Trump's Failed Infrastructure Plan Is a Wasted Opportunity

The president's trillion-dollar proposal could have been a signature achievement.
October 2018
A "Road Closed" sign under a highway overpass.
(Shutterstock)
Donald F. Kettl
By Donald F. Kettl  |  Columnist
Former dean of the School of Public Policy at the University of Maryland, and a nonresident senior fellow at the Volcker Alliance and the Brookings Institution

To get to her home in Washington County, Miss., where many of the bridges have been closed by the state and declared structurally deficient, Lori Gower has to maneuver her Dodge Charger through farm fields. Once, after heavy rains, the engine flooded and her husband Mack had to come out to rescue her. Mack has his own road-related problems, as NBC News has reported. He’s diabetic and can’t get his insulin delivered.

The Gower family is an icon for President Trump’s trillion-dollar infrastructure pledge. The roads and bridges around them are crumbling. The Gowers live deep in the heart of Trump country, where voters went for him by a margin of 2 to 1. But the prospects for a big infrastructure program that could help with their real-life problems are becoming more distant every month.

The irony is that this is the one part of Trump’s presidential agenda that looked like a sure bet. In the first hours after his victory, he announced that his administration was going to “rebuild our highways, bridges, tunnels, airports, schools, hospitals.” Bipartisan support was almost immediate. Democrats, led by Senate Minority Leader Charles Schumer, quickly jumped on board.

The need is indeed enormous. The American Society of Civil Engineers has graded the nation’s infrastructure as a D+ and warned that its deterioration is harming the nation’s ability to compete in the global economy. In the early days after Trump’s inauguration, Republican strategist Steve Bannon predicted that infrastructure would give the president an added bonus, the key to “an entirely new political movement, as exciting as the 1930s,” even “greater than the Reagan revolution.” It was such a good idea, the White House believed, that Trump’s team boosted the target to $1.5 trillion.

But nearly two years after the election, the plan is by all reports dead. Everyone seems to love the idea of investment in infrastructure, but no one has figured out how to pay for it.

Early in the debate, Trump’s advisers suggested they could link the infrastructure program to the 2017 tax bill, extracting revenue from corporations that parked their earnings abroad. Corporate opposition killed that. Then there was a quiet plan to increase the gas tax or phase out some costly tax breaks. It turned out that there wasn’t the stomach in the White House for either of those ideas.

The Trump administration finally launched its $1.5 trillion plan with a pledge of just $200 billion in federal cash, to be offset by cuts elsewhere in the federal budget and supplemented through public-private partnerships. State and local officials across the country couldn’t have been more disappointed. They didn’t have that much cash to put into infrastructure projects -- if they had, they would already have been doing them. The promise of a big federal aid program suddenly had turned into a burdensome expense they’d have to meet on their own. Analysts at the University of Pennsylvania’s Wharton School, the president’s alma mater, calculated that the $200 billion White House infusion might not even produce $200 billion in new investment, because state and local governments might simply decide to put the money into existing programs.

That left public-private partnerships as the best option. That seemed a reasonable plan. Many European countries have enjoyed success with such ventures, and with interest rates near zero over the past decade, the costs were at historic lows. But in St. Louis, for example, a deal to turn the airport over to private operators has been bogged down due to the complexity of working out such partnerships, and because local voters are opposed to total privatization, preferring to keep some control over such a big local resource. The controversy has scared off some investors, who are squeamish about navigating turbulent governmental waters when other bets offer better -- and much faster -- returns.

Even where public-private partnerships have produced pavement, the results have raised questions. A new 10-mile stretch of interstate highway outside Washington, D.C., built with private funds, has seen congestion-based tolls hit $47.25 during rush hour, causing drivers’ jaws to drop. Even then, the overall speed on the highway hasn’t improved much. And a P3 toll road in Austin, Texas, designed to take traffic off the city’s congested Interstate 35, has generated only a third of the volume that a study projected. Texans, it turns out, just don’t like to pay tolls.

So what looked like the one can’t-miss deal of the Trump administration has gotten stuck in a deep rut. With budget deficits ballooning and interest rates rising, the odds of getting out aren’t improving.

According to some estimates, half of the American population in 20 years will live in just eight states. The fast-growing states won’t be able to build infrastructure quickly enough to accommodate all those people. Many of the other states will be bleeding population and won’t have the tax base to fix their infrastructure.

The failure of Trump’s infrastructure deal isn’t just the loss of Bannon’s Roosevelt-Reagan vision. It might well be the collapse of the best chance the country has had in a very long time to do what has to be done. Meanwhile, the going will only get tougher.