Trump official admits Americans will have to pay for his infrastructure projects

Bryce Covert

Bryce Covert Economic Policy Editor, Think Progress

n his first address before Congress last week, President Trump promised that during his presidency, “Crumbling infrastructure will be replaced with new roads, bridges, tunnels, airports, and railways gleaming across our very, very beautiful land.”

“To launch our national rebuilding, I will be asking Congress to approve legislation that produces a $1 trillion investment in infrastructure of the United States — financed through both public and private capital — creating millions of new jobs,” he added.

What he didn’t mention is that under the current design of his proposal, Americans will be directly paying for these projects. But that was later made clear by his Transportation Secretary.

In an interview with Fox News’s Sean Hannity, Elaine Chao explained that the projects will necessitate higher tolls and fees levied on the people who use them.

“The federal government cannot assume the cost for all of it,” she said. Therefore, she added, “Public private partnerships are a very important part of a new way of financing our roads and bridges.”

Any private firm that invests in infrastructure, however, will only do so if there’s a source of profit — the ability to charge people for using it — even if the government helps with financing.

When Hannity asked Chao directly if this will mean new tolls on roads and bridges, she responded “that is certainly one example of how that would work.”

“I have to say that there are some people who may not support toll roads, but we have to take a look at all of these financing mechanisms,” she said, “because once again, the needs of our infrastructure are so great that the federal government cannot and should not be the only source of funding to repair our bridges, our roads, and our energy grids.”

While Trump hasn’t put forward any infrastructure proposals or legislation since assuming office, his campaign did release a paper outlining how to make his pledges to upgrade the country’s roads, bridges, and energy grids into reality. The plan would have the government give private investors tax credits to fund projects, and those investors would then raise the rest of the money they need and recoup all the costs through profits on the other end.

That would mean either new tolls where they didn’t exist before to use these public goods or higher ones where they already exist. Without any safeguards in place, private firms can jack up rates as high as they need. As one example, Chicago privatized its parking meters in 2008 and rates subsequently more than doubled within five years.

That means money funneled from Americans into the pockets of the kinds of firms that can make these investments, such as investment banks or private equity.

This kind of plan also means that some critical projects wouldn’t be feasible and would therefore miss out on upgrades. School buildings and facilities, rail projects, levees, or water systems in places where residents can’t be squeezed for higher rates would all be left out. Even roads and bridges in more rural areas that have less traffic might not get any attention.

It’s unlikely that this kind of plan can generate the economic boost that Trump has promised from investing in infrastructure. The campaign paper argued the government’s cost would be fully covered by new taxes generated by businesses and newly employed workers paying more. But that would require firms undertaking new projects that wouldn’t have happened without the government funding, with labor provided by previously unemployed workers. What’s more likely is that projects that are already underway or feasible will simply move forward with federal tax credits.

The other model for infrastructure upgrades is for federal or state governments to spend money directly — for the federal government, taking advantage of incredibly low interest rates to borrow funds — on the most critical needs. This spending has fallen off a cliff over the last decade. That’s the kind of $1 trillion-plan Democratic Senators introduced in January.


This was reposted from Think Progress.

Bryce Covert is the Economic Policy Editor for ThinkProgress. She was previously editor of the Roosevelt Institute’s Next New Deal blog and a senior communications officer. She is also a contributor for The Nation and was previously a contributor for ForbesWoman. Her writing has appeared on The New York Times, The New York Daily News, The Nation, The Atlantic, The American Prospect, and others. She is also a board member of WAM!NYC, the New York Chapter of Women, Action & the Media. Follow her on Twitter @brycecovert

Posted In: Allied Approaches

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

More ...

There is Dignity in All Work

There is Dignity in All Work