Political uncertainty envelops Trump’s vow to revamp U.S. infrastructure
At his presidency's two-year mark, Donald Trump's promise to invest $550 billion in American infrastructure has yet to take shape.
Trump's proposal last February to inject $200 billion in hard federal dollars fell well short of the more than half-trillion figure he cited on the campaign trail. Yet even this more modest proposal has not gained traction.
Any attempt to push an infrastructure package during the second half of Trump's first term will need to clear a split Congress, after Democrats reclaimed the House in the midterm elections.
It's unclear whether a divided government moves Trump closer or further from delivering on his promise. Following the November election, both sides sent mixed messages about the prospect of reaching a deal.
The day after his party lost the House, Trump said he was willing to negotiate with Democrats on infrastructure, and said the two sides share much common ground. House Speaker Nancy Pelosi, D-Calif., also sounded an optimistic tone.
"We've talked in a very positive way," Pelosi told reporters Dec. 20. "Almost every conversation I've had with him since he's been president has involved how we can work together on infrastructure."
On the other hand, infrastructure may be shaping up as something of a wedge issue, with either side tethering its fate to highly partisan issues.
For his part, Trump threatened to veto any deal that did not include funding for border security.
"The Democrats, who know Steel Slats (Wall) are necessary for Border Security, are putting politics over Country," he tweeted Dec. 20. "What they are just beginning to realize is that I will not sign any of their legislation, including infrastructure, unless it has perfect Border Security. U.S.A. WINS!"
Trump also warned Democrats he would assume a "warlike posture" if the new House majority launched fresh investigations into his campaign and administration, indicating that such scrutiny would be incompatible with bipartisanship efforts on legislation.
The top Senate Democrat, Chuck Schumer of New York, told Trump there would be no deal on infrastructure without a substantial investment in efforts to combat climate change, which could prove a hard sell to Republicans.
Infrastructure experts we spoke to were also unsure about the odds of the two sides reaching an agreement.
"Sometime this year, President Trump must decide whether to pivot from his base-oriented political strategy toward issues where cooperation across party lines is essential. If he does, infrastructure will be at the top of the list," said William Galston, an expert on government at the Brookings Institution. "I have no way of predicting which path he will take."
Given the political uncertainty, we'll leave our Stalled rating undisturbed.
President Donald Trump, White House press conference, Nov. 7, 2018
Transportation Topics, "Trump, Congress Eye Possibility of Infrastructure Bill in 2019," Jan. 3, 2019
Washington Post, "Trump vows 'beautiful' deals with Democrats but threatens 'warlike' retaliation to probes," Nov. 7, 2018
Email interview with William Galston, an expert on governance at the Brookings Institution, Jan. 4, 2019
Only $200 billion in federal outlays in new blueprint
After months of build-up, the Trump administration released its outline for "rebuilding infrastructure in America" to Congress on Feb. 12, 2018.
"To help build a better future for all Americans," the proposal says, "I ask the Congress to act soon on an infrastructure bill that will: stimulate at least $1.5 trillion in new investment over the next 10 years, shorten the process for approving projects to 2 years or less, address unmet rural infrastructure needs, empower State and local authorities, and train the American workforce of the future."
The proposal has uncertain prospects in Congress, which has ultimate say in how the government spends its money. Aside from that, what President Donald Trump is asking for falls short of the investment he promised on the campaign trail.
His $1.5 trillion request may seem big, but it is undercut by the actual amount of federal money pledged under the proposal — only $200 billion (potentially offset by cuts elsewhere).
This breaks down to:
• $100 billion for an "incentives program" for state and local projects. However, these federal incentive grants "could not exceed 20 percent of new revenue," meaning the split would be 80 percent paid by states or localities and 20 percent paid by the federal government. That's the opposite for the current standard for highways. Today, the split is 80 percent by the federal government and 20 percent by the state or locality. It's also less than the current 50-50 split for transit projects.
• $50 billion for a "rural infrastructure program." The proposal says that "funding under this program would be awarded on a competitive basis to projects that are likely to be commercially viable, but that possess unique technical and risk characteristics that otherwise deter private sector investment."
• $20 billion for a "transformative projects program." This would fund and provide technical assistance for "bold, innovative, and transformative infrastructure projects" that "are capable of generating revenue, would provide net public benefits, and would have a significant positive impact on the nation, a region, state, or metropolitan area."
• $20 billion to expand "existing credit programs." The proposal says because these credit programs address a broader range of infrastructure needs, they give "state and local governments increased opportunity to finance large-scale infrastructure projects under terms that are more advantageous than in the financial market."
• $10 billion to finance finance real-estate acquisition for the federal government. These outlays would be repaid by the agencies making the acquisition.
Grand total: $200 billion.
