He Said, She Said

The plans for America’s infrastructure from the two Presidential candidates
By Genevieve Smith

The 2016 election has, by far, been one of the most controversial elections in decades. Whomever you support, it’s important to know what each candidate’s plan is for the United States infrastructure. Infrastructure projects are vital to the U.S. economy when it comes to jobs, natural disaster safety and security. The country’s investment needs for road and bridge repair, public transit, upgrading water and wastewater systems and modernizing the nation’s antiquated power grid, among others, are great. About 20 percent of the nation’s 900,000 miles of interstates and major roads needs resurfacing or reconstruction, according to one analysis. A quarter of the 600,000 bridges are considered structurally deficient or functionally obsolete.

The U.S. interstate highway system, celebrating its 60th birthday this year, is showing its age. Many roads and bridges are in need of repair or expansion. Similar problems exist for public drinking and wastewater systems, dams and levees, airports, railroads and mass transit systems. Politicians generally agree the nation’s infrastructure is in need of improvement. Deciding how to pay for it and which projects should take priority is more difficult.
At the time of print of this issue, the Presidential debates have begun and the fate of America’s infrastructure will be in the hands of the next President of the United States. Here is what’s on the agenda for each candidate:

Hillary Clinton
Secretary Clinton published a plan to rebuild America’s infrastructure earlier this year and is now making infrastructure investments a key part of her economic pitch to the American people. Her proposal costs $275 billion over five years with a focus on providing well-paying jobs for millions of Americans that are out of work or underemployed.
The spending would consist of $250 billion for repairs and $25 billion over five years to a new national infrastructure bank, which she said could support about $225 billion in loans for local infrastructure projects.
However, a report by the American Society of Civil Engineers says that the country actually needs $1.6 trillion in infrastructure spending at all levels by 2020 to bring us up to date and to make America competitive with the rest of the world. Clinton’s plan could be just scratching the surface—though it’s a good start.
“So we have to rebuild the infrastructure we have, and we have to build a stronger future together because every community in our country, every single one of them, deserves clean water, clean air, clean energy, and think of the millions of people we can put to work, including some of those laborers right down there in the front,” said Clinton during a speech in California in July.

Donald Trump
Mr. Trump is taking the “bigger is better” approach. He is known as a builder of hotels, casinos, luxury apartment buildings, and is now proposing to rebuild America’s infrastructure and
seeking to nearly double Secretary Clinton’s proposal—proposing nearly $500 billion in spending to stimulate the economy and provide growth. He wants to, as he said recently in Detroit, “build the next generation of roads, bridges, railways, tunnels, sea ports, and airports.”

Though no structured plan has been laid out by the candidate, Trump described a strategy to create an infrastructure fund that would be supported by government bonds that investors and citizens could purchase. His campaign team has stated that a more detailed plan is coming soon.

“We’re going to go out with a fund,” he said. “We’ll get a fund, make a phenomenal deal with low interest rates and rebuild our infrastructure.” He added, “We’d do infrastructure bonds from the country, from the United States.”

According to the American Enterprise Institute, there is a compelling case that infrastructure investments pay for themselves by expanding the economy and increasing the tax base. The McKinsey Global Institute has estimated a 20 percent rate of return on infrastructure projects. If the return is only six percent and the government collects about 25 cents on every dollar of GDP, the government will earn 1.5 percent on investments. This far exceeds the real cost of borrowing even over a horizon of 30 years.

These are only plans, of course. They would both have to get these approved by Congress and propose to raise taxes or add to the national debt. Hillary Clinton and Donald Trump may not agree on many things, but they can both agree that rebuilding infrastructure is key to America’s future.

Genevieve Smith the Editor for American Infrastructure magazine. She may be reached at gen@penpubinc.com.

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