Category Archives: Infrastructure

There Never Was Any Plan: The Story of the entire Orange Blossom Administration

Return with us now to those days of yesterday, if not exactly yesterday, when the Trump declared his health care plan would be wonderful — “No one will lose coverage. There will be insurance for everybody. Healthcare will be a “lot less expensive” for everyone — the government, consumers, providers.”  [Politico]  That was March 13 2017.  Well now, some people have lost coverage, it isn’t going to be any less expensive to get health insurance. In fact, health insurance premiums are expected to increase in California, Connecticut, and Pennsylvania, and it is just as bad elsewhere:

Rate filings to date show that many insurers are requesting large premium increases for 2019. The average requested rate increase was 30.2 percent in Maryland and 24 percent in New York state. Most insurers have specifically cited the repeal of the individual mandate in their actuarial memorandums. In New York, insurers attributed about half their large requested increases to mandate repeal. Even in states with small rate increases or overall decreases, insurer filings state that premiums next year would be significantly lower in the absence of federal sabotage. For example, BlueCross BlueShield of Vermontrequested a relatively small 7.5 percent increase for 2019 but said that its request would have been 2.2 percentage points lower if not for mandate repeal. Peter V. Lee, the director of Covered California, said that his state’s average rate increase of 9 percent “could—and should—have been much lower.” [CAP]

Let’s be serious here. There wasn’t a health care plan, not one with any specifics. There was a ton of “repeal and replace” rhetoric.  Trumpian campaign slogans never translated into much more than the continual erosion of Affordable Care Act provisions in favor of the insurance industry.  There never was a comprehensive plan to deal with market problems, industry sector issues, and the health care needs of some 330 million people in this country.  This administration doesn’t PLAN.

But wait, wasn’t there an “infrastructure plan?”  It would seem there should be since we keep having infrastructure weeks?   On February 11, 2018 the administration rolled out its grand infrastructure proposal [CNN] albeit without any suggestion about how this would be paid for;

“At the Conference of Mayors in January, Gribbin explained that the Trump administration would not be proposing a specific funding mechanism for the infrastructure plan, saying that will be a conversation with Congress. But that discussion just got a lot harder following the passage of a tax plan that is expected to expand the deficit by over a trillion dollars over ten years.” [MoneyCnn]

So, we got “conversations with Congress” about how to implement the “infrastructure plan,” but no infrastructure plan with much of anything except sops to for profit job training centers, lowered work rule and environmental permitting standards, and precious little else.  There never was a real, a comprehensive, plan in place such that the negotiations (or conversations) with Congress would ever be on a firm foundation. Surprised? We shouldn’t be.

Perhaps we should have been impressed with the trade plan?  After all, isn’t this supposed to put America First?  However, our friends and trading partners have been reduced to using color coded cue cards to explain high school level trade concepts to an American president [Marketwatch] and he doesn’t give any appearance he understands  fundamental concepts.  Reason sums up one area of dissonance:

“As Veronique de Rugy noted here a couple of weeks ago, “This is one policy area where he’s been remarkably consistent over the years.” Even when Trump pays lip service to free markets, she observed, it’s with the aim of increasing exports and reducing imports so as to bring down the number he thinks crystallizes our failure and lack of resolve. Trump is not talking like a mercantilist in service of free trade; he is talking like a free trader in service of mercantilism.” [Reason]

Let’s just operate on the simpler assumption — he doesn’t understand the subject; he doesn’t really have a plan; and, all the “motion” that passes for “action” in this administration’s trade policy is tantamount to economic and monetary plate juggling.  As long as he can make grand announcements about vague promises to eventually do something, and none of the plates fall, he’s all good.  Witness the EU deal:  “In reality, the Europeans gave up little except their prior refusal to negotiate under threat. Juncker’s pledge that the E.U. would import more U.S.-grown soybeans, for instance, formalized something that was likely to happen anyway.” [NewYorker]  Always assume: There is NO Plan.

And, about that Immigration enforcement policy which was supposed to have a plan to reunite children with their parents?   As of June 22, 2018 the Trump Mis-administration had to admit it had NO PLAN to reunite all children with their parents. [NYMag]  Really?  Well, not really completely opaque since the policy was all about punishing people who had the temerity to appeal for asylum in the United States who happened to be people with slightly darker skin than their Caucasian cohorts.   Thus if the policy didn’t meet the needs of the children and their parents, then the children could be conveniently re-categorized as “ineligible”  meaning the mis-administration might side step any accountability for their plight. [MSNBC]

Pick a topic, any topic.  Speak of environmental protections, clean drinking water, the protection of wildlife, or the protection of consumers from banking institution predation.  Speak of plans to provide better housing for married members of the US Armed Forces? Speak of plans to offer better, more efficient educational, medical, or dental services to Veterans?  Speak of plans to insure more cities are not plagued with lead in their water supplies?  Speak of how to provide long term assistance to American ranchers and farmers, and to promote the global trade in the crops and animals they raise for sale? Speak of how to research, study, and restrain the levels of gun violence in this country so that we are a safer place for ourselves and our children?  Speak of how we address matters of election security? To address Russian infiltration and attacks on our political institutions?  Pick a topic. Any topic.  Then rest unassured, this administration HAS NO PLAN.

