Trump’s big infrastructure plan has a lot of detail on everything but how to pay for it


February 12, 2018

February 12, 2018

President Trump listens during a meeting with law enforcement officials at the White House last week. – Jabin Botsford/Washington, D.C.

WASHINGTON, D.C. – President Trump is poised to unveil a long-awaited plan Monday that aims to stimulate $1.5 trillion in new spending on the country’s ailing infrastructure over the coming decade, but many lawmakers in both parties say the president isn’t providing a viable way to pay for his initiative.

A year in the making, the proposal is an attempt to fulfill a marquee campaign promise and would rely heavily on states, localities and the private sector to cover the costs of new roads, bridges, waterways and other public works projects.

The plan calls for investing $200 billion in federal money over the coming decade to entice other levels of government and the private sector to raise their spending on infrastructure by more than $1 trillion to hit the administration’s goal of $1.5 trillion in new funding over 10 years. It also seeks to dramatically reduce the time required to obtain environmental permits for such projects.

White House aides say Trump is open to a new source of funding to cover the federal share — such as raising the federal gas tax for the first time since 1993 — but Congress will have to make such decisions.

For now, the White House is suggesting that lawmakers cut money from elsewhere in the budget, including some existing infrastructure programs. That prospect seems unlikely given that Congress just last week reached a bipartisan deal to spend significantly more funds over the coming two years.

“I think it’s just dead on arrival. . . . It’s not a plan that will really work,” said Rep. Daniel Lipinski (D-Ill.), a member of the House Problem Solvers Caucus that works on bipartisan solutions. “Are Republicans going to embrace any kind of funding plan besides stealing from Peter to pay Paul within the federal government?”

In a statement Sunday, Rep. Bill Shuster (R-Pa.), chair of the House Committee on Transportation and Infrastructure, said legislation “needs to be bipartisan, fiscally responsible and make real long-term investments in our nation.”

He has repeatedly called for a sustainable source of funding. At the recent GOP retreat in West Virginia, he floated the idea of raising the gas tax. It’s “the elephant in the room,” Shuster said.

In a briefing over the weekend for reporters, senior White House aides stressed that Trump’s plan is intended to be an opening bid on legislation that will require bipartisan cooperation to pass.

“This in no way, shape or form should be considered a take-it-or-leave-it proposal,” said one senior official, who requested anonymity to provide a preview of the president’s plan. “This is the start of a negotiation — bicameral, bipartisan negotiation — to find the best solution for infrastructure in the U.S.”

As crafted, the plan faces obstacles in both parties.

Democrats have long championed public works projects as a way to create jobs and stimulate the economy, but they are calling for a far larger federal investment than Trump will propose. Just last week, House Democrats unveiled an alternative plan, dubbed “A Better Deal to Rebuild America,” that envisioned $1 trillion in direct federal spending — five times what Trump will propose.

Many Republicans, meanwhile, are leery of any new spending, particularly in the wake of passage last year of a $1.5 trillion tax cut plan and last week’s budget agreement that will pump more than $500 billion in additional money into domestic agencies and the Pentagon over two years, the biggest increase in spending in almost a decade.

Trump, who is trying to turn the page after a week of turmoil surrounding allegations of spousal abuse against two male aides, plans to tout his infrastructure plan on Monday morning at a White House event with state and local officials.

Aides say in coming weeks he will travel around the country to highlight both the need for new infrastructure projects and instances where states and localities have crafted the kind of projects that his administration is trying to stimulate more broadly.

Many in Washington have wondered whether Trump should have led with an infrastructure proposal as a means to build support for his un­or­tho­dox presidency.

Instead, coming a year into his tumultuous tenure, the initiative is being pushed in a toxic partisan environment, following bruising battles over health care and taxes and amid bitter tensions over the Russia probe into election meddling.

Of the proposed $200 billion in federal spending over the coming decade, half of it would be used to create an incentives program to reward states and localities that invest more in infrastructure projects. The money would be doled out on a competitive basis, with awards that amount to up to 20 percent of a project’s cost, aides said.

To qualify, states and localities would have to be willing to raise new revenue for their projects. White House aides offered several examples, including increases in property taxes or sales taxes or an increase in tolls or other user fees.

