Local Governments And Politically Connected Contractors Are Worried Donald Trump Won’t Pay Them Off

During the presidential campaign, Donald Trump talked about investing $1 trillion in infrastructure. He talked about putting that money towards roads, airports, and other projects.

This had some on the left thinking that Trump was open to a New Deal-type jobs program that would make it rain on state and local governments. Those governments could pay off construction unions and political cronies with “make work” projects designed to employ the otherwise unemployable.

But it seems they’re disappointed in what Trump really has in mind. Now they’re whining to the press and calling Trump a liar.

From the AP:

“We’re worried,” said Brian Turmail, a spokesman for the Associated General Contractors of America, which represents more than 26,000 construction companies and 10,500 service providers and suppliers.

“Are we hearing signs that people just don’t know what the plan is?” he asked. “Or signs that people don’t want any kind of plan? We don’t know the answer.”

Lobbyists have responded by flooding the Trump transition team with briefing memos, lining up meetings and privately pitching their proposals to what they hope will be a more receptive Congress.

Trade associations are urging their local members to seek out their senators and House members while they’re home for the holidays. The contractors’ association held a news conference in front of a bridge construction project in Little Rock, Arkansas. The American Road and Transportation Builders Association has given members form letters to send their lawmakers, while quietly floating a plan for new transportation fees to provide reliable sources of additional income for the federal Highway Trust Fund.

Leaders of the U.S. Conference of Mayors emphasized their support for an infrastructure program in a recent meeting with Trump and urged him to protect the municipal bond tax exemption, one of the primary ways localities raise money for projects.

The Airports Council International-North America is lobbying to raise the limit on fees airports charge airline passengers. The money goes to renovate or expand terminals and increase the number of gates.

Trump’s campaign pitch for infrastructure improvements included few details. A paper circulated after the election recommends using $137 billion in federal tax credits to generate $1 trillion in private-sector infrastructure investment over a decade. To offset the cost of the credits, U.S. corporations would be encouraged to bring home profits that they have parked overseas to avoid taxes, in exchange for a lower tax rate. But private investors are typically interested only in projects that create revenue, such as tolls, so that they can recoup their investments.

What states and communities need most is more direct spending, rather than tax credits, to help pay for upkeep and replacement of existing roads, bridges and transit systems, said Bud Wright, executive direction of the American Association of State Highway and Transportation Officials. “Those aren’t necessarily projects that lend themselves to generating revenue,” he said.

Trump’s plan sucks from a free-market perspective, so we won’t spend too much time defending it. What Trump wants to do is incentivize investors to sink private money into things like toll roads and other revenue-generating infrastructure projects.  Trump will pay for the Federal tax credits with tax reform measures that repatriate capital from overseas. Trump’s plan does crowd out private investment in other projects, but it is better than the 21st century New Deal that these guys want.

The contractors, unions, and local governments are angry that Trump won’t pay them off. Now they’re going to complain to the media, which will run with their crying because they hate Donald Trump. The problem is that the American people are ignoring the mainstream media now.

When the media tries to call Trump a liar over his infrastructure proposals, they themselves are lying. Trump has never been a supporter of the New Deal type program that the unions and their allies have been wanting.

 

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