$1 Trillion for Infrastructure: Where’s the Money?
Policy + Politics

$1 Trillion for Infrastructure: Where’s the Money?

Two high-powered senators have upped the ante in the drive to boost spending for highways, bridges, power grids and other job-generating infrastructure. Sen. Bernie Sanders (I-VT), the ranking member of the Senate Budget Committee, and former Senate Appropriations Committee Chair Barbara A. Mikulski (D-MD) jointly introduced legislation that would provide $1 trillion of infrastructure spending over the next five years. 

Sanders did not specify sources of funding for his proposal on Tuesday, but said he hoped to prompt discussion on it. “He did say some modest changes in the tax code for corporations and upper income earners could be an easy place to start,” said Vincent Morris, a spokesperson.

Related: Biz Group Makes Congress an Infrastructure Offer They Can’t Refuse    

Sanders is a self-described Democratic socialist who is exploring a challenge to former Secretary of State Hillary Clinton for the 2016 Democratic presidential nomination. He said the fastest way to help Americans left behind by the economic recovery is to rebuild infrastructure. 

The Sanders-Mikulski proposal is one of the most ambitious ideas floated on Capitol Hill to address a shortfall in the federal Highway Trust Fund that threatens to delay or shelve state construction projects. The measure would inject an additional $75 billion a year into the Highway Trust Fund, create a national infrastructure bank, and expand financing and grant programs, according to the American Society of Civil Engineers (ASCE). It would also fund freight and passenger rail improvements, airports, water projects, ports and inland waterways and national parks, along with broadband and electric networks. 

Leaders of transportation and public works committees have been struggling to find ways to keep federal highway and infrastructure spending at roughly $50 billion a year – and the Sanders-Mikulski proposal would raise that by an additional $148 billion a year. Congress approved a stopgap $10.8 billion measure last year to keep the trust fund solvent through May.  

Related: Obama Says China’s Infrastructure Puts the U.S. to Shame  

“By taking steps to invest in our nation’s infrastructure, the U.S. can protect $3.1 trillion in GDP, $1.1 trillion in U.S. trade value and 3.5 million jobs and a little over $3,000 a year per family,” Casey Dinges, ASCE’s senior managing director, said in a statement. “Without these investments, infrastructure … will continue to decline and Americans will pay the price.” 

Sanders said his proposal would put millions of people to work repairing the backlog of infrastructure projects and have a ripple effect on the economy, creating demands for new equipment, supplies and services.   

Few would argue the need to bolster infrastructure. The ASCE has calculated that an additional $1.6 trillion should be spent on infrastructure by 2020, and President Obama has repeatedly bemoaned how the U.S. trails China and other global competitors in investment.

Related: Gas Tax Hike May Be First Victim of Boehner Revolt

Yet there’s tremendous disagreement on how to proceed, though Obama, Boehner and Senate Majority Leader Mitch McConnell (R-KY) generally believe something needs to be done this year. The White House and congressional leaders have floated proposals for generating new revenues for infrastructure as part of an overhaul of the corporate tax code. And some prominent Senate Republicans, including John Thune (SD) and Bob Corker (TN), have said that with gas prices below $2.50 per gallon, Americans could afford to pay a slightly higher gasoline tax to help fix highways and bridges.

House Speaker John Boehner (R-OH) and McConnell (R-KY), though, are wary of anything resembling new taxes – and would oppose an increase in the 18.3 cents-per-gallon gas tax. Even debt-financed infrastructure projects would practically pay for themselves these days, with long-term interest rates so low.

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