Why We Might Get an Infrastructure Deal

The Odds of Fixing U.S. Infrastructure Just Got Better
The U.S. Chamber of Commerce now is calling for higher gas taxes to repair America’s crumbling roads.
Bloomberg, January 31, 2018, 12:13 PM EST




After all the complaints I have made about the need for a big improvement in American infrastructure, I am genuinely excited by the prospect that something might happen this time.

My optimism isn’t the result of President Donald Trump’s claim in last night’s State of the Union address that he’s interested in an infrastructure program; history teaches us that the speech offers little guidance in whether future projects come to fruition. 1 Rather, my optimism springs from a schism between two of the major players on the political right, who disagree about things like taxes, spending and the role of government.

On one side is Tom Donohue, president of the U.S. Chamber of Commerce; on the other is Grover Norquist, president of Americans for Tax Reform. Both have unimpeachable conservative bona fides.

Two weeks ago, Donohue proposed a big infrastructure plan, including a 25 cent a gallon increase — phased in over five years — in the federal tax that supports the Highway Trust Fund. The chamber has made a substantial push for this, issuing position papers and even setting up a separate website, letsrebuildamerica.com. Just as an aside, the federal gas tax of 18.4 cents a gallon isn’t indexed to inflation and hasn’t been raised since 1993. In today’s dollars, the tax is equal to about 10.8 cents.

Norquist opposes this tax increase along with any and all others, and has expressed opposition to states that want to raise their own gas taxes.

Norquist has helped to kill every infrastructure bill proposed for more than a decade. That is why I have suggested in the past that you should be sending your auto repair bills for flat tires, broken axles and other damage resulting from neglected infrastructure directly to him.

The Chamber was at best lukewarm in its past support for a big infrastructure bill, suggesting “increasing the federal gas tax as the simplest, fairest and most straightforward way to raise more money for projects.” The new position is a much bigger, bolder and more vocal proposal. Such taxes are opposed not only by Norquist, but also by the influential Koch political network. Koch Industries, by the way, is a major energy producer, so I guess it’s not too surprising that it opposes tax increases on one of its main products.

The Chamber’s positions on climate change, minimum wages and the fiduciary rule for retirement-savings accounts have been woefully out of step with America’s business community. As I’ve said before, the Chamber often look more like a conservative think tank than an advocate for business interests. And yet businesses generally support infrastructure upgrades and maintenance. So this shift seems to be a realignment of the Chamber with its members’ interests.

The Chamber’s proposal strikes me as particularly enlightened. In addition to raising the tax by 25 cents a gallon by 2024, the Chamber also calls for it to be indexed to inflation. The failure to do this originally is one of the reasons the Highway Trust Fund has been running out of money the past few years. In total, Donohue’s proposal would raise about $400 billion over the next decade. That’s not enough to fix everything that needs to be repaired, but it’s certainly a good start.

If the U.S. wants to stay competitive with China and other advanced or even developing countries, it needs a modern, robust transportation system; efficient mass transit; an advanced electrical grid, broadband, cellular networks; and a state-of-the-art shipping and port system. Despite pioneering many of these public-sector programs, the U.S. has fallen far behind other industrial nations and will fall even further behind unless dramatic reforms are adopted.

It is long past due that America modernizes its infrastructure. We may have a glimmer of a shot at it this time.

1. Between 1965 and 2013, presidents made 33 policy proposals, on average, in each State of the Union address, according to a study that was published by the Congressional Research Service in 2015. During that period, Congress passed 41.6 percent of the requests made in State of the Union speeches in the year they were given.



Originally: The Odds of Fixing U.S. Infrastructure Just Got Better

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