel con job and a gigantic gift
to the rich. Sad.

This opinion column does not necessarily reflect the views of Boulder Weekly.

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