Tag: Infrastructure

How To Reinvent Infrastructure

There was only one reference to the deficit in last night’s State of the Union speech, and it had nothing to do with the federal budget. I found that refreshing — we can carry a deficit if the money’s spent wisely — but that’s another story. What President Trump talked about was America’s staggering infrastructure deficit, a whopping $2 trillion fault line in the backbone of the American economy, according to the latest estimates from the American Society of Civil Engineers.

The president’s proposal sounded like an ambitious plan to take a big bite out of the problem. He urged Congress to produce a bill that would “generate at least $1.5 trillion” to modernize our decrepit infrastructure. The problem — at least for Democrats — is that the bulk of the financing is apparently supposed come from private investors, who would ultimately shift most of those costs onto to the public in the form of user fees and tolls. Most Democrats won’t sign onto this kind of legislation.

Yet without the support of many Democrats, there can be no bill. So where does that leave us?

Doing nothing is itself costly. As water mains break, roadways deteriorate and bridges crumble, businesses forgo trillions in sales, families lose an estimated $3,400 a year in disposable income, and our economy sacrifices millions of jobs. That’s why Larry Summers, the former Democratic Treasury secretary, urged the next president to “go big — yuge, even — on infrastructure spending.”

If Democrats were in control, they would be pushing not only for the brick-and-mortar projects the president spoke of last night, but also for enormous investments in high-speed broadband and renewable energy. Unfortunately, the president wants to spend more money on 20th century technology — so-called clean coal — instead of modernizing our electric grid and reorienting our economy away from coal and other fossil fuels.

So, how can Democrats find a way to get things into an infrastructure bill that (a) are good policy and things they would want anyway and (b) can be tied to goals of the Trump administration and a certain number of moderate Republicans in Congress?

If done right, infrastructure can actually deliver in four areas the president emphasized again and again in his speech last night: a boon for the economy and the Trump administration; addressing the high cost of health care; tackling the opioids epidemic ravaging the country; and the safety of the American people.

Mr. Trump talked about repealing the individual mandate, but offered no plan to make good on his campaign promise to give every American health care. He talked about opioids and helping people get treatment but offered no specific plan to deal with the crisis. He talked about terrorist threats and keeping Americans safe but said nothing about the threat of epidemics and bioterrorism.

What Democrats can propose that will touch on all those areas: a national network of community health centers (C.H.C.s).

“America is a nation of builders,” the president said. A bipartisan plan for hundreds of C.H.C.’s across America would reduce the cost of health care, bring down premiums, deal with the opioid crisis and help keep Americans safe by serving as centers of preparedness for epidemic and bioterrorist events.

America’s health care system is a costly, bureaucratic mess, and virtually every American knows it.  C.H.C.s will improve health outcomes, remove primary care from insurance coverage and reduce the cost of health insurance premiums. Bringing premiums down will be critical for Mr. Trump, because according to CBO, repealing the individual mandate will drive insurance premiums up by as much as 10 percent for millions of Americans.

C.H.C.s can also serve as treatment centers for services related to the opioid epidemic. They can also act as treatment centers of preparedness for epidemic and bioterrorist events, helping to keep Americans safe.

The blueprint such a bipartisan plan already exists.  Democrats and Republicans just need to come together to build on it. Community health centers already provide services to millions of Americans, and they do it at an exceptionally low cost — less than $1,000 per person per year. For a fraction of what we’re paying now, we could provide a free base of primary care with mental health and dental care as part of a large-scale buildout of community health centers.

They already claim bipartisan support. Of course, with a plan of this size and scale, C.H.C.s would offer bureaucratic challenges.

But they may offer a bipartisan way forward as an infrastructure plan that doubles as a health care plan.

Why We Must Raise Taxes On Corporations And The Wealthy, Not Lower Them

When Barack Obama was president, congressional Republicans were deficit hawks. They opposed almost everything Obama wanted to do by arguing it would increase the federal budget deficit.

But now that Republicans are planning giant tax cuts for corporations and the wealthy, they’ve stopped worrying about deficits.

