Infrastructure Investment Could Save the Economy—If We Get It Right

crane-air-1227485-1280x960

By Felicia Wong |

America needs genuine infrastructure investment now more than ever—and that means more than just filling potholes. It means building the foundation for 21st century commerce, which is a long-term strategic necessity. It includes public investments in high-speed rail, universal broadband, and a carbon-reducing power grid, all of which will drive growth and help usher in shared prosperity for millions of Americans.

The 2016 election results show that this is the will of the American people: According to a recent poll by the Roosevelt Institute and Democracy Corps, 70 percent of voters support commitments to transformational infrastructure investments that will grow our economy, create jobs, and transform our nation to meet the demands of the 21st century. However, we must be wary. Infrastructure’s ability to bring true growth and opportunity depends on how we finance it.

In October, Donald Trump’s campaign said that he plans to finance his infrastructure plans through tax credits to private for-profit projects. This could create several significant problems.

First, these financial structures could involve a higher cost of capital to the public than either the federal debt financing Trump originally proposed or the tax-exempt municipal bonds often used by state and local governments to finance such projects.

Second, private financing of this type runs the grave risk of not actually providing the infrastructure our economy needs. We must have projects that in the short term would bring labor and capital off the sidelines and drive growth today, and in the long term would create platforms for growth for future generations. Instead, these financing mechanisms could very well concentrate new projects in already wealthy communities, and bring even more profits to already wealthy developers. (Think pay-to-use toll roads, not replacing lead-riddled pipes in Flint, Michigan.) This kind of program, were it to come to pass, would fail to deliver the growth we need and would violate the election promises Trump made to his voters—and to all Americans.

The Roosevelt Institute’s new report, “Transformative Infrastructure Investment and American Competitiveness,” clearly outlines the economic and social need for genuine infrastructure innovation. Given this, we must hold any infrastructure proposals that are put forth to the following criteria:

• Will they be inclusive—reaching white people and people of color, rural and urban communities—and targeted to create jobs where they are most needed and where growth can be most transformative?
• Will they include investments such as broadband and transportation, which will increase labor market participation over the long term?
• Will they be held to high labor and environmental standards?
• Will project decisions be made locally and by actors serving the public interest, rather than by those who will benefit financially?
• Will they make good use of relatively inexpensive public funds and avoid the unnecessary costs of private financing?

These are our standards, and we must not be duped—must not let voters, workers, and families be duped—by any plan that falls short.

Felicia Wong is Roosevelt's President and CEO, seeking to reimagine the social and economic policies of Franklin and Eleanor Roosevelt for the 21st century.