The White House on Monday unveiled its plan to raise $1.5 trillion in capital for public works. This will cause sticker shock among Republicans, but the President’s innovative regulatory reforms deserve debate and may even garner some Democratic support.
President Trump is proposing to spend $200 billion in federal funds to leverage $1.3 trillion in state, local and private investment in public works. This bid is probably dead on arrival since Republicans have little appetite for more spending after blowing the budget sequestration caps last week.
Many bridges and airports need a face-lift, though claims of crumbling roads are overwrought and often politically motivated. One problem is that public works like other discretionary programs are being squeezed by entitlements, which constitute nearly two-thirds of federal spending. But even while politicians in Washington gripe that we—always the royal “we”—don’t spend enough on public works, they consistently prioritize other discretionary programs.
Consider: Of the $787 billion stimulus in 2009, only about $60 billion financed public works. Most was spent on safety-net programs and other progressive causes. More Hurricane Sandy recovery money went to “community development” than repairing train tunnels.
Many projects that do receive federal funding aren’t national priorities, such as California’s bullet train. That’s because the government typically awards “competitive” grants to politically favored projects rather than those that would produce the biggest economic benefits. The Obama Administration rigged cost-benefit analysis to reward projects that would promote public housing and reduce carbon emissions.