Joe Biden announced his $2.3 trillion so-called infrastructure plan this week. “So-called” because only about 5 percent of the package is actually devoted to badly needed American infrastructure. The rest is pure old-fashioned pork and social engineering. It is all Democratic spending on pet projects, crazy social justice measures, and the Green New Deal—a “climate change” pile of dung. What’s more, the administration promises another $2 trillion for “human infrastructure/capital projects”—whatever that means—in the next few weeks. That is over $4 trillion in a total boondoggle giveaway to leftist cronies.
Why dare call it something it is clearly not and market it to the unknowing and gullible American public as something it is not? This isn’t even the proverbial “bridge to nowhere.” Although it goes nowhere, there isn’t even a bridge!
Because almost everyone is for improved bridges, dams, airports, and roads, especially in their own state or district, it is easier to dupe people and get the media to do your bidding if you mislabel spending in this way. It is sort of like calling something a beauty rinse when it is in fact a harsh disinfectant or calling diet soda a health beverage. Oh, the marvels of mass marketing and branding à la Slippery Joe Biden.
The Biden bill is a hodgepodge of the following items:
- Only $115 billion of the package goes to modernize the bridges, highways, and roads most in need of repair. The White House outline estimated 20,000 miles of roadways would be repaired, while economically significant bridges and 10,000 smaller bridges could get fixed. That’s it.
- $85 billion for public transit, doubling the federal government’s commitment in an effort to shorten the repair backlog and expand service in major Democrat-controlled cities.
- $80 billion to modernize Amtrak’s heavily trafficked Northeast Corridor line, Biden’s favorite rail, and address its repair backlog and improve freight rail. This benefits mostly wealthy commuters in blue states, like Delaware.
- $174 billion to build 500,000 electric vehicle charging stations, electrify 20 percent of school buses and electrify the federal fleet, including U.S. Postal Service vehicles. This will help put the oil and gas industry out of work for good, which is the real intention of the plan.
- $25 billion to upgrade air travel and airports and $17 billion for waterways and coastal ports, blue states favored.
- $20 billion to redress communities with neighborhoods—typically nonwhite—that were divided by highway projects. A pittance to the BLM activists.
- $50 billion to improve resilience in the aftermath of natural disasters. In other words, more climate change bunk.
- $111 billion to replace lead water pipes and upgrade sewer systems, in places like Flint, Michigan. You saw the movie?
- $100 billion to build high-speed broadband that provides 100 percent coverage for the country. A bone to the high-tech barons.
- $100 billion to upgrade the power grid and move to clean electricity, among other renewable power projects.
- $213 billion to produce, preserve, and retrofit more than 2 million affordable houses and buildings.
- $100 billion to upgrade and build new schools. A payoff to the teachers’ unions.
- $18 billion to modernize Veterans Affairs hospitals and clinics, and $10 billion for federal buildings. The Feds always need more government buildings.
- $400 billion to expand long-term care services under Medicaid. Big number but nothing to do with infrastructure.
- $180 billion invested in “research and development” projects for God knows what?
- $300 billion for manufacturing, including funds for the computer chip sector, improved access to capital and investment in clean energy through federal procurement.
- $100 billion for what is termed “workforce development.”
Biden’s plan would naturally finance such projects by massive increases in taxes:
- Raising the corporate tax rate from 21 percent to 28 percent. This would kill any economic recovery and see companies forego investment and hiring.
- Imposing a 21 percent global minimum tax, so that companies cannot avoid taxes by shifting income to lower-tax countries.
- Making it harder for businesses to merge with foreign companies to avoid taxes, a process known as inversion.
- Eliminating tax breaks for companies that shift assets abroad, and denying deductions for offshoring jobs.
- Imposing a 15 percent minimum tax on the income that corporations report to shareholders.
- Eliminating all tax preferences for the fossil fuels sector.
- Increasing IRS audits of large corporations.
The initial package, to be followed by an even more dubious, “human capital infrastructure plan,” includes two environmental ideas Biden talked about repeatedly while running for president, namely: creating a New Deal-inspired Climate Conservation Corps to work on green environmental justice efforts, as well as catalyzing an irreversible shift from gasoline-powered to electric vehicles.
Now, I know a thing or two about infrastructure, as I authored one of the Trump transition team white papers on the subject.
The manner in which infrastructure projects are currently undertaken needs to be overhauled. In essence, we need new finance, regulatory, and political infrastructure to support more privately financed development in physical infrastructure. It can’t be business-as-usual or another expensive Democratic giveaway, which is what the Biden plan amounts to.
Federal infrastructure development too often gets bogged down in bad management and cost overruns. There is a misallocation to low-value activity and too many “bridges to nowhere,” all due to politics.
At the state and local level, where the government owns and operates a lot of infrastructure, little political will exists to move toward a user-pays system and to properly maintain roads, bridges, waterworks, power systems, and airports.
Among the key steps that could overhaul how infrastructure projects are conceived, financed, and managed is to end tax-exempt financing.
State and local governments, using tax-exempt financing, build about 90 percent of all infrastructure in the United States. This severely limits the pool of private capital and creates market distortions in how capital is allocated.
In addition, the United States needs regulatory reform and new sources of capital, as well as scalable tools to locate, fund, and deploy infrastructure capital where it is needed most.
Policymaking needs to overcome the hurdles to private involvement in infrastructure. A longer-term focus and a vision rooted in the private sector are essential.
Indeed, it should be infrastructure next—but on a bipartisan basis and as a jet engine to relaunch the crippled U.S. economy, not as a political payoff.
As long as infrastructure is owned and operated by state and local governments, there will continue to be little to no political will to move toward a more efficient and rational user-pays system. That needs to change. But it won’t under Biden.
Taxpayer beware! This stupefying Biden bonanza for his Democratic cronies is the most transformative, anti-market government scam since the New Deal, and Biden thinks of himself as the next FDR.
Call it what you like. But it isn’t infrastructure.