A tentative infrastructure deal was reached between White House negotiators and a bipartisan group of senators. The framework is expected to increase federal spending by around $600 billion for investments in roads, broadband internet, electric utilities and other federal infrastructure projects. A leading funding mechanism is expected to be an increase of Internal Revenue Service (IRS) enforcement efforts to reduce tax evasion by corporations and high earners.
Though this nation desperately needs substantial infrastructure investments across a variety of fields, the way it is paid for is a cause for concern. The bipartisan infrastructure plan supported by 20 senators (10 each from the Republicans and Democrats) calls for mechanisms such as “infrastructure financing authority to leverage private investment”, “public private partnerships, private activity bonds, and asset recycling”, and of course “direct pay municipal bonds for infrastructure investments” this is troubling to say the least. Much of this is a fancy way of saying tolls, which are regressive inefficient debt schemes. Another popular funding mechanism would explore a national vehicle miles traveled tax (VMT) which would be both extremely costly and highly inefficient.
Now, to be fair to the infrastructure 20, there are some excellent funding proposals such as indexing the gas tax ton inflation, and the repurpose of unused Covid relief for infrastructure but Americans, particularly those who operate small businesses, middle and working class should be very concerned about the possible use of public-private partnerships to fund infrastructure. Private tolling in New York has led to massive problems such as excessive, non-negotiable late penalties many times that of the original tolls, not receiving notices, registration suspensions, and refusal of the agencies to offer payment plans. If such a system were to be enacted nationwide to fund infrastructure it would prove to be an unmitigated disaster.