Another $50 billion would be directed to rural infrastructure programs, distributed to governors through block grants. That’s in keeping with what White House aides say is a broader philosophical shift to give states and localities a greater say in their infrastructure priorities than the federal government.

Another $20 billion would be spent on “transformative” projects, such as plans to build tunnels for high-speed trains.

The remaining $30 billion would be used to significantly expand loan programs, for private activity bonds and for a capital financing fund. Those provisions are likely to draw more support.

Lawmakers in both parties agree that the low-cost government loan programs for highways and rail projects that began in the late 1990s are working well and should be expanded.

While Trump’s push to streamline permitting has been panned by environmentalists, that provision is also likely to garner significant support.

“We’ve had projects that seem to take forever,” said Mick Cornett, the mayor of Oklahoma City who is a Republican candidate for governor. “Here’s an example: I used to be a journalist and I covered a city council meeting in 1998 where they chose a new route for Interstate 40 through Oklahoma City. I ended up cutting the ribbon on that route in 2012.”

Taken as a whole, Trump’s proposal is more of a “financing plan” than a “funding plan,” said Mike Friedberg, a former staff director of a subcommittee of the House Transportation and Infrastructure Committee. Friedberg said while Democrats prefer the latter, he sees “a little momentum” on Capitol Hill for some sort of deal. “I don’t think it’s dead,” he said.

Others are skeptical, particularly of legislation emerging from Congress that closely tracks Trump’s plan.

The idea that $200 billion in federal money will leverage more than $1 trillion in overall infrastructure investment is “just a prayer and hope,” said Martin Klepper, who served most of last year as executive director of the Department of Transportation’s Build America Bureau.

“Who is going to come up with all that extra money? The states are broke,” said Klepper, who joined the Transportation Department in early January 2017 and resigned in November. He had hoped to help shape an infrastructure plan along the lines of what Trump promised during the campaign. However, he said, he found “a real gap between the president’s articulation and the meat of this proposal.”

Klepper said the federal government has provided at least half of the financing for major projects like the new Tappan Zee Bridge in New York and the expansion of light rail in San Diego. He said the White House is “misleading” people when it claims that the federal government can fund 20 percent or less and still see the kind of massive transportation upgrades that the American public expects.

In addition to his infrastructure proposal, Trump also plans to release his budget blueprint for the coming fiscal year on Monday. Aides would not describe it in detail on Sunday, but did say that it contains cuts to transit funding and to an Obama-era program that offered transportation grant funding to states and localities on a competitive basis.

An analysis of Trump’s first budget released by Senate Minority Leader Charles E. Schumer (D-N.Y.) cited $206 billion in proposed cuts to existing infrastructure programs, leading Democrats and advocates to question whether Trump was merely moving money around.

“Funding infrastructure by cutting infrastructure is not a serious proposal,” said Beth Osborne, senior policy adviser for the advocacy group Transportation for America and former senior official in President Obama’s Department of Transportation.

In private meetings, Trump has mused about raising the gas tax as a means to generate more revenue for infrastructure projects.

The gas tax has been the same — 18.4 cents a gallon — since 1993. Many think tanks and expert studies have recommended raising it to fund road and bridge repairs.

Last month, the U.S. Chamber of Commerce called for a 25-cent-per-gallon increase, which it said would raise more than $375 billion over the coming decade.

“Raising the gas tax would be a terrific way to finance additional infrastructure spending,” said Douglas Elmendorf, dean of the Harvard Kennedy School and a former economist in the Clinton administration. “A lot of people on both sides of the aisle have recognized that the time for the gas tax has come.”

Trump’s infrastructure plan was initially advertised as a priority for his first 100 days in office. As it failed to materialize, many in Congress began feeling that the whole effort was a “boy-who-cried-wolf” scenario.

The White House designated the first full week in June as “Infrastructure Week,” but it quickly imploded after former FBI director James B. Comey’s explosive testimony before Congress about his firing and interactions with Trump. The White House attempted another infrastructure week in mid-August, the week that white supremacists rallied in Charlottesville and Trump blamed “both sides” for the violence.

Top aides then said a plan would be coming in January, only to see that derailed by Trump’s comments that America didn’t need more immigrants from Haiti, El Salvador and Africa, places he described as terrible ones to live. His remark drew swift rebukes from around the world.