Monday, November 21, 2016

Former expert on infrastructure plan says Trump's plan "is a trap." And he warns, "Don't fall for it."

Ronald A. Klain worked in the White House as President Obama's point man for implementing the American Recovery and Renewal Act in 2009-2011.   This was the plan, less expansive than Obama wanted but as much as he could get through Congress, that was to restore jobs through spending on infrastructure.

Klain has a message (quotes from Nov. 18 Washington Post):

"I’ve got a simple message for Democrats who are embracing President-elect Donald Trump’s infrastructure plan: Don’t do it. It’s a trap. Backing Trump’s plan is a mistake in policy and political judgment they will regret, as did their Democratic predecessors who voted for Ronald Reagan’s tax cuts in 1981 and George W. Bush’s cuts in 2001."

Klain then explains that Trump's plan "is not really an infrastructure plan. It’s a tax-cut plan for utility-industry and construction-sector investors, and a massive corporate welfare plan for contractors. The Trump plan doesn’t directly fund new roads, bridges, water systems or airports, as did Hillary Clinton’s 2016 infrastructure proposal. Instead, Trump’s plan provides tax breaks to private-sector investors who back profitable construction projects. These projects (such as electrical grid modernization or energy pipeline expansion) might already be planned or even underway. There’s no requirement that the tax breaks be used for incremental or otherwise expanded construction efforts; they could all go just to fatten the pockets of investors in previously planned projects.

"Moreover, as others have noted, desperately needed infrastructure projects that are not attractive to private investors — municipal water-system overhauls, repairs of existing roads, replacement of bridges that do not charge tolls — get no help from Trump’s plan. And contractors? Well, they get a “10 percent pretax profit margin,” according to the plan. Combined with Trump’s sweeping business tax break, this would represent a stunning $85 billion after-tax profit for contractors — underwritten by the taxpayers."

And that's only the investment side problems with Trump's plan.   Klain says it "isn’t really a jobs plan, either. Because the plan subsidizes investors, not projects; because it funds tax breaks, not bridges . . .  there is simply no guarantee that the plan will produce any net new hiring. Investors may simply shift capital from unsubsidized projects to subsidized ones and pocket the tax breaks on projects they would have funded anyway.

And, beyond those two big problems of (1) not rebuilding the intrastructure and (2) not creating jobs, Klain explains that Trump's plan does not include how to pay for it -- at the same time he's proposing huge tax cuts -- so it will increase the deficit by as much as $137 billion.   And then you can be sure that Trump and a Republican congress will "weaponize" this deficit increase and use it to justify cuts in social programs, healthcare and education.

That's not all.   Klain also predicts that hidden in the plan will be policy changes that weaken wage protections, undermine unions, and ultimately hurt worker's earnings.  Environmental rules that Obama has attached to federal contracts will undoubtedly be gutted.

Klain ends by saying that he understands Democrats' hope to find some areas where they can work with a Trump presidency on common interests, and that his stated interest in big infrastructure projects could have been one of those.   But it does not do what Democrats think it would -- instead, it would help investors at the expense of workers.   When the real plan becomes evident, this will likely hurt Democrats' attempt to reconnect with workers;   because, once again, they will have been sold out for the benefit of the investor class.    It's a trap;   don't fall into it.

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I wonder how long it's going to take the angry, white working class Trump voters to realize that -- once again -- Lucy has jerked aside the footballleaving the gullible Charlie Brown to fall on his back.

Once again they have been used to win elections for Republicans, only to fall victims to their bait-and-switch scam.   Guess who's going to benefit from the tax cuts, and which street -- Wall Street or Main Street -- is going to benefit from the Trump/GOP agenda?   What was that about a populist movement?    


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