Why Trump’s $1 trillion infrastructure plan could wind up in a ditch
Why Trump’s $1 trillion infrastructure plan could wind up in a ditch
His hopes for a ‘very bipartisan’ bill are running into the same kinds of political forces that torpedoed the Obamacare repeal.
By Lauren Gardner
04/10/17 06:27 PM EDT
President Donald Trump and his senior advisers have ramped up their infrastructure chatter as the White House looks for a win to move past setbacks like the GOP’s health care debacle. | AP Photo
President Donald Trump is counting on his $1 trillion infrastructure proposal to produce the kind of bipartisan legislative victory that has eluded him on health care and pretty much everything else.
Instead, he’s running into familiar roadblocks: suspicious Democrats, a divided GOP and questions about the math.
Trump’s plan, expected to be released as early as May, has already faced months of skepticism from some conservative deficit hawks — even though it’s likely to call for far less direct federal spending than its eye-popping price tag implies. Meanwhile, Democrats are crying foul at suggestions that the blueprint will include hefty tax breaks for private investors and a shredding of permit requirements.
And even if the plan entails just a few hundred billion dollars in direct federal spending on roads, bridges, tunnels, railroads and airport upgrades — as most leaks to date indicate — no easy answers exist on where Congress would find that money. Trump is expected to let lawmakers do the heavy lifting on those details, which most likely depend on Congress' ability to craft a once-in-a-generation overhaul of the tax code.
Still, Trump and his senior advisers have ramped up their infrastructure chatter as the White House looks for a win to move past setbacks like the GOP’s health care debacle. “I think it’s going to be one of the very bipartisan bills and it’s going to happen,” the builder-turned-president told The New York Times last week, saying Democrats in particular are “desperate for infrastructure.”
But here are some of the biggest reasons Trump’s vision may fall short:
1. Democrats don’t like what they’re hearing
After the November election, top Democrats like Senate Minority Leader Chuck Schumer of New York sounded optimistic that they might be able to work with Trump on a big-ticket infrastructure initiative. That would seem to mesh well with Democrats’ traditional priorities: Hillary Clinton had proposed her own infrastructure package during the presidential campaign, and former President Barack Obama spent years unsuccessfully proffering similar ideas to congressional Republicans.
But Democrats’ enthusiasm has waned sharply as the likely contours of Trump’s plan have become clearer — and as his low polling numbers have lessened the political incentive to cooperate with him.
Based on leaks, his advisers’ remarks and Trump’s own past rhetoric, the plan will probably rely less on direct federal spending and more on tax breaks, partnerships with private enterprise and other incentives for investors to put money into projects. Leaks have indicated that the plan would probably involve somewhere from $160 billion to $300 billion in spending, probably over a decade, with the aim of “inducing” public and private investments that would total $1 trillion or more.
“It doesn’t necessarily mean that it will be a trillion dollars off of the government’s balance sheet,” Treasury Secretary Steven Mnuchin told Fox Business in late February. But he said the plan will still be “one of the most significant we’ve ever seen, and we’re going to rebuild America.”
Democrats, though, fear that many of the tax breaks would go to projects that would have been built anyway, making the proposal more of a boon to investors than a source of jobs.
Trump and Transportation Secretary Elaine Chao have also been vocal in portraying red tape as the major impediment to putting shovels in the ground — leading Democrats to suspect that the administration will use infrastructure as another excuse to gut environmental permitting.
Mainly, they say, Trump needs to start filling in the blanks.
“Every conversation or any interaction I have had with the president has been infrastructure, infrastructure, infrastructure,” House Democratic leader Nancy Pelosi of California said at a news conference last week. “Where's the bill? Show us the bill.”
2. Republicans are still unsure of the details
Even the lower-range cost estimates could be hard to swallow for conservative groups if they'd add to the federal budget deficit. House Speaker Paul Ryan (R-Wis.) has also expressed less than overwhelming enthusiasm for passing a big infrastructure package, while noting that it’s been less than 18 months since Congress enacted a $305 billion, five-year transportation bill.
