Tuesday, November 22, 2016

Conservatives attack Trump's expensive infrastructure program

One of Trump's key economic policies was a trillion-dollar infrastructure spending program to rebuild U.S. highways, bridges and airports.

Certainly many of Trump's policies and policy directions such as those on the environment are opposed to those of liberals and leftists but not all his policies are such, including his view on the necessity of rebuilding U.S. infrastructure. Indeed, it is conservatives who already are criticizing his plans to spend up to a trillion dollars over 10 years. Trump claims that his program will create ""millions" of jobs, and compared it to Eisenhower's creation of the interstate highway system. While Trump is no doubt inflating the job creation numbers a bit, this is the sort of program that Democrats could support and attempt to modify. Obama also had an $832 billion dollar program a target also of conservative criticism. During the campaign, Hillary Clintonadvanced her own infrastructure spending campaign of $275 billion over five years financed partly by oil revenue and also a tax overhaul. Trump points out his plan is much larger than that of Clinton's and boasts: “We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals. We’re going to rebuild our infrastructure — which will become, by the way, second to none — and we will put millions of our people to work as we rebuild it.”
According to an article in Politico, Trump has not made it clear how much if any of the funds for the project would come from Federal coffers. However, it seems clear that his most recent views are quite different from those he outlined earlier in the summer to the Fox Business Network. He said then that the government would spend as much as $550 billion at phenomenally low interest rates. The Politico article notes:“Donald Trump Proposes $550 Billion in New Government Debt,” the resulting Wall Street Journal headline read, suggesting the difficulties such a plan could face in a Republican Congress that has spent eight years lambasting President Barack Obama over deficit spending. The conservative site Newsmax called his idea “a steaming pile of hogwash.”
His more recent plan crafted by economist Peter Navarro and financier Wilbur Ross would rely heavily on private funding driven by a tax credit. They claim that costs would be reaped from tax revenues that would come from the resulting jump in business activity. The plan is said to leverage public-private partnerships, and private investments through tax incentives, to spur one trillion dollars in infrastructure development over ten years. This language suggests that there will be relatively little or even no federal money being invested in the development. Trump claims the plan could be revenue neutral. A comparison of Hillary's plan and Trump's can be found in this article by Navarro.
Dan Holleer, spokesperson for Heritage Action for America, questioned Trump's assessment of the job-creation potential of the program: "Conservatives do not view infrastructure spending as an economic stimulus, and congressional Republicans rightly rejected that approach in 2009. It would be a mistake to prioritize Big Government endeavors over important issues like repealing Obamacare, reforming our regulatory system and expanding domestic energy production.” The group is the political arm of the conservative Heritage Foundation. The Trump initiative also was criticized by the Competitive Enterprise Institute(CEI) ironically a group that Trump's own transition team has used for advice on environmental issues. Marc Scribner of the CEI wrote: “There is little evidence that these public works projects promote long-run economic growth.” in a blog post called "The Great Infrastructure Myth".
While the idea of infrastructure improvement has support among some key Republicans in Congress and is likely to gain the support of many Democrats the issue of how to pay for such improvement has been divisive. House minority leader, Nancy Pelosi said the the Democrats want to work with Trump "to pass a bill very fast". The group Building America's Future chaired by former Democratic Pennsylvania Governor Ed Rendell and former New York mayou Michael Bloomberg pledged to work with Trump and Congress to "tackle this unifying issue in the first 100 days."
Bud Wright, executive director of the Association of American State Highway and Transportation said: “Financing is a nice piece of the puzzle. We certainly believe that we need additional federal investment, but really finding funding to do that — using some traditional or creative sources to generate new revenues — is important." Ed Mortimer, of the U.S. Chamber of Commerce said that the group would tell the Trump administration that some kind of sustainable funding must be part of any new infrastructure spending plan. With respect to this issue there is general agreement that it needs to be addressed urgently and it is possible that both parties can work together to come up with a plan to improve U.S. infrastructure.

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