WASHINGTON – While President Trump received applause for asking Congress to produce a bill that generates at least $1.5 trillion in new infrastructure investment, lawmakers and others said too many hurdles exist to expect enactment of any such legislation at this juncture.
For starters, President Trump has not proposed a way to pay for his plan and that troubles both Republicans and Democrats.
White House officials and a draft of the plan have been consistent in proposing $200 billion of direct federal funding that could be leveraged to $1 trillion, or the higher $1.5 trillion figure that Trump mentioned in his State of the Union speech.
The higher amount may stem from the recently enacted lower tax rates and the fact that the administration could, for example, expand the amount of tax-exempt private activity bonds that could be issued with the same loss of federal revenues over 10 years, sources said.
"The question is, how are you gonna pay for it?” Senate Majority Whip John Cornyn, R-Texas, told reporters according to Politico. “You tell me how we pay for it and I’ll tell you what we can do … leveraging private dollars is a good start but we’ve got a lot of work to do.”
“And the obvious thing is, where are we with debt and deficit and how are we going to be able to pull it together?" asked Sen. James Lankford, R-Okla.
“The issue is where you get the resources” for an infrastructure plan even if there is widespread agreement that one is needed, said House Democratic Whip Steny Hoyer, D-Md. “What we don’t want to see is an increasing exacerbation of the deep, deep hole that we’re creating for our debt with the $1.5 trillion from the tax cut.”
The mid-term elections later this year will make it hard for House and Senate members to vote for an increase in spending with no pay-fors, especially after the increase in the federal deficit from the tax law changes enacted in December, sources said.
D.J. Gribbin, special assistant to the president for infrastructure policy, told the nation’s mayors meeting here last week that that the money for the infrastructure plan would not involve new revenues and would be instead come out of existing Amtrak and transit programs.
But Rep. Peter DeFazio, D-Ore., the ranking minority member on the House Transportation Committee, told CBS News, "Cutting other already under-funded transportation programs to fund a new fanciful program is not going to happen. It's a non-starter with both sides of the aisle and both houses."
The American Public Transportation Association agreed, saying, “That action would be a step backwards and counterproductive, as well as harmful to the economy and to the tens of millions of people who depend on public transportation.”
In addition, there are debates over what the infrastructure bill should contain. Gribbin told the mayors that the bill would not eliminate the ailing Highway Trust Fund, which is supported by fuels taxes and serves as the main source of highway and transit grants to state and local governments.
But the draft version of the leaked infrastructure plan was silent on the HTF.
The U.S. Chamber of Commerce, the American Association of State Highway and Transportation, APTA, and some lawmakers have all called for the HTF to be fixed with an increase in federal fuels taxes – a controversial issue in Congress. Many lawmakers are loathe to increase taxes, especially in an election year.
The American Association of State Highway and Transportation Officials executive director Bud Wright said AASHTO is pushing for “a long-term strategy to shore up the Highway Trust Fund in order to maintain federal investment in surface transportation.”
Kristina Swallow, president of the American Society of Civil Engineers said after Trump’s speech, “I urge Congress to develop legislation that increases federal investment in infrastructure, including fixing the Highway Trust Fund.”
The draft of the administration’s infrastructure plan called for an expansion of interstate tolling and more private investment.
But the American Trucking Associations is adamantly against more tolls and public-private partnerships.
“America cannot be rebuild with funding gimmicks and finance schemes,” it said after Trump’s State of the Union speech. ATA has proposed the creation of a Build America Fund that would be backed by fuels fees built into wholesale prices and collected at fuels terminals. ATA says the fees would generate $340 billion over 10 years.
The International Bridge, Tunnel and Turnpike Association, however, supports tolling. The current federal restriction on tolling of the interstate system is [a] barrier to increased highway investment. Some of the highest capacity, interstate quality highways in America would never have been built without tolling,” said Patrick Jones, executive director and CEO of IBTTA.
Trump talked about partnering with state and local governments. But the draft of his infrastructure plan would flip the historical federal cost-sharing on its head, asking governments to pay 80% rather than 20% of some project costs. It would also put the federal government, rather than state and local governments, in charge of picking most of the infrastructure projects to be funded.
“The recently leaked Trump plan would kick the responsibility for funding infrastructure to states, or allow private developers to obtain federal loan guarantees in exchange for the privilege of collecting tolls from American taxpayers,” said Josh Bivens, director of research at the Economic Policy Institute. “That’s not an investment in the public good. It’s an open invitation for crony capitalism, corruption, and rampant inequality of public investments across communities.”
Trump got much applause at his proposal to speed up permitting and the regulatory process for infrastructure projects so that it takes two years or less.
“We are encouraged by the President’s call to cut burdensome regulations and laws that prevent states from accessing all available funding options to meet their local needs,” said Jones.
But environmental groups have complained that a leaked legislative package for that plan would undermine key environmental laws.