Trump's $1 Trillion Plan to Rebuild Infrastructure: Who's Funding It?

  • Noah Peterson
  • Dec 14, 2016 11:18AM

It’s no secret that America’s infrastructure is falling apart. Our highways are riddled with potholes, our energy grid is patched together, and some of our railways look as though they’ve come straight from a Soviet-era gulag. During their last review in 2013, the American Society for Civil Engineers (ASCE) gave US infrastructure a grade of D+, with a rating of poor. Pretty sad for a nation that is supposed to lead the rest of the world by example.

Prior to Election Day, Trump released his plan for rebuilding America’s crumbling infrastructure, pledging to spend up to $1 trillion. During his victory speech, Trump said “We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports. We’re going to rebuild our infrastructure, which will become, by the way, second to none.” This commitment to rebuilding the United States couldn’t come soon enough. The last time America spent any substantial amount of money on infrastructure was during the Great Depression, and the 1950’s. US spending since then has been slowly declining.

“Our infrastructure is broken,” Trump said in June. “The roadways are so bad. Our bridges are bad. Airports are bad... We need to rebuild our country.” Who could argue with Trump’s plan to rebuild America? It was by far one of the least controversial things he touched during his campaign for the presidency. Even Hillary Clinton seemed to agree with him, and had similar investment plans. Back in 2013, publications were pleading with Obama to spend $1 trillion on US infrastructure. Now progressives are coming out of the woodwork, calling Trump’s plan reckless and stupid. Some critics of this plan are claiming that it is simply a way to offer tax loopholes to the rich, and will accomplish little more. Others state that potential backers of the plan would have no way of recouping their investment.

According to a paper from the Center for American Progress, Trump’s plan “shovels money at wealthy investors instead of solving real infrastructure challenges.” Kevin DeGood, the report’s author and director of infrastructure at the center, said “It’s really a huge failure because it just doesn’t deliver on what the actual needs are out there. “These really complicated deals for which contracts [with private investors] can be beneficial only apply to one-half of 1 percent of the need that is out there.” As it is with any large-scale project that benefits the public, the challenge is clear: Investors need a return on their money, and aside from adding tolls to bridges and roads, few projects allow for it.

Rep. Peter A. DeFazio (Ore.), Democrat on the House Transportation Committee, said citizens who supported Trump’s plan may be in for a rude awakening. 

“That would be a very rude shock to a lot of people who voted for Donald Trump if they suddenly found that the rural roads in Nebraska or Indiana — the interstate highway, which they paid for and they’re still paying gas taxes — now they have to pay a toll on top of that? They probably wouldn’t be happy.”

So if investors couldn’t possibly recoup in any meaningful way, where is the money going to come from? Tax breaks – the tried-and-true “American Way” of getting the rich to fund massive projects. Trump’s plan would give private investors an 82 percent tax break to pump money into infrastructure projects. According to the President-elect, his method would play a pivotal role in funding these massive projects without taxpayers suffering. Trump said that the tax credits given to investors of projects would be recouped by the taxes collected from contractors and laborers hired for rebuilding.

Degood said that the lack of overall tax dollars available is what’s wrong with the plan, not the investment and financing gap. “If just having access to debt at 3 percent were all that project sponsors needed to kick off big projects, then that would have happened already,” he said. “We’re in the lowest cost financing universe that we’ve been in since World War II, and yet we don’t see explosive growth in construction activity because it’s a lack of tax revenue, not a lack of access to debt.”

Another part of Trump’s plan to rebuild America involves repatriation: The idea to bring back $2.5 trillion in cash held by outside of the United States by American corporations. He has proposed to reduce the rate these companies would pay to bring money back to the US, from 35 percent to 10 percent. These corporations could then invest that much more into American infrastructure projects, use the 82 percent tax credit to their advantage, and essentially wipe out the remaining 10 percent tax.

The bottom line is the United States needs a way to find the money. Progressives are claiming that Trump’s plan is just going to placate the rich, but I haven’t seen anyone else come up with a plan to rebuild America’s failing infrastructure in my lifetime. Who other than the ultra-wealthy will pay for these construction projects? American taxpayers certainly don’t want to, and the President-elect is attempting to put a proposal into action that will enable the common man to enjoy these improvements without paying more. Of course, it is necessary to offer investors and companies huge incentives to put money into the builds – do you think that the rich are simply going to invest billions of dollars out of the goodness of their hearts?

Opposing groups of Trump’s plan need to either come up with a better idea, or shut up. The media has put out a ton of data outlining the issues with Donald’s proposal, with no alternative solutions discussed. During the Great Depression, President Franklin D. Roosevelt recognized the necessity for modern infrastructure on the homeland, and domestic job growth. The fight for these improvements led to the construction of the Hoover Dam, the Lincoln Tunnel, LaGuardia Airport, and much, much more. America is in dire need of more than just a paint job – our infrastructure is falling apart and needs to be rebuilt from the ground level up. If Trump’s plan can simultaneously achieve that while providing Americans work that isn’t tied to the service industry, it’s time to make that happen.

Within the last 25 years, many have talked a big game about rebuilding infrastructure. At the end of the day, nobody did shit. Bill Clinton sold America’s future to China- he didn’t build bridges. George W. Bush invaded the Middle-East- he didn’t improve airports. Barack Obama passed an unconstitutional health care mandate- he didn’t fix the energy grid. When we look back at history, hopefully, Donald Trump’s countless controversies will be overshadowed by the fact that he was able to reshape the United States into a 21st-century powerhouse. It’s time to get to work.