Senate Democrats Transportation Proposal is a Political Stunt


Senate Democrats Transportation Proposal is a Political Stunt

Unwilling to wait even a week for President Donald Trump to release an infrastructure plan, Senator Chuck Schumer and other Democrats are hoping to score some cheap political points by releasing their own $1 trillion infrastructure package.

According to the proposal’s summary, it provides $210 million to repair roads and bridges, $10 billion to expand the TIGER (Transportation Investment Generating Economic Recovery) grant program, $180 billion to expand and rehabilitate transit systems, $200 billion to build vital infrastructure projects, $70 billion to improve ports/airports/waterways, $110 billion to rehabilitate water and sewer programs, $75 billion to rebuild schools, $100 billion to create 21st century energy infrastructure, $20 billion to expand broadband, $20 billion for building infrastructure on public lands/in “Indian country”, and $10 billion to construct new veterans facilities. More bluntly, it gives something to just about everybody regardless of need, so everybody can claim they have something in the package.

The elements of the plan are included Table 1 and listed by proposed level of funding.

Table 1: Senate Democrat’s Proposed Transportation Funding

Category Funding Category Funding
Vital Infrastructure Program $200B Improve Airports $30B
Repair and Expand Transit $130B Build Resilient Communities $25B
Revitalize Main Street $100B Expand Broadband $20B
Rehabilitate Water and Sewer $110B Rebuild Public Lands $20B
Reconstruct Roads and Bridges $100B Modernize VA Hospitals $10B
21st Century Energy Infrastructure $100B Provide Innovative Financing Tools $10B
Rebuild Public Schools $75B Address Ports and Waterways $10B
Modernize Rail Infrastructure $50B Expand TIGER $10B

I am skeptical that this is an actual policy document; it seems designed as more of a political instrument. Senator Schumer and Democratic leadership are trying to hold President Trump to his billion of infrastructure investment he promised on the campaign trail. Only Trump did not promise $1 billion of spending (funding), he promised $1 billion of investment (funding and finance).

Trump’s plan is likely to rely more on financing and tolls. Financing is a tool that helps stretch funding further. Tolls are a users-pay/users-benefit revenue source. Both can improve the nation’s infrastructure without increasing the debt, something Schumer’s plan would increase enormously.

Since Democrats are in the minority in both the House and the Senate, they need leadership to schedule floor time for this bill, which is not going to happen. Assuming by miracle that they can get floor time, then they need a number of Republicans to vote yes on a billion dollars of new funding, which is not happening. If anyone is salivating at the prospects of drastically increasing funding, he should take a cold shower. This package is nothing more than a dream.

But let’s say that this is a serious policy proposal; why is it a bad idea? This package repeats many of our past mistakes in infrastructure policy without incorporating the lessons learned.

First, the Democrats’ plan seems more like a stimulus for infrastructure. Certainly some of these needs are genuine. But it includes every type of infrastructure project imaginable. Some of these projects lack bipartisan consensus, such as the rebuilding public lands or building 21st century energy infrastructure. Most would be better suited to the private sector, which has a much better record of expanding broadband or modernizing VA hospitals.

Second, there is already a long-term roadway and transit bill entitledFixing America’s Surface Transportation (FAST) Act. This bill that funds transportation through a mix of dedicated revenue via the transportation trust fund and general funds, was enacted in late 2015 and expires in 2020. There may a need for some additional targeted funds, but not $1 trillion worth of funding. How will this new funding be tied into existing funding? The 12-page Blueprint to Rebuild America does not say.

Third, the precise policy and goals lack definition. What is the goal of this spending? Are we trying to reduce congestion to level of service B on 50% of urban roads? Are we trying to have a modern customs facility in every airport that serves 20 million or more passengers per year? Programs with explicit quantitative goals can direct needed money to the correct projects. Programs without such goals tend to squander money on politically oriented projects.

Fourth, eligibility standards for funding are not stated. The document does not say how projects will be evaluated. Will benefit-cost analysis be used? The federal government has a history of bumbling infrastructure spending. Remember the American Recovery and Reinvestment Act (ARRA) officially referred to as the stimulus in which billions was promised for infrastructure but less than 7% of total funding supported the cause. Nobody wants a repeat of that blunder.

Fifth, all federal funding should support national priorities. The Democratic blueprint uses words such as “local”, “community”, “cities” and towns”. Federal funding is not designed to fix the potholes on main street or build bike lanes in an upper middle class suburb. Federal funding is designed to be used on modes with a federal purpose such as highways, airports, rail and maritime. Bicycle safety projects in small towns are in no way deserving of federal funding.

Sixth, it expands federal programs that are clearly failing. There has been bipartisan consensus that the Transportation Investments Generating Economic Recovery (TIGER) grants rewarded funds to politically important projects in the districts of moderate Democrats, and members of both political parties on the appropriations and transportation committees. While I would prefer to see the TIGER program killed, an alternative would be for President Trump’s administration to change eligibility so projects with a national purpose that score highly on a cost-benefit analysis are the only ones that get funded. But the idea of expanding TIGER without making changes is beyond ludicrous.

Seventh, this proposal has no funding source, so it represents new deficit spending. The plan claims to be fiscally responsible by closing tax loopholes used by corporations and super wealthy individuals. However, an earlier analysis shows closing such loopholes would account for only $100 million, about 10 percent of the funding. The only point of making such an absurd claim is to play politics.

The bottom line is that this plan is nothing but a marketing piece. President Obama used infrastructure as a political talking point. If this is the most realistic plan that Senate Democrats can come up with, it’s clear that they are using transportation as the same type of political football. While the transportation vision that President Trump and the Republicans create may not be perfect, it is bound to be a lot more realistic than this proposal from Fantasyland.