So did this advance the president's campaign promise to "invest $550 billion in infrastructure"?
Beyond the long legislative road ahead, a lot depends on the definition of "investment" in the promise's reference to $550 billion.
Experts say the relevant figure here is not the administration's top-line figure of $1.5 trillion but rather the $200 billion in hard federal dollars that the proposal puts on the table. And that number falls short of the $550 billion Trump cited on the campaign trail.
"Calling it new investment is disingenuous at best," said Kevin Heaslip, an associate professor of civil and environmental engineering at Virginia Tech.
Heaslip added that the switch in the percentage of funding footed by the federal government will be a likely deal-breaker.
"If higher percentages of capital could be attracted for many projects, the formula would have been changed long before this," Heaslip said. "If I were a private entity getting one dollar for four, I'm not sure I'd find that to be a good lure."
While the White House's proposal has moved his infrastructure plan from the internal discussion phase to a paper document, the actual investment in federal dollars doesn't reach half of the amount Trump cited on the campaign trail. And the proposal released by the White House faces an uncertain fate in Congress. For now, we rate this promise Stalled.
White House, "Legislative Outline for Rebuilding Infrastructure in America," Feb. 12, 2018
Vox.com, "Trump's infrastructure proposal, explained," Feb. 12, 2018
Email interview with Kevin Heaslip, associate professor of civil and environmental engineering at Virginia Tech, Feb. 12, 2018
Infrastructure plan delayed, but set for January release
During the 2016 presidential campaign, Donald Trump said that his administration would seek to invest "$550 billion to ensure we can export our goods and move our people faster and safer."
This pledge remains on the administration's list of priorities, but 11 months into Trump's presidency, there has been little concrete progress, in part because Congress has turned to other Republican priorities first, including attempting to repeal the Affordable Care Act and enacting a tax bill.
Now, with the tax bill nearing passage, there is a widespread expectation that the White House will introduce an official infrastructure proposal in January 2018, possibly before his State of the Union address Jan. 30, Politico reported.
Early discussions have suggested that the headline number in the White House proposal will be worth $1 trillion -- almost twice the amount promised during the campaign. However, the federal share of spending might be as low as $200 billion, with the rest made up through private investment.
"The hangup will always be how you pay for it, as it always is," said Matt Jeanneret, deputy chief operating officer at the American Road & Transportation Builders Association. "What that $1 million would mean, no one is really sure yet. The private sector likely wouldn't get involved unless there's a benefit to them."
Jeanneret added that it remains unclear how much of the White House proposal will be for transportation-related funding and how much for other areas, such as broadband communications and water projects.
It also remains to be seen how Democrats will react to the pending proposal. Unlike the health care and tax bills, which Republicans were able to address on a 51-vote basis, an infrastructure bill would increase spending, meaning Democratic votes would be needed to reach the 60-vote threshold in the Senate.
Since the White House is still planning to pursue an infrastructure bill, we'll keep this rating at In the Works.
Politico, "Democrats cool to Trump's infrastructure pitch," Dec. 14, 2017
Interview with Matt Jeanneret, deputy chief operating officer at the American Road & Transportation Builders Association, Dec. 14, 2017
White House budget gives rough outline of Trump infrastructure plan
On the campaign trail, President Donald Trump pledged to invest $500 billion in infrastructure. His first annual White House budget calls for $1 trillion.
The budget document, released May 23, says the White House intends to meet this $1 trillion goal through "new Federal funding, incentivized non-Federal funding, and expedited projects that would not have happened but for the Administration's involvement (for example, the Keystone XL Pipeline)."
This means the administration wants to spend about $200 billion over 10 years that it believes will, in turn, spur private investment.
A fact sheet attached to the budget says the government could incentivize more private and local investment by, for example, expanding a program that provides credit and financing for infrastructure projects and lifting restrictions on highway tolls.
The budget also calls for eliminating regulations that the White House views as burdensome to accomplishing major infrastructure projects.
Since Trump's election, some Democrats have expressed willingness to work with Trump on an infrastructure spending plan. But Senate Democrats blasted his budget for actually cutting more than $200 billion from existing infrastructure programs, such as major cuts to Amtrak.
The White House budget is only a proposal, and it doesn't contain much detail. Congress would have to pass legislation for Trump's infrastructure plan to become reality.
The document reflects Trump's policy priorities, though, and so we rate his promise to invest $550 billion in infrastructure In the Works.
White House Office of Management and Budget, "A New Foundation For American Greatness Fiscal Year 2018," May 23, 2017
White House, "Off-camera Briefing of the FY18 Budget by Office of Management and Budget Director Mick Mulvaney," May 22, 2017
White House, "Press Briefing on the FY2018 Budget," May 23, 2017
White House, "Fact Sheet: 2018 budget infrastructure initiative," May 23, 2017