US President Donald Trump addresses the Conservative Political Action Conference, February 2017 (Michael Vadon/Wikimedia Commons)

Trump’s $1.5 trillion infrastructure plan underwhelms, outrages US commentators

13 February 2018 | By Joe Quirke 0 Comments

President Trump has issued a $1.5 trillion infrastructure plan for the US, which he claims will “strengthen the economy, make our country more competitive, reduce the costs of goods and services for American families and enable Americans to build their lives on top of the best infrastructure in the world”.

Less than meets the eye

“We will build gleaming new roads, bridges, highways, railways, and waterways all across our land. And we will do it with American heart, and American hands and American grit”– President Trump

Although the $1.5 trillion price tag may seem impressive, only $200bn will come from the federal government over the next 10 years, sourced from budget cuts, with the remainder to come from private investors and state and local governments.

About $20bn of the funding will go towards the Transformative Projects Program, aimed at “bold and innovative projects that have the potential to dramatically improve America’s infrastructure” but which “may not attract private sector investment”.

Another $14bn will be spent on existing credit programs, $10bn will go to a new Federal Capital Revolving Fund, to buy up federal property that is currently rented, and $6bn will go on expanding private activity bonds.

The White House almost immediately issued a defensive news release, letting skeptics know that “although the federal government plays an outsized role in issuing infrastructure permits, it actually owns and funds very few projects”.

“Embarrassingly small”

A Construction Employers of America spokesperson said: “The president wants to invest in the repair and construction of $1.5 trillion in infrastructure projects over 10 years; we are concerned how this level of investment can be achieved with only $200bn in real federal dollars.”

Peter DeFazio, a Democrat member of the House Committee on Transportation and Infrastructure, said: “For more than a year, we have been hearing from President Trump about a big, beautiful infrastructure proposal.

“Now, it turns out President Trump’s plan is embarrassingly small.

“President Trump’s plan slashes real federal investments and shifts the burden to cash-strapped states and local governments. It would cut more than $168bn from existing transportation and infrastructure programs to pay for Wall Street and foreign investors to toll our roads and it would gut bedrock environmental, clean water and clean air protections under the guise of speeding up projects.  

DeFazio’s words were echoed by Chuck Schumer, a Democrat writing in The Washington Post, who commented: “Hedge funds and wealthy investors will want projects that generate a profit by charging middle-class Americans hundreds of dollars a year in tolls, taxes and fees.

“Our nation’s roads, bridges and tunnels would become tools for wealthy investors to profit off the middle class rather than the job-creating public assets they ought to be.”

In 2015, GCR reported that Alison Premo Black, the American Road & Transportation Builders Association chief economist, said: “State and local governments are doing the best they can, but without additional investment from all levels of government, our infrastructure spending will be a zero-sum game.”

Environmental impact

Trump is also strengthening his anti-environmental credentials by creating a “one agency, one decision” initiative for environmental reviews, rather having dedicated agencies each looking into a case, with congressional hearings needed for larger or controversial projects.

The budget would weaken current safeguarding laws, such as the Endangered Species Act and National Environmental Policy Act.

The I35 bridge collapse in Minneapolis in 2007 killed five (Wikimedia Commons)

Collin O’Mara, National Wildlife Federation president, commented: “America is long, long overdue for smart, forward-thinking infrastructure investments, but the administration’s proposal reads more like a strategy to gut clean air, water and wildlife protections, while silencing local voices.

“It is categorically false to suggest that we must sacrifice public health standards and basic environmental protections in order to build critical infrastructure projects efficiently — Americans want and deserve both.”

The Guardian newspaper quotes Shelley Poticha, from the Natural Resources Defense Council: “President Trump’s infrastructure proposal is a disaster. It fails to offer the investment needed to bring our country into the 21st century.

“Even worse, his plan includes an unacceptable corporate giveaway by truncating environmental reviews.”

However, Michael Bellaman, Associated Builders and Contractors chief executive, said: “Addressing regulatory burdens, such as streamlining the federal infrastructure permitting process, will reduce costs and increase the speed of project approval and completion.”

The White House has stated that two pilot programmes will be created to “test new ways to improve the environmental review process”, while limiting the environmental review process to two years.

Rural America

Some $50bn of the federal government’s $200bn is earmarked for a modernisation scheme called “the Rural Infrastructure Programme”.

Most of this $50bn will be given to state governors, who will choose what the money is spent on with little influence from congress. Some will be spent on “rural performance grants”, where projects receive funding if they complement other local or private investments.

Trump said local governments would “prioritise projects based on the needs of their communities”.

Jobs

A unknown amount of financing will go towards training and job opportunities, with Trump’s administration saying it was “committed to helping more individuals access affordable, relevant, quality education and skills development that leads to full-time work and long-term careers”.

In future, states that accept federal funds will have to allow employees from other states to work on their projects. Trump’s administration said this would “speed project delivery, reduce project costs, and provide flexibility to workers with out-of-state skilled trade licences”.

Plans will also be made to allow more people to apply for grants.

What was missing?

Noticeably absent from the infrastructure plan was any mention of Trump’s wall between the US and Mexico, which is estimated to cost $21bn according to a recent government report.

Stephen Sandherr, Associated General