Friday, August 5, 2016

American Prospect: Presidents, Congress, and Infrastructure Investment Gridlock


ne thing that Hillary Clinton and Donald Trump can agree on is that America’s infrastructure is an embarrassment. That neglect is on full display in the nation’s capital, where a subway network that dazzled the country when it opened 40 years ago now slogs through an aggressive, federally-imposed schedule of maintenance and repairs.
What do the two presidential candidates plan to do about the country’s trillion-dollar infrastructure maintenance backlog? In her Thursday night address, Clinton vowed, if elected, to kick-start some of the biggest infrastructure investment proposals since World War II during her first 100 days in office. She also touts a $275 billion infrastructure plan that includes a national infrastructure bank. As he has with most major issues, Donald Trump provides few details or specifics beyond throwaway remarks about the nation’s “third world” type airports and deteriorating roads and bridges.
Yet when it comes to the scope and pace of U.S. infrastructure investment, the person moving into the Oval Office may actually matter less than who gets new digs on Capitol Hill.  Despite some noises on the left about infrastructure investment, Congress’s austerity politics continue to put roadblocks in the way of municipalities across the country that are desperate for infrastructure solutions and the dollars to make them happen.
There is little currently to suggest that November will bring a seismic shift in thinking from federal lawmakers obsessed with demonstrating their cost-cutting chops to tax-averse voters back home, particularly on issues like raising the federal gas tax. Ed Rendell, the outspoken former Pennsylvania governor and Philadelphia mayor-turned infrastructure guru, hammered home these hard truths at a National League of Cities’ Democratic National Convention forum on infrastructure earlier this week. Rendell has been a leading voice for one possible short-term funding boost: A hike in the federal gas tax. Despite declining gas tax revenues due to improved fuel efficiency and the nation’s slow but steady move away from fossil-fueled vehicles, raising the gas tax still holds out appeal as a quick-and-dirty source of funding for highways and mass transit.
However, raising the federal gas tax is nonstarter in Congress. Senator Tom Corker, a Tennessee Republican, who co-sponsored a gas tax increase proposal with Connecticut Democrat Chris Murphy, tried to wrestle his Republican colleagues into supporting a 10-cent hike in the current 18-cent per gallon gas tax. Corker could not get any other Republicans to support his bill, according to Rendell. Meanwhile, the 2016 Republican Party platform enshrines opposition to a gas tax increase as a kind of ideological litmus test.
“Regardless of who wins the presidential election or wins control of the Senate, the ability to get 60 votes to close off a filibuster on increasing the gas tax is fairly nil,” Rendell said.
“Regardless of who wins the presidential election or wins control of the Senate, the ability to get 60 votes to close off a filibuster on increasing the gas tax is fairly nil,” Rendell said.
That gridlock, rooted in equal measures of political orthodoxy and fear of voter retribution, merely tosses back to cities and states the thorny question of whether to raise revenues to confront the infrastructure squeeze. State lawmakers face the same tactical problems as their federal counterparts, but they are less insulated from the public fallout from gaping potholes and rusty bridges than their colleagues in Washington. So the pressure is on for them to act, whatever the political consequences.
In 2013, when former Pennsylvania Governor Tom Corbett cobbled together a coalition of Democrats and Republicans in a Republican-dominated legislature to phase in a series of gas tax increases over five years, none of the Democrats or Republicans lawmakers who voted for the tax lost their seats in the 2014 election, Rendell told the forum audience. Nevertheless, Corbett himself went down in defeat against Democrat Tom Wolfe, in part because of his stances on taxes like the gas levy. Meanwhile, after Georgia’s Republican Governor Nathan Deal signed off on a $900 million increase in taxes for road and bridge projects last year, the Democratic and Republican state lawmakers who supported the package becamenervous about their November election chances.
City leaders also continue to push for new revenues for metro-area improvements. Atlanta Mayor Kasim Reed managed to get his “rock-red Republican” governor to agree to put a half-penny sales tax ballot initiative before Atlanta voters that would fund an expansion of the MARTA, the greater Atlanta transit system. Reed suggested that the federal government would be more inclined to provide a financial assist to states and cities that demonstrate that they can go it alone.
But while Democrats and Republicans may find common ground even in the rough political terrain of such red states as Georgia, cooperation on infrastructure needs has not been a hallmark of congressional relations over the past eight years. After all, Congress has kept cities and states on a fiscal tightrope, dithering for nearly a decade and passing one short-term extension after another of surface transportation bills, before finally passing a five-year authorization last December. Instead, Atlanta’s go-it-alone gambit may reassure some in Congress that cities can, indeed, survive without federal assistance.
Sheila Amoroso, a municipal bond expert with the Franklin Templeton Fixed Income Group, noted that when it comes to financing infrastructure, it is a lack of revenues to backstop new projects rather than a lack of access to capital in the bond markets that holds states and cities back. Other financial obligations, such as pension liabilities and health care costs, also crowd out state and local dollars for infrastructure. Which is another reason why municipalities are eager for the federal government to step up to provide unencumbered financial support.
Nevertheless, absent a major philosophical shift, Congress is likely to remain in austerity mode for the foreseeable future. Given that intransigence, some city officials would prefer to see Congress consider structural changes that would allow federal funds to flow directly to cities, eliminating the states as a “pass through” clearinghouse for federal dollars. Such a move would help cities meet their own demands, and free them from having to battle regional interests in state capitals for scarce federal funds.
Tampa Mayor Bob Buckhorn offered a revealing observation about what infrastructure-obsessed municipalities are up against: lawmakers who see no benefit, electoral or otherwise, in sending scarce funds to cities. “Convincing legislators that mobility options are important, I have found to be a frustrating and not a very productive discussion,” said Buckhorn to applause from the forum audience. “They just don’t get it; they don’t want to helpful to the urban areas for a lot of different reasons, most of which are not altruistic.”
Congress, too, is full of people who don’t see the utility of sending money to cities, even though most Americans now live in them. Metropolitan regions are the primary engines of economic growth in most states. Cities are where the jobs are, and increasingly they are places where people of all ages and races want to be. But federal lawmakers have not grasped that metro regions are worthy of a massive investment to stop infrastructure backsliding. Both Clinton and Trump would need a major shift in the balance of power in Congress to make the types of forward-looking infrastructure investments that the U.S. needs to improve the daily lives of Americans and remain competitive with its peers in the developed world.


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