President unveils $200 billion infrastructure plan
On Monday, President Trump unveiled his $200 billion “Legislative Outline for Rebuilding Infrastructure in America.”
It is important to note that the proposal is only an “outline,” as noted in its title. The big catch is that, while it calls for $200 billion in federal spending, it does not suggest a source of that funding. Rather, the President is putting that ball into Congress’ court, but the White House has suggested the money could come from cuts elsewhere in the federal budget.
“The President has outlined a needed and thought-provoking proposal to rebuild and improve the nation’s aging and over-burdened public infrastructure,” said AGC of America CEO Stephen Sandherr. “The details of this proposal are important and many, including this association, will seek changes to further improve upon the President’s concept. Yet the most significant aspect of today’s release is that it signals the start of what should be a timely, bipartisan and bicameral process to identify the best ways to fund and finance desperately needed improvements to our public infrastructure.”
Senior White House officials say the plan is aimed at fixing the current system of funding infrastructure that they say is broken in two ways.
The first is that the country has been under-investing in infrastructure, leading a state of growing disrepair. The American Society of Civil Engineers gives the nation a grade of D+ for the condition of transit, highway, bridge, rail, water and other infrastructure, and says the country is in need of an investment of $2 trillion more than is currently budgeted.
The second way the White House says the system is broken is in the lengthy federal permitting process, which officials say can take five to ten years or longer, driving up costs.
Many have expressed concerns over the plan’s effort to addresses the funding shortfall by committing $200 billion in federal funding over ten years to stimulate state and local spending and private investment. Half of the funding, $100 billion, will be used as incentives to entice cities, counties and states to raise at least 80 percent of the infrastructure costs themselves. That's a significant departure from the way many projects are funded now. Funding for federal-aid highways, including interstates, is usually allocated in an 80-20 federal/state split. This program would flip that funding burden. Major mass-transit projects are often funded on a 50-50 federal/local basis. Again, this plan puts a much greater burden on local taxpayers and users.
To address concerns that projects in rural areas don't have the ability to generate much in user fees, the White House plan calls for spending $50 billion of the $200 billion on rural infrastructure needs. That funding would go to states in the form of block grants, giving governors and state legislatures the authority to figure out the best way to spend that money.
And $20 billion would go to federal loan programs that are aimed at attracting private investment in infrastructure, and into private activity bonds.
The White House also wants to earmark $20 billion in funding for "transformative" projects, which a White House official says "have a vision toward the future." These would be "projects that can lift the American spirit, that are the next-century-type of infrastructure as opposed to just rebuilding what we have currently."
The remaining $10 billion would go into a capital financing fund, which the administration says would go toward funding federal-government office-building infrastructure.
The President wants to significantly streamline the federal environmental-review and permitting process for infrastructure construction projects, which they say can often involve several different federal agencies that can drag the process out.
The President's plan will call for the creation of "One Agency, One Decision" type of process that would put one lead federal agency in charge of completing an environmental review within 21 months.
The President says he will work with Congress to make changes, if needed. The infrastructure-spending plan would need 60 votes to pass in the Senate, so it will need Democratic support, but White House officials say this is one issue on which there should be room to compromise, because they say the president's infrastructure plan is in-line with priorities and objectives outlined by members of both parties in Congress, even if not in the way it would be funded.
"This is in no way, shape or form ... a take-it-or-leave-it proposal," said one senior administration official. "This is the start of a negotiation."