Politics

Trump Needs a Win? Infrastructure Should Be a 'Gimme'

There's an easy, important, bipartisan deal just waiting to be made.

His presidency doesn't have to be all hazards.

Photographer: Ian MacNicol/Getty Images

How was your summer? Quite likely better than President Donald Trump’s cruel, cruel summer.

He spectacularly failed to “repeal and replace” Obamacare as promised. That much-hyped border wall gets no love from Congress (though plenty of taunting and trolling from Mexico’s former president). North Korea keeps lobbing missiles over the heads of American allies and detonating nuclear bombs.

And Trump won’t let us forget his epic Charlottesville meltdown, with his bewildering equivocation about white supremacists and neo-Nazis. CEOs on his various advisory panels ditched him en masse. His approval ratings are at record lows, heading in the general direction of Nixon territory.

Oh, and the special counsel investigating Russia ties seems to be tightening the inquiry into Trump’s private business dealings.

Republicans in the House and Senate have, if not outright abandoned him, certainly put lots of daylight between the White House and the GOP. It has gotten so bad that Trump is now cutting deals with Democrats(!).

The president’s misplaced priorities have put his entire economic agenda at risk. Now it seems that his bad decision-making process is putting his entire presidency in peril.

Summer officially ends Friday at exactly 4:02 p.m, when the autumnal equinox arrives. With it comes a new season for the president to try to accomplish something – anything! – of lasting value.

He has repeatedly shanked multiple opportunities to get the ball in the hole.

The president, who loves golf, 1  should take a “gimme.” 2

There is no greater gimme in American politics today than the combination of profit repatriation and infrastructure spending. As we have detailed many times before, 3  roads, dams, bridges, tunnels, mass transit, ports and the electrical grid in the U.S. are in conditions ranging from bad to worse. Incidentally, American corporations are sitting on almost $2 trillion in profits overseas. The math on this one is pretty easy.

The gimme here would involve a one-time, temporary reduction in taxes on overseas corporate profits, with the revenue earmarked toward a trillion-dollar infrastructure spending bill. I would expect to see a combination of incentives and penalties that looked like some variation on:

  • Tiered tax reduction to bring much of that $2 trillion in cash home. The numbers can vary, but think something like a flat 15 percent on the first $20 billion, 10 percent on the next $30 billion, and 5 percent on anything over that (play around with those numbers if you want to optimize the revenue or cash returns). I am guessing that can pull in about $200 billion, give or take $50 billion.
  • Create a temporary window of 24 to 36 months for this money. After that period, assets held overseas get taxed at the full 35 percent, with no deductions allowed.
  • Earmark this toward a huge infrastructure bill intended to fix what is broken, create jobs and stimulate the economy. Part of this would also include raising the gas tax, now currently at 18.9 cents per gallon, to 25 cents per gallon in the first year and 30 cents per gallon in the second, and then indexing the tax to CPI inflation afterward.
  • Spend a trillion dollars over the next decade on new projects, refurbishments of crucial roadways, airports and security-related infrastructure. Improve and harden the electrical grid by doing a dollar-for-dollar match with utilities that update and secure their systems. Improve the ports, which fail to securely check most of the goods coming into the country for nuclear materials or biological threats.

All of the above should be a gimme for most politicians: It’s popular, it has bipartisan support, and it just might do some good.

If Trump wants to accomplish something, this is his chance.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
  1. Trump has played lots of golf as president, as various websites tracking his frequency and cost to the taxpayer will attest.

  2. In golf, a gimme is any shot that is so close to the hole that players count it automatically without the need for it to be actually shot.

  3. See, e.g.:
    Repairing Infrastructure Can Help Repair Economy (Oct. 22, 2011) 

    Fix Infrastructure on the Cheap While You Still Can (July 12, 2013)

    U.S. on Highway to Flunking Out (Aug. 23, 2014)   

    Conservatives Learn to Love Infrastructure (Aug. 29, 2014) 

    The Shame of America's Rotting Roads (Dec. 11, 2014)

    The Bonds That Can Cure America's Ills (March 19, 2015) 

    A Tax Deal That Fixes U.S. Roads? (May 27, 2015)

    The Dumbest Way to Fund America's Infrastructure (Dec. 2, 2015)

    Please Debate America's Sorry Infrastructure (Sept. 26, 2016)

    Last Best Chance for Fixing Roads and Refinancing Debt (Nov. 18, 2016) 

    Failing Dam Is a Symbol of U.S. Infrastructure (Feb. 16, 2017)

    Chance for Smart U.S. Debt Funding Is Slipping Away (March 16, 2017) 

To contact the author of this story:
Barry Ritholtz at britholtz3@bloomberg.net

To contact the editor responsible for this story:
Philip Gray at philipgray@bloomberg.net

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