To Fix America’s Roads and Bridges, Trump and Democrats Need Each Other
After running heavily on fixing roads, bridges and transit, President Trump is supposed to unveil his trillion-dollar infrastructure package by next month.
Unlike with the new tax law, Trump will need Democratic votes to pass it.
The tax bill, compared to transit and tunnels, was easy. No Republican senator wanted to vote against a tax cut, so the president didn’t need Democratic votes. The resulting bill slams blue states with higher tax rates.
Paying for roads, bridges and tunnels, though, is different. It’s likely that a few Republicans will refuse to vote for it, since it’ll likely increase the deficit and the size and scope of the federal government.
“Unlike with the new tax law, Trump will need Democratic votes to pass [an infrastructure package].”
That means a role for Dems, like Senate Minority Leader Chuck Schumer — something Trump is anticipating. Last month, the White House made it clear that it’s not above taking hostages. Federal transit officials informed New York and New Jersey that Washington isn’t going to pay half of the cost, $12.7 billion, to build a new rail tunnel under the Hudson River. We need the new tunnel so the existing tunnel, used by New Jersey Transit and Amtrak riders, can be repaired from Hurricane Sandy saltwater damage.
But Washington said that an Obama-era agreement is “non-existent.” The game is clear: No Democratic votes means no agreement — and no $6.3 billion or so of federal funding.
Yet New York and New Jersey lawmakers should tread carefully; $6.3 billion is nice — but it’s not worth what could be the price: a pork-laden bill for the rest of the country, paid for by us.
New York state sends $47.9 billion more, annually, to Washington than it gets back, according to the Rockefeller Institute. New Jersey is right behind it, followed by a slew of other blue states.
Consider what could go wrong with the infrastructure bill if we’re not careful.
Rather importantly, no one has clearly defined what a trillion dollars is. Trump officials have said that the figure would be spent over a decade. But they don’t actually want to spend $1 trillion of taxpayer money. Instead, they want to spend $200 billion, with the private sector as well as state and local government providing the remaining $800 billion.
That’s actually not all that impressive — $200 billion over a decade is $20 billion a year. But the feds already spend about $100 billion a year.
That’s especially true, when state and local governments are going to have a hard time raising their share. A federal official told Politico that the “primary” factor for states “would be how much revenue they are willing to raise, from taxes, fees or other sources.”
Yet the tax law just made it more expensive for states to maintain their existing tax rates. Washington matching a dollar for every four dollars New York spends locally is not a good deal for New York.
The “cost” of this local match just went up 40 percent, in terms of how much a taxpayer has to pay in state and local taxes when he can’t deduct such taxes from his federal return.
As for the private sector: Of course, private investors will put money into anything with a good chance of making a profit. That’s the key word: profit. Our most deteriorated infrastructure — like that Hudson rail tunnel, and subways and dams — is not profitable, and is not going to be. That’s why no one has fixed it.
Airports, pipelines and electricity grids are profitable, or at least self-sustaining. That’s why we’re already getting a new LaGuardia Airport financed by private investors, and why gas and power come to our house without the president’s intervention. Companies that invest in this type of infrastructure don’t need big new inducements, paid for, indirectly, out of tax dollars we could use to fix the subways.
Trump can do a lot of good with a well-planned public-works bill. He was right, during the campaign, that “we need to rebuild our country.”
But he can’t do what he did with the tax bill, and cut blue states out. If he does, they have a nuclear option: insist, instead, on getting our state- and local-tax deduction back, which, coincidentally, also would cost about $1 trillion over a decade.
We can pay for this ourselves — and will, anyway, either way.
This piece originally appeared in the New York Post
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Nicole Gelinas is a senior fellow at the Manhattan Institute and contributing editor at City Journal. Follow her on Twitter here.
This piece originally appeared in New York Post