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Print Version-The President Says He Wants To Invest In Infrastructure, How Will He Propose Paying For It?


The President Says He Wants To Invest In Infrastructure, How Will He Propose Paying For It?

by Rep. Michael Capuano (MA-07) | Read it on

May 10, 2017

There is broad agreement among Democrats and Republicans on the need to focus on ways to improve our nation’s infrastructure. In fact, modernizing our transportation system is one of the few national issues that starts with firm bipartisan support. The question that few ask and even fewer answer, of course, is how to fund our necessary infrastructure improvements.

A tax increase is one option, but the likelihood of that passing Congress is virtually nonexistent. President Trump seemed to raise the possibility of promoting a gas tax increase recently when he said he would be open to considering it. His comments were quickly walked back by the administration, with press secretary Sean Spicer clarifying that the president made those comments “out of respect” for a trucking group, that he had an “open mind” about it but wasn’t actively considering a gas tax increase. There are other potential tax considerations, such as a vehicle miles traveled tax or congestion pricing, but none of these generate more than tepid enthusiasm in Congress. While I am personally supportive of increasing revenues to pay for infrastructure investments, it seems that the political realities will continue to make this approach impossible.

One alternative is for Congress to find other areas of spending to cut and, thereby, offset increased infrastructure spending. As I am sure everyone understands, finding congressional consensus on which $1 trillion of current federal spending to cut is unlikely.

The only other legitimate alternative is to borrow money needed to improve our infrastructure. I would not support this approach, and since Congress has regular trouble these days raising the debt ceiling to absorb what the government has already spent, I don’t see this as a viable option.

Would creative accounting work to generate revenue for transportation? Maybe, but the business community won’t invest in something backed by funny accounting. Tax credits for private investors might be a possibility, but tax credits are really just another form of tax cuts, which have to be paid for either by a revenue increase, offset cuts or debt — so we come full circle.

Public-private partnerships are often highlighted as a viable option for financing large transportation or construction projects. However, that approach would still require plenty of federal money. Notably, a bipartisan report in 2014 concluded that there are only a very limited number of projects where a public-private partnership would really work. It should be noted, too, that investors require a profit. So when a public-private group wants to widen a highway or rebuild a bridge, those profits can only be realized through significant tolling and no viable travel options. This simply doesn’t work in most circumstances, and even when it does work, it can cause cascading issues on nearby infrastructure that must be addressed.

Trump has been promising a trillion-dollar infrastructure plan since he was a candidate, but count me among the skeptics who don’t see how he gets his currently nonexistent plan through Congress.

Of course, Trump’s budget blueprint doesn’t instill confidence that he is being fully honest about his desire to increase spending on infrastructure. After all, he proposes to cut 13 percent from the Department of Transportation’s fiscal 2018 budget. When this proposed cut is viewed in conjunction with the lack of even an outline of a plan, he is not demonstrating a real commitment to investing in infrastructure.

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