Go big or not at all. When it comes to repairing and replacing America’s decaying roads, bridges, sewers, water systems, and tunnels, throwing around figures like a trillion dollars isn’t unusual. Experts believe that the US needs to spend $2 trillion over the next 10 years just to make up for lack of spending in recent decades.
The situation is dire. This is from a report by the American Society of Civil Engineers:
- More than two out of every five miles of America’s urban interstates are congested and traffic delays cost the country $160 billion in wasted time and fuel in 2014.
- One out of every five miles of highway pavement is in poor condition and our roads have a significant and increasing backlog of rehabilitation needs.
- After years of decline, traffic fatalities increased by 7% from 2014 to 2015, with 35,092 people dying on America’s roads.
That’s just the roads. Hundreds of bridges and tunnels are in bad shape. The electrical grid, a collapsing water system, sewers, airports – the fact is, government at all levels has failed to maintain our infrastructure over recent decades which has led to the slow motion crisis we have today.
The rotting infrastructure is costing the US economy hundreds of billions of dollars a year. So Donald Trump’s campaign promise to spend large and spend long on infrastructure is welcome news.
The president is going to send up a legislative package on infrastructure to Congress in May. The White House won’t say exactly how much it will be but it could be as much as $1 trillion over 10 years. More importantly, it will slash red tape that delays hundreds of projects a year and adds billions to the cost.
President Donald Trump vowed on Tuesday to cut red tape to speed up approval of infrastructure projects and said his overhaul could top $1 trillion on roads, tunnels and bridges, one of his 2016 election campaign promises.
Trump, a real estate businessman before he was elected, did not provide further details on the amount or where the money would come from when he spoke to a White House meeting of 50 chief executives and other business leaders.
U.S. Transportation Secretary Elaine Chao said at the forum that the administration plans to release a legislative package in May. Investors have become more skeptical that the plan would win approval this year in Congress, which is controlled by Republicans who are traditionally wary of big spending.
Trump said building a highway can require dozens of approvals and take 10 to 20 years, a process he vowed to speed up. Trump said he would not fund projects that cannot be started within 90 days.
The administration wants to improve the electrical grid and water systems, rebuild airports, bridges, roads and potentially hospitals for military veterans and broadband.
National Economic Council director Gary Cohn told executives that privatizing air traffic control, which the administration proposed in its budget outline in March, “is probably the single most exciting thing we can do.”.
Cohn, an investment banker with Goldman Sachs before he became Trump’s top economic adviser, said it could help speed flight times and reduce fuel use.
Cohn said if cities “sell off” or privatize infrastructure assets, the administration could provide financial support.
“We’re not on the cutting edge of this,” Cohn said. “We’ve got to get a little more comfortable with public-private partnerships.”
Cohn touted an idea of electric car maker Tesla Inc (TSLA.O) CEO Elon Musk to use tunnels to speed rail transit on the densely populated east coast and also to cut traffic congestion in Los Angeles. A Tesla spokesman declined comment.
In a related story, the Trump administration is seriously considering a value added tax as well as a carbon tax to help pay for the new spending. The VT has always been a non-starter in Congress, although it’s been in use in some European countries for a long time. Nor does a tax on carbon have much of a chance of passage, given the animus in Congress toward global warming funding schemes.
But by proposing a gigantic infrastructure bill, the president is showing he’s not thinking small. Bringing along reluctant deficit hawks in the House will probably be his biggest challenge.