WASHINGTON, D.C. – (RealEstateRama) — An editorial published today in the Baltimore Sun urges President-Elect Trump to adopt Congressman John K. Delaney’s (MD-6) proposal to use revenues from international tax reform as part of a bipartisan plan to rebuild America’s infrastructure and create good jobs.
Congressman Delaney has authored two bills that create a new national infrastructure fund for state and local projects; The Partnership to Build America Act (H.R. 413) and The Infrastructure 2.0 Act (H.R. 625) and over the past four years Congressman Delaney’s framework has generated significant bipartisan support. The possibility of the President-Elect adopting Delaney’s framework was also mentioned today in coverage by the Washington Post.
Don, the builder
Editorial Board, Baltimore Sun, 11/29/16
Can Trump boost jobs and demonstrate leadership? A bipartisan infrastructure bill offers his best shot
If President-Elect Donald J. Trump is the dealmaker that he claims to be, sometime between now and Jan. 20, he ought to stop by the Longworth House Office Building’s Room 1632 and ask for John. The two men might find they have a few things to talk about.
That’s because Maryland’s 6th District Rep. John K. Delaney, a Democrat, has been a leading voice in his party for leveraging greater private investment in the nation’s failing infrastructure — its roads, bridges, airports, water and sewer systems, rail lines, schools and the like. During the campaign, Mr. Trump touted his own plan to increase such spending by $1 trillion over the next 10 years, chiefly through tax incentives.
Both plans have their flaws. But at their core, they also have something, if readers can pardon the expression, to build upon. Encouraging greater private sector investment in infrastructure — building privately-owned toll roads, for example — can be a net positive, and encouraging such projects through appropriate changes in tax law can work as well. Maryland’s best examples of this are the public-private partnerships that built new rest stops on the John F. Kennedy Highway and financed a much-needed expansion of the Port of Baltimore.
As frequently as we have bemoaned Washington’s failure to update the federal government’s circa-1993 gas tax to reflect 21st century realities (the higher cost of construction, the reduced rate of fuel consumption and the need to encourage conservation in the wake of climate change), it’s clear that a Republican-controlled Congress and a Republican president are unlikely to raise the federal gas tax from its current 18.4 cents per gallon. But it’s also clear that Republicans can’t increase needed infrastructure spending without Democratic votes — too many in the GOP’s ultra-orthodox wing are allergic to a yes vote on the subject.
And make no mistake, this is needed spending. The most recent report card from the American Society of Civil Engineers rates U.S. infrastructure at a D-plus and in need of a $3.6 trillion boost. The problem didn’t happen overnight; we’ve maintained a systemic underinvestment in infrastructure over decades. But it represents a “yuuuge,” as the president-elect might say, impediment to the nation’s economy if the disrepair is allowed to continue.
Mr. Delaney’s Partnership to Build America Act would use repatriated corporate profits now held overseas (made available by a reduced tax rate on overseas earnings brought home and a larger tax on profits that remain off-shore) to put billions in the Highway Trust Fund and to create a bank — a $750 billion infrastructure fund — that would be available to state and local governments. The beauty of this concept is that it spares Republicans from raising taxes but still contributes to traditional government-managed infrastructure.
Mr. Trump’s plan, while lacking in specifics, has already been criticized as more of a profit opportunity for large corporations than any real fix for neglected infrastructure. It’s one thing to find private equity to create a toll road, it’s another to find investors anxious to sink millions into lead-free water pipes in Flint, Mich. Yet there are public-private partnership opportunities out there, as Maryland’s recent examples demonstrate, that ought to be encouraged.
The solution? Probably a deal with Democrats that takes the best of both proposals and perhaps adds an inflation-escalator to the federal gas tax in future years. That’s not raising taxes so much as embracing the realities of basic economics. And given the nation’s historically low gasoline prices of late, we seriously doubt Trump supporters will be bothered by a penny or two in future years — particularly if it means tens of thousands of new jobs created almost overnight by infrastructure construction projects.
Here’s the best part. Democrats have already signaled a desire to work with Mr. Trump on this issue. Given the undiminished (and perhaps even rising) levels of anxiety among traditional Democratic supporters following the election, that’s not something to be taken lightly. As House Minority Leader Nancy Pelosi observed, a robust jobs and infrastructure bill could allow the two sides to “work together.” That’s a deal practically begging to be done.