Trump went to Cincinnati to talk about fixing the nation’s aging locks and dams. Would his public-private financing model fit?
It’s “Infrastructure Week” at the White House—five days of attention-building around President Donald Trump’s mystical $1 trillion plan to rebuild America’s concrete lifelines—and the only trip on Trump’s agenda took place Wednesday afternoon in Cincinnati. You’d think it might have been at the Brent Spence Bridge, the dilapidated and congested Ohio River span that Trump repeatedly vowed to fix during his campaign. The White House even put the crossing at number two on its infrastructure “priority list” earlier this year.
Instead, Trump spoke before a members-only audience of a private Cincinnati marina, as protestors marched nearby. Policy specifics were not to be found in his speech, which riffed on the decrepit state of America’s transportation systems, amid broader statements. ”Today we will build the dreams that will open new paths to a better tomorrow,” the president said at one point. He did not mention the Spence bridge once. But he did place a slight emphasis on aging inland waterways. “We simply cannot tolerate a five-day shut down on a major thoroughfare for American coal, American oil, and American steel,” Trump said, referring to the hydraulic failures that shuttered Ohio’s New Cumberland Locks and Dam in December 2016. “We cannot accept these conditions any longer.”
Unless you’re a Pete Seeger fan, dams, rivers, and other waterways may not leap to mind when thinking of 21st-century infrastructure. But they are indeed workhorses of U.S. commerce. Often cheaper and more efficient than road, air, or rail, rivers move tens of billions of dollars of bulk commodities every year. The Waterways Council, an advocacy group for the river shipping industry, has estimated that more than 60 percent of U.S. grain exports, 22 percent of domestic petroleum, and 20 percent of the coal used to make electricity travels on the nation’s 12,000 miles of inland waterways. The Ohio River, where Trump recited his oft-heard proposal to spend $200 billion in federal funds to rustle up another $800 billion in private infrastructure investment, carries more freight traffic than any other river in mid-America.
Like so much else under federal jurisdiction, Congress hasn’t historically funded upkeep and improvements along U.S. waterways adequately, leading to breakdowns and bottlenecks at critical locks that costs the economy millions annually. (Because locks need a certain depth of water to operate, prolonged dry spells, like the Mississippi’s historic drought in 2013, can also be ruinous.) The slow-downs at the Ohio River’s leaky, deteriorating Lock and Dam No. 52—which moves more than $22 billion of grain, coal, fuel, and other items annually—are staggering, as the New York Times reported in 2016:
The average delay at No. 52 in October and November was 15 to 20 hours. At the moment, No. 52’s sister dam downriver, No. 53, is adding 48 more hours to the wait.
Dealing with both dams, it can take five days to travel just 100 miles on this stretch of the Ohio River. And if something goes wrong at either one — which does happen — the delay can build to a week or more. On Sept. 14, for instance, all river traffic stopped for an additional 15 hours while emergency repairs were made to No. 52’s dam.
Plans to replace these locks are decades behind schedule, and likely billions over budget. That’s representative of waterway infrastructure writ large. Currently, such projects are supposed to be paid for by a 50-50 split between users and government; barge operators pay a 29-cent-per-gallon diesel tax, which goes into a waterway trust fund, and the feds pay the rest with general funds.
Infrastructure Week’s document-signing ceremonies notwithstanding, there is still no legislation mapping out how Trump’s $1 trillion public-private infrastructure plan would work (if it can even be called a plan). Nor did Trump expand on the mechanics by which he might fix the nation’s failing waterways in his visit to Cincinnati.
But his budget proposal, released at the end of May, contains some hints about the administration’s plans to “reform inland waterways financing.” The budget asserts that companies aren’t paying enough to hold up their half of what’s necessary to upgrade waterway infrastructure in the future. To supplement the fuel tax, the White House proposes an annual fee on commercial barge operators, which it says would generate about $1 billion for the waterway fund over the next 10 years.
Sounds like a not-bad idea. But industry leaders and policy analysts warn that waterways don’t work like highways, where toll operators (for example) have to keep prices reasonable enough to compete with all the un-tolled roads out there. Waterways are almost like monopolies: There’s only one Ohio River, and a rival waterway is not going to move in and offer a competing service. Establishing an annual fee could have the knock-on effect of making goods shipped along the busy Ohio and Mississippi pricier—hurting customers in Trump country, of all places—and could push more freight to roads, worsening congestion and pollution. “Consumers will always seek the lowest cost, even if it gridlocks the other modes,” writes Michael Toohey, the president and CEO of the Waterways Council Inc., via email. That’s another way that rivers are not like roads: government-controlled, per-mile driving fees are a sound idea because they can ease congestion. On waterways, there is no such policy goal; the aim is just to keep funds flowing in.
Kevin DeGood, the director of infrastructure policy at the Center for American Progress, a left-leaning think tank, says that other types of shipping providers (such as railroads) could also jack up their shipping prices in response to waterways getting pricier. “It’s like having only two gas stations in town,” he says. The low costs of waterway freight are, currently, keeping other forms of shipping relatively cheap, too. He says a less disruptive way of increasing shippers’ contributions to the waterways fund is by ratcheting up the gas taxes they already pay.
What may most attract the Trump administration to “reforming” waterway financing through $1 billion in user fees is that it would create a meatier stockpile of funds to pay back would-be private investors. Remember: The most we know about the president’s infrastructure vision is that, rather than disburse federal funding across the entire economy, the White House hopes to divert that money into the pockets of private firms through tax cuts and toll revenues, with the promise that the public could eventually benefit. Indeed, Trump’s budget also calls for a $1 billion funding cut for the U.S. Army Corps of Engineers next year.
User fees could fit with Trump’s free-market infrastructure philosophy: They might be a means of leveraging private capital to pay for more river upgrades, with private investors promised some portion of the fee revenues as payback. Public-private partnerships on infrastructure projects aren’t inherently bad, but they don’t always deliver the amazing cost and efficiency savings they promise government. No matter what, people wind up paying for what they use in the end.
Whether Team Trump wants to “privatize” rivers or not, we don’t really know. The budget offers scant detail, and Trump’s argle-bargle on the podium in Cincinnati did no more than observe that locks and dams, among America’s many other systems of transport and conveyance, badly need modernization. As Infrastructure Week rolls to a close with nothing accomplished and little said, the thing to bear in mind is that, whatever road-and-bridge-building package Trump eventually tries to pass, it will lean on a Reagan-era supply-side philosophy that never really worked. “They’ve invented another form of trickle-down economics,” DeGood says.