clock menu more-arrow no yes

Filed under:

Trump’s infrastructure plan: A deal doomed from the start?

New, 1 comment

As the White House preps plan for January release, observers find issues with outlines of deal

Shutterstock

Fresh off his administration’s first major legislative accomplishment, a massive tax reform package, President Trump has reportedly turned his eye to infrastructure. The White House plans to introduce a plan in January to repair and renovate the country’s aging and ailing roads, airports, bridges, and transitoads, according to multiple sources.

But many political writers and politicians already feel this is a deal that Trump can’t deliver. And, considering the winding path this big infrastructure bill has taken so far, with numerous iterations and proposals, it’s not clear anybody has figured out a funding formula or vision to deliver what the country truly needs.

Trump made infrastructure a central part of his pledge on the stump. His past as a famous developer gave credibility to boasts that he would restore the crumbling infrastructure of a country that was “falling apart.

“The only one to fix the infrastructure of our country is me - roads, airports, bridges," he once tweeted. "I know how to build, pols only know how to talk!"

His diagnosis wasn’t wrong. In 2015, government infrastructure spending at all levels hit a 30-year low. But since becoming president, his strategy to attack the problem, and the policy proposals he’s made regarding transportation, infrastructure, and spending, have at times seemed like the opposite of what the situation requires.

On the campaign trail, Trump supported a Republican platform that called for shifting the way the Highway Trust Fund supports anything other than roadbuilding; the significant portion of the fund that’s used to support mass transit, bike-share programs, sidewalks, recreational trails, landscaping, and historical renovations was to be channeled back into building roads, leaving local governments to foot the bill for everything else.

The White House’s draft budget for 2018 would have cut the Department of Transportation’s discretionary budget by $2.4 billion and reduced the government’s regular infusions to the dying Highway Trust Fund by $95 billion by 2027. That included slashing the TIGER and New Starts programs which have become vital for funding new transportations projects, such as light rail lines. As NACTO, the National Association of City Transportation Officials, noted in a statement at the time, it would have been a “disaster for cities and their transportation systems.”

Construction Workers Shutterstock

Trump’s current plan, based on proposals and statements from administration officials, such as DJ Gribbin, an infrastructure policy advisor to the President, has been described as an “incentive program.” The federal government would provide $200 billion for infrastructure investment, aiming to attract $800 million in matching funds from state, local, and private sources.

“If you as a state or local elected official are willing to create a new revenue stream for infrastructure, we as the federal government want to partner with you in doing that,’” Gribbin said.

Adie Tomer, a fellow at the Brookings Institution’s Metropolitan Policy Program who has seen draft details of the plan, likens it to existing discretionary grant programs such as New Starts and TIGER, which provide state and local governments with funding to help finish large projects. Additional regulatory and permitting reform would help accelerate any new projects. It’s a significant rollback of initial proposals that would have invested $1 trillion in federal dollars.

That all sounds good—a federal boost, encouraging private investment, to help state and local projects break ground. And, Gribbin added, the program would use block grants to fund rural projects, which tend to offer private investors fewer financial incentives, making them harder to fund.

But there’s a catch. According to the plan’s outline, state and local governments would need to create new revenue streams to attract federal funding. Spurring reform of transportation funding wouldn’t be bad. But many state and local officials feel that, with potential funding losses due to the tax reform package, specifically the SALT deduction change, it’ll be harder to create additional revenue sources for transportation projects when the focus will be on balancing existing budgets. Almost half of states have a budget shortfall.

The contours of the plan suggest a potential rich-getting-richer scenario, where only those who can afford to raise the money can partake, as opposed to those areas that need it (the rural block grants would be a notable exception).

This has led New York Magazine’s Eric Levitz to basically call the plan DOA: he sees no possible future where Democrats agree to cutting regulations and redirecting $200 billion from social programs to create a mechanism where states and cities still fund the bulk of these projects themselves. With state and local governments smarting from the budget hits that came from tax reform, he sees it unlikely they’ll be able to fully participate as partners in the White House’s infrastructure funding proposal.

“If this is the president’s infrastructure plan,” Levitz writes, “then he has no viable infrastructure plan.”

He isn’t the only one who feels the best chance to pass infrastructure reform may have passed. Bud Wright, executive director of the American Association of State Highway and Transportation Officials, said as much in a letter last month to Senate leaders.

“We need to be honest with the American people,” he wrote. “Failure to find the revenue for an infrastructure initiative now, as part of tax reform, will make passage of such a package nearly impossible in the future.”