Presidential candidates usually have very little to say about infrastructure. But 2016 has been an atypical election in most respects and so is the conversation about national infrastructure investment that has been kick-started by Hillary Clinton and Donald Trump. Both the Democratic and Republican presidential contenders have pledged to begin much-needed work on the country’s decrepit infrastructure assets, especially in transportation, a sector that affects the daily lives of every American. They have proposed steering massive amounts of federal dollars into nation’s roads, bridges, and airports, and current interest rates are very low which helps make the case for debt financing to get major projects moving. Emil Frankel, a senior fellow at the ENO Center for Transportation, considered what the two candidates have had to say about infrastructure investment and more broadly on issues like raising the federal fuel tax and how to persuade American voters that major, multi-billion dollar projects are in their long-term interests. Frankel served as an U.S. Department of Transportation assistant secretary for policy during President George W. Bush’s first term and as a Connecticut commissioner of transportation in the early 1990s. The views he shared with The American Prospect are his alone and should not be attributed to the ENO Center. This is an edited and condensed version of our conversation.
How do you assess the infrastructure programs that Hillary Clinton and Donald Trump have proposed?
Secretary Clinton has talked for some time, probably going back to her time in the U.S. Senate, about an infrastructure bank. That continues to be an important proposal of the Clinton campaign. She is also talking about a major expansion of grant programs, in general. I don’t think anybody is talking about increasing the motor fuels taxes. As far as Mr. Trump is concerned, who knows? He has talked about a major expansion of investment, which suggests debt financing or increased federal loans. It’s really hard to say.
He has talked about creating an infrastructure fund that will be supported by government bonds that investors and other could purchase.
Which sounds sort of like an infrastructure bank and that would suggest some similarity between their major proposals. [But] an infrastructure bank has not been supported by Republicans in Congress, with some exceptions. There has been bipartisan sponsorship of an infrastructure bank bill. But broadly speaking, the Republican congressional leadership and membership have not been supportive of a national infrastructure bank or fund. If that’s what Trump is talking about, that would represent a departure from what has been effectively the Republican position over the last several years.
Why do Republicans in Congress oppose an infrastructure bank?
They think that it is creating another big agency. Some of these proposals, if you remember, came in the wake of the financial collapse. There were some saying, wow, the last thing we want to do is create another Fannie Mae or Freddie Mac. Some Republicans leaders, not incidentally, the leaders of the relevant committees, but some other people said, no, we don’t want to put the federal government on the hook again. It seems to be, if I can use this term, a small government argument than it is specifically related to federal financing because when you get into the components of it, there is broad support including in the Republican Party for [financing] programs and similar things.
What indication is there that either a Clinton or a Trump administration is going to take these issues seriously?
First of all, they are talking about it. It’s not just buried in footnotes on their web pages, but they’re talking about it. To his credit, although I don’t personally necessarily agree with the specifics of the proposals, President Obama has talked about more about transportation and infrastructure more than any president since Eisenhower. So that’s good, so I think they take it seriously as economic matter.
How would you assess what the Obama administration was able to accomplish in transportation?
I am very complimentary of the president for having focused attention on these issues. But the fact of the matter is I don’t think they led in terms of specifics. I think this president personally is not a big fan of user fees and when you think about the investments in transportation or the proposals from transportation they are largely from general funds [and not user fees]. They did not propose an increase in the federal gas tax or diesel tax at any point during the almost eight years.
One reason for the administration not to propose an increase in the federal fuel tax was the likely opposition he would have run into on Capitol Hill.
That’s true enough. I understand that, although people differ. There are some people who feel that there is more latent support on the Hill, even some Republican support, for higher fuel taxes if the administration had taken the lead. I do understand that. Nonetheless to talk about these ambitious investment programs without identifying sustainable revenue sources, I think, is kind of squandering leadership in this area.
Where is the federal government headed on user fees? A fuel tax increase is a question mark. There has been plenty of discussion about vehicle-miles-traveled levies, but there is no consensus on that either.
At the federal level, Congress has indicated by not acting. As revenues from gas taxes stagnate and decline, they are replaced with general funds. I see no reason to believe that that is going to change in the short or intermediate term. Little by little, you are seeing some signs at the state and metropolitan levels, particularly at the state level, of greater interest in mileage-based fees and certainly a greater reliance on tolls for major projects. Eventually, over a very long time, there will be a greater reliance on mileage fees of some sort, whether it’s tolls that are related to specific facilities or more general kinds of vehicle-miles travel charges that apply across systems. The gasoline tax started at the state level and worked its way up to the federal level. I think that the same thing will happen with the vehicle miles tax, albeit over a long period of time.
Policymakers and journalists use words like “billions” and “trillions” without blinking. But those are tough numbers for the average voter to come to grips with. They understand potholes, but they don’t make the connection between those local problems and what has to happen on a broader scale nationwide. How do you persuade people that the United States must invest very large sums of money in transportation?
It’s very hard at the federal level because you’re talking in general terms. The last time we could relate to improvements in terms that people could understand was the interstate highway program. There were lines on a map. You could talk about travelling from Portland, Maine, to Portland, Oregon, without a traffic light. People could understand that and they were willing at some level to pay gasoline taxes. Someone in my state of Connecticut would pay a federal gasoline tax knowing at some level that that money was being used in Montana or Wyoming. That was acceptable.
At the state and local level, it gets easier to relate to specific charges whether it’s a toll or a dedicated project of some sort. California has been pretty successful with half-cent increases in sales taxes to go into specified transportation improvements. But the benefits are more easily shown at the state and local level, which is another reason the burden is going to be on more states and localities with the federal government playing a supportive and certain kind of leadership role.
How do you approach the regional competition that goes on within states for federal dollars? Should federal dollars go directly to cities rather than through state departments of transportation?
The fact of the matter is the major metropolitan regions are the engines of economic growth of the American economy. The answer to your questions rests largely on states, so it will vary from state to state. In California, metropolitan planning organizations are relatively much, much stronger than other places in the country. That’s a function of California law. California’s state statute dictated that decisions about public money, whether state or federal, would largely to move to those organizations. As a result Caltrans, the California Department of Transportation, is essential as an implementer as opposed to a decision maker.
How do states do avoid squabbles between metropolitan areas and more rural regions over federal dollars?
Money for improving arterials in rural areas is important for safety reasons, which is also a national goal. There are a lot more fatalities on rural roads than urban roads, and we should be investing money in them. We need to show how rural areas can benefit from money that is invested in metropolitan regions: Sometimes that competition in states is not even urban-rural as much it is within regions. So there is a balance that can be struck.