Rendell Revives the Debate for a Capital Budget, as Trump Prepares to Release Infrastructure Plan
By John Ascher
Dec. 9, 2017–According to a December 9, 2017 article in The Hill, President Trump will be soon releasing a 70-page memo detailing his long-awaited proposal for rebuilding America’s crumbling infrastructure. The release of the report, according to the article, will come after the ‘success’ of passing tax reform and will provide a framework for a package of legislation which Trump seems to be discussing with the Republican leadership.
The debate concerning the scale of an infrastructure rebuilding plan, and how to pay for it, has been heating up in the past several months, as it is clear that this question will soon be on the top of the Administration’s bucket list from its many remaining 2016 campaign promises.
Former Pennsylvania Governor Ed Rendell, in a December 6, 2017 article in The Hill, entitled “This is the only solution to fixing America’s crumbling infrastructure” outlined an indispensable element of this debate: a separate Capital Budget for national infrastructure requirements. (1) He presented this as what he called a “Hail Mary” to a meeting of the bi-partisan “Problem Solvers” caucus in late November.
The caucus is a 40-member grouping, which has met five times, and is now preparing a report they hope will be incorporated into a Trump proposal.
Critics of the (so far unknown) Trump approach, include former Transportation Secretary Ray LaHood, who works with Rendell. Quoted in the December 9 Hill article, LaHood attacked the Administration for failing to use the tax reform package to create specific forms of funding infrastructure projects.
There have been other small tax -reform related income streams proposed recently, perhaps motivated by the revival of “trickle down” economics.
Rep. John Delaney (D, Md), as part of his recently announced Presidential campaign, has proposed creating a dedicated income stream using the international tax part of the tax reform package, which would direct repatriated money into rebuilding plans.
None of the various plans were taken up in the disastrous tax reform plan, being prepared now as the ultimate Scrooge-like Christmas present for the American people. Therefore, all of these schemes seem dead.
While an increase in the gas tax, and a separate Capital Budget, are both probably indispensable elements of a national mobilization for building infrastructure, they alone will clearly not suffice. The scale of investment needed will be more like 8 trillion. That kind of investment can only be generated by a new National Bank, as has been extensively discussed on this blog.
We are running out of time. Can we launch the national mobilization needed now, or will the United States wait for another crash, and then have to respond (like FDR did) at the bottom of a depression collapse?