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Filed under Health Care, health insurance, Immigration, Infrastructure, Politics, trade deficit

The Infrastructure Scam

Leave it to the current mis-administration to get an infrastructure development and renovation program exactly backwards.

The premise: The federal government will chip in 20% (of something) and the states will be responsible for the other 80% of the funding.  And now we can ask — in what Universe do the states have the funding to contract for these projects?   Case in point — for those wishing to download and review the Nevada budget for 2017-2019 (pdf) you will note that there are some infrastructure projects and some funding for deferred maintenance. Now we can ask — where in that budget might a person find “extra” money for the Oval Office Occupant’s Grand Infrastructure scheme?

Public Private Partnerships?  PPP (P3s) is a popular suggestion these days for funding capital improvement projects.  However, there’s a catch for state and local governments.  Let’s go back to basics for the moment,  if Nevada wants to build a new bridge the legislature can fund the project from existing appropriations, or it might fund the bridge by allowing a private source to construct and collect revenue, or it might offer a Triple P form of funding in which state funds are augmented by private money.  Option 1 isn’t in the stars given the current Nevada budget. Option 2 means toll roads and bridges, not necessarily a good idea especially for those offering public transportation or those businesses which rely on employees commuting to work.  Option 3 is often presented as a compromise measure. It has some of the same problems as Option 2.

Problem One:  Private investment tends to drive the priority given to infrastructure projects.  If private expectations for a profitable investment align with priority needs all the better, but there is always the prospect those priorities will not be in alignment.  One classic example of this problem is the 63rd Street area of Chicago, a depopulated area of the central city, devoid of population, and therefore of services, retail areas, and housing.   Affordable housing would be the logical investment to repopulate and thereby rebuild the area, but this is hardly the plan to create the profits demanded by private investment.   Cities like St. Louis, MO demonstrate another issue in this category — what to do with brownfield areas, land/parcels contaminated by previous industrial use and in need of extensive clean up before redevelopment can take place?  It isn’t too hard to imagine that finding funds for a toll bridge or road would be much easier than locating investors for affordable housing and brownfield restoration.

Problem Two:  Private investment, like so many other human activities, too often tends toward our herd mentality. There may be great enthusiasm for certain projects (Roads!) at one point, which fades out into the next enthusiasm (Bridges!) only to fade into yet another popular type of project.  This is an extension of the Problem One alignment issue, and an opportunity for good old fashioned pork-barrel initiatives should a sufficient number of investors be enticed by the latest P3s fad.  P3s are generally associated with new construction, and rarely desirable for renewal or renovation projects even though these latter projects may be of greater urgency.

Problem Three:  The devil is in the details.  The City of Chicago adopted some P3 projects a decade ago, only to discover that it had bargained away long term revenues for short term developments.  Not to put too fine a point to it, the city entered into some projects at the expense of its long term fiscal responsibility.  (Chicago Skyway)  Similar issues arose in North Carolina, and of course in the notorious Indiana Toll Road which filed for bankruptcy in 2015. [AmProsp]

There are some other pitfalls often included in P3 agreements, such as the problems observed in California when the state wanted to expand parts of SR 91 in Orange County, only to discover that the P3 in place for the construction of express lanes forbid the state from “competing” by expanding the roadway to relieve traffic congestion.  Another tale from the Indiana Toll Road comes from the 2008 flooding when the state waived tolls in order to allow people to evacuate, and was then hit with a $447,000 bill from the operators.  Virginia used a P3 to install high occupancy vehicle lanes, but if too many car-poolers use the lanes the state loses money to the private operators.  [Gov]

Problem Four: Fuzzy Math. P3s are nearly always sold as ways to save taxpayers money.  This is not always the case.  First, the funding for a P3 may actually end up costing taxpayers more than if the city or state had gone the old fashioned way and voted to issue municipal or state bonds to secure the financing for the project.   At this point we need to return to that hoary concern for all investors: Risk.

“The decision to use a P3 approach must rest on the partnership’s ability to efficiently transfer project development, revenue, or other risk. Moreover, the estimated monetary value of the transferred risk should exceed the additional financing charges that accompany P3 equity capital. In short, the policy conversation to date has almost exclusively and wrongly promoted P3 deals as a mechanism for raising project capital, when in reality the true advantage of a P3 approach is the ability to transfer risk.” [CAP]

And this note of caution leads to a common conclusion:

Julie Roin, a University of Chicago law professor, also questions whether the “risk transfer” argument carries any weight. Ostensibly, for the private sector to turn a profit, a deal only makes sense if the government overestimates its risk and underestimates the project’s revenue potential. “It’s not as if any investor is going to accept risk without demanding compensation,” Roin says. “You’re just paying for the risk in a different way.”