Both Republicans and Democrats who represent rural regions have expressed concern about another idea Trump and his advisers have floated: public-private “partnerships” that would entice investment. Lawmakers tend to agree that such arrangements make sense in some urban areas where private companies can recoup their money by levying tolls or other charges — but in less-populated regions, they say, charging users simply wouldn’t recoup enough money.
Unlike with Democrats, for many Republicans these may just be details to wrangle about — once they see the details. But even Trump himself has seemed unsure about the partnerships. “We haven’t made a determination as to public/private,” he said in the Times interview. “There are some things that work very nicely public/private. There are some things that don’t.”
3. The return of 'shovel ready'?
Trump emphasized speed in a speech last week to a gathering of building trades unions, saying communities that want a slice of his infrastructure money need to be ready to seize the opportunity.
“We’re going to say, if you don’t spend the money — if you don’t start — if you have a job that you can’t start within 90 days, we’re not going to give you the money for it,” Trump said.
But the Obama administration ran into trouble when it pushed for “shovel ready” transportation projects in its $832 billion stimulus eight years ago. The problem: Even projects on “ready to go” lists can take years to be realized, even if they can be started right away — and often that means taking funding in stages, giving the appearance of “unused” money.
In addition, many of the country’s most desperately needed projects — such as the Gateway tunnel that New York wants under the Hudson River — are by design enormous, multiyear undertakings, involving much more than simply laying down some asphalt.
Still, White House officials have continued to drive home their zeal for quickness, including during a recent conference call with representatives from various state offices. The officials emphasized their desire to cut through regulatory and permitting obstacles, according to people familiar with the call.
“The sense that was conveyed was, how much can you get done if we improve the process, and a lot less focused on the dollars or the resources that would be provided on that end,” one person told POLITICO.
4. Where does the money come from?
Lawmakers have called a tax overhaul the most likely avenue to pay for Trump’s proposal. But even that will probably be no easy lift, as shown by GOP infighting over a proposed border tax. In addition, some congressional tax-writers are wary of linking the two issues, fearing that spending too much of the money generated by tax changes could tank the whole effort.
Democrats haven’t been awash in original suggestions either, even as the government’s traditional transportation financing source — the Highway Trust Fund — has withered amid falling gasoline tax revenue. When Schumer and other Democratic senators put out their own $1 trillion infrastructure plan in January, they leaned heavily on federal spending but skimped on details on how they’d pay for it.
5. Infrastructure vs. immigration
Another potential obstacle to Trump’s infrastructure plan is his crackdown on illegal immigration.
That’s because some of the country’s greatest transportation needs are in cities like New York, Los Angeles, Boston, Chicago, San Francisco, Baltimore, Washington, D.C., and Newark, New Jersey, which have declared themselves “sanctuaries” for undocumented immigrants. Trump has vowed to cut off federal grants to local governments that won’t cooperate with federal immigration authorities.
The administration hasn’t spelled how it would carry out that threat, but the White House’s rhetoric hasn’t indicated much room for compromise. Trump’s order announcing the cutoff said sanctuary cities “have caused immeasurable harm to the American people and to the very fabric of our Republic.”
6. But what if everything goes right?
Still, things could go Trump’s way this time. A tax overhaul could generate trillions in new revenue, and GOP lawmakers could unite to give themselves and the president a much-needed victory.
One intangible factor could be the visceral appeal that infrastructure seems to hold for Trump, who repeatedly played up his builder bona fides in his labor speech last week.
“So did you ever think you’d see a president who knows how much concrete and rebar you can lay down in a single day?” Trump asked the audience. “Believe me, I know.”
Republicans say they think Democrats, despite their complaints, will come to the negotiating table when work begins in earnest. And some say enthusiasm from Trump could be the ingredient to make it work.
“Obama never really had infrastructure on his mind,” said Sen. Jim Inhofe (R-Okla.), who worked with Democrats on two major transportation laws. “This president does, and one thing we’ve learned — whether you guys like him or not — he does what he said he was going to do. Maybe to a fault, but he does.”
http://www.politico.com/story/2017/0...dblocks-237082