Senate Republicans have agreed to cut taxes by $1.5 trillion over the next decade, which means giant budget deficits.

Unless Republicans want to cut Social Security, Medicare, and defense, that is.  Even if Republicans eliminated everything else in the federal budget – from education to Meals on Wheels – they wouldn’t have nearly enough to pay for tax cuts of the magnitude Republicans are now touting.

But Republicans won’t cut Social Security or Medicare because the programs are overwhelmingly popular. And rather than cut defense, Senate Republicans want to increase defense spending by a whopping $80 billion (enough to fund free public higher education that Bernie Sanders proposed in last year’s Democratic primary, which deficit hawks in both parties mocked as being ridiculously expensive).

There’s also the cleanup from Hurricanes Harvey and Irma, estimated to be least $190 billion. And Trump’s “wall” – which the Department of Homeland Security estimates will cost about $22 billion.

Oh, and don’t forget infrastructure. It’s just about the only major spending bill that could be passed by bipartisan majorities in both houses. Given the state of the nation’s highways, byways, public transit, water treatment facilities, and sewers, it’s desperately needed. Trump campaigned on spending $1 trillion on it.

So how do Republicans propose to pay for any of this, and a big tax cut for corporations and the wealthy – without exploding the federal deficit?

Easy. Just pretend the tax cuts will cause the economy to grow so fast – 3 percent a year on average – that they’ll pay for themselves, and the benefits will trickle down to everyone else.

If you believe this, I have several past Republican budgets to sell you, extending all the way back to Ronald Reagan’s magic asterisks.

The Congressional Budget Office and the Joint Committee on Taxation don’t believe it. They realistically assume that the economy won’t grow over 2 percent a year on average over the next decade.

The Federal Reserve estimates the fastest sustainable rate of economic growth will be 1.8 percent, given how slowly America’s working-age population is growing as well as the slow rate of productivity gains.

But Trump has already made a fetish out of discrediting anyone that comes up with facts he doesn’t like, and other Republicans seem ready to join him.

Senator Bob Corker, a Tennessee Republican who sits on the budget committee, says he doesn’t want to rely on estimates coming from economists at the CBO and the Joint Tax Committee. He’d rather rely on supply-side economists outside government. “I do think it is time for us to have a real debate and to have real economists weighing in and we should take other things into account other than Joint Tax and C.B.O,” Corker said last week.

Unfortunately for the Republican tax cutters who used to be deficit hawks, we already have real-world historical evidence of what happens after massive tax cuts. Ronald Reagan and George W. Bush both cut taxes on the wealthy and ended up with huge budget deficits.

Besides, there’s no reason to cut taxes on big corporations and the wealthy. If anything, their taxes should be raised.

Trump says we’re “the highest taxed nation in the world.” Rubbish. The most meaningful measure is taxes paid as a percentage of GDP. On this score, the United States has the 4th lowest taxes of any major economy. (Only South Korea, Chile, and Mexico ranking lower.)

American corporations aren’t overtaxed. After taking deductions and tax credits, the typical U.S. corporation today pays an effective tax rate of 24 percent. That’s only a tad higher than the average of 21 percent among advanced nations.

The rich aren’t overtaxed. The wealthiest 1 percent in the U.S. pay the lowest taxes as a percent of their income and total wealth of the top 1 percent in any major country – and far lower than they paid in the U.S. during the first three decades after World War II, when the American economy grew faster than it’s been growing since the Reagan tax cuts.

But we do have a deficit in public investment – especially in education and infrastructure. And we do have a national debt that topped $20 trillion this year and is expected to grow by an additional $10 trillion over the next decade.

What’s the answer? Raise taxes on big corporations and the wealthy. That’s what rational politicians would do if they weren’t in the pockets of big corporations and the wealthy.

The Nina Turner Show: Appalachians Rising

In this episode of The Nina Turner show hosted on the Real News Network, Nina Turner (at the 2017 People’s Summit) talks to organizers from West Virginia and Ohio during the about the challenges of living and affecting change in rural America.