Thus we end up with the Re-negotiation problem all too commonly associated with P3 projects:

“…then there’s the issue of renegotiation. Private companies have incentives to engage in opportunistic renegotiation. Such renegotiations reverse all of the benefits of ever engaging the private sector in infrastructure provision and financing. Take, for example, the case where a P3 toll-road is built, but traffic is lighter than forecast, so revenue disappoints. The private operator might try to renegotiate higher tolls or even minimum revenue guarantees from a public provider.” [EPI]

Indeed, this has been a problem in too may P3 financed projects to date.  For those wishing to get further into the weeds on the topic of P3 financing, I’d recommend the following sources:

Spending on Infrastructure Investment, CBO March 1, 2017, links to blog posts and other information.   No Free Bridge, EPI March 21, 2017. Public Private Partnerships, CAP, December 8, 2014.  Public Private Partnerships are Popular but are they Practical? Governing, November, 2013.  Public Private Partnerships in Transportation, CRS, November 7, 2017.  Federal Real Property, Limited Role of P3s, GAO (pdf) August 30, 2016.  The Perils of P3s, American Prospect, November 2013.

Problem Five: Location, Location, Location.  The administration is touting its plan for meeting the infrastructure needs of rural America, a topic of interest to those in northern Nevada.  However,  remember the admonishments and cautions listed above.  Rural America isn’t exactly a revenue driver for investment in infrastructure — toll roads can go through it, but collecting tolls on those roads isn’t likely to help those in the transportation industry — see truckers, hay haulers, etc. Other infrastructure projects are practically nowhere on the economies of scale.

Problem Six:  Privatization.  Few suggestions ar.  e more likely to raise the ire of rural Nevadans than the prospect of the privatization of water systems, and yet these would be the kind of investment most attractive to outside private investment.  Investment in rural water systems could “fix” mineral contamination problems, aging pipes and equipment, and related system fixtures — at a price — giving up control of the water rights.  Not exactly a popular proposal in the Silver State outback.

One of the problems with almost all the proposals emanating from the current Oval Office Occupant is that the details are not adequately.  The money will come from “partnerships” without specifying who and what is to be partnered, and will be driven by state and local resources — good luck finding state and local governments which can afford the initial capital investment.   Unfortunately, I’m guessing this will be the last post on the subject of infrastructure for quite some time as the administration hauls out its glitzy proposals without offering the substance necessary for thorough analysis.  And then Infrastructure Week fades into the mists of distance memory.

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Filed under Economy, Infrastructure, Politics

The Amazing Invisible Infrastructure Plan

On December 7, 2017  the White House said it was going to release its infrastructure plan in January 2018.   As usual from this administration it’s vague:

“The president aims to release a detailed document of principles, rather than a drafted bill, for upgrading roads, bridges, airports and other public works before the Jan. 30 State of the Union address, said the administration official, who spoke on condition of anonymity because the details aren’t public. Naysayers should wait until they see the details and how the legislative process unfolds, the official said.”

And, there’s a kicker:

The guiding principle of the plan is to shift responsibility for funding from the federal government to states and localities — which own or control most assets — by providing incentives for them to generate their own sustainable funding sources and work with the private sector.

Now, how do we translate “generate their own sustainable funding sources?”   The easiest way is to say “privatization.”   As in work with private corporations for the construction of toll roads, toll bridges, increased airport fees, and other forms of “sustainable funding sources?”

This notion is buttressed by the President’s budget.   In the aftermath of the Washington Train Wreck the President was probably ill-advised to tout his infrastructure “plan,”

“For that matter, if Trump wants to talk about his interest in this issue, perhaps we can start with his White House budget plan, which called for slashing federal aid to U.S. rail systems, including a dramatic cut in grants for Amtrak routes.

“As for the president calling on policymakers to “quickly” approve the White House infrastructure plan, now seems like a good time to point out that it does not currently exist.  In early April, Trump boasted, “[W]e’re going to have a very big infrastructure plan. And bill. And it’s going to come soon. And I think we’ll have support from Democrats and Republicans.” That was eight months ago. There’s still no plan.”

So, this week we have a middle class tax cut that doesn’t help the middle class nearly as much as it assists corporations and wealthy Americans.   And, now we have an infrastructure “plan” which doesn’t fund infrastructure.  Oh well, what we seem to have is an administration remarkably unwilling to govern and a Congress equally uninterested in representing their constituents.

