With only a few days remaining until one of the most controversial presidential elections in history, there has been little focus on the candidates' plans as it pertains to the future of infrastructure development in America. But both Hillary Clinton and Donald Trump have big spending plans -- they are just vastly different in their proposals on how funds will be raised and spent. If you're interested in a detailed breakdown of Clinton's and Trump's infrastructure plans, there is an excellent article by Chuck Devore in Forbes titled "Where Clinton and Trump Stand on Transportation".
According to the article, infrastructure experts predict that America needs $500 billion of new infrastructure spending per year -- about 3 percent of the national economy and a little more than double the current rate of spending. Where would that money come from, and how would it be spent? Here's a brief re-cap of the article discussing where Clinton and Trump stand, along with Devore's take on potential issues or concerns:
- $500 billion in added infrastructure spending over a 5 year period.
- Funding primarily coming from a hike in taxes on businesses, along with a revolving fund government infrastructure bank to underwrite projects.
- Broad spending on areas outside transportation, including school construction and environmental spending. (Devore's article uses California as a cautionary tale, with the state's borrowing tens of billions of dollars to build transportation and water infrastructure, but instead significant money is spent on endless studies, environmental remediation, and park land acquisition.)
- Spending along the lines of the status quo, with politicians picking projects, often based on political considerations, rather than where the dollars can most be efficiently spent.
- $1 trillion in added infrastructure spending over a 10 year period.
- Funding does not come from raised taxes, but instead by adjusting the tax code to incentivize private investment in public projects with an 82% tax credit on equity invested in infrastructure, combined with federally-subsidized loans.
- Spending focused on creation of more roads, bridges and water projects -- projects that can create a revenue stream from users in order to incentivize private investments in public projects. (Devore's article suggests the need for eminent domain reform in this instance to ensure private property owners have greater assurance of being treated fairly by powerful public-private partnerships that can condemn their land for public transportation projects.)
- Relies on investors, not politicians, to make decisions about what to build, and with private "skin in the game," a lower likelihood of costly, underused projects.
While infrastructure development continues to be a huge issue in America, and Clinton and Trump's proposed plans differ significantly, transportation spending will likely remain out of the main stream media given the more dramatic issues surrounding each candidate. Happy voting America!
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