White House looks to sell off public assets to Saudi Arabia, rich investors
WASHINGTON, D.C. (May 24, 2017) — The Washington Post reports today that the Trump administration is drafting plans to privatize public assets, including airports, bridges, highway rest stops and other facilities. President Trump’s budget proposal released on Tuesday would spend $200 billion over 10 years to “incentivize” private, state and local spending on infrastructure.
How does it incentivize? One way is by giving rich investors from around the world tax benefits and subsidies to buy up airports, pipelines and other public projects in the United States. Marketwatch reports that Saudi Arabia, on the heels of President Trump’s visit there, has committed $20 billion to a new private fund to invest in American infrastructure.
The plan to promote private and foreign investment in public assets has emerged amid conflicting promises by Trump and Congressional Republicans to improve crumbling infrastructure while also cutting taxes. Although Trump recently signaled an openness to raising the federal gas tax to help pay for U.S. roads and highways, the tax-averse GOP Congress immediately quashed the idea. Instead, Republicans continue to push for more tax cuts.
“Rather than taxing the wealthy and then using the money to fix our dangerously outdated infrastructure, the states and the federal government increasingly are giving rich investors tax credits to encourage them to do it,” writes Robert Reich in reaction to the report. “The investors then charge tolls and user fees, and earn big profits. So the public pays twice — once when we subsidize the investors with our tax dollars, and then again when we pay the tolls and user fees that also go into their pockets.”
“We don’t even get the infrastructure that’s most needed. Projects most attractive to investors are those whose tolls and fees bring in the biggest bucks – giant mega-projects like major new throughways and new bridges.
“Not the thousands of smaller bridges, airports, pipes, and water treatment facilities most in need of repair. Not the needs of rural communities and smaller cities and towns too small to generate the tolls and other user fees equity investors want. Not clean energy.
“To really make America great again we need more and better infrastructure that’s for the public — not for big developers and investors. And the only way we get that is if corporations and the wealthy pay their fair share of taxes.”
Trump advisers also say that in order to entice state and local governments to sell and privatize their assets, the administration is considering paying them a bonus. The proceeds of the sales would then go to other infrastructure projects.
The AFL-CIO is fighting for a major job-creating, economy-boosting investment in infrastructure but is also strongly opposed to the privatization of public assets. Last week, AFL-CIO President Richard Trumka urged the president to stop delaying and make good on his promise for a $1 trillion investment in America’s infrastructure.
“My question to the White House and Congress is this: Where is the bill?” Trumka said.