President Trump's Infrastructure Plan Falls Short of Promises
In his victory speech, then-President-elect Donald J. Trump remarked, “we are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals,” He then added that “we will put millions of our people to work.” His campaign promise drew praise from both sides of the aisle. By and large, Republicans and Democrats agree that the miserable state of U.S. infrastructure is in desperate need of repair. On Monday, President Trump unveiled his marquee legislative package to leverage $200 billion in federal investment into a total of $1.5 trillion dollars from state and local governments and private investors to rebuild American crumbling infrastructure. While the notion of more federal investment in American infrastructure is admirable and critically needed, the proposal falls short in several areas. There are far too few federal funds invested. The bill relies too much on private investment and toll roads. The proposal guts key environmental permitting processes, and most importantly, the bill fails to establish a permanent stream of revenue to bolster the unsustainable Highway Trust Fund.
President Trump’s proposal marks a steep departure in how federal appropriations are allocated for transportation and other infrastructure; around half of the $200 billion price tag will go to a competitive program where states and municipalities apply for funding. The funds would then go to localities willing to put up the most cash on their own. Democrats rightfully assert that state and local governments would be forced hike fees and taxes to raise cash to compete for limited funds. The process would also disadvantage larger projects that rely more heavily on federal investment. The bill also falls short of the $4.59 trillion sum, estimated by the American Society of Civil Engineers, required to address the backlog of needed investment.
The proposal also relies substantially on private investment and toll roads. Ten percent of the bill would be used to buttress existing federal loan programs for infrastructure and broaden eligibility for tax-exempt private activity bonds. Oregon Congressman Peter DeFasio, the Ranking Member of the House Transportation Committee, asserted that Trump Administration’s plan would “privatize critical government functions, and create windfalls for their buddies on Wall Street.” The windfall presumably would come from the tax treatment of certain bonds to fund private toll roads. Instead of depending on private investment, it would behoove Congress to appropriate more funds and direct investment straight into their districts. The approach endorsed by the Trump Administration is too circuitous and is nothing more than an unnecessary tax expenditure that litters the Internal Revenue Code.
Unsurprisingly, the legislation reimagines the regulatory framework for the permitting process and not in a good way. The legislation imposes an arbitrary deadline of two years of environmental review for transportation projects. Trump seeks to accomplish this through stripping the Environmental Protection Agency of its authority created under the Clean Air Act and Clean Water Act, Instead of imposing arbitrary deadlines for permit approval, a more effective strategy would be to follow through with existing statutes designed to streamline permitting and fully staffing and equipping the Department of Transportation.
Perhaps, the most glaringly absent policy proposal in Trump’s plan is the lack of a sustainable revenue stream to fully fund the faltering Highway Trust Fund. Doing so would require either raising Federal Gasoline Taxes or finding an alternative stream of revenue. This is an abdication of leadership. The new infrastructure would be offset by some key governmental function. Transportation funding, without Congressional action, will run dry, and it would compound our nation’s capacity to care for our roads and bridges.
If anything, I hope that Trump’s infrastructure proposal is a starting point, rather than a line in the sand. There are some positive aspects of the bill such as the investments in rural communities and a special fund for innovative projects. However, the litany of flaws within this piece of legislation are disappointing given the hype leading up to the unveiling of the President’s proposal. Hopefully, the Administration’s latest move will bring about a thoughtful counterproposal from Senate and House Democrats.
James Nickerson a Senior Editor at Sojourn Review. You can follow him on Twitter here.