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Filed under Infrastructure, Politics

Infrastructure Funding and Financing: Another Trumpian Disaster in the Making

Let’s start with the ASCE’s report card on Nevada’s infrastructure.  The last report card on our kitchen table gives us an overall average C-.  Nevada’s two lowest grades (both D’s) are in categories for schools and dams. The claims from the current White House administration would imply that Nevada will see marvelous levels of investment in Job Creating Infrastructure Projects.  Not. So. Fast.

There are some questions related to projected infrastructure legislation which Nevada elected officials may want to consider very carefully.

#1. Does the infrastructure legislation address Nevada’s greatest needs?  The answer at present is “maybe not.” The commentary coming from the White House, and from members of Congress imply that most of the infrastructure plans are part of the Transportation budget.  [Hill] Again, roads and bridges are important, so are airports, but the greatest needs in this state are for projects and funding for upgrading schools and dams.

This past February a dam failed in Elko county, flooding farmland, homes, and stopping traffic on the Union Pacific RR. Obviously dams must eventually get their due. First, we should notice that the state of Nevada doesn’t keep a ranking of hazardous dams, most of which fall into the “earthen” category.  Secondly, it should be noted that a high hazard dam refers to the damage possible should the dam fail, not to the actual condition of the dams themselves.  Third, many dams in this state are privately owned.  About one third of our 650+ dams are constructed for flood control, another third for mining operations, and the remaining third fall into the amorphous category “anything else.” The state has been relying on 11 engineers to keep track of the 650+ dams, and Governor Sandoval’s budget proposal calls for three additional engineers in the Water Division for the next fiscal term. [LVRJ]

School facility upgrades and construction generally lie outside the common understanding of ‘infrastructure’ expenditures, being the province of local school districts, and based on the shifting sands of bond issues. Nothing signaled by the administration thus far would suggest expansion of federal interest in this category of infrastructure investment.

#2.  Will the legislation address Nevada’s needs for the construction and maintenance of roads and highways?  Maybe not.   The situation at present:

“The Nevada Department of Transportation maintains 5,300 miles of state highways, which includes many rural roadways within Nevada. Without an increase in the gas tax since 1992, the state funding levels have stagnated and Federal funding has remained at a similar level the past 5 years. Hence, the maintenance of the existing highway system has fallen behind and the state will need approximately $285 million annually for the next decade to catch up on the current backlog of highway maintenance. The current funding levels provide only 60% to 70% of the required funding to maintain the state highways. This has resulted in an increase in the number of lane miles requiring either an overlay or full rehabilitation from 28% two years ago to 38% currently.” [ASCE]

New construction is great, no one should argue against it where it’s needed to improve the flow and traffic and attendant commerce, however, when nearly 40% of the current roadways need overlays or full rehabilitation, the problem is focused on maintaining what we have at present not necessarily on new construction projects.

#3. Does the administration’s plan differentiate between financing and funding?  This is important.  A definition is in order:

“Infrastructure funding and financing are different concerns. Funding specifies how resources will be collected to pay for infrastructure construction, operations and maintenance, and repairs. Financing generally concerns how to raise the large upfront costs needed to build the infrastructure.” [EPI]

So, the administration has spoken of “a trillion dollars in infrastructure investment,” what does this mean?  For the administration is apparently means “leveraging private dollars.” Again, some translation is necessary.  What the administration is talking about is the financing of construction projects. And, we’re back to the difference between funding and financing — if states are facing the same questions posed back in 2015, when Republicans proposed that HTF projects be limited to the revenue accumulated from gasoline and diesel taxation, then many projects, especially of the improvement and maintenance variety will be put on hold. [BondBuyer] Infrastructure funding will be a function of how the administration budget addresses the issue of raising the money necessary to construct, operate, and maintain.  However, if the administration is speaking of “leveraging private funds,” then we should assume that the White House is referring to new construction.  And, now we enter the land of the P3.

A P3 is: “Public-private partnerships (P3s) are contractual agreements formed between a public agency and a private sector entity that allow for greater private sector participation in the delivery and financing of transportation projects.” [DOT]

Let’s put this question of infrastructure investment in purely financial terms:  Who benefits from P3 structuring?  Hint: It isn’t necessarily the state and local governments because bond yields for such things as school construction, road construction, and other large projects have been dropping since their “highs” around 1982 (13+%) to the current rates (3.5+%). [MuniBond]

Bluntly stated, it’s not the financing that’s a problem for state and local governments, they’re paying almost historic low yields (interest) on the bonds they’ve issued for major projects.  The administration is approaching the infrastructure investment issue from the wrong end of the stick — focusing on the financing and not the funding.

