Trump's Infrastructure Plan: Stuck in Traffic?
During his weekly radio address Friday, President Trump spent five minutes celebrating the health care legislation adopted by the House on Thursday, plus his ambition to enact “massive” tax cuts this year. He said nothing about another bold promise: $1 trillion in infrastructure investments.
The president, his Cabinet members and White House advisers have been largely tight-lipped for months about key details attached to a major Trump campaign pledge to fix crumbling roads, bridges, airports and water systems while also creating good-paying jobs.
"We're going to do infrastructure very quickly,” he told CBS News during an interview broadcast this week. “We've got the plan largely completed, and we'll be filing over the next two or three weeks, maybe sooner," Trump said, appearing to refer to filing legislation.
More than a month ago, Transportation Secretary Elaine Chao described a complex administration package of transportation infrastructure, water, broadband, energy and electrical grid, and upgrades to veterans’ hospitals, and predicted an announcement later in 2017. Trump told interviewers he was considering accelerating that timeline.
He suggested he might try to attach infrastructure spending to a health care measure (the infrastructure plan is rumored to be hundreds of billions dollars over 10 years in proposed new federal money paired with private-sector investments backed by federal tax credits). That did not happen this week, and it is unlikely that health care will be the vehicle to pass infrastructure spending, considering the complications ahead for the House bill in the Senate.
Trump originally said securing congressional backing to invest $1 trillion for infrastructure could become a bipartisan cinch. But Democrats are not the only hurdles. The president could encounter plenty of GOP opposition: Republicans want to cut federal spending, not increase it, and rural-state conservatives are not sure they’d ever see private investment in roads and bridges in the least populated parts of the country.
Just 16 months ago, Congress adopted and President Obama signed a compromise five-year, $305 billion highway and transit measure. But they failed to find a stable funding mechanism for the investments they blessed. Budgetary gimmicks largely covered the price tag on paper.
If Trump expects similar bipartisan collaboration, lawmakers and analysts say the policies, the price tag, and the deficit-neutral pay-fors are as important as the tactics used to propel a plan forward.
House Republicans wrote and passed the American Health Care Act without Democratic support, and a senior administration adviser recently said the president will not seek and does not expect to get Democratic backing for his pending tax reform plan, either.
“We have to be realistic,” the senior official said.
The president could try to embed portions of his infrastructure proposals in a major tax bill, but many policy elements would fall outside the budget rules that govern the use of reconciliation, which the White House says it will tap to encourage GOP senators, who number 52, to adopt tax cuts with a simple majority drawn from their own caucus.
If Trump believes he is on track to unveil his infrastructure ideas this month, he would plow into a thicket of competing business and presidential messaging.
The president will make his first major trip abroad to Saudi Arabia, Israel, Rome, Brussels and Sicily at the end of the month, and will likely be out of the country through Memorial Day.
The Office of Management and Budget is expected to release Trump’s first complete budget blueprint on May 23. And while the health care debate shifts to the Senate, the ultimate contours of the president’s tax reform package – also in outline form – could depend on whether new health care law, if enacted, frees up resources he hopes to shift to offset lost revenues projected from lower tax rates.
The infrastructure package – initially described as a mix of federal funding paid for with new revenues from “energy production,” plus private investments, backed by federal permitting relaxation, regulatory relief, and tax sweeteners –appeared this week to be a work in progress, despite administration assurances that it is ready.
“It’s is clearly still up there on the priority list,” White House Press Secretary Sean Spicer told RealClearPolitics Monday, noting Trump’s aim to get it passed this year. “It’s just a question of when he wants to announce it.”
If Trump’s plan is poised to launch, key lawmakers are awaiting the details.
“I can’t speak to any specifics on timing or exact contents, but Chairman Shuster is optimistic that it will happen this year and appreciates the president’s leadership in keeping infrastructure at the front of the policy debate,” said Justin Harclerode, spokesman for House Transportation and Infrastructure Committee Chairman Bill Shuster, R-Pa.
The president sparked a flurry of interest on the Hill this week when he told Bloomberg News during an interview that he would consider raising the 18.4 cent federal gasoline tax, which has not been increased since 1993, to help cover the cost of upgrading roads and highways. Spicer immediately backtracked, saying Trump did not endorse or support a tax hike on gasoline.
During a recent conversation with a senior administration official, reporters learned how determined the White House is to promote an infrastructure plan that does not remind anyone of the $800 billion stimulus package known as the American Recovery and Reinvestment Act of 2009, signed by Obama and overseen by Vice President Joe Biden.
The official, who spoke on background to describe how the National Economic Council is steering Trump’s economic agenda, said infrastructure, regulatory reforms, health care and tax reform make up the four main drivers on the president’s agenda at the moment.
“Infrastructure as a whole is an enormously high priority. Outside of modernization of the air traffic control system, we’re not really picking and choosing projects,” the official explained when asked about specific airport and bridge projects proposed to modernize and ease congestion in and around New York City.
“What we’re trying to figure out is an infrastructure bill that does not make the federal government an organization that just hands out money to people,” he continued. The administration’s aim is to promote the federal government as “a stimulator of smart projects by giving people financial incentives in investing along with investors in smart projects,” the senior adviser said.
If cities and states seek projects to improve transportation and infrastructure, and are willing to get resident support and raise sales or income taxes, “we should not circumvent that,” he continued. “We should be their partner.”
The president has long suggested that if elected, he would back a public-private partnership model for infrastructure funding. But in an interview a month ago, Trump said the decision on that was pending. “We haven’t made a determination as to public-private. There are some things that work very nicely public-private. There are some things that don’t,” he said.
Asked last week if a public-public partnership model was more likely to be a policy priority, the senior administration official said, “It could be a public-private; it could be a public-private for-profit; it could be a public-private not-[for]-profit.”
One focus inside the West Wing has been easing the approval process for infrastructure projects that stretch out over years, raising their costs, the official added.
Trump is also interested in a version of “shovel ready” investments. He recently said the administration wants to support projects that can get under way rapidly. "If you have a job that you can't start within 90 days, we're not going to give you the money for it because it doesn't help," he said. "We're going to be very strong on that. They have to be able to start within 90 days."
The president’s own policy development, however, has taken longer than that.