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Trump's Infrastructure Plan Hits Early Roadblock over Funding

Democrats’ call for more funding comes in addition to the tax measure costing $1.5 trillion over 10 years, and Republican leaders say they don’t want a big spending bill.

(Bloomberg)—Top Democrats are questioning President Donald Trump’s infrastructure plan even before it’s released, raising doubts about whether the administration’s approach can win bipartisan support.

Trump has long touted his plan to upgrade U.S. public works as something that can win Democratic backing, and he will appeal to Democrats on infrastructure in his State of the Union address on Tuesday. He’s offering at least $200 billion in federal money over 10 years to spur states, localities and the private sector to spend as much as $1.6 trillion.

Democrats say that’s not nearly enough. Senate Minority Leader Chuck Schumer and other Senate Democrats have called for $1 trillion in federal investment. The American Society of Civil Engineers has said more than $2 trillion in additional funding is needed by 2025 to upgrade conditions of everything from roads, bridges and airports to mass transit and drinking water.

“It’s a ‘nothing burger,’” Oregon Representative Pete DeFazio, the top Democrat on the House Transportation and Infrastructure Committee, said of the administration’s proposal in a Jan. 9 interview. “It has to have real investment, not just a bunch of polemics and ideology pretending to be taking major steps to rebuild our infrastructure.”

Infrastructure Next

Infrastructure is the next big item on Trump’s legislative agenda, after a failed attempt to overhaul health care and passing a tax bill last year. But Democrats’ call for more funding comes in addition to the tax measure costing $1.5 trillion over 10 years, and Republican leaders say they don’t want a big spending bill. The push also follows the acrimonious government shutdown, and lawmakers are already fighting about budget spending with mid-term elections looming in November.

Trump is expected to tout his infrastructure plan in his State of the Union speech, and detailed principles will be transmitted to Congress a week or two after that to start the legislative process, adviser DJ Gribbin said.

With Republicans controlling the Senate by only a 51-49 margin, Trump needs Democratic votes. It’s unlikely an infrastructure bill can pass on a simple, party-line majority, the way the tax overhaul was enacted last year, using what’s known as budget reconciliation.

Carper Skeptical

Delaware Senator Tom Carper, the leading Democrat on the Senate Environment and Public Works Committee and a former governor, said he supports encouraging states and localities to generate funding for projects. But he returned from a meeting with administration officials earlier this month skeptical about their approach.

“Can we do a better job using scarce resources to leverage state and local monies? Yes,” he said. “But I’m still not sure how you transform $200 billion into $1 trillion. You’ll have to show me.”

Representative Bill Shuster, the Pennsylvania Republican who is chairman of the House Transportation and Infrastructure Committee, said he has told Trump that any bill must be bipartisan and fiscally responsible.

Democrats will want to address the Highway Trust Fund, which uses primarily federal fuel taxes to help fund state and local projects but is projected to become insolvent by 2021, Shuster said. Republicans don’t want deficit spending, he said.

“So we have to find a path forward that satisfies both the Democrats and Republicans,” Shuster said. “But I believe there is a path forward.”

Bipartisan Appeal

Trump will appeal to Democrats in his State of the Union speech that a bipartisan approach is needed to rebuild the country, Marc Short, the White House legislative affairs director, said on “Fox News Sunday.” Trump has eyed Democratic support for his public-works plan, in part because it means jobs for the Democrats’ traditional allies in labor unions.

There’s no doubt that Democrats in Congress will want more federal dollars, but there’s a significant debt problem in the U.S., Short said. “This can’t just be all federal largess that pays for this,” he said.

 

Some governors and mayors have said they’re already paying their fair share and that they need a better federal partner. But Trump wants to allow communities to keep more of their funds, make their own decisions, and “simplify the federal bureaucratic maze,” White House spokeswoman Lindsay Walters said.

“The Washington establishment still thinks that infrastructure can only be built correctly if they make all the decisions and control the purse strings, but one look at the crumbling bridges and roads across America shows that approach has failed,” Walters said in an email.

Shift Burden

Still, allocating $200 billion in federal funds is “a drop in the bucket” compared with the cost for slashing taxes for corporations and the wealthy in the tax bill, said Senator Ron Wyden, the top Democrat on the Senate Finance Committee. It appears Trump also wants to shift the funding burden to states and cities already strapped for cash, he said.

“This is not a formula to pull our infrastructure out of disrepair,” Wyden said in a statement.

Drew Hammill, a spokesman for House Minority Leader Nancy Pelosi said “a token GOP infrastructure plan” that guts environmental protections, privatizes assets and increases tolls won’t work, and that Democrats “will continue to fight for broad, bold federal investment.”

New Approach

Trump’s White House wants to change the approach to funding projects to reduce over-reliance on federal money and get more public works built and maintained. A leaked draft of principles that emerged this week said half of the federal monies would go toward incentives in a competition to encourage non-federal entities that own most assets to secure their own funding for projects. Tax-exempt bonds also would be expanded to help attract private investment, according to the draft.

White House officials have said the plan being developed also would allocate funding for rural projects, money for federal lending programs and “transformative” projects that can’t secure private financing. Streamlining environmental reviews and permitting to get project approvals in an average of two years also will be part of the plan, officials have said.

Gribbin said the White House is “open to conversations” with lawmakers about increasing the $200 billion, and the administration is purposely not including new revenue in its proposal to allow those details to be negotiated with Congress.

Streamlining Approvals

Congressional Republicans have been supportive of streamlining project approvals and leveraging federal dollars, though lawmakers who represent rural areas, including John Barrasso of Wyoming, chairman of the Senate Environment and Public Works Committee, have expressed concerns about relying too heavily on private investment that doesn’t work well in less-populated areas.

Barrasso has said his panel was working on a bill while waiting for a White House proposal. Committee Democrats outlined a blueprint in July that called for more than $500 billion and may draft their own measure, Carper said. Other committees would also be involved.

While some administration proposals are good, $200 billion in federal funds “barely gets you out of the starting gate” in addressing deficient bridges and other U.S. needs, said Ed Rendell, the former Democratic governor of Pennsylvania who co-founded Building America’s Future, a bipartisan coalition of officials that promotes infrastructure spending. He called the White House framework “dead on arrival.”

“It’s all show and no go,” Rendell said. “You can’t do infrastructure without a significantly sized federal commitment, and I think it has no chance to get Democratic votes -- and it won’t get 100 percent of the Republican votes because of the Tea Party.”

Spending Amount

Ray LaHood, a Republican and former transportation secretary under President Barack Obama, said he thinks it’s possible to find a spending amount that both Democrats and Republicans could support “if people will be reasonable and talk to one another.”

“I think the administration really wants to be bipartisan on infrastructure and wants to include Democrats and wants Democrats in the room when the bill is written and when the funding sources are really determined,” said LaHood, who is a co-chairman of Building America’s Future.

Even so, getting a major infrastructure bill enacted in 2018 will be “an uphill climb,” said Stephen Sandherr, chief executive officer of the Associated General Contractors of America, representing more than 26,000 construction companies and other firms. Sandherr said a lot of his members are more optimistic than he is because of the partisan political battles during the past year.

“To think that they’re all going to now, all of a sudden in the new year sit around a campfire, hold hands and sing ‘Kumbaya’ on infrastructure is a little bit unrealistic,” Sandherr said on a conference call with reporters earlier this month.

To contact the reporter on this story: Mark Niquette in Columbus at [email protected] To contact the editors responsible for this story: Sara Forden at [email protected] Elizabeth Wasserman

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