Trump Infrastructure Plan a ‘Corporate Tax Break Scam’ Democrats Should Reject

Former Obama aide calls Trump’s Infrastructure Plan a ‘mistake in policy and political judgment [Democrats] will regret’
—by Nadia Prupis, staff writer

Public infrastructure projects that don’t appeal as much to private contractors “get no help from Trump’s plan,” Kain wrote. (Photo: AP)

A former Obama aide is calling on Democrats not to support President-elect Donald Trump‘s so-called infrastructure plan, saying it’s a “trap” and a “mistake in policy and political judgment they will regret.”

On the campaign trail, Trump promised to invest $1 trillion into repairing America’s crumbling roads and bridges, creating new jobs along the way—an investment which the nation clearly needs. Over the weekend, influential Democrats like Sen. Charles Schumer of New York pointed to it as a bipartisan issue that could help unite a bitterly divided country.

But a closer look at his proposal shows the plan may just be a smokescreen for corporate tax cuts that might not build anything new at all.

Ronald A. Klain, who served as an assistant to President Barack Obama and led the team implementing the American Recovery and Renewal Act, wrote in the Washington Post last week, “I’ve got a simple message for Democrats who are embracing President-elect Donald Trump’s infrastructure plan: Don’t do it. It’s a trap.”

Klain, who also served as an adviser to Hillary Clinton’s 2016 campaign, explained:

First, Trump’s plan is not really an infrastructure plan. It’s a tax-cut plan for utility-industry and construction-sector investors, and a massive corporate welfare plan for contractors. The Trump plan doesn’t directly fund new roads, bridges, water systems or airports, as did Hillary Clinton’s 2016 infrastructure proposal. Instead, Trump’s plan provides tax breaks to private-sector investors who back profitable construction projects. These projects (such as electrical grid modernization or energy pipeline expansion) might already be planned or even underway. There’s no requirement that the tax breaks be used for incremental or otherwise expanded construction efforts; they could all go just to fatten the pockets of investors in previously planned projects.

Meanwhile, public infrastructure projects that don’t appeal as much to private contractors—such as repairs to city water systems, existing roads, and non-toll bridges—”get no help from Trump’s plan,” he added.

And Trump’s planned tax break windfall for businesses, combined with a “10 percent pretax profit margin” included in the infrastructure plan, would add up to an $85 billion profit for contractors, after taxes, and “underwritten by the taxpayers,” he continued.

There’s more.

Because the plan prioritizes investors and tax breaks, rather than subsidizing projects and repairing public infrastructure, “there is simply no guarantee that the plan will produce any net new hiring,” Klain wrote. “Investors may simply shift capital from unsubsidized projects to subsidized ones and pocket the tax breaks on projects they would have funded anyway.”

Those warnings were echoed by Nobel Prize-winning economist Paul Krugman, who writes in the New York Times on Monday, “Progressives should not associate themselves with this exercise in crony capitalism.”

Krugman says:

If you want to build infrastructure, build infrastructure. It’s hard to see any reason for a roundabout, indirect method that would offer a few people extremely sweet deals, and would therefore provide both the means and the motive for large-scale corruption. Or maybe I should say, it’s hard to see any reason for this scheme unless the inevitable corruption is a feature, not a bug.

Now, the Trump people could make all my suspicions look foolish by scrapping the private-investor, tax credits aspect of their proposal and offering a straightforward program of public investment. And if they were to do that, progressives should indeed work with them on that issue.

But it’s not going to happen. Cronyism and self-dealing are going to be the central theme of this administration—in fact, Mr. Trump is already meeting with foreigners to promote his business interests. And people who value their own reputations should take care to avoid any kind of association with the scams ahead.

In his op-ed for the Post, Klain compared the plan to former President Ronald Reagan’s disastrous tax cuts in the 1980s, which, he noted, led to massive deficits that were used to justify slashing funding to social programs.

“Thus,” Klain wrote, “Democrats should know that every dollar spent on the Trump tax scheme to enrich construction investors and contractors is a dollar that will later be cut from schools, hospitals, and seniors.”


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White House Office of Public Engagement Weekly Update

Last week at the White House, the President and First Lady welcomed President Lee Myung-Bak and First Lady Kim Yoon-Ok of the Republic of Korea for a State Visit. During their visit, President Lee held joint press conference with President Obama, Mrs. Kim Yoon-Ok visited Annandale High School in Virginia with Mrs. Obama, and all attended a State Dinner.

Friday, the White House released Creating Pathways to Opportunity, a report that highlights steps the Administration has taken to create opportunity for all Americans. This report is an important update, and discusses the critical investments this Administration has made to lift and keep millions of Americans out of poverty, provide critical support to families throughout the economic downturn, and invest in long-term reforms to grow the middle class.

Also last week, the Office of Public Engagement illustrated the ways in which the American Jobs Act would help small businesses, veterans, and educators back into the job market. The White House continues to highlight the inspirational stories of a restaurant entrepreneur, a social studies teacher and other Americans who are working hard every day and would receive significant support from this legislation.

