Trump’s voodoo infrastructure plan

The collapsed elevated section of Interstate 10, seen on July 22, 2015, near Desert Center, Calif.
The collapsed elevated section of Interstate 10, seen on July 22, 2015, near Desert Center, Calif.Tom Tingle/The Arizona Republic via Associated Press

If your goal is to invest $1.5 trillion in the country’s ailing roads, bridges, railways, airports, and water systems, pushing through $1.5 trillion in deficit-funded tax cuts is a funny way to do it. But not to worry, President Trump suggested in his State of the Union address Tuesday, because the money will magically appear.

To promote “the safe, fast, reliable, and modern infrastructure our economy needs and our people deserve,” Trump called on Congress to pass a bill that “generates” a trillion-plus dollars. Note his use of “generates,” not “ponies up.” Early versions of the plan indicate that, over a decade, it would set aside about $200 billion in federal money.


In theory, the lure of federal grants would prompt states and cities to find additional sources of money. In practice, though, it’s not as if governors and mayors have vast piles of money sitting around unused. To them, the Trump plan may look more like a cut than an infusion of new money; instead of picking up 80 percent of the cost of certain highway projects, as it now does, Washington would contribute only 20 percent.

At best, Trump is offering an infrastructure plan for an age of lowered expectations. More likely, it’s the roads-and-bridges version of voodoo economics. Simply presuming that $200 billion will make $1.5 trillion materialize doesn’t mean it’ll happen.

During his presidential campaign, Trump’s complaints about the state of American infrastructure resonated at least as much with liberals as with his Republican base, and his administration has been holding out infrastructure as one area ripe for bipartisan compromise. But the reason Republicans and Democrats historically worked together well on transportation issues isn’t that building physical bridges always builds metaphorical bridges too; it’s that Congress was investing more in roads and bridges, and everyone had an interest in making sure it was doled out with some degree of equity.


The long squeeze on public infrastructure spending hasn’t just left us with potholes and disabled trains; it’s also eroded states’ ability to plan and oversee complicated projects efficiently. State and local governments, which normally can’t run deficits, have far less flexibility in funding infrastructure than Congress, which can. When even the US Chamber of Commerce is pushing for a big hike in the federal gas tax, which hasn’t gone up since 1993, it’s a sign of a broader frustration — and a deeper public willingness to reinvest.

According to a draft that leaked last week, Trump’s infrastructure bill would make one important and long-overdue change: It would allow states to put tolls on interstate highways. That could generate money for infrastructure investment — and give states more power to manage traffic by charging more at peak hours.

Yet if Trump wants states and municipalities to pay for projects out of their own funds, he should be offering them stronger financial incentives to tax themselves. (If states imposed dedicated taxes to pay for transportation, for instance, the federal government could match a share of the revenue.) The new tax law moves in the opposite direction. By limiting the amount of state and local taxes that people can deduct on their federal returns, the law makes it harder for a governor or mayor to sell the public on a new levy.


Instead, the Trump administration has been signaling that states should bring in private teams to help manage and finance highway projects. And it’s true that private companies sometimes have advantages — such as technical expertise, easier access to money, an ability to make decisions more quickly than government agencies do — that can help certain projects move along faster.

But private involvement is no substitute for federal grants. Sure, it’s great when, say, Harvard University agrees to kick in for a train station on property it controls. But Wall Street investors and financiers don’t contribute money to the typical infrastructure project out of the goodness of their hearts; reasonably enough, they want to be paid back, plus interest.

In the end, taxpayers generally get the public infrastructure that they are willing to pay for. If a pipe bursts in your basement, you can experiment with innovative financing systems, leverage outside money, seek out private equity partners, and yada yada yada. But one way or another, you have to dig into your pocket and hire a plumber.

Dante Ramos can be reached at dante.ramos@globe.com. Follow him on Facebook: facebook.com/danteramos or on Twitter: @danteramos.