#4. Is the use of the P3 structure based on the needs and capacities of the states and municipalities or the desires of private investment?  Some attention is required because:

“In theory, they can(P3)  be effective—but they provide no free lunches. Funding must still be found for the projects—and ordinary households will end up paying the costs through taxes or user fees. In addition, the details of contract construction and oversight are daunting and require a competent, democratically accountable government to manage them. In short, P3s do not allow for simple outsourcing because they do not bypass the need to fund infrastructure or the need for competent public management.” [EPI]

Or, P3s don’t replace the more traditional methods of financing — local and state taxation is still required for paying project costs. There’s nothing ‘simple’ about these arrangements, and they require extensive oversight and management.  Before leaping into a P3 it should be revealed that these generally allow governments and investors to ignore the requirement of Davis-Bacon Act ‘prevailing wages.’ This may ‘create jobs’ but it doesn’t create ‘good paying jobs’ in the construction sector.

#5. Does the administration plan specify financing and funding of infrastructure projects or is it simply a “tax credit” giveaway to investors?  It certainly sounds like it at this point, but the administration, as is becoming more obvious every day, seems to be short on specifics, and the only solid at the moment is the “tax credit” portion of the pronouncements.  If this is a tax credit for projects already in the planning stage, then it’s hard to characterize this as a bright and shiny new proposal.

#6. Location, Location, Location?  Granted that Nevada is an urban state, with most of the population located in two counties, but the roads, bridges, and dams are aligned through predominantly rural areas. Investors, in P3 or other financing schemes, can clearly see the benefits of construction in urban areas (toll roads, toll bridges, etc.) Rural areas, not so much. Nor does the financing strategy address other infrastructure issues in urban areas — how, for example, does Clark County improve its public transportation facilities and components? Washoe County? Or, Douglas, Lyon counties, and Carson City?  How will investment be directed to poorer areas, or areas under served by current transportation systems? Stated more generally:

“The other problem is that Trump’s approach makes it less likely he’ll actually create new jobs. If the customer base can afford it, and they really need the infrastructure, then the project is almost certainly already profitable and private firms are already willing to do it. The tax credit just sweetens the deal on the margins. Where there’s demand, the private market can already create jobs. The less you’re willing to redistribute, the fewer new jobs you can create.” [TheWeek]

This is another point at which the magic hand of the Market fails on one side and succeeds on the other — where there is demand (and the capacity to meet that demand, the tax credits are minimally useful (except to investors) — where there is great need but little capacity to meet the demand, then the tax credits aren’t an inducement to job creation.

We need to take some care to observe whether the “infrastructure” plan is (1) truly about infrastructure needs in Nevada? (2) truly a job creating plan and not merely a way to get tax credit benefits to the investor class, or ignore the Davis Bacon Act requirements for American workers, (3) about getting the infrastructure investments where it is actually needed.

Caveat Emptor.

 

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Filed under Economy, Federal budget, Infrastructure, Nevada highways, Nevada politics, Politics, public transportation

The Republican Money Pits

money whirlpool So, how many ways can the House GOP find to waste taxpayer money? Let’s start with the House Oversight Committee which wasn’t pleased with the FBI’s conclusions on their manufactured outrage narrative concerning Secretary Clinton’s emails – now they want to haul the FBI director in for a grilling. [TPM]  However, this is only the latest.

Meanwhile, it’s estimated by the Department of Agriculture that 15.3 million children in the United States under the age of 18 live in homes where they don’t have consist access to enough nutritious food to sustain a health life. [FA.org]

It was reported yesterday that House leadership was meeting to discuss whether to launch a formal investigation into the sit-in staged by House Democrats over the failure of the leadership to bring a gun safety bill to the House floor. [TPM]

Meanwhile,  every day 7 children in the United States die in gun violence, and another 41 survive being shot in assaults (31), suicide attempts (1), and accidental shootings (8). [BC.org]

Representative Marsha Blackburn (R-TN) continues to pump for more investigations into … Planned Parenthood. Who would have guessed? Not that the committee hasn’t soaked up some 80% of the supplemental funds for the House Administration Committee, that would be $790,000.  [Esq]

Meanwhile,  the CDC reports that between 2011-2014 the prevalence of children with obesity aged 2-5 yrs. was 8.9%, 17.5% among children between the ages of 6 and 11; and, 20.5% among adolescents aged 12 to 19. [CDC pdf]

The House Republicans racked up approximately $7,000,000 in expenses for its interminable Benghazi hearings.  [BBN]  The State Department spent about $14,000,000 trying to process and present information requested by the Committee, the Pentagon reported about $2 million in expenses associated with the “investigations.”

Meanwhile,  when the FAST Act expires at the end of FY 2020, the Congressional Budget Office projects the average annual shortfall to the federal Highway Trust Fund will grow to $16 billion, [TRIP scrib] and we have a backlog of pavement projects of about $59 billion, and another $30 billion needed to improve and maintain bridges.  This isn’t even county the $100 billion we need for highway system expansion and enhancement. [TRIP scrib]

Is it not reasonable to conclude that the House GOP is far more interested in political scandal mongering than it is in … investigating why 15.3 million children aren’t getting enough nutritious food to eat? Or, why 20% of our teenagers are suffering the health effects of obesity? Or, why we’re losing 7 children every day to gun violence?  Or, why we’re only spending 61% of what we should be allocating to the repair and maintenance of our national highway system?

