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Trump promises to make infrastructure a major focus

November 12, 2016 at 5:59 PM EST
Donald Trump has signaled that infrastructure will be a major issue in his administration. He has also promised to create 25 million jobs through infrastructure spending, tax reduction, trade deal reform and lifting restrictions on American energy development. Laura Bliss of CityLab and Binyamin Appelbaum, a correspondent for The New York Times, join Alison Stewart.
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ALISON STEWART, PBS NEWSHOUR WEEKEND ANCHOR:  Donald Trump has signaled that high on his domestic agenda is attending to the nation’s infrastructure, which he addressed in his election night victory speech.

DONALD TRUMP, PRESIDENT-ELECT:  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.

ALISON STEWART: Two weeks earlier, outlining his contract with the American voter, Trump put a price tag on his plan.

DONALD TRUMP:  The American Infrastructure Act leverages public-private partnerships and private investments through tax incentives to spur $1 trillion in infrastructure investment over the next ten years.

ALISON STEWART: The American Society of Civil Engineers, in its last report card, graded the country’s infrastructure a “D- plus” and estimated $3.5 trillion in spending is needed to fix it.

When it comes to jobs, Trump has promised to create 25 million of them through infrastructure spending, tax reduction and simplification, regulatory relief, trade deal reform and lifting the restrictions on American energy development.

Joining me now to discuss Trump’s infrastructure and jobs plans are: Laura Bliss, a writer for “CityLab”, which is part of Atlantic Media here in New York; and in Washington, Binyamin Appelbaum, a correspondent for the “New York Times.”

Laura, the American Society for Civil Engineers gave the U.S. infrastructure a D-plus rating.  Why does it deserve a D-plus rating?  How did we get to a D-plus rating?

LAURA BLISS, CITYLAB: Yes, it’s a great question, and I think most Americans actually have pretty firsthand experience just driving on highways and losing time and money and productivity, facing roads that have really been not adequately maintained.  And what we’re look at, according to the American Society of Civil Engineers, is actually something to the tune upon a $3 trillion infrastructure spending gap.  So that’s, you know, the difference between what we are spending and what we’re not to keep our roads, as well as our bridges, our airports, our transit system, our ports, really functioning and serving the American public.

ALISON STEWART: What’s an example of recent of recent D-plus fail in infrastructure?

LAURA BLISS: Yes, absolutely, not even two months, right, very close to here in New York, New Jersey transit.  We saw that fatal train crash, and that was partly driven by a failure to keep that system up to date as far as its safety mechanisms.  Of course, very memorably in Flint, Michigan, earlier this year, we saw the failure of a water system to be really adequately maintained.

ALISON STEWART: Binyamin, has Trump signaled what this infrastructure plan, that he’s talked about, what it might look like?

BINYAMIN APPELBAUM, THE NEW YORK TIMES: So, he has suggested that the portion of the infrastructure plan focused on transportation would be about $550 billion.  And his economic varies, Peter Navarro, has sketched out a way it might be paid for.  He suggested that what we would be talking about is a tax credit that would incentivize private developers to put their own money into public infrastructure in exchange for which they would pay not very much at all in taxes on those investments, and that the government could then recoup some of that lost money by imposing a one-time tax on the repatriation of profits that American companies have been keeping stashed overseas.

ALISON STEWART: Trump finds himself in a unique position.  The Republican Party is not always that excited about spending money on things like infrastructure, whereas the Democratic Party often is.  What kind of political maneuvering is he going to need to do to get this off the ground?

BINYAMIN APPELBAUM: Yes, the landscape here is interesting.  Pretty much everyone agrees that the nation’s infrastructure is crumbling.  Where the agreement breaks down is when it comes to time to figure out who is going to pay for it.

So, as you said, Republicans have traditionally been very reluctant to invest funds in these types of projects.  President Obama proposed something very similar to what Donald Trump proposing and congressional Republicans refused to take it up as an idea.

So, the hope for Mr. Trump is that this alternative financing model will be attractive to Republicans.  But the sticking point for many Republicans is that they don’t accept his argument that this is good for the economy.

ALISON STEWART: Laura, from your reporting, what kind of private-funded infrastructure has worked or hasn’t worked?

LAURA BLISS: Privatization of infrastructure projects is not an inherently bad idea, and it can work, you know, especially on a project like a toll road, for example, where a private company is sort of guaranteed revenues down the line after the project is completed.  But as a funding mechanism for the vast majority of infrastructure projects that our country could really benefit from, it doesn’t really seem to hold up because they’re not going to be particularly lucrative in the long run for those private companies.  They’re really designed– supposed to be designed for the public good, and not to– not to force the public to pay very, very high usage rates.

ALISON STEWART: Binyamin, Trump said that he’s tied his job creation to this infrastructure idea.  Does that work?  Does that make sense with what he’s proposed?

BINYAMIN APPELBAUM: It really depends on the details.  So, you know, interestingly enough, from the perspective of many Democrats, the extent to which the government provides funding for these projects is an important consideration because in their view, the types of projects that are most likely to be built with government funding are the ones least likely to be built by the private sector and, therefore, the most likely to create new jobs.

If you’re simply providing a tax subsidy so that companies can build things they were already going to build and it’s just more profitable for them to do so, you don’t create a lot of jobs by doing that.  You just put money in the pocket of people who own those companies.  If, however, what you’re doing is providing funding for projects that wouldn’t otherwise get off the ground, that has the potential to actually create new jobs.

So, this question of the funding model isn’t just a question of who pays for it but a question of how much economic benefit there’s likely to be.

ALISON STEWART: Binyamin, will politics play a role here as to which infrastructure projects get started first?

BINYAMIN APPELBAUM: Yes, I think it’s fair to say that politics will play a role here, absolutely.  The details, again, matter.  If what he’s proposing is a tax credit that anyone can take advantage of, the government would have somewhat less of a role in selecting projects.  Developers would have to line up and meet the requirements for the tax credit.  But, again, to the extent that the government starts allocating the funds, yes, Congress has a long history of picking out pet transportation prohibits for funding.  It’s a fair bet that that would happen again.

ALISON STEWART: Laura, we should point out that voters seem to be hungry for increased funding or at least increased support of infrastructure.  On many local initiative ballots, there was a great show of support for this, correct?

LAURA BLISS: Yes, at least certain types of infrastructure.  Sort of– I think a story that was definitely overshadowed on Tuesday night was a real victory in the public transportation sector, something like 70 percent of the ballot measures nationwide that were about funding transit got passed.  So, yes, you did sort of see this story of voters, primarily in dense, urban centers, really, you know, voting for a more urban future and, you know, demonstrating a willingness to pay for it, in terms of investment and transit.

Less so, you know, there was– there were a number of measures that were also, you know, geared towards highway fund, other kinds of transportation projects, less so about water infrastructure, energy infrastructure, you know, ports, airports.  Those were a little bit lesser seen.

ALISON STEWART: Binyamin, you wanted to add something?

BINYAMIN APPELBAUM: Yes, you know, the support for the transit measures that Laura was just talking about came mostly from parts of the country that also supported Hillary Clinton.  One issue Donald Trump is going to need to grapple with is House Republicans largely represent parts of the country that have less infrastructure and are perhaps less excited about increased infrastructure spending.  It’s not clear that he can rally a majority of the House right now to back a rebuilding of LaGuardia Airport, for example.  They may not care how bad conditions are in New York.

ALISON STEWART: All right. This is to be continued, it sounds like.

Laura Bliss from “CityLab,” and Binyamin Appelbaum from the “New York Times” — thanks to both of you.

LAURA BLISS: Thanks so much for having us.

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