It’s obvious that President Trump is not a typical Republican. At no point has that been more clear than on Tuesday night, when he made investing in infrastructure a major part of his “America First” agenda during his address to a joint session of Congress.
Americans have spent $6 trillion in the Middle East, Trump said, while failing to maintain roads, bridges, ports and other transportation facilities. That has to end.
“To launch our national rebuilding, I will be asking the Congress to approve legislation that produces a $1 trillion investment in the infrastructure of the United States – financed through both public and private capital – creating millions of new jobs,” Trump said to a rare moment of bipartisan applause.
Trump’s words are music to the ears of Mainers who drive over potholes and crumbling bridges every day. Modernizing our transportation systems would not only put Mainers to work, but would also create new opportunities for businesses that bring products to market, or those that welcome visitors from away.
But details matter in a proposal like this, and if Trump is sticking to the plan he unveiled during the campaign, Mainers should not get their hopes up too far. Very little of it would be headed this way, at least not to the places where it’s most needed.
Two Trump economic advisers wrote a position paper during the campaign outlining the $1 trillion infrastructure plan.
Both are now in the administration, with Wilbur Ross as secretary of commerce and Peter Navarro as chairman of the National Trade Council, so we can assume that their proposal is still in play.
The catch, from Maine’s prospective, is the language about private capital that will “produce $1 trillion” in investment.
Instead of raising the money for much-needed projects, Ross and Navarro propose tax credits that create an incentive for investors to borrow money for the projects.
In order to repay the bonds, the investors would need a revenue stream from the project, which is most likely to be toll roads and bridges.
Maine has one toll road, the Maine Turnpike, and it is beautifully built and maintained, but it’s hard to imagine other revenue-producing projects making a dent in the infrastructure backlog.
Toll roads would never raise enough revenue to rebuild a rural highway in Somerset County, let alone upgrading sewer and water systems in our cities, or storm surge protection along the coast. Completing those kinds of projects could spur investment, but building them won’t make money on their own. That’s why you need the government to be involved.
If Trump were to put forward a real infrastructure program, like President Dwight D. Eisenhower’s interstate highway system, he might be able to smash the partisan divide that has crippled Washington. He might lose the votes of fiscal conservatives who abhor borrowing, but pick up votes from Democrats who are frustrated by a slow economy that doesn’t produce enough good-paying jobs, even when the labor market is tight.
Infrastructure projects would put people to work, especially young people without a college education, a key group that has been left behind in the economic recovery. Interest rates are still at historic lows, which makes this a good time for the government to issue bonds. The right types of projects create new economic opportunities that last long past construction.
A perfect example is the International Marine Terminal in Portland, which is the North American headquarters of Eimskip, the Icelandic steamship company.
It could not have developed as the busy container port it is without the investment of federal funds during the stimulus package passed in the early days of the Obama administration.
Congress should find a way to bring Trump a real $1 trillion infrastructure plan that could reach all the way to Maine.
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