Connecting state and local government leaders

5 Things We Know (And Don’t Know) About Trump’s Pending Infrastructure Plan



Connecting state and local government leaders

In the nation’s capital, there was plenty of talk during Infrastructure Week about the forthcoming proposal.

WASHINGTON — There was no shortage of chatter here this week about the possibility significant new infrastructure spending legislation could come together before year-end.

U.S. Transportation Secretary Elaine Chao offered new details about the White House timeline for releasing information about President Trump’s promised infrastructure proposal. She also fielded questions about the administration’s plans during testimony before a Senate committee.

A number of congressional lawmakers offered their views on the package as well, during hearings and at events around town. It was, after all, “Infrastructure Week” an annual event put on by business groups, labor unions and think tanks with an interest in infrastructure.

Below are a few takeaways from some of the discussions that took place about the president's expected plan.

1.) The White House intends to issue an initial proposal soon.

Chao said during her testimony to the Senate Committee on Environment and Public Works that Trump wants to see a document outlining principles for the infrastructure plan released in May.

This document will not be a detailed legislative proposal. It would serve as a starting point for further discussions between the administration and Congress. A legislative package would probably come out in the third quarter of this year, according to Chao.

U.S. Rep. Sam Graves, a Missouri Republican who chairs the House Subcommittee on Highways and Transit, said at an event that an infrastructure bill would come after lawmakers have addressed legislation to make changes to the federal tax code.

“We’re going to have to have a tax reform package before we can move into infrastructure,” he said.

2.) There are big questions about funding.

Chao indicated in her testimony and during remarks at an event sponsored by the U.S. Chamber of Commerce that the president’s proposal would call for $200 billion in direct federal funding, which would be used to “leverage” $1 trillion in total investment over a decade.

Asked about funding for the infrastructure package during the Senate hearing, Chao acknowledged that “the gas tax per vehicle-mile has been decreasing"—a reference to how improved vehicle fuel efficiency has eroded federal gas tax revenues in recent years. She then added: “The good news is nothing is off the table.”

Congress has not acted in over two decades to increase the gas tax, which is a key source of transportation funding. It is currently 18.4 cents per gallon, equivalent to its level in 1993. The tax rate for diesel is 24.4 cents per gallon.

Trump said in an interview with Bloomberg News in early May that he was not committed to a gas tax increase but that, “it’s something I would certainly consider.” White House spokesman Sean Spicer, when later asked about the president’s comments concerning the possibility of gas tax hike, emphasized: “There was no endorsement of it or support for it.”

Graves said there would be “a repatriation component” to funding the president’s infrastructure plan. There are different types of “repatriation” tax models. But, in short, they focus on taxing offshore corporate profits. The recently released one-page description of Trump’s tax plan calls for a one-time tax on “trillions of dollars” companies now have overseas.

U.S. Sen. Tom Carper, a Delaware Democrat who is the ranking member on the Environment and Public Works Committee, said this week that tolling on newly constructed highway projects was a good idea in his view. He also suggested it would make sense for the federal government to move toward a program that charges motorists fees based on the amount of miles they drive.

3.) Some GOP lawmakers remain leery of rural P3s.

Private investment is expected to be a major part of Trump’s infrastructure proposal.

“We need to be incentivizing state and local entities” to engage more with the private sector, Chao said, “to not discriminate against the private sector.”

But there’s ongoing debate over the extent to which perks like tax incentives are needed to lure new private investment toward public infrastructure projects. And there are doubts about how well public-private partnerships, or P3s, will serve small and rural communities.

“Public-private partnerships can be effective in urban areas but don’t work for rural states,” said U.S. Sen. John Barrasso, a Wyoming Republican who chairs the Environment and Public Works Committee. The senator has made similar statements previously.

4.) The administration is defining infrastructure broadly.

Based on Chao’s comments, the Trump administration is taking an expansive view of infrastructure. “The proposal will include not only transportation infrastructure,” she said in her testimony. “But also energy, water, possibly broadband, veterans hospitals.”

The secretary later added that “There will not be a specific list of projects” in Trump’s proposal.

Barrasso takes the position that highways, roads and bridges should be a central element of any infrastructure investment bill. He has also voiced a preference for adhering to the existing federal funding formulas that guide how transportation dollars get distributed to states.

But when Barrasso asked Chao if she agreed the formula approach was preferable to creating a new way to distribute money, she gave a noncommittal answer.

“We have certainly talked a great deal about formula funding,” she said. “That certainly has been one way in which the various demands and requirements of members of Congress are addressed. So we are still talking about that.”

5.) There are still doubts.

It’s still far from certain an infrastructure bill will reach Trump’s desk in the coming months.

Looking ahead, Congress has other major items on its agenda, dealing with issues like health care, the tax code and the federal budget. And the Trump administration continues to grapple with controversies, particularly inquiries into links between the president’s campaign and Russia.

Among some insiders watching progress on the infrastructure package, there’s skepticism.

“We’re, what, five months into a new administration and not one thing has happened,” Norman Anderson, president and CEO of CG/LA Infrastructure, Inc., said as he discussed the administration’s infrastructure ambitions at an event this week. Anderson’s firm helped to develop a list of possible infrastructure projects for the White House to consider prioritizing.

“Nothing has happened,” Anderson added. “That’s a big deal.”

Route Fifty’s additional Infrastructure Week coverage can be found here:

Bill Lucia is a Senior Reporter for Government Executive’s Route Fifty and is based in Washington, D.C.

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