Immediate funding for protective and productive infrastructure projects, in multiple U.S. states and in Puerto Rico, has forced its way back onto President Donald Trump’s plans as he prepares for an 11-day trip to Asia which includes a crucial summit with President Xi Jinping in China.
Pundits and Washington insiders had been in agreement that Trump’s trillion-dollar infrastructure build had “faded on the agenda” and been postponed to 2018 at earliest. But Trump’s own unique comments, against public-private partnerships, for rebuilding Puerto Rico’s infrastructure, and for recognizing that its debt is unpayable, have brought Democrats rushing to the White House to discuss a plan. And Xi Jinping’s China is building major new infrastructure virtually all over the world except in North America, and would invest to help build it here.
First, the White House has requested $29 billion in new funds to FEMA, the Army Corps of Engineers, and HUD for recovery in Texas (which requested $18.7 billion of it), emergency recovery in Puerto Rico (which has requested $8 billion), Florida, and other southeast states. This can be voted this week in the House, but is not economic infrastructure funding.
Puerto Rico Gov. Ricardo Rosselló told a delegation of U.S. Senators he flew over the island on Oct. 7, that he is preparing another request, for either loans or grants for long-term rebuilding of the island’s infrastructure “within weeks,” not giving any details publicly. A Texas State Representative, Republican Ron Simmons, has called for the formation of a state infrastructure bank to fund reconstruction along the Gulf Coast. Given the size of the investments needed, the state bank would best be supported by a National Bank for infrastructure.
Trump’s legislative aides held another meeting with members of Congress from both parties Friday to discuss infrastructure. These are exchanges of what clearly remain vague ideas on all sides. But Infrastructure Committee chair Rep. Bill Schuster (R-PA) claimed after the meeting that a White House infrastructure plan now exists and will soon be publicized.
Building a new economic infrastructure in Puerto Rico cannot be done, however, without setting aside the great majority of its $72 billion in debt. Even the Control Board set up under Obama’s PROMESA Act of 2016 recognizes that Puerto Rico cannot, even with now-deadly austerity measures, pay more than $800 million or 1% of this debt annually — in other words, not even interest.
It took President Trump, and no other national elected official, to state this publicly and say Wall Street’s debt would have to go. Then, Democrats who had led the “slow, indifferent response” attack on Trump enthusiastically chimed in. Rep. Luis Gutierrez (D-IL) — who said “Donald Trump, you wanna take care of that one? Hallelujah, I’m with you. If you eliminate the debt, like Donald Trump says, you don’t need a control board and therefore you don’t have to make decisions anymore between paying the bondholders, and many of them are unscrupulous members of Wall St. hedge funds…” — can stand for others like Sen. Bernie Sanders, Rep. Adriano Espaillat (D-NY) and others who reacted in much the same way.
But in fact Puerto Rico is already unable to borrow on the municipal bond market, and would be cut off from credit indefinitely if its debt were just “wiped out.” It has to be reorganized, illegitimate debt written down, and the rest made payable over a long period by being absorbed into a Federal credit institution which can help build the new infrastructure. Just as with any Texas State Bank grappling with tens of billions of Gulf Coast rebuilding investments, “setting aside” Puerto Rico’s debt requires a National Bank for infrastructure.
LaRouchePAC and EIR are pushing this clear and necessary idea in the otherwise vague “infrastructure” debate. Its main opposition is the so-called “Delaney plan” of presidential candidate, ex-Rep. John Delaney of Maryland. It would provide perhaps $200-250 billion for national infrastructure investments, gotten from repatriated corporate tax-avoidance funds abroad, and would involve hedge and vulture funds in its capital. LaRouche’s “Hamiltonian” National Bank will provide trillions in credit, and open the door to China’s Belt and Road Initiative.