Infrastructure, trade take center stage at Democratic presidential debate

Candidates Hilary Clinton and Bernie Sanders agreed on the importance of infrastructure investment, but clashed over trade policy during Sunday night’s Democratic Primary debate.    Trade policy and infrastructure took center stage in last night’s Democratic presidential debate against the backdrop of a water crisis and economic blight in Flint, Mich.
   Former Secretary of State Hillary Clinton and Sen. Bernie Sanders agreed that Flint’s aging water system is a key reason the city’s drinking water is contaminated by lead and that replacing the pipes should be a top priority for state officials.
   In an effort to save money, the state of Michigan switched Flint’s water source from Detroit to a cheaper alternative, the Flint River. But the Flint River has a different alkalinity and acidity, which caused corrosion inside the city’s pipes. Most water systems have a film on the inside of pipes that protects or inhibits the majority of contaminants that could leach from the pipes into the water, but the corrosion removed that film and caused lead to leach into the water.
   Flint isn’t the only city with water infrastructure problems. Many cities have water systems with pipes that were installed more than 100 years ago. The median age of a water main in the District of Columbia, for example, is 79 years.
   And the Flint situation could be a catalyst for investment in infrastructure writ large if public outrage over a neglected government service leads to recognition that other foundations of society and the economy are in jeopardy of failing too.
   Early in the debate, Sanders drew the connection between infrastructure, health, safety, jobs and economic inequality.
   “Among many other things, we need to rebuild our crumbling infrastructure, our water systems, our waste water plants, our roads and our bridges. The wealthiest country in the history of the world has got to get its priorities right, take care of the people. No more tax breaks for billionaires,” the Vermont senator said.
   Sanders has proposed a $1 trillion plan over 10 years to invest in infrastructure that would be paid for by closing tax loopholes that allow companies to keep subsidiaries in tax havens such as the Cayman Islands and Bermuda, and defer paying tax on foreign earnings until that money is repatriated, greatly limiting their federal tax liability.
   Clinton, for her part, said she wanted to go further than the FAST Act – the $305 billion, five-year surface transportation bill enacted in December – noting the country has “an enormous backlog of infrastructure repairs” and that the highway bill could have been passed sooner without partisan divides.
   “I want to put $250 billion on top of what Congress has done. That gets us to half a billion dollars,” she said. “I want to start a National Infrastructure Bank. I want to capitalize it with $25 billion that I believe will leverage 10 times that. That’s another $250 billion.
   “So I’m trying to do this in a way that will gain support and be affordable, but there’s no doubt, we have to do more on our roads, our bridges, our tunnels, our ports, our airports. And as we’ve talked in the beginning here, under our ground, our water systems, our sewer systems we have pipelines that are leaking and that are dangerous,” she added. “We have so much work to be done and we can put millions of peoples to work.”
   Sanders argued the poor state of Michigan’s economy can be tied to trade deals that resulted in the export of many manufacturing jobs, which undercut the tax base and led to the decline of schools and other social services. He reiterated his opposition to the Trans-Pacific Partnership free trade agreement now before Congress while accusing Clinton of supporting the North American Free Trade Agreement and other policies aimed at liberalizing trade without providing adequate protections for American workers.
   “Secretary Clinton supported virtually every one of the disastrous trade agreements written by corporate America. NAFTA, supported by the Secretary cost, us 800,000 jobs nationwide, tens of thousands of jobs in the Midwest. Permanent normal trade relations with China cost us millions of jobs,” he said. 
   “I was on a picket line in early 1990’s against NFATA because you didn’t need a PhD in economics to understand that American workers should not be forced to compete against people in Mexico making 25 cents an hour. And the reason that I was one of the first, not one of the last, to be in opposition to the TPP is that American workers should not be forced to compete against people in Vietnam today making a minimum wage of $0.65 an hour.
   “Look, what we have got to do is tell corporate America that they cannot continue to shut down,” Sanders said. “We’ve lost 60,000 factories since 2001. They’re going to start having to, if I’m president, invest in this country — not in China, not in Mexico.”
   The incentive to outsource production has allowed companies that produce domestically to reduce wages for American workers, Sanders added.
   “Those trade policies, as much as any other set of policies, has resulted in the shrinking of the American middle class. And, I’ll tell you what else it did. It’s not only job loss by the millions, it is the race to the bottom so that new jobs in manufacturing, in some cases today, pay 50 percent less than they did 20 years ago. How stupid is that trade policy?” he asked.
   Clinton waited until the fall, as Sanders’ outsider candidacy and progressive message gained momentum, to announce her opposition to the TPP. She claimed she wanted to see the final agreement before taking a position.
   The former senator from New York tried to turn the tables by charging Sanders for not supporting President Obama’s 2009 bailout of the auto industry or the Export-Import Bank.
   The auto bailout saved millions of jobs – many in Michigan — and was repaid with interest. Sanders voted against the bailout because it was part of a larger bill that include federal help for Wall Street institutions in the wake of the financial crisis. 
   The Export-Import Bank’s charter lapsed last year because of opposition by conservative congressional hardliners who argued that it isn’t the government’s job to put taxpayer money at risk to support the overseas sales of companies, many of which are multinational corporations. The Ex-Im Bank makes loans and loan guarantees to overseas companies to help them buy goods from U.S. producers and sells export credit insurance to U.S. companies in case a customer doesn’t pay its bills. A majority of the credit financing goes to large companies, but most of the companies that receive assistance are small and medium enterprises.
   The agency was allowed to issue new credit in December after Congress reauthorized its operations as part of the FAST Act.
   Sanders opposed funding for the Ex-Im Bank, saying it is an example of corporate welfare for titans such as Boeing. But the United States needs to keep pace with major competitors that provide export credit assistance, argued Clinton.
   “I think we’re in a race for exports,” she said. “When I traveled around the world as Secretary of State and went to 112 countries, one thing I saw everywhere was how European and Asian countries were supporting their companies back in their countries, to be able to make sales and contracts in a lot of the rest of the world. In fact, without the Export-Import Bank supporting businesses of all sizes, I believe more jobs would be lost here at home and more jobs literally would be exported. Instead of exporting products, we would be exporting jobs.
   “I know, if we are going to compete and win in the global economy, we can’t let every other country support their companies and we take a hands-off approach.”
   Boeing rightly gets a lot of money from the Ex-Im Bank because it needs an even playing field to compete with Airbus, which gets substantial assistance from the European Union to make sales around the world, said Clinton.
   Speaking more broadly about her manufacturing policy, Clinton said she would create incentives for companies to invest in domestic plants, but will also work to “claw back” tax benefits from companies that promised to keep production at home and subsequently shifted operations to another country.
   “I am also going to go after companies like Johnson Controls in Wisconsin. They came and got part of the bailout because they were an auto parts supplier and now they want to move headquarters to Europe. They are going to have to pay an exit fee. We are going to stop this kind of job exporting and we are going to start importing and growing jobs again in our country,” Clinton said.