Trump finally launching $1.5T sales pitch
The White House is rolling out President Donald Trump’s long-awaited infrastructure plan Monday, swinging for the fences with a $1.5 trillion initiative that is light on new federal dollars — but could inspire a wave of toll roads, ease decades-old regulations and permanently change cities’ and states’ expectations for assistance from Washington.
The proposal faces tough odds in Congress: Some conservative Republicans are already expressing shock at Trump’s total price tag, while Democrats say the share coming from the federal government would be too little to fill the backlog of crumbling roads, bridges, railroads, tunnels and airports, along with other needs like rural broadband service.
Trump is proposing to provide $200 billion for his plan over the next 10 years — “not a large amount,” he has conceded — paid for by unspecified cuts elsewhere in the budget proposal that the White House also plans to release Monday. That spending is meant to draw an additional $1.3 trillion or more in investments from cities, states, private investors and other sources.
But more fundamentally, the White House says it will finally address a dysfunctional system in which Washington calls too many of the shots, federal red tape gets in the way and some communities fail to put enough “skin in the game” — all while dire needs go unmet.
“The current system is fundamentally broken, and it’s broken in two different ways,” a senior administration official told reporters during a briefing Saturday. “We are under-investing in our infrastructure, and we have a permitting process that takes so long that even when funds are adequate, it can take a decade to build critical infrastructure.”
Trump’s plan, the official said, would be “a permanent fix.” The plan would also include specific money for rural communities, aim to encourage apprenticeships and other forms of workforce training, and pay for unspecified “transformative,” “next-century-type” projects that would “lift the American spirit,” the official said.
However, many infrastructure advocates believe that the real fix that’s needed is a permanent new revenue stream, something Trump’s plan doesn’t address.
Oregon Representative Peter DeFazio, the top Democrat on the House transportation committee, said in an address Friday that Trump’s plan would “slash the federal commitment to a national infrastructure network.”
“This is not a real infrastructure plan — it’s simply another scam, an attempt by this administration to privatize critical government functions, and create windfalls for their buddies on Wall Street,” DeFazio said. “This fake proposal will not address the serious infrastructure needs facing this country, so our potholed roads will get worse, our bridges and transit systems will become more dangerous, and our tolls will become higher.”
The plan that the White House will release Monday is a statement of principles that Congress will have to translate into legislation — potentially leaving the fate of Trump’s proposal in the hands of 11 House and Senate committees that oversee slices of the policies in play. The kickoff will include a Monday briefing with state and local officials.
Administration officials said to expect an extended sales pitch from Trump and his Cabinet, who “will be talking about infrastructure all across the nation.”
The woeful state of U.S. infrastructure is something Republicans and Democrats largely agree about, even if they don’t agree on the solutions. The American Society of Civil Engineers has said the backlog comes to $4.59 trillion in needed investments by 2025.
But already, some lawmakers are expressing deep concerns about the administration’s plan to pay for the federal share of its proposal with budget cuts instead of proposing new revenue sources. Even some Republicans, notably House transportation Chairman Bill Shuster of Pennsylvania, are pushing for a hike in the federal gasoline tax that pays for the ailing Highway Trust Fund.
Democrats, meanwhile, are criticizing the White House’s push to dramatically speed up the federal permitting process for infrastructure projects — and warning that the Senate won’t go along with any effort to impose arbitrary time limits on regulatory reviews.
“There’s zero appetite for that,” Senator Brian Schatz (D-Hawaii) told POLITICO last week. “There may be a handful of Democrats that would support that but they’d also lose a couple of Republicans.”
The senior administration official said the White House has no intention of dismantling environmental protections — but does want to shorten the process to two years, for example by letting one agency render the final yes-or-no verdict. The White House is preparing to achieve some of this streamlining through executive action, but it’s unclear what changes it may seek to make in existing laws that, for example, allow the Environmental Protection Agency to veto permits issued by the Army Corps of Engineers.
“We’re not saying you can have a bigger impact on endangered species, or the water can be dirtier or the air can be dirtier, or anything like that,” the official said.
Democratic lawmakers and liberal groups like the Center for American Progress have countered that agencies have yet to follow through on recent laws that would let them streamline permitting. CAP has argued that to accelerate the process, the most effective strategy would be fully funding agencies like the Department of Transportation so they have enough staffing and technology.
The Natural Resources Defense Council denounced the plan Sunday as a “disaster” and an “unacceptable corporate giveaway,” saying the proposal to speed up environmental reviews “would leave local residents all but voiceless when it comes to the massive projects that will reshape their communities.”
Another source of controversy is the plan’s heavy preference for doling out money to states and communities that are willing to put up the most cash on their own. Democrats say that would cause cities and states to hike taxes and fees on their residents, and would heavily disadvantage large projects such as the multibillion-dollar effort to rebuild rail infrastructure in and around New York City.
