Nov. 9, 2018—Speaking to CNBC on Nov. 8, former U.S. Transportation Secretary Ray LaHood laid out his current thinking on the prospects for a bipartisan Federal infrastructure plan. LaHood, a former Transportation Secretary and long-time proponent of major federal infrastructive spending, pinned his hopes on President Trump supporting an increase in the federal gas tax. A ten cent rise would raise billions and get the process started, he said.
LaHood scoffed at the idea of President Trump’s plan to put the onus for raising infrastructure monies on the states. “The states have no money,” he said, so a plan to have them finance 80% of the cost of infrastructure projects just won’t work. The Federal government financed 80% of the interstate highway project, and that is the formula which has prevailed to this day.
And “you can’t do it with public private partnerships ,” LaHood added. There is some money there, but it’s nowhere near enough.
LaHood’s list of huge infrastructure needs included 60,000 structurally deficient bridges, crumbling roads full of potholes, and the New York-New Jersey Gateway Project. There are necessary projects like the $30 billion Gateway project all over the country, he added.
Indeed, U.S. economy’s demands for infrastructure range far beyond LaHood’s modest list. They involve funding a leap in technology to high-speed rail and funding of advanced nuclear power technology, in addition to the repair of current facilities. The price tag will range in the trillions. And while a rise in the Federal gas tax will be an important part of servicing the new loans, the scale of the need requires nothing less than a new credit facility capable of financing projects all over the country. For a Hamiltonian approach to such funding, click here.