Should There Be Concern Over Trump’s Infrastructure Plan?

President-elect Donald Trump has pledged to spend $1-trillion on infrastructure over a 10-year period, stressing the need to rebuild America to a 21st century standard. Mr. Trump, speaking of his infrastructure plan, said,“We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals, we’re going to rebuild our infrastructure — which will become, by the way, second to none — and we will put millions of our people to work as we rebuild it.” Sounds good, but haven’t we heard this before?

“We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals, we’re going to rebuild our infrastructure — which will become, by the way, second to none — and we will put millions of our people to work as we rebuild it.”

President Obama promised a complete overhaul of the United States’ infrastructure with his $831-billion stimulus package, also known as the American Recovery and Reinvestment Act. A large portion of the stimulus was infrastructure spending, but President Obama failed to deliver on his promise. Shovel-ready projects, like the rebuilding of the bridge over the Conodoguinet Creek in central Pennsylvania or the restoration of the Brent Spence Bridge between Cincinnati and Kentucky, were delayed for months and have not been completed to this day. Government bureaucrats and countless regulations are holding up projects that should have been completed by now. In the final budget of President Obama’s term, the Democrat President and Republican Congress only appropriated $305-billion for infrastructure spending which constitutes a 30 year low in infrastructure spending. This is just one more example of both Congress’ and President Obama’s failure to prioritize the country’s crumbling bridges, roads, and airports.

In the final budget of President Obama’s term, the Democrat President and Republican Congress only appropriated $305-billion for infrastructure spending which constitutes a 30 year low in infrastructure spending.

In comes President-elect Donald Trump to clean up the mess left by the Obama administration. Fiscal conservatives and Republicans have expressed concern that Mr.Trump’s promise of $1-trillion in spending could add to the federal government’s $441-billion deficit. Wasteful government spending without a tangible way to pay for it is the reason we are in this debt debacle to begin with.  However, now is the time to invest heavily in infrastructure. Current interest rates are at all-time lows and with President-elect Trump’s experience in building and renovating, he is the right man for the job. A key part of his plan to pay for the uptick in spending is the repatriation of money overseas. To incentivize companies to bring back money held overseas, a one-time tax payment of only 10% (25% less than the current rate of 35%) will be offered. With more than $2-trillion being held overseas, a large portion of the returned money could be used for infrastructure. The money must be accounted for, so having specific appropriations and earmarks from Congress that outline exactly what the money will be spent on will be crucial for both the transparency and execution of his plan. President-elect Trump also vows to make use of private-public partnerships for financing. The Bipartisan Policy Center has conducted case studies on such partnerships and found that it is often beneficial to privatize certain infrastructure projects. Per his website, President Elect Trump plans to award tax breaks to the private sector contractors who will be working on these projects.

…with President-elect Trump’s experience in building and renovating, he is the right man for the job.

Recently appointed Treasury Secretary and former Goldman Sachs partner Steve Mnuchin told reporters that President-elect Trump was “looking at the creation of an infrastructure bank,” something even Democrats could get on board with. Mnuchin went on to say the focus of the administration will be lower taxes, less regulation, and restructured trade deals which will all greatly influence the ability of Trump to move his infrastructure plan forward. President-elect Trump is banking on his GDP growth projection of 3-4% to spur economic growth and get America back on its feet. Another recent appointee, Elaine Chao for Transportation Secretary, will undoubtedly be a major influence on the infrastructure plan. Chao was the Deputy Secretary of Transportation under President George H.W. Bush and United States Secretary of Labor under President George W. Bush. This level of experience will certainly be of help to the incoming President.

Mnuchin went on to say the focus of the administration will be lower taxes, less regulation, and restructured trade deals which will all greatly influence the ability of Trump to move his infrastructure plan forward.

Going forward, also look for the much talked about Keystone XL Pipeline to get the go ahead. The proposed pipeline has garnered a lot of criticism from Democrats and environmental advocates. It was shot down in 2015 by President Obama, but with new leadership in the White House it will more than likely be approved. The pipeline would carry crude oil from Canada down to refineries in Illinois and Texas, creating many jobs in the process.

keystone
They Keystone XL Pipeline will be a key job-getter for President-elect Trump

President-elect Trump has also promised to make it a priority to generate clean water and clean air. During his campaign, Flint, Michigan and its water crisis played a huge role in helping him to win the state during the primary and the general election.

With Mr. Trump, it’s all about jobs, jobs, jobs. Now is the time for a complete overhaul of our infrastructure system to bring in those jobs and rebuild America.

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