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New Infrastructure Plan Would Boost Economy

March 14, 2018 at 4:30 PM

Senate Democrats’ new Jobs & Infrastructure Plan for America’s Workers would invest roughly $1 trillion in public transit, roads, schools, water treatment plants, housing, and other critical infrastructure to create better-paid jobs, boost broadly shared economic growth, and improve Americans’ quality of life. Unlike President Trump’s infrastructure plan, it would go a long way toward restoring the federal government’s role as a full partner with states, localities, and the private sector in building and maintaining the nation’s infrastructure.

The condition of infrastructure greatly affects the economy’s ability to function and grow, and there’s a real unmet infrastructure need across the country — as anyone who uses our roads or airports can see. States have stepped up to help address these needs as federal support has lagged; for example, over half the states have raised gas taxes in the last four years to improve roads and bridges. While Republicans and Democrats in Washington agree that the federal government needs to do more, they have very different approaches.

Here are some highlights of the Senate Democrats’ plan:

  • It includes $425 billion in grants to states and localities to improve transportation networks vital to commerce and to Americans’ ability to get to work. It also addresses needs such as repairing or replacing aging water pipes, preserving and expanding affordable housing, building or improving K-12 schools and community colleges, and improving high-speed Internet access in rural areas. (See table.)
  • A share of the funding would target disadvantaged areas — including tribal communities and rural areas — where lack of local resources has put many children’s futures at risk, as they grow up with lead water pipes, overcrowded schools in poor repair, and lack of decent, affordable housing.
  • In addition to direct grants, the plan establishes an Infrastructure Financing Authority, which would help states and localities finance projects by reducing their borrowing costs.
  • To guarantee that a diverse cross section of American workers benefit from the construction and other well-paying jobs that come with infrastructure investments, the plan includes protections for workers’ rights to a safe workplace, fair wages, and education and training. It also includes incentives for infrastructure projects to involve small businesses and businesses owned by minorities, women, or veterans, and to use American-made materials.

By contrast, President Trump’s infrastructure plan is a mirage. It claims to turn $200 billion in “new” funds into “$1.5 trillion” in new infrastructure investment. But the $200 billion figure ignores the fact that the 2019 Trump budget overall would reduce federal infrastructure spending over the long run by cutting Highway Trust Fund spending and cutting various programs, including those that support mass transit and affordable housing. Further, the $1.5 trillion number simply assumes that state and local governments and the private sector will provide $1.3 trillion in support.

The Administration says that private investment will be a big part of its plan, with investors providing funding through public-private partnerships that generate revenue through tolls, fees, or other sources. This approach would likely leave out some areas where new infrastructure investment is most needed, such as improving school buildings and repairing infrastructure in low-income communities – needs that the Senate Democrats’ plan would directly address.

Moreover, the Senate Democrats’ plan recognizes that upgrading infrastructure is a far better use of resources for growth, wages, and jobs than a massive tax cut for the wealthiest among us, so it rolls back some of the misguided aspects of the new tax law to offset its cost.

TABLE 1
Senate Democratic Jobs & Infrastructure Plan for America's Workers
Proposed investments over ten years (in billions of dollars)
Transportation:  
    Roads & Bridges 140
    Public Transit 115
    Railroads 50
    Airports 40
    Ports and Waterways 30
    Other Transportation 50
Energy and Technology 120
Water and Sewer 115
Housing 62
Schools 50
Natural Disaster Preparedness 25
National Parks and Forests 15
Tribal Infrastructure (add'l)* 10
Health (Department of Veterans Affairs) 10
Financing Assistance 20
Misc. 30

Notes: Excludes Highway Trust Fund solvency baseline adjustment.

*Tribal grants are in addition to funds designated for tribal areas in highway, housing, and disaster preparedness grants.


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