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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

Galston: How New Congress Can Create Common Ground

From TDS founding editor William Galston’s Wall St. Journal column “Common Ground for the New Congress“:

…Many Republicans believe that infrastructure is principally a state and local responsibility. Republicans are committed to tax reform, Democrats to increased infrastructure investment. The highway trust fund will run out of money by midyear, but there is little support in either party for increasing the gas tax, the fund’s traditional revenue source.
Despite support from economists of both parties, a broad-based carbon tax is deeply unpopular as well. It is hard to imagine most Republicans assenting to finance infrastructure with higher general-fund deficits. Neither do they want to be held responsible for infrastructure projects grinding to a halt.
One possible solution is to combine tax reform and infrastructure finance. There is agreement across party lines that corporations should bring home the roughly $2 trillion they have stashed overseas–and that they won’t do so if the tax on repatriated earnings remains high. So why not lower that tax substantially, with the proviso that at least a portion of the resulting revenues would be dedicated to infrastructure finance? Both sides would have to eat some crow, but the dish might still be palatable.

It’s an interesting proposal. Some Republicans are finally waking up to the reality that substantial investment in infrastructure upgrades can’t be avoided much longer if the U.S. is to remain economically-viable. A commitment to shared sacrifice — along with shared credit for forward progress on our infrastructure — could be a win-win for both parties.

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