Is there to be no investigation into why there isn’t adequate affordable housing in one single county in the entire United States? [Fortune]  Why aren’t members of the Congressional leadership interested in hearing why the gender pay gap is the widest for blue collar women? [Detroit News]

Instead, the House GOP seems entangled in the past, engaged in corybantic fits of furor over all but imaginary “threats” while veritably ignoring the very real economic, health, educational, infrastructure, and commercial interests of this country.  A person can reside in the past only so long as the future doesn’t catch up.

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Filed under Gun Issues, Health Care, Infrastructure, Republicans, youth

Local Water, the EPA: Beyond Goodsprings

Water Faucet EPA

The Reno Gazette Journal reports that there are 23 local water systems in Nevada which are not in compliance with drinking water standards (there are currently 22, but more on that later).  Three local systems listed in the article have lead contamination levels exceeding the lead standard, 15 ppb (parts per billion) as the “action level.”  The public needs this information. However, the agency responsible for establishing the maximum contaminant level (MCL) standards is the whipping boy of choice for the Republican Party.  In short – it really doesn’t do to get up in arms about water or air pollution levels and then call for the abolition of the Environmental Protection Agency.

The regulatory system isn’t all that complicated. The EPA establishes the standards and then it’s up to the states to devise the implementation.  There’s a reason for this. Setting national standards means that states can’t compete in a ‘race to the bottom’ in which some states seek to attract industry by lowering standards until they are in competition to achieve the status of “Worse Than Any Pig Would Ever Consider in a Sty.”  And, potentially damaging everyone else’s air and water in the process.  However, this hasn’t stopped Over-Hyped Demagogue Donald Trump from calling for handing over environmental regulation to the individual states.  [WaPo]

Nor has this made much of an impression on Seven Mountain Dominionist Ted Cruz; “Cruz has called the EPA a “radical” agency that has imposed “illegal” limits on greenhouse gases from power plants. “I think states should press back using every tool they have available,” the Texas senator has said. “We’ve got to rein in a lawless executive that is abusing its power.” [WaPo]

Ohio Governor John Kasich has been critical of the Michigan attempts to address its man-made, GOP inspired, water quality issues in Flint, MI, but hasn’t been on top of the situation with the Sebring, OH water contamination. [TP]

The 2008 Republican national platform was exceptionally mealy-mouthed about environmental protection:

“Our national progress toward cleaner air and water has been a major accomplishment of the American people. By balancing environmental goals with economic growth and job creation, our diverse economy has made possible the investment needed to safeguard natural resources, protect endangered species, and create healthier living conditions. State and local initiatives to clean up contaminated sites — brownfields — have exceeded efforts directed by Washington. That progress can continue if grounded in sound science, long-term planning, and a multiuse approach to resources.”

It’s not likely that much more will come from a 2016 version.   Nor should we expect much in the way of support for addressing the national problems associated with our drinking water systems.  Remember the ASCE’s Report Card on American Infrastructure (2013)?

“At dawn of the 21st century, much of our drinking water infrastructure is nearing the end of its useful life. There are an estimated 240,000 water main breaks per year in the United States. Assuming every pipe would need to be replaced, the cost over the coming decades could reach more than $1 trillion, according to the American Water Works Association (AWWA). The quality of drinking water in the United States remains universally high, however. Even though pipes and mains are frequently more than 100 years old and in need of replacement, outbreaks of disease attributable to drinking water are rare.”

Not to put too fine a point to it, but as a nation we’re running on a Run-to-Ruin system in which local water distributors are functioning with outdated infrastructure while trying to maintain acceptable levels of quality.  Goodsprings Elementary School offers us an example of what can happen given a 1913 building and 21st century water quality standards. [RGJ]  If Goodsprings was an isolated example, then we could address the aging pipes and move on, but it’s not that isolated, nor that uncommon.  Current EPA estimates indicate we are having to replace between 4,000 and 5,000 miles of drinking water mains in this country on an annual basis, and that the annual replacement rate will peak sometime around 2035 with 16,000 and 20,000 miles of aging pipe needing to be replaced each year. [ASCE]

Putting The Public Back In Public Utility

I am going to start with some basic assumptions. First, that a family or person should be able to move to any part of this great land and expect to find clean water running from the faucet.  Secondly, that it is not a good idea to allow individual states to set drinking water standards, since some might find it inconvenient or inexpedient to set scientifically reliable standards in the interest of “development” or “industrialization.”  Such a piece meal approach would put paid to the first basic assumption.   So, if we’re agreed that any person in this country should have a reasonable expectation of clean drinking water then we need national standards.

