It’s hard to call a plan that spends $275 billion in taxpayer dollars over five years “modest” and keep a straight face. But that may be the best way to describe the proposal Hillary Clinton unveiled on Monday to upgrade the nation’s ailing infrastructure.
Clinton’s blueprint is certainly broad in scope: It aims to bolster not only roads and bridges but also public transit, freight rail, airports, broadband Internet, and water systems. It’s the most expensive domestic policy proposal she’s made to date. And when added to the nearly $300 billion Congress is poised to authorize in a new highway bill, the Clinton plan tops the $478 billion that President Obama sought for infrastructure earlier this year.
Yet the reaction from advocates of more robust infrastructure spending has been less than enthusiastic, a nod to the fact that the size of the Clinton plan falls well short of what studies have shown the country needs. “Secretary Clinton is exactly right to call her plan a ‘down payment,'” said Damon Silvers, the AFL-CIO’s director of public policy. “The reality of our infrastructure deficit is in the trillions, not billions.”
Specifically, that deficit has been pegged at $1.6 trillion—the amount of additional money governments at all levels would have to spend by 2020 to bring the nation’s infrastructure up to date, according to a widely-cited report issued two years ago by the American Society of Civil Engineers. Even Bernie Sanders didn’t make it that high, but he came a lot closer than Clinton by introducing legislation to spend $1 trillion over the next five years on infrastructure.
The Clinton campaign has tagged the Sanders agenda as overly expensive, requiring either a dramatic increase in the deficit or tax increases that hit not only the nation’s wealthiest but millions of middle-class families as well. Politically, the Sanders plan is only achievable with the kind of the Democratic majorities in the House and Senate that Obama enjoyed briefly in 2009. Clinton’s proposal, by contrast, is pegged to the reality that barring an electoral tsunami in 2016, she would have to work with at least one chamber of Congress controlled by Republicans, and maybe two.
“The plan is a promising step in the right direction,” said Brian Pallasch, chief lobbyist for the society of civil engineers. That’s a more polite way of saying it doesn’t go far enough. “Most of these plans are constrained by our ability to raise revenue,” Pallasch said. “This one is probably no different than that.”
Clinton’s allies don’t deny that. She hasn't detailed exactly how she’d pay for the plan other than to say she would raise revenue through “business tax reform.” That probably means she is looking to tap the same fiscal spigot as are Democrats and some Republicans in Congress (as well as the Obama administration)—a one-time infusion of cash from corporations that bring their profits back from overseas accounts in exchange for a tax discount. Such a move would bring in enough money to boost infrastructure spending for several years, but it would not be able to sustain those levels into the future.
A permanent fix for highway spending, for example, would require Congress to do something it hasn’t done in 22 years: increase the federal gas tax. And Clinton is not calling for that. Nor is she advocating a switch to a tax on vehicle miles traveled, an alternative being tried in Oregon that some analysts say would be a fairer way for drivers to pay for public roads. Endorsing either idea would leave Clinton vulnerable to attacks from Republicans who would call them a tax on the same “everyday Americans” she has vowed to protect.
“It would be pie-in-the-sky for Hillary to say we’re going to base the infrastructure plan on a tax increase. Because it's not getting through the Congress, no matter how right it is,” said Ed Rendell, the former Pennsylvania governor who now advocates for infrastructure improvements as a co-chairman of Building America’s Future.
Rendell, who has endorsed Clinton and consulted on her proposal, told me the plan is more ambitious than the top-line number would suggest. That’s in large part because unlike the Sanders proposal, it does not rely as heavily on direct government spending. Clinton is calling for $250 billion in new spending, plus another $25 billion that would go toward launching a national infrastructure bank, which she borrowed from an Obama administration proposal that stalled in Congress. The new government entity, combined with the reauthorization of a Build America Bonds program that was included in the 2009 stimulus, would support private investments that could bring total infrastructure spending to around half a trillion dollars, according to the campaign. “It’s bold and at the same time realistic,” Rendell said.
The Clinton plan is one that seems aimed at a general-election audience, with a price tag that won’t cause sticker shock and with an added emphasis on eliminating “red tape” that slows the permitting and construction of new projects. Not that Republicans are giving her any credit for restraint. In a statement, the Republican National Committee said Clinton’s infrastructure proposal brought the cost of her total domestic campaign agenda to more than $1 trillion. “It’s clear she wants to treat Americans’ tax dollars like every day is Black Friday with no plan to pay the bill,” RNC spokesman Michael Short said. “The real reason Hillary Clinton isn’t saying how she’ll pay for her trillion-dollar spending increase is because she knows it means raising taxes on the middle class.”
With a Republican-controlled Congress about to pass a long-term highway bill for the first time in a decade, the bipartisan approach to funding infrastructure projects may be returning. The GOP’s decision to oppose en masse the 2009 stimulus package had ruptured it for years. But more recently, reports of roads and bridges that are literally crumbling, worsening traffic, and persistent complaints about air and rail travel, have slowly rebuilt the coalition. Declining deficits and the end of an austerity era in Congress have helped as well. Advocates have also had success in pointing out what they call the “pothole tax”—the economic cost of allowing the nation’s infrastructure to decay.
“I don’t have to tell you what a sorry state we’re in,” Clinton said in previewing her plan Sunday at Boston’s Faneuil Hall. “Our roads and bridges are potholed and crumbling. Families endure blackouts because our electric grid fails in extreme weather. Beneath our cities, our pipeline infrastructure—our water, our sewer, you name it—is up to a century or more old. Our airports are a mess. Our ports need improvement. Our rail systems do as well.”
The Democratic frontrunner seems to have diagnosed the problem, but is her pragmatic plan bold enough to fix it?
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