Washington's misguided pivot to infrastructure
President Trump's new push for a $2 trillion infrastructure bill would've been a pretty self-aware April Fools' Day gag if he hadn't tweeted the idea on March 31. After all, the administration's repeated inability to generate any sustained momentum on the issue has become a long-running joke among the pundit class. "Infrastructure Week" is now social-media shorthand for clumsy political messaging that is either doomed to fail or meant to distract.
But it's not a stretch to think this time might be different. Washington is spending like never before in the national fight against the coronavirus pandemic. Deficit hawks are as hard to find as toilet paper — even in the supposedly debt-averse GOP. Congressional Republicans overwhelmingly favored the recently approved $2.2 trillion economic relief bill. Moreover, there are going to be new efforts by both parties to provide more financial support to individuals, businesses, and state governments. What's one more thing if money is no obstacle? Even better, House Democrats already have their own nearly $800 billion infrastructure plan ready to go.
And that's why Trump's political timing couldn't be worse, despite his sound economic logic. The president is correct when he writes, "With interest rates for the United States being at ZERO, this is the time to do our decades long awaited Infrastructure Bill." Few experts would also counter the idea that the nation needs a big upgrade — though maybe not $2 trillion worth — to its roads and bridge, as well as better digital infrastructure.
Just not now, OK?
Washington needs to keep its economic focus locked tight on making sure the U.S. economy stays as intact as possible during this national economic shutdown. This is particularly true of the small business sector that's currently in the process of disintegrating due to social distancing and "stay-at-home" orders. Washington should be making sure the existing small-business relief package of forgivable loans works as efficiently as possible. It's also going to have to spend way more than $400 billion on the lifeline. (Maybe three or four times more.) Also helpful: if business owners actually knew about the plan and how it works. That's going to require a major government messaging campaign, which needs to start almost immediately. The presidential Twitter account could be a helpful part of that effort.
Saving small business would be a much better use of White House bandwidth and political capital than negotiating an infrastructure bill with House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer. Remember, the previous attempt didn't go so well. The meeting last May between Trump and the two Democrats barely went five minutes before Trump stormed out, supposedly angry about some Pelosi impeachment comments. It's hard to imagine negotiations being more fruitful today during the heat of a presidential race — especially when Trump and Pelosi apparently haven't spoken to each other since October.
Congressional Republicans also aren't going to just wave through a $2 trillion infrastructure plan right after approving a $2 trillion economic support plan. During that last infrastructure push, many top Republicans made clear they didn't want to just borrow the money for the plan and continued to push for public-private partnerships to be a key financing option. Interest rates were pretty low back then, too. Senate Majority Leader Mitch McConnell is already saying he wants to gauge the effectiveness of the economic support package before considering any new spending ideas. See, all of this infrastructure talk is only going to bog down the next economic support bill, which we will need sooner rather than later.
If Trump is serious about infrastructure as more than a distracting political ploy — and really wants to get Republicans on board at some point in the future — then any plan should incorporate a hard-nosed analysis of what upgrades America really needs. A good place to start is a Manhattan Institute proposal from urban analyst Nicole Gelinas who outlines a targeted $200 billion plan that would, among other things, build a new train tunnel under the Hudson River between New Jersey and New York, help local governments do basic road and utilities maintenance and repair, and fix the nation's struggling subways and commuter rails. Washington should also look at proposals to create a much faster and robust digital infrastructure — clouded based and linked by 5G, recommends former Google CEO Eric Schmidt — especially if we are going to embrace a post-virus future where distance learning and telemedicine are a permanently bigger part of our lives.
But first, let's make sure the virus doesn't kill hundreds of thousands of Americans, along with millions of American businesses. All that cheap money Trump loves so much likely isn't going anywhere.
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