As the ranking member of the Senate Budget Committee, Sen. Bernie Sanders (I-VT) has released a report that exposes Trump’s infrastructure plan as a scam designed to benefit Wall Street.
The report exposes how Trump’s infrastructure plan actually cuts infrastructure funding:
Under Trump’s proposal, billionaires on Wall Street, wealthy campaign contributors and even foreign governments would receive hundreds of billions in tax breaks to purchase our highways, airports and water treatment plants. They would then be allowed to impose huge new tolls and fees on the backs of American commuters and homeowners.
The reality is that Trump’s plan to sell off our nation’s highways, bridges and other vital infrastructure to Wall Street, private investors, and foreign governments is an old idea that does not work. Trump’s plan to rebuild America relies heavily on the use of public-private partnerships to finance infrastructure projects with private equity capital. Such financing, whether through private equity or traditional tax-exempt municipal bonds, is repaid by ordinary citizens through a combination of taxes
and user fees.
Private equity financing is markedly more expensive than traditional government financing, however – by as much as three to six times. Considering the scale of infrastructure development under consideration, that difference could be enormous. For example: the charge for a $100 million-dollar investment using traditional government bond financing (at 3 percent, over 30 years) is about $90 million. For private equity capital, at a 15 percent return, the total skyrockets to $450 million.
Trump’s infrastructure plan is to cut real infrastructure spending while giving tax cuts to corporations and billionaires so that they can buy the nation’s infrastructure and profit off of it with tolls and fees. Once the infrastructure is privatized, the new owners will be motivated to keep expenses down and profit up. The easiest way to accomplish this goal would be to spend less on the maintenance of roads and bridges while charging user fees to all.
Sen. Sanders said, “Donald Trump wants to hand over critical public infrastructure to private investors who will squeeze profits from the American people by putting up new tolls and exorbitant user fees. That is unacceptable. We shouldn’t be selling off our infrastructure to billionaires to make huge profits on the backs of working people.”
Trump’s plan is a con. Sen. Sanders and his report make an important point. While the Russia scandal consumes the bulk of the national spotlight, Trump is continuing his efforts to use the presidency to make the wealthiest Americans ever richer.