On Friday October 7th,  the President welcomed the 1985 Chicago Bears football team for a long-overdue reception at the White House, an honor that was originally postponed following the Space Shuttle Challenger disaster. On Tuesday the First Lady, in partnership with National Geographic Kids Magazine, kicked off an attempt to set the world record for the most people doing jumping jacks around the globe in 24 hours. The First Lady served as the “Jumper in Chief” and led hundreds of local kids in one minute of continuous jumping jacks.

Blog Highlights

West Wing Week: 10/14/11 or “We Go Together”

October 14, 2011 — Check out this week’s West Wing Week, your guide to everything that happens at 1600 Pennsylvania Avenue.

President Obama: Americans Want Congress to Do Its Job

October 12, 2011 — President Obama today vowed to keep fighting for the American Jobs Act, despite the Senate’s failure to pass the bill. The American Jobs Act would keep teachers in the classroom, cops on the beat, and put construction workers back on the job while providing tax cuts for middle-class families and small business owners and helping our veterans share in the opportunity they defend.

National Service: Powering Community Solutions in Dallas

October 12, 2011 — Three years ago Chris Oliver was unemployed and facing homelessness after being evicted from his Dallas apartment.  He turned to City Square, a local nonprofit that provides vital services to neighbors struggling with poverty.  City Square didn’t just help Chris put food on the table – it gave him a second chance on life.

Dr. Biden: October Is the Time for Each of Us to Consider the Role We Can Play in Combatting Breast Cancer

October 12, 2011 — Last week, Secretary of Health and Human Services Kathleen Sebelius, Dr. Jill Biden and actress Jennifer Aniston toured a state-of-the-art breast health center in Northern Virginia. They met with committed health professionals as well as with women who shared personal stories about their battles with breast cancer. Forward this video to your loved ones; together we will win this fight!

American Jobs Act Would Help Hard Working Families Pay for Education

October 11, 2011 — Sabrina Mangrum works hard as a student teacher in Maryland, and even harder at home, where she and her husband are raising six children, aged two to 25. Sabrina and Dannie, who has been a corrections officer for 17 years, are hoping Congress passes the American Jobs Act, because the extra money in every paycheck will enable them to put something aside for their children’s educations.

Cutting Red Tape to Help Create Jobs

October 11, 2011 — Today, as President Obama meets with his Council on Jobs and Competitiveness in Pittsburgh, Pennsylvania, the Administration is announcing the selection of 14 infrastructure projects around the country that will be expedited through permitting and environmental review processes. This is an important next step in the Administration’s efforts to improve the efficiency of federal reviews needed to help job-creating infrastructure projects move as quickly as possible from the drawing board to completion.

Get Involved

For more information about the American Jobs Act conference calls and other ways to get involved email Public@who.eop.gov. You can also follow Jon Carson, the Director of the Office of Public Engagement on twitter: @JonCarson44.

Know someone who is an everyday hero, demonstrating commitment to improving their own communities, their country, or their fellow citizens? Nominate them to be a Champion of Change.

Berkley to Heller: It’s Time to Vote FOR Nevadans

BERKLEY SENDS LETTER TO HELLER URGING HE STAND UP TO CHINESE GOV’T IN TODAY’S VOTE

VOTE SCHEDULED 10:30AM ET / 7:30AM PT TODAY

Something tells us Nevada’s unelected Senator may be on the market for a time machine after he sees this week’s local coverage in Nevada regarding his vote to allow the Chinese government to continue cheating American workers out of their jobs.  Heller was one of 19 senators to vote against legislation cracking down on China’s currency manipulation that has cost Nevada 14,800 jobs since 2001, according to the Economic Policy Institute.

Today, Shelley Berkley, candidate for U.S. Senate, sent a letter to Senator Dean Heller strongly urging him to change his mind and support legislation cracking down on unfair trade practices by the Chinese government that are cheating Nevada workers out of thousands of jobs.  The Senate voted to end debate on the legislation last Monday.

The Senate is expected to take another vote on the legislation at 10:30am ET/ 7:30am PT this morning.

The letter can be found below.

Senator Dean Heller
4 Russell Courtyard
Washington, DC 20510

Dear Senator Heller:

On behalf of the thousands of unemployed Nevada workers, I strongly urge you to stand up to the Chinese government and vote to stop their unfair trade practices that are cheating American workers out of their jobs.As you know, the economic downturn hit Nevada harder than any other state and families are struggling to cope with the highest unemployment rate in the nation.  China’s unfair currency manipulation is making things worse, costing Nevada approximately 14,800 jobs since 2001 according to the Economic Policy Institute.  We can’t afford to lose one job – let alone 14,800!

This legislation will not only stem American job loss to China; it will create jobs here in the United States.  In fact, it is estimated that this legislation could create as many as 2.25 million jobs.  Additionally, it could boost the U.S. economy by approximately $300 billion in two years alone.  With so many families struggling in Nevada and across the country, we cannot afford to miss out on this opportunity to put people back to work.

With American jobs on the line, we must not succumb to pressure from foreign nations.  Now is the time to stare down the Chinese government and demand they stop cheating Nevada’s workers out of good paying jobs here at home.

I respectfully urge you to rethink your opposition to this legislation that will not only save American jobs, but put Nevadans back to work.

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