Senate Minority Leader Chuck Schumer (D-N.Y.), has warned that drivers could soon be paying “Trump tolls” because of the plan’s incentives for communities to seek money from private investors.
“Hedge funds and wealthy investors will want projects that generate a profit by charging middle-class Americans hundreds of dollars a year in tolls, taxes and fees,” Schumer wrote in an op-ed just before Trump’s State of the Union address. “Our nation’s roads, bridges and tunnels would become tools for wealthy investors to profit off the middle class rather than the job-creating public assets they ought to be.”
The White House says it would be up to local communities to decide how to raise money to pay for their projects, with sources that could include property taxes, sales taxes or user fees.
But the administration’s making it clear that communities looking for help from Washington have to show they’re prepared to pay for their own needs.
“It’s all about how do we get people to compete around in projects that they truly care about,” the senior administration official said. “And how do we know they truly care about them? Well, because they’ve got a lot of skin in the game on the project.”
Instead, the official said: “A lot of comments I’ve received since starting this job are people who are going, ‘This is an absolutely critical project, it has to be done, it’s vital to our community. Our economy will boom if we do this.’ And I ask, ‘How much you’ve invested in it?’ And they’re like, ‘No, we’re not investing in anything. We’d like you to invest in it.’”
Those comments fit in with the message of a White House budget document last spring that bemoaned what it called communities’ over-reliance on federal dollars — rhetoric that drew a rebuke from the GOP-led Senate Appropriations Committee. DOT has similarly told New York state and New Jersey not to expect the federal government to pay half of a proposed $13 billion rail tunnel project across the Hudson River, despite previous assurances from the Obama administration.
The senior administration official said that contrary to what many of the critics say, the federal government pays already only about 14 percent of the nation’s overall infrastructure needs. “If you go and ask the public what their preference is, they would prefer to invest locally as opposed to sending money to Washington,” the official said.
Meanwhile, fiscal conservatives are already casting side-eyes at the $1.5 trillion total price tag, even though only $200 billion would come from the federal budget. That’s especially true after Congress enacted tax cuts that are expected to add $1.5 trillion to the deficit in the coming decade and both parties agreed last week to boost overall spending by $300 billion over two years.
On the other hand, last week’s spending deal gives lawmakers extra cash to work with. And Trump administration officials have been scurrying since Friday to craft an addendum to its fiscal year 2019 budget proposal that will tell legislators just how the president would like to see those dollars spent.
“Take the money that the Democrats want to put to these social programs, and move it to things like infrastructure, move it to things like opioid relief, move it to things that are in line with the president’s priorities, so that — if it does get spent — at least it get spent to the right places,” White House Budget Director Mick Mulvaney said on “Fox News Sunday.”
In Saturday’s briefing, the senior White House official stressed that Trump’s infrastructure pitch isn’t “a take-it-or-leave-it proposal.”
“This is the start of a negotiation — bicameral, bipartisan negotiation — to find the best solution for infrastructure in the U.S.,” the official said.
The official added that Trump “is open to new sources of funding” as well. However, something as politically perilous as a gasoline tax increase isn’t likely.
Half of the $200 billion would be allocated to a competitive program in which states and localities can apply for federal funding. Those who have already secured their own sources of cash would be most likely to receive federal money.
Ten percent, or $20 billion, would add to existing federal loan programs for infrastructure and broaden eligibility for tax-exempt private activity bonds. And another 10 percent would be set aside for what the Trump administration describes as “transformative” projects — a category that some people think could include Elon Musk’s gee-whiz “Hyperloop,” although the White House said the New York-New Jersey rail tunnel might qualify as well.
A quarter, or $50 billion, would be reserved for projects in rural parts of the country. That money would go to states as block grants with relatively few strings. It would at least partially address concerns from lawmakers who say rural infrastructure projects may be relatively unappealing to private investors — and seems tailor-made to attract support in the Senate.
The White House official indicated that governors would make the call on how to divide the rural money. In contrast, some rural lawmakers have been pushing to steer a designated portion to broadband internet service.
Five percent of the federal dollars would be used to set up a “capital financing fund.”
Some component of the plan will also center on workforce training, the official said. The administration will suggest broadening eligibility for Pell grants, tweaking requirements for trade licensing and growing apprenticeships.
Before his election, Trump swore to voters that a bill to generate $1 trillion in investment would materialize in his first 100 days as president. But the administration has delayed a plan again and again as it first crusaded to repeal Obamacare and then to rework the tax code.
The number has ballooned to $1.5 trillion “because we’ve actually received a sort of more enthusiastic response than we anticipated from state and local governments,” the White House official said.