President-elect Trump will need to win over the fiscal hawks inside his own party to follow through on one of his most popular campaign promises, a massive investment in the nation’s infrastructure.
Trump’s promises to revamp the nation’s roads, bridges, airports and other vital infrastructure could cost upward of $1 trillion, according to some estimates. Coupled with a tax cut that could cost the country a bit less than $6 trillion, that would be a massive expansion in the federal debt that some fiscal conservatives are already loathing.
Michael Sargent, a research associate at the Heritage Foundation, said the details of Trump’s plan would be the sticking point for many conservative lawmakers. At this point, no one knows what Trump’s plan will entail, how much it would cost and how it would be paid for, he said.
Republicans are generally more willing to spend on infrastructure than on other issues, and there are ways Trump can make it easier for them to politically swallow an infrastructure package, he said.
“Is it going to be direct spending? That would have to be offset. But, if you do things like tax credits or Build America Bonds … that allows you to say that helps spur private investment,” he said.
Trump has suggested the idea of a private fund that would pay for infrastructure improvements across the country, similar to the way state turnpikes are structured. Specific details on that proposal haven’t been released.
During her confirmation hearing for transportation secretary on Wednesday, nominee Elaine Chao said she would be looking at “all the options and to create a mix of practical solutions — both public and private — that provide the greatest cost-benefit to the public.”
One of the most important groups of lawmakers Trump’s team will have to work with is the House Freedom Caucus, sometimes known as the Hell No Caucus because of its reluctance to expand the federal debt.
The caucus and its approximately 40 members have been a thorn in the side of both President Obama and Republican House leadership in recent years. The group votes as a bloc and announced last year it wouldn’t support any budget that would increase the federal debt.
However, the group seems to have softened in recent months toward the idea of expanding the debt. When a budget was proposed by congressional Republican leadership earlier this month that would increase the debt by $10 trillion over the next decade, some members of the caucus said they would support it because its goal was to repeal Obamacare.
Rep. Mark Meadows of North Carolina, the chairman of the group, said Trump’s infrastructure plans could be another place where the group would bend, if there was a smart way to pay for it.
“Meadows is generally more focused on the pay-fors involved in a plan like this as opposed to just the price tag itself,” said Ben Williamson, Meadows’ spokesman. “If we can find a responsible way to pay for an infrastructure package like this one, then we’d certainly be open to it. We’re looking forward to working with the president-elect’s team.”
In the Senate, one fiscal conservative is already making noise about putting up a major fight against any measures to increase the debt.
A few days into the new Congress, Kentucky Sen. Rand Paul went to the Senate floor to complain about the budget resolution proposed by Senate Republican leaders. He winced at the idea of adding $10 trillion in new debt during the next decade, the estimates included in the new budget. When the Senate took up the budget resolution two weeks ago, Paul was the only Republican senator to vote against it.
Paul’s office declined to comment about what could get him to support an infrastructure spending plan, but in that floor speech he made his feelings about the debt clear.
“So this is what Republicans are for. This is the blueprint that the Republican Party says they’re for. Ten trillion dollars worth of new debt,” he said. “I’m not for it. That’s not why I ran for office. It’s not why I’m here. It’s not why I spend time away from my family and from my medical practice. It’s because debt is consuming our country.”
Sargent said Heritage will be looking for reforms to be included in the infrastructure legislation to give the proposal its stamp of approval.
He said the conservative think tank wants to see changes in how the Highway Trust Fund is used. Too much money is being sent to mass transit, pedestrian walkways, bike lanes and “things that the original Highway Trust Fund was never meant to fund,” he said.
An infrastructure package that allows states to figure out how to spend the money would be a major plus for Heritage, Sargent added.
But it looks like any discussion on infrastructure will have to wait until later on in the Congress, despite many lawmakers thinking it’s one of the only areas Trump and lawmakers could work together easily. Instead, the fight over repealing Obamacare looks set to be the first battle of the Trump administration, followed by tax reform.
Sargent said there’s no political urgency for lawmakers to move on infrastructure spending immediately, especially considering a five-year, $350 billion package for the nation’s highways was signed in December 2015. That allows the infrastructure package to possibly serve as a salve to heal wounds opened up during the Obamacare fight.
“Politically for both Congress and the president-elect, a big infrastructure package would make sense and would be a success,” he said. “It would be an olive branch and bring people together.”
Yet, there’s no guarantee the Trump administration would produce legislation that would pass Congress even with a unified Republican government.
Sargent said he expects the Trump administration to develop a proposal this year. The question is what will that package look like after Congress gets its hands on it.
“Once you have this huge package going through Congress, everyone’s going to want their own bite at the apple, the industries are going to want to get their priorities in there,” he said.
“It could turn into a Frankenstein and die under its own weight.”
