Morici: Infrastructure gives Trump an opportunity to shine

Peter Morici 

US President Donald Trump demonstrated he can work with the Republicans in congress by passing the Tax Cut and Jobs Act. The nation’s sagging infrastructure offers an opportunity to reach across the aisle and prove he can lead the nation in common purpose.

Whereas he failed to convince Democrats that tax cuts were prudent and could be fair, most everyone agrees rebuilding America’s infrastructure is needed but is terribly difficult.

The shortage of federal, state and private funds to upgrade Interstate 95, metropolitan New York’s mass-transit system and other facilities around the country exceeds $1 trillion.

Through 2025, the American Society of Civil Engineers estimates inefficiencies imposed by outdated facilities will cost $3.9 trillion in lost GDP – not to mention the terrible frustrations we endure commuting to work, running businesses or just visiting family at the holidays.

By addressing the mess, big cities stand to gain a lot – something Democrats like Sen. Schumer should love – and the jobs created in smaller municipalities and rural communities would be substantial – a direct boost to the GOP’s political base.

Sadly, political stars are as much crossed as aligned. Finding the money and the penchant for the courts to arrogate policymaking authority from democratically elected legislatures has frustrated political and business leaders of all stripes.

Federal and state budgets hardly have the $1 trillion the Trump administration says is needed to catch up the nation’s infrastructure investment. Initially, several hundred billion was to be found by taxing U.S. corporate profits parked abroad but that money was used to help lower the top corporate tax rate from 35 to 21 percent.

Some projects could be financed by raising dedicated taxes – most notably the gas tax to fix roads and bridges – but many in Congress and motorists fiercely opposes that solution. Too often, highway funds are spent wastefully and on green projects such as bike paths.

Mr. Trump should seek consensus with unions to streamline work rules so that the Davis-Bacon Act, which essentially requires union workers on federally assisted projects, results in fewer workers merely leaning on shovels. In exchange, he offers more dollars for the roads and genuinely productive jobs. A bike and tire excise tax to finance cycling projects makes sense too.

The administration is pushing hard for private financing but state experiments with private investors have often resulted in exorbitant utility bills, unreliable ambulance services and bankrupt toll roads – or at least roads too expensive for many commuters.

The basic problem is privatized facilities usually become unregulated monopolies, and private equity loads them up with debt to create big paydays for Wall Street financial engineers.

If the administration is set on privatizing the nation’s air traffic control system, then the customers – which too often were not adequately represented by local governments in the situations noted above – must be at the table. The airlines – represented by their chief financial officers – along with federal and local officials, should have to approve financial structures, fees and standards of performance in any deal that hands the air traffic control system to private investors.

Finally, environmental activists have abused the courts to impose controls contrary to national and state policies established by congress and elected legislatures. For example, the Millennium Pipeline Company proposed to build a 7.8 mile line to an electric utility in New York that local groups managed to get a federal judge to delay on grounds that natural gas use added to greenhouse emissions and encouraged fracking.

Such environmentalists’ tactics and judicial activism are ill-conceived and mock democracy – these amount to little more than irrational guerrilla warfare to subvert majority rule.

Environmentalists should consider that gas-fired plants generally displace coal-fired generators and reduce CO2 emissions. If they think the country should cap electrical generation altogether or end fracking, then congress is the place to make law.

It’s high time that Congress looked at how judicial restraint is enforced. It seems the courts are the only branch of government that can grab policymaking authority without any oversight and with impunity.

Articulating those issues by engaging Democratic senators and governors is the only way for Mr. Trump to deliver on his promise to rebuild America.

If the president is the dealmaker he offers himself to be, infrastructure offers his time to shine.

Peter Morici is an economist and business professor at the University of Maryland, and a national columnist. © 2018, The Washington Times.