The Trump administration hopes that $200 billion in new federal infrastructure spending over the next ten years can trigger up to $1.8 trillion in investments by the private sector plus state and local governments, to the benefit of roads, bridges and jobs.
In a plan to be announced Monday, the White House hopes to make due on a campaign promise to bolster the country’s roads and bridges, sink $50 billion into new rural infrastructure programs, and speed up the permitting process to allow new projects to proceed far more quickly.
“Every federal dollar should be leveraged by partnering with state and local governments and, where appropriate, tapping into private sector investment — to permanently fix the infrastructure deficit,” President Trump said in his State of the Union address. “Any bill must also streamline the permitting and approval process — getting it down to no more than two years, and perhaps even one.”
"We used to build them in three months, and now it takes years and years of approvals. We're going to bring that down, ideally, to one year. Two years is our goal, but one year is our real goal," Trump added.
Senior administration officials said they wanted to implement deep-seated policy, regulatory and cultural shifts within the federal government to make “shovel-ready” a real possibility when it comes to building a sagging national infrastructure.
But that phrase raises the challenges any Trump infrastructure program faces. Democrats would like to see more federal spending and direction, fearing the nascent White House proposals lack both. Republicans don’t want a repeat of the $1 trillion Obama administration stimulus package, especially after a bipartisan and bicameral budget deal that threatens to restore the massive budget deficits that accompanied the Democrats’ largely ineffectual pump-priming.
The White House said the president would be willing to negotiate on the $200 billion figure to win Democratic support, arguing that infrastructure should be a bipartisan initiative. But is there a limit to how far Trump would go in raising that number? “Of course,” said a senior administration official.
Early on, Democrats ranging from Senate Minority Leader Chuck Schumer, D-N.Y., and House Minority Leader Nancy Pelosi, D-Calif., to socialist Sen. Bernie Sanders, I-Vt., pledged to work with the Trump administration on infrastructure.
“If Donald Trump comes up with an idea or a program which he campaigned on that says that our infrastructure is crumbling, that we can create millions of jobs rebuilding our infrastructure, that we’re going to put people back to work at decent wages, yeah, I will work with him,” Sanders told reporters at a Christian Science Monitor breakfast after the presidential election.
But since then, there have been high-profile fights on Obamacare, immigration, judicial appointments, taxes and the Russia investigation. It did not take long for Sanders, in particular, to pivot to calling Trump infrastructure proposals a “scam” and “corporate welfare.”
Democrats are already calling for up to five times more federal spending on infrastructure, at a time when conservatives are steaming over the projected return of $1 trillion federal budget deficits.
Administration officials insist they are on solid ground politically when it comes to pushing infrastructure funding obligations onto state and local governments. These levels of government already fund, operate and maintain most of these projects, they say, while Washington makes most of the rules. They want states and municipalities to match federal allocations by a four-to-one ratio, arguing that massive national expenditures will crowd out spending by lower levels of government.
"There will be a lookback provision so that states and local governments who have already recently raised revenues aren't penalized for being forward thinking and implementing the types of policies that we're encouraging through this program," said one official.
They point to polling done for the National Governors Association that shows 72 percent of Americans have a “great deal” or “fair amount” of confidence in local authorities to handle infrastructure projects while 62 percent said the same of the states and only 40 percent said so about the federal government.
Some business groups, like the U.S. Chamber of Commerce, also want more federal spending than in the administration’s initial proposal and are willing to see an increase in the gasoline tax to make it happen. The last increase in this federal levy was part of the 1993 tax hike signed into law by President Bill Clinton, over unanimous Republican opposition.
Another problem the White House could face is that Democrats may be unwilling to hand the president a bipartisan legislative victory in an election year. But two can play at this game.
“[I]f Democrats want to continue to play the obstruction game, Republicans should dare them to vote against fixing a bridge or highway in their home district heading into midterm elections,” Christian Ferry, a Republican strategist, told the Washington Examiner earlier this year.