Trump’s $1.5 Trillion Infrastructure Plan Is Light on Federal Funds, and Details
Posted January 31, 2018 8:36 p.m. EST
WASHINGTON — President Donald Trump’s long-awaited plan for overhauling the nation’s crumbling infrastructure includes spending $200 billion in federal money during the next decade to spur an additional $1.3 trillion in spending from cities, states and private companies on major projects, White House officials said Wednesday, a formula that faces long odds on Capitol Hill.
The increased infrastructure spending would be offset by unspecified budget cuts. Officials would not detail where those cuts would come from, or how the proposal would effectively leverage at least $6.50 in additional infrastructure spending for every dollar spent by the federal government, a ratio many infrastructure experts consider far-fetched.
The officials said Trump would leave it up to Congress — where there is little consensus about how to pay for such a plan — to figure out the details, giving lawmakers wide latitude in creating what would need to be a bipartisan bill against the backdrop of the midterm elections.
Asking a polarized Congress to hash out a complex and contentious plan could complicate an already steep climb for a proposal that was a pillar of Trump’s presidential campaign. That difficulty was underscored by a cool reception for Trump’s proposal from Democrats and labor groups, longtime champions of boosting infrastructure spending, on Wednesday.
“That’s not a plan. That’s a hope,” said Richard Trumka, the president of the AFL-CIO, which has lobbied for a large infrastructure bill. “It’s sort of pathetic.”
Democrats and the U.S. Chamber of Commerce have pushed Trump’s administration to commit far more federal dollars, funded by tax increases. The Chamber of Commerce proposed a federal gasoline tax increase this month that it estimates would raise nearly $400 billion over a decade, as part of a broader infrastructure package that includes private funding, worker training and streamlined permitting.
Senate Democrats called last year for a $1 trillion infrastructure program, financed by closing tax loopholes. They seemed unimpressed by the latest details of Trump’s plan.
Sen. Sherrod Brown of Ohio, one of several Democrats up for re-election this year in states Trump won, said Democrats were still waiting for the president to deliver on a campaign pledge to pour $1 trillion into rebuilding the nation’s infrastructure. “Accounting gimmicks don’t build bridges,” Brown said.
An ambitious infrastructure program has been a frequent theme of Trump’s economic agenda since he took office. But despite repeated promises by White House officials and the president himself that such a plan was just weeks away, a detailed proposal has yet to be made public.
An administration official who was not authorized to speak publicly said Wednesday that Trump would be open to virtually any bipartisan proposal from Capitol Hill that met his criteria of generating a total of $1.5 trillion in infrastructure spending, speeding the process of permitting projects and making a significant investment in rural communities, preferably including broadband. The proposal, the official added, would have to garner the support of both Democrats and Republicans, a tall order given the vast divisions between the two parties over how to pay for such a plan at a time of rising deficits and disagreements about spending priorities. The national debt has already topped $20 trillion, and the Congressional Budget Office said on Wednesday that the nation is expected to bump up against its borrowing limit a month earlier than expected because the Treasury Department is bringing in less revenue as a result of the $1.5 trillion tax cut.
The hands-off approach is similar to the one the White House pursued with its tax cut, in which the president laid out broad parameters and drew senior lawmakers into the process of determining the details. But such a process faces long odds on infrastructure, given that Republicans are far less united on the issue and the president will not be able to rely on unified partisan support to force through a plan over the objections of Democrats.
Passing a plan through a polarized Congress, in an election year, will require “strong presidential leadership, a bipartisan effort by leaders in both parties and bringing together the broad constituency of stakeholders who will push their lawmakers to get something done,” said Ed Mortimer, the chamber’s executive director of transportation infrastructure. “That’s how we take advantage of this opportunity to do something transformational.”
Democrats say the White House has not seriously courted their input. Several Senate Democrats and their aides noted that the administration appeared to be rejecting their long-standing call for much more federal spending. “Unless we get real dollars, we will not build the infrastructure we need,” said Sen. Chuck Schumer of New York, the minority leader.
White House officials said they had met with Democrats and Republicans on Capitol Hill, including members of key committees that oversee infrastructure policy. They also said they spent months meeting with mayors and state officials to determine infrastructure needs throughout the country and the funding streams available to finance them. They concluded that a larger package than Trump had initially proposed was necessary and feasible.
Administration officials say an increase in federal funds would unleash a wave of spending from cities, states and the private sector, the result of unspecified incentives in the plan. But many local and state officials have expressed concern in recent days that the administration’s faith in that potential effect is misplaced.
Some Democrats and progressive groups have branded the plan a “scam,” meant to reward wealthy investors and gut environmental regulations under the guise of a job-creating, economy-juicing initiative, and said it would not prove sufficient to meet America’s need to improve roads, bridges, communications and other infrastructure.
The idea that a $200 billion federal investment would drive $1.5 trillion in total spending is “the great hocus-pocus,” said Kevin DeGood, director of infrastructure policy at the liberal Center for American Progress think tank. “There’s absolutely no evidence for that.” White House officials dismiss such concerns, arguing that many aspects of the nation’s infrastructure, including the Federal Aviation Administration and the inland waterways system, have built-in revenue streams that can finance improvements and save money, and that the new tax law preserved incentives to finance projects. But many lawmakers privately worry that relying on such mechanisms will not be sufficient to ensure that resources flow to areas that need them most.
Trump’s advisers also disputed the notion that expediting permitting for projects could harm the environment.
White House officials did not rule out an alternative funding mechanism proposed by Congress, including a possible gas tax increase. Trump, the senior administration official said, would like to see a higher federal contribution to the plan but said the administration was being realistic about those chances.