President Donald Trump stopped his infrastructure meeting with Democratic congressional leaders short on Wednesday, stating that he would not continue negotiations with House Speaker Nancy Pelosi and New York Senator Chuck Schumer until “phony investigations” were completed. The meeting was supposed to result in a $2 trillion deal to rebuild the nation’s roads, bridges, airports and other infrastructure.
“Everyone knew going into this that the infrastructure deal was on shaky ground,” Ben Brubeck, Associated Builders and Contractors vice president of regulatory, labor, and state affairs, told Yahoo Finance On the Move. “There were no big surprises that this kind of fell apart… politics kind of killed infrastructure once again.”
Despite what looked like a productive April meeting between Democratic congressional leaders and Trump, the May meeting was a “nonstarter,” he said.
Schumer and Pelosi “said the only way they were going to move forward on a $2 trillion, 10-year plan is if Trump undercuts his tax reforms, “which is a signature legislative move for Republicans and the Trump administration,” said Brubeck.
“You’ve got Democrats who want to increase taxes, either through the gas tax or other revenue streams, and they really don’t want to give Trump a big legislative victory leading into the elections. On the other side, Republicans don’t want to raise taxes at all and want to find other alternatives to get to the $2-trillion number,” Brubeck explained. “I think those two things don’t mix really well right now, and no one has a comprehensive plan to fund infrastructure.”
Unfortunately, “the real losers in this are the American people,” Brubeck said.
“You can’t tell whether a bridge was built by a Republican or a Democrat,” he said, but each parties’ agenda is standing in the way of a deal. “The American people just want infrastructure that’s safe, that’s reliable. It’s a big drag on our economy, unfortunately, when our infrastructure is just not where it needs to be.”
States need to take action
Now that the infrastructure deal has reached an impasse, Brubeck suggested that state governments should get more involved in improving infrastructure. “Some of the states are really going to have to take on a larger leadership role, and push for higher revenue, explore public-private partnerships, increase gas tax perhaps,” he said adding that a number of Republican states have increased taxes in recent years “with very little political repercussions.”
Brubeck explained that the increased “leadership” role would be a good thing, “I think there is a lot of federal red tape that comes with federal assistance on some of these projects, and states may be able to get projects to market faster, and do things more efficiently.”
When asked about how to fund state infrastructure ventures, Brubeck said muni-bonds is one source of funding for such projects.
“Muni-bonds are pretty cheap right now, so it’s good to borrow if you’re a locality or a state,” he said.
Taylor Locke is a producer for Yahoo Finance On the Move.