Home Posts How The New Infrastructure Agreement May Result In More Fees And Tolls
How The New Infrastructure Agreement May Result In More Fees And Tolls
Joe Biden

How The New Infrastructure Agreement May Result In More Fees And Tolls

President Joe Biden held a celebratory press conference on Thursday after agreeing to a new bipartisan infrastructure proposal, emphasizing one of his administration's victories in negotiations with Republicans: No one earning less than $400,000 per year would face a tax increase.

Republicans pushed to increase the nation's 18.4 cents-per-gallon gas tax or tie it to inflation in the future, after ruling out the corporate tax increases Biden had sought to pay for infrastructure investment. Neither made it into the final proposal, which still has a long way to go before becoming law.

“We’ve all agreed that none of us got everything we would’ve wanted — I clearly didn’t get everything I wanted,” Biden told reporters outside the White House, flanked by ten of the 21 senators who have signed on to the bipartisan agreement.

Beyond a White House-issued list of how negotiators propose to distribute the $579 billion in new spending, details on the final agreement remain hazy. There is a list of ways the bipartisan group of Senators proposes paying for the plan, but no details or dollar amounts are attached. Some members of Congress on Thursday seemed unsure of what exactly was in the proposal.

“We haven’t written this down yet, and in terms of legislation, there’s going to be a lot that happens down the road,” admitted one of the negotiators, Sen. Mitt Romney (R-Utah).

One of the pay-for provisions, however, should raise red flags among some Democrats: “public-private partnerships, private activity bonds, direct pay bonds, and asset recycling for infrastructure investment.”

These agreements, known colloquially as public-private partnerships, typically involve long-term leases or sales of public infrastructure to a private company, such as a road or a port, with the government using the revenue from the lease to build new infrastructure and the private company charging tolls or fees to the public for use of the old infrastructure.

And, almost invariably, this means that people at all income levels, including those earning less than $400,000, may have to pay more to access some critical infrastructure.

“There is only one way to pay that money back,” said Donald Cohen, executive director of In The Public Interest, a nonprofit research group that has warned of the dangers of public-private partnerships: “we will pay more in taxes, tolls, and fees.”

Democrats have previously opposed such proposals, claiming that they are handouts to Wall Street and foreign investors that leave Americans holding the bag.

Vermont Senator Bernie Sanders, an Independent who caucuses with Democrats and chairs the Senate Budget Committee, stated on NBC's "Meet The Press" on Sunday that he would be hesitant to support a deal that handed over infrastructure to private entities.

“One of my concerns about the bipartisan bill is how they are going to pay for their proposals, and they are not clear yet,” Sanders said, adding, “Privatization of infrastructure, those are proposals that I would not support.”

In Chicago, former Mayor Richard Daley sold off the rights to the city's parking meters and other assets in the late 2000s, causing the price of a parking space to skyrocket to more than $6 an hour in some areas, and meters were routinely broken or overcharged motorists.

According to the Chicago Sun-Times, as of August 2020, the consortium of private investors who now own the meters had already reaped more than $1.6 billion from their initial $1.16 billion investment, and they have the right to collect parking meter revenue for the next 60 years.

Other public-private partnerships in the United States have failed, including toll-road partnerships in Texas, Alabama, Indiana, and California, which all went bankrupt in the last decade.

Other concerns include rural Democrats' fear that private investors will be less likely to support projects outside of major metropolitan areas, and Cohen notes that the long duration of most infrastructure leases limits cities' and states' options over the course of decades.

Former President Donald Trump's administration aggressively promoted public-private partnerships as part of its failed pitch for "infrastructure week," and Democrats were skeptics at the time.


“The president’s plan is a recipe for Trump tolls from one end of America to the other,” said New York Sen. Chuck Schumer (D), now Senate majority leader, of Trump’s plans in 2017. “That’s not what the American people are crying out for. They don’t want more tolls. They want us to rebuild our crumbling water systems, bridges, and schools — not finance new toll roads.”

However, it is unclear whether Democrats will react to Biden's plan with the same fervor, especially given how closely it is linked to the outcome of their larger agenda.

Reporting was provided by Arthur Delaney.

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