PRESS RELEASE
Despite High Economic Benefit, Infrastructure Funding Still AWOL
Nov. 22, 2017 (EIRNS)—President Trump told his Monday, Nov. 20 Cabinet meeting, "We’ll be submitting plans on infrastructure to Congress, soon after taxes." The Hill reported yesterday that the Administration has been sending short memos to Rep. Sam Graves, head of a sub-committee of the House Transportation and Infrastructure Committee. The White House says a "detailed, 70-page memo of infrastructure principles," is to be sent to Congress supposedly in early December.
Republican Party tax reform folly clearly impedes this. Rep. Shelley Moore Capito (R-W.Va.) said of infrastructure legislation on Nov. 20,
"The pay-for [i.e, funding] is where I think we’ll stumble. I don’t believe a gas tax will be in there. I don’t see us doing that. And the repatriation dollar is getting scooped up into tax reform, so I don’t think that will be available as a source."
One could ask the Representative: What about the Belt and Road Initiative that just rolled into your state with 20 years of power, roads, etc.?
The Administration is apparently going to propose a 7-cent/gallon Federal gas tax increase in its legislative memo; but here again, GOP top-down stupidity intrudes. Chairman Jeb Hensarling’s staff of the House Financial Services Committee wants "no additional Federal guarantees" for new infrastructure investments, and that apparently means no new Federal funds. Where does that leave Texas, Hensarling’s state, which is urgently demanding new dams, reservoirs, and sea walls after Hurricane Harvey?
The Administration has so far made one proposal for a kind of separate capital budget, though its scope unknown. The "Federal Capital Revolving Fund" would be
"a mandatory revolving fund for the financing of Federally-owned civilian capital assets. The Fund would be repaid with annual appropriations, and would help address the underinvestment in capital assets driven in part due to the large upfront costs of such procurements. Creation of such a fund parallel to the appropriations process, to fund investment in Federally-owned civilian capital assets, would avoid capital investments having to compete with operating expenses in the annual appropriations process."
AECOM, a multinational engineering firm headquartered in Los Angeles, produced a report for the Treasury on infrastructure projects, called the Build America Investment Initiative study. (This BAII is a pre-existing program from the Obama Administration.) It found that,
"The 40 projects identified in this study would generate an estimated $800 billion (midpoint) of net economic benefits across the nation if they were completed and available for use. This represents a range of $700 billion to $1.3 trillion in total benefits, less capital costs over $200 billion in net present value terms." And, "The major roadblock in starting work on or completing these projects is funding."
The AECOM report’s projects are roads, rail corridors, waterways/locks/dams, ports, and airports. The largest projects are the Northeast Corridor expansion/Atlantic Gateway and California High Speed Rail. None of the projects is assessed a benefit/cost ratio of less than 2-4 to 1; some 15 of the projects are assessed at benefit/cost of 7-10 to 1.
