AS REPORTED BY BLOOMBERG AND INDUSTRYWEEK STAFF FOR INDUSTRYWEEK
President Donald Trump released his long-awaited proposal to upgrade roads, airports and other public works on Monday, kicking off what will likely be a tough sell in Congress with Democrats saying the plan falls short and Republicans wary of another big spending measure.
The 53-page document details how Trump plans to stimulate at least $1.5 trillion in new investment, shorten project permitting time to two years, invest in rural projects and improve worker training. The newest elements of the proposal include expanding the use of tax-exempt debt, letting states add tolls on interstates and making it easier to lease airports and other public assets.
The infrastructure plan proposes streamlining environmental reviews by putting a single agency in charge of the work, imposing a 21-month deadline for completing those assessments and requiring final decisions on permitting three months after that.
The proposal also gives the Interior Department authority to approve oil and gas pipelines that cross lands controlled by the National Park Service, a change that’s been opposed by environmental groups. Currently, congressional approval is required for each project, resulting in time-consuming delays, according to the plan.
What They’re Saying
Reactions from industry groups leaders were mixed. Among those who expressed disappointment was Scott Paul, president of the Alliance for American Manufacturing.
“The president promised on Inauguration Day that his infrastructure plan would ‘follow two simple rules: Buy American and Hire American,’” Paul said in a statement. “Today, that promise seems to have disappeared. We hope the White House will swiftly clarify its position on Buy America for infrastructure.
“American workers are eager to supply the steel and other materials that form the spine of our nation’s infrastructure. They deserve a policy that explicitly supports and expands Buy America. Infrastructure investment is vital to our economy. We look forward to working with Congress and the White House to advance a real plan for robust infrastructure investment into law.”
Likewise, Larry I. Willis, president of the Transportation Trades Department, AFL-CIO, expressed disappointment in the overall structure of the proposal.
“While we appreciate the spotlight President Trump has shined on the need to rebuild America, too many aspects of this plan undermine the diverse needs of our transportation network and the businesses, communities, and working families that depend on it,” he said.
“Robbing other federal priorities — including important transportation programs — to pay for infrastructure will only add to our growing problems. Furthermore, devolving the federal government’s funding responsibility to cash-strapped states and municipalities will leave too many projects and jobs behind.”
Dennis Slater, president of the Association of Equipment Manufacturers, said in a statement that, “The Trump administration’s proposal does not solve our nation’s underlying infrastructure issues, including the solvency of the Highway Trust Fund and other programs to support our utility, water and aviation infrastructure.”
Slater did focus more on positives, among them that the proposal “should serve as an important starting point for serious debate in Congress, given that an overwhelming majority of Americans wants for Washington to act on infrastructure this year.”
Jay Timmons, president of the National Association of Manufacturers, figuratively applauded Trump during his presentation of the organization’s State of Manufacturing address at Automation Alley in Troy, Michigan.
“The administration has already delivered on some important permitting reforms. To get projects back on track, now the President is calling for a substantial $1.5 trillion investment,” said Timmons, who also noted that NAM’s ‘Building to Win’ plan, which was introduced last year, was used as a guidepost by both the current administration and Congress. “It’s the kind of leadership manufacturers have wanted for a very long time, and it could help us reclaim our rightful place as a global leader on true 21st-century infrastructure. Manufacturers are ready to work with Congress and the Trump administration to deliver a tremendous plan that will literally get America moving again.”
Bud Wright, executive director of the American Association of State Highway and Transportation Officials, also was pleased with Trump’s announcement. “State DOT leaders appreciate the president’s ongoing interest in, and support for, increased federal investment in infrastructure. We hope the release of the Trump infrastructure plan can be a starting point for a robust conversation on how best to make the critical investments in surface transportation. AASHTO and its members stand ready to work with the Administration and Congress to address the long-term viability of the Highway Trust Fund and to speed the federal review and permitting process.”
And Edward R. Hamberger, president and CEO of the Association of American Railroads (AAR), noted, “The private freight rail industry commends the Trump administration for formally beginning the discussion on infrastructure legislation with this document today. The sector particularly welcomes the efforts to streamline the federal permitting processes, including in the proposal’s attempt to codify Executive Orders into law while also strengthening existing processes. At its core, however, the most important aspect to any such package remains the integrity of the Highway Trust Fund. Policymakers should make every effort to return surface transportation funding to a truly equitable, user-pay system as originally designed.”
There also is a section for financing water infrastructure projects, inland waterways and allowing Veterans Affairs to improve facilities by allowing the agency to retain proceeds from the sale of properties and to exchange existing facilities for new ones.
“For too long, lawmakers have invested in infrastructure inefficiently, ignored critical needs, and allowed it to deteriorate,” Trump said in a note to Congress introducing the plan. “It is time to give Americans the working, modern infrastructure they deserve.”
The plan’s premise is that the U.S. would spend $200 billion to spur states, localities and the private sector to raise the $1.3 trillion balance. Since the federal government owns very little infrastructure, the Trump plan aims to create local revenue streams for investment and focus on permit streamlining.
No Specific Projects
The White House said it isn’t including specific projects, such as the $30 billion Gateway proposal that includes a new rail tunnel connecting New York City and New Jersey, although such initiatives could be eligible for funding under the plan. An $18 billion fund would be dedicated to pay for maintenance on public lands that’s been deferred with revenue from mining and energy production on federal lands and waters — something that’s not currently allowed.
The plan allocates $100 billion for a grant competition with preference given to applicants that raise revenue such as taxes, fees or tolls, and would limit federal help to 20% of new money generated. It includes $20 billion to boost federal lending programs and private-activity bonds used to attract private investment. There would also be $50 billion in block grants to governors to choose rural projects, $20 billion for “transformational” projects and $10 billion for a capital financing fund for federal infrastructure.
The program for innovative projects that can’t get private financing would be led by the Commerce Department in areas including transportation, clean water, drinking water, energy, commercial space and broadband, according to the principles. Applicants could seek funding for planning and construction, and the federal government would have rights to share in a project’s value.
The White House said it wants to offset the $200 billion in the 2019 budget, which is also being released Monday, with spending cuts elsewhere — including from some transit and transportation funds the administration doesn’t think have been spent effectively. But Trump is open to new sources of funding, a senior White House official has said.
“This will be a big week for Infrastructure,” Trump tweeted this morning ahead of the plan’s release. “After so stupidly spending $7 trillion in the Middle East, it is now time to start investing in OUR Country!”
There are big questions about whether Trump can get his plan approved this year. He’ll need Democrats to pass a bill in the Senate and many have already blasted the proposal as “fake,” saying it doesn’t include anywhere near the amount of federal investment required to meet U.S. needs.
The proposal also comes on the heels of a $1.5 trillion tax cut and a $300 billion spending measure signed by the president last week that will add to the federal budget deficit. Republicans have been wary of another big spending measure, especially with mid-term elections approaching in November.
The administration sees its plan as an opening bid in a negotiation with lawmakers and will be flexible on the ways to meet the objectives, a senior White House official has told reporters. There are at least six committees in the House and five in the Senate that will consider elements of the plan, White House officials have said.
Trump ran for president on the promise of a $1 trillion infrastructure fix and pledged a plan in his first 100 days in office, but the initiative was delayed as the White House and Congress pursued overhauling health care and the tax code.