“The Trump administration has not established a legacy of policy clarity, but it is increasingly apparent that the president’s infrastructure plan will be heavily reliant on public-private partnerships. Public-private partnerships should be a part of rebuilding America’s infrastructure, but if the White House’s plan is overly reliant upon private capital, it will ultimately be insufficient and inadequate.
As someone who spent two decades as an entrepreneur before being elected to Congress, I believe that the private sector is an incredible source of innovation and expertise. In the case of infrastructure, the private sector can and should also be considered as a viable source of capital and financing. A public-private partnership can take various forms, but fundamentally it is a collaborative effort between a federal, state or local government entity and a private entity to build, maintain, finance or operate an infrastructure project.
Australia, Canada, France, the United Kingdom and others have all embraced such partnerships as part of their infrastructure portfolio, and in many cases this has led to these nations being able to address pressing infrastructure needs more effectively than has sometimes been the case here. This is another example of the United States falling behind.
According the American Society of Civil Engineers, the U.S. faces an infrastructure crisis. In its 2017 Infrastructure Report Card, the society gave the country a cumulative grade of a D+ and pointed out that the country now has over 600,000 structurally deficient bridges, over 2,000 high-hazard deficient dams and a $90 billion dollar transit repair backlog. Each year, over 200,000 water mains break and Americans waste billions of hours each year in traffic. We didn’t get here overnight, this problem was created by decades of under-funding across all levels of government.
This is where the president’s outline of a plan runs into trouble: More public-private partnerships are needed, but the bottom line is that we can’t rebuild America’s infrastructure using them alone.
So how do we get this done? How do we end the gridlock in Washington and on our highways and really improve our infrastructure? Clearly, we need a new solution that dramatically increases public and private investment. After working on this issue for over four years, I believe that the only way we can tackle this problem is to pair international tax reform with infrastructure. This addresses the single biggest obstacle – funding – by also solving a major problem in our tax code.
An estimated $2 trillion of U.S. corporate cash is overseas, locked-out by the highest corporate tax rate in the world and a system that perversely encourages companies not to repatriate their earnings back to the U.S. by allowing them to defer paying any U.S. tax on international earnings if they keep the cash generated from international earning overseas. So that’s what these companies do; they keep their profits abroad. This is bad for our economy because it blocks economic activity here and it’s also bad for public services and our fiscal health, because it’s tax revenue that we don’t collect. This also encourages companies to invert and to move operations abroad. Whether you’re a conservative, a progressive or somewhere in the middle, you should be concerned.
Under my framework, we would lower our international tax rate and end the ability to defer and invest the revenues that we raise in infrastructure. My framework creates the American Infrastructure Fund, which would provide financing to state and local projects and would encourage the further expansion of both public-private partnerships and traditional publicly-built infrastructure. It’s a triple bottom line for our country: a better tax code, more domestic investment and the jobs and growth created by more infrastructure investment. Despite all the partisan warfare in Washington, this solution has received bipartisan support. Over 40 Democrats and 40 Republicans have cosponsored my infrastructure legislation over the last four years. Sometimes, all that’s needed is a new idea.
When President Donald Trump was elected, I made it clear that if he came to Congress with a good infrastructure plan, I’d be willing to work with him. For the good of the country, I still hope that this is the case. Public-private partnerships are part of the solution, but if that’s all that the president does, it just won’t be enough.”