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Tags: buttigieg | infrastructure | democratic | socialism

Buttigieg's Infrastructure Plan Is Just More Democratic Socialism

Buttigieg's Infrastructure Plan Is Just More Democratic Socialism
Pete Buttigieg (Andrew Cline/Dreamstime)

Peter Morici By Wednesday, 19 February 2020 08:13 AM EST Current | Bio | Archive

Pete Buttigieg's sudden surge in Iowa and New Hampshire — and Joe Biden's quick fade — make him the Democrats' best hope to field a candidate in line with voters' more-moderate center-left leanings than Sens. Bernie Sanders and Elizabeth Warren present.

At least that's what the media — and his well-honed campaign — claim, but his $1 trillion infrastructure plan demonstrates he's a democratic socialist like the rest.

The Trump administration and campaign had better take note. The incumbent can't rely on the economy alone. He gets low marks from voters on health care, and Democrats did well in 2018 congressional elections promising to work for solutions to middle-class problems.

Few of those confront voters every day like nerve-racking commutes, flight delays and crowded trains and airports. Transportation Secretary Elaine Chao has not tabled a credible plan that challenges Democrats in Congress to act, and without concrete proposals on transportation and other middle-class issues, his justification for a second term is seriously impaired.

Decayed and crowded

Federal and state governments spend about $450 billion a year on roads, mass transit, waterways and the like, and at least another $200 billion is needed to fully repair and expand decayed and crowded facilities, address climate-change abatement, and build out 5G in underserved areas.

Congestion is costing the U.S. economy at least $400 billion a year, and outdated connectivity could hold back growth for many small towns and rural areas.

Climate change is increasing the incidence of violent storms and flooding, and Miami, New Orleans and other communities need costly mitigation projects to remain viable.

Free markets

To his credit Buttigieg's infrastructure proposal identifies these challenges but his prescriptions are chock full of unnecessary intrusions into free markets.

He wants to create a new entitlement by cutting in half water bills in many communities.

He wants to further steer infrastructure spending and employment in favor of African-American and Latino communities, increase Community Development Grants, retrain workers to move them from the oil and gas industries to sustainable energy and transportation, subsidize charging stations for electric vehicles, and create 6 million union jobs.

The Davis-Bacon Act requires excessively high union wages and cumbersome work rules on federally sponsored transportation projects. Requiring union and non-union contractors to compete on an equal basis and removing other unnecessary regulatory burdens could lower costs by about 20%.

With only 6% of private-sector employees now represented by unions, it is clear that Buttigieg wants to impose on workers something they have already rejected through their private decisions.

Paying for it

Last spring, congressional Democrats proposed a $2 trillion, multiyear package. That's more in line with what the country needs but paying for it all is the puzzle.

The federal gas tax was last adjusted in 1993 and bringing it in line with inflation — along with increased user fees for mass transit, bicycles and recreational vehicles which also benefit from the federal highway trust fund — could raise $50 billion a year.

Democrats won't consider those without repealing many benefits for high-income households in the 2017 tax cut.

In any case, the gas tax will have to be replaced as electric vehicles come on line and on that score Buttigieg has it right. The roads should be paid for by those that use them, and GPS technology would permit a vehicle-miles-traveled tax.

That raises privacy considerations but so does Google Maps and our cell phones - safeguards can be implemented.

Top down solutions

Instead of government engineering progress from the top down, let markets work.

As electric cars arrive, charging stations will be built the same way gas stations were - by entrepreneurs looking for business opportunities.

The Trump administration is already building out a comprehensive system of apprenticeship and training programs. There is no need for one solely focused on workers leaving the oil and gas sector as we decarbonize.

A casual look at any road project indicates minorities are well represented, and the Army Corps of Engineers and states already have a long backlog of projects needing funding.

It would be best to replace the gas tax with a VMT, impose more robust competition to lower costs, and take the rest of what is needed from general tax revenues. The additional tax receipts on $400 billion in gross domestic product would likely replace a good deal what is added to infrastructure spending from general revenues.

Peter Morici is an economist and business professor at the University of Maryland, and a national columnist. He tweets @pmorici1

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Mayor Pete's policy prescriptions are chock full of unnecessary intrusions into free markets
buttigieg, infrastructure, democratic, socialism
Wednesday, 19 February 2020 08:13 AM
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