During his address to Congress on Tuesday, President Trump called for $1 trillion in public and private investment to rebuild the nation's roads and bridges, noting that the $6 trillion spent fighting wars in the Middle East could have easily rebuilt America two or three times over.
Former Labor Secretary Robert Reich said Trump's plan to lure investors with tax credits would be a huge giveaway for wealthy developers, but agreed there's a big need for more and better infrastructure for the public.
"And the only way we get that is if corporations and the wealthy pay their fair share of taxes," he said. "We'd be turning over public roads and bridges to private corporations who will charge us expensive tolls."
Reich said tolls likely would be set by private companies to provide the kinds of returns expected by Wall Street. Infrastructure in rural areas might not get fixed at all if the project isn't seen as profitable, he said. Some Republican leaders including Senate Majority Leader Mitch McConnell, R-Ky., also are wary of Trump's plans to finance the effort.
Reich said taxpayers could end up footing the majority of the bill under Trump's proposal because for every dollar a developer puts into a project up front - due to tax incentives - they'd actually pay only 18 cents, leaving taxpayers to cover the remaining 82 cents.
"Rather than taxing the wealthy - and then using the money to fix our dangerously outdated roads, bridges, airports, water systems - Trump wants to give rich developers and Wall Street investors tax credits," Reich said.
The public essentially would end up paying twice, Reich said, first by subsidizing developers and investors with tax dollars and again by paying tolls and user fees. President Obama's proposal to tap private investors to pay for infrastructure projects also was opposed by Republicans in Congress during his years in office.