the national interest

Here’s Why Trump and His Party Are Desperate to Sign a Huge Infrastructure Bill

Charles Schumer. Photo: Bill Clark/CQ-Roll Call,Inc./Getty Images

Democratic Senate Minority Leader Charles Schumer is plunging ahead with his plan to help Donald Trump pass a gigantic infrastructure plan. One apparent reason for this decision is a misunderstanding about how public opinion works — a mistaken belief that Democratic senators will get credit for working with Trump, when in reality the primary credit will flow to Trump, and the secondary credit to Republicans in Congress, even those who might oppose popular bills. But an additional reason for this strategy is a failure to understand the priorities of the Republican Party. Not only Senate Democrats but also other liberals — including some critical of their strategy — believe they are cleverly outflanking the Republican conservatives who hope to enact a radical right-wing domestic agenda. In reality, they are playing directly into their hands.

Schumer has broadcast his calculations. His premise is that he can force Trump to choose between a large public infrastructure plan supported by Democrats and the opposition of fiscal conservatives in the Republican Congress, who have opposed such a plan for several years. Signing an infrastructure bill, Schumer says, would mean “breaking with the Republicans who have always opposed these things.”

But Republicans have not “always opposed these things.” The last time Republicans held complete control of government, they passed a massive highway bill despite the formal protestations of fiscal conservatives. Only when Barack Obama took office did the GOP flip back to demanding fiscal austerity. This is the same political logic that drove Republicans to support Keynesian fiscal stimulus in the face of a mild recession in 2008 (under a Republican president) and then turn against Keynesianism in the face of a catastrophic recession under a Democratic president.

Republicans have mostly maintained the fiscal blockade that unofficially defined their Obama-era stance. Other than regressive tax cuts, which they are happy to pass or extend under any circumstances, Republicans have demanded that any new spending be paid for with offsetting cuts. And since they oppose new revenue in any form, and the list of mutually agreeable spending cuts (or even budget gimmicks masquerading as cuts) has long since been exhausted, this has stalemated new spending. Members of both parties, with strong support from the business lobby, have pleaded with Congress to take advantage of low interest rates to fund necessary infrastructure repairs and upgrades, to no avail.

Now that Republicans hold power again, they will lift the Obama-era fiscal blockade. There will be no more requirement that Republican-supported spending be “paid for.” They will simply resume debt-financed spending. The infrastructure improvements they opposed under Obama will now pass easily. Steve Bannon, Trump’s chief strategist, sees this proposal as the lynchpin of Trump’s domestic policy and the key to cementing his support with the white working class. “With negative interest rates throughout the world, it’s the greatest opportunity to rebuild everything. Ship yards, iron works, get them all jacked up,” he told Michael Wolff. “We’re just going to throw it up against the wall and see if it sticks. It will be as exciting as the 1930s, greater than the Reagan revolution — conservatives, plus populists, in an economic nationalist movement.” It is not clear exactly which exciting, 1930s-era infrastructure-building leader Bannon has in mind, but his grasp of the political benefit is evident.

Some liberal critics have focused on the fact that Trump’s campaign proposal would not actually fund much infrastructure at all, and would instead mainly confer windfall benefits for projects that would have been built anyway. Paul Krugman treats this difference as the main impediment to any possible cooperation. “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,” he writes today, “And if they were to do that, progressives should indeed work with them on that issue. But it’s not going to happen.”

Actually, it probably will happen. Jim Newell reports that, according to a senior Democratic Senate aide, Democrats are not working off Trump’s campaign proposal. They’re instead planning a real infrastructure bill that would actually build stuff. Krugman’s suspicion that Republicans would never support such a bill is a misread. Trump proposed funding infrastructure through tax credits because, one, he was running as a Republican, which forced him to pretend popular goals could be accomplished without big government, and two, neither he nor his advisers understand anything about policy.

To be sure, it will be slightly awkward and embarrassing for Republicans in Congress to suddenly toggle their rhetoric from denunciations of wasteful pork to support for necessary infrastructure upgrades. But this is where Schumer plans to come and rescue them. His party will supply the votes for the bill that will create the jobs needed to make Trump popular, and thus to supply the tailwind for down-ballot Republicans. Conservative Republicans eager to maintain their anti-spending purity can cast symbolic votes against the bill without preventing it from coming to the floor. Then they can enjoy the political benefits from rising wages under their party’s government. And if the deficit rises? (Which it probably will, after a debt-financed infrastructure law, debt-financed tax cuts, and debt-financed defense hikes.) Well, then Republicans can point to the big-spending infrastructure bill Democrats passed over their objections, stuffed with Democratic pork. And they can demand cuts to social spending to rectify it.

Helping Trump pass a bipartisan bill that will spread prosperity is a gigantic political boon — one that will make it far more difficult for Democrats to contest either the midterm elections or Trump’s reelection bid. As I’ve noted before, it would be a mistake for Democrats to withhold cooperation unconditionally. Perhaps Democrats would trade this chip for something valuable. Say, Schumer could (as Ed Kilgore suggests) demand that Trump refuse to go along with the Republican plan to pass sweeping fiscal changes through a reconciliation bill, and instead work with his party across the board. That’s the sort of bargain that would make cooperation on infrastructure worthwhile. Is Schumer planning to make demands like this? Or is he planning to give Trump and his party a huge favor for nothing?

Why Trump Is Desperate to Sign a Huge Infrastructure Bill