Some of the standards are easier than others.  Arsenic contamination levels offer an example of a complex problem with some nuanced related issues.  The MCL (maximum contaminant level) for arsenic was lowered in 2001 from 50 ppb to 10 ppb. Public water systems were to be in compliance by January 23, 2006. [EPA] [More information at FAS pdf] The Reno Gazette Journal reports ten Nevada water systems not in compliance.  One, the McDermitt GID has recently been declared in compliance with a current projected annual running average below 10 ppb after the system put in a new central well.

Arsenic enters the drinking water systems one of two ways, either through industrial activity or as a naturally occurring contaminant.  If the system is west of the Rocky Mountains it’s a reasonably good bet that the arsenic is naturally occurring.  It’s probably not too far off the mark to say that if the standard were set at 15 ppb most Nevada water systems would be in compliance, but the standard is 10 and that’s ultimately what matters.

The smaller public water systems have more trouble meeting the standards than the larger ones, as described by the BSDW:  “The smaller systems are the ones that tend to struggle with regaining compliance because they typically have limited financial resources so we have to collectively figure out ways to help that community get back to compliance,” said Jennifer Carr, NDEP deputy administrator. “Larger systems such as TMWA also have more personnel to tackle projects whereas some of our smaller water systems are operated by one person who might be doing another side job.” [RGJ]

And, now we’re down to the gritty part: Where does the money come from to resolve contaminant problems with arsenic? Or, for that matter, other water infrastructure issues?    The State Revolving Fund provides low interest loans for water infrastructure projects in the state; and can in some circumstances offer “forgiven” loans to small public water services.  The “bottom line” is that in 2016 there will be a need for approximately $279 million for arsenic treatment, groundwater treatment, storage tank replacements, metering systems, and distribution lines in Nevada.  And, the worse news, “Not all will be funded.” [KTVN]

The Drinking Water State Revolving Fund was created in 1996 to support water systems and state safe water programs.  “The 51 DWSRF programs function like infrastructure banks by providing low interest loans to eligible recipients for drinking water infrastructure projects. As money is paid back into the state’s revolving loan fund, the state makes new loans to other recipients. These recycled repayments of loan principal and interest earnings allow the state’s DWSRF to “revolve” over time.”  [EPA]   As of 2014 this system had provided $27.9 billion to water suppliers to improve drinking water treatment, improve sources of drinking water, providing safe storage tanks, fixing leaking or aging distribution pipe, and other projects to protect public health. [EPA] The EPA estimates that small public water systems nationwide, those serving populations less than 3,330,  will need approximately $64.5 billion for infrastructure needs. [EPA 5th report pdf]

What was the Republican controlled Congress’s response? They may have avoided a shutdown, but the waters weren’t exactly flowing:

The bill provides $863.2 million for the DWSRF  well below President Obama’s request of $1.186 billion and more than $40 million below the programs FY2015 appropriation.While the figure represents the lowest DWSRF appropriation in several years, it is significantly above the FY16 funding levels originally proposed by the House and Senate Appropriations Committees, each of which would have cut DWSRF funding to below $780 million. [UIM]

What have we learned?

  • The Republican candidates for the presidency show little to no enthusiasm for infrastructure investments in general, and beyond bemoaning the state of Flint’s water system which must be someone’s fault “just not ours,” even less enthusiasm for funding local drinking water improvement projects.
  • The Republicans in Congress were only too happy to cut funding for the best source for local public water companies projects, in the name of “fiscal responsibility” – meaning, one could think, that preserving tax cuts for the rich is preferable to providing clean drinking water to everyone.
  • The infrastructure needs in this country are serious and go well beyond fixing bridges and filling pot-holes.  This, and we’ve not yet reached the peak of distribution line replacement needs coming up in the next 20 years.
  • “Austerity” is a lovely buzz word, and “We’d love to do it but we just can’t afford to” is a fine campaign trail stump speech phrase, but these won’t keep the water coming from the tap clean and safe.  We need to stop thinking of our infrastructure as an expense and begin to consider it for what it is – an investment; an investment in the capacity of our cities and towns to provide basic services so that economic activity can take place.
  • And, NO it isn’t a good idea to abolish the EPA.

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Filed under Appropriations, Congress, conservatism, Economy, EPA, Infrastructure, nevada health, Politics, public health, Water

From Deep in the Dark Heart of Texas: GOP Scheme to Cut Social Security Foiled

Deep in the Dark Heart of Texas Representative Sam Johnson (R-TX3) had a great idea to find some offset money for the government to use for highway construction – or as the Congressman was pleased to say “fight crime and save taxpayer dollars.” [Johnson]  The idea is to cut Social Security benefits from those who have outstanding warrants for felonies, and superficially this might sound like a good idea. It isn’t a good idea and it was quashed when Senate Democrats put a spotlight on the notion and threatened to pull support from the Federal highway bill. [HuffPo]

Now why would someone go and crunch this crime fighting taxpayer dollar saving idea?

#1. It’s not like we’re paying benefits to Jack the Ripper: “Large numbers of those who will lose benefits had warrants routinely issued when they were unable to pay a fine or court fee or probation supervision fee. Eliminating what may be their only source of income does not help resolve these issues.”

And: “Many people never know that a warrant has been issued for them as warrants are often not served on the individual.”

And: “These warrants are often not easily resolved since many of those who lose benefits live far from the issuing jurisdiction.”  [JIA]

The aforementioned problems mean that the stage is set for the withdrawal of benefits from some elderly or disabled person who was in poverty in the first place (witness the unpaid fees or fines), who may not even know there is an outstanding warrant, and may not be able to resolve the warrant because it could have been issued years ago and miles away.

#2. The Social Security Administration’s gotten itself in trouble with the complexities of this situations before.  See: Martinez v. Astrue and Clark v. Astrue. [Proskauer]

The order is the culmination of more than five years of litigation in Clark v. Astrue – Docket No. 06-15521 (S.D.N.Y.) – a case brought against the U.S. Social Security Administration (SSA) challenging its practice of relying exclusively on outstanding probation and parole warrants as sufficient evidence that individuals are in fact violating a condition of probation or parole as a basis for denying them benefits. Rather than check the facts of a case, SSA merely matched warrant databases against its records. When it found a probation or parole warrant in the name of someone who was receiving benefits, SSA checked with law enforcement and, if the law enforcement agency was not actively pursuing the individual, SSA would cut off that individual’s benefits.

In March 2010, the U.S. Court of Appeals for the Second Circuit ruled that the agency’s practice of relying solely on outstanding probation or parole violation arrest warrants to suspend or deny benefits conflicted with the plain meaning of the Social Security Act. Under Judge Stein’s order, the SSA is enjoined from denying or suspending benefits in this manner and must reinstate all previously suspended benefits retroactive to the date the benefits were suspended. The SSA has until June 12, 2012, to submit a plan setting forth its anticipated time frames for implementing the terms of the order. […]

“The unlawful policy caused widespread suffering while it was in effect. Elaine Clark, one of the lead plaintiffs, had her benefits stopped in the beginning of 2006 because of a warrant from Santa Clara County, CA, where she had been sentenced to probation and ordered to pay restitution as a result of an embezzlement charge. During that time, she was diagnosed with end-stage renal disease on top of other ailments and was no longer able to work. Unable to get a kidney transplant in California, she returned to her hometown of Buffalo, NY, when she learned the waiting time there would be far less. Although she obtained the transplant, she was still in need of extensive medical care and unable to work. Her modest Social Security benefit was barely enough to pay the rent at the long-term care facility and not sufficient to pay the required restitution. Ms. Clark died in 2008 at the age of 65. All the while, law enforcement officials in California knew where she was and knew of her condition, and had no interest in pursuing her.” (emphasis added)

Information from the Social Security Administration concerning the cases and the settlement is as follows:

“If your Social Security, Supplemental Security Income (SSI), or Special Veterans Benefits (SVB) were suspended due to a felony arrest warrant, the Martinez settlement might offer you relief and reinstatement. On September 24, 2009, the United States District Court in the Northern District of California approved a nationwide class action settlement agreement in the case of Martinez v. Astrue. The Martinez settlement changes the types of felony arrest warrants that we will use to prohibit payment of Social Security, SSI, and Special Veterans benefits. This settlement does not apply to persons whose benefits we denied or stopped because of an arrest warrant due to a parole or probation violation.”

Thus, the SSA is already doing what the CUFF bill specified (proscribing benefits from those with parole and probation violations) and the remainder who would be affected are those individuals who are in that nebulous category of non-payment of fines and fees category.

#3. The amendment implies that Social Security benefits are paid from “taxpayers,” and in a sense they are, those benefits are paid by working people who paid for those benefits in payroll taxes, including those who have those outstanding warrants for non-payment of fines and fees.  Further, the amendment is a vehicle for moving payroll tax dollars out of Social Security and into general appropriations – and here I thought all along that the Republicans were all for “saving” Social Security?   The point was emphasized by an organization formed to protect the Social Security program:

“The National Committee to Preserve Social Security & Medicare hailed the decision to drop the provision. “Dropping the Social Security cuts from the Highway bill is the first encouraging sign we’ve seen from this Congress, when it comes to Social Security & Medicare, this year,” coalition spokeswoman Kim Wright said in an email. “We certainly hope they’ve finally realized using these programs as an ATM for everything else under the sun simple won’t fly with seniors who’ve paid into these programs their entire working lives.” [HuffPo]

It was a bad idea, but it’s not one which may stay out of sight and mind.  The CUFFS bill is part of the old “law and order” stable of increasingly outmoded nags hauled out for a periodic run by Republican jockeys.   It bears watching.

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Filed under Infrastructure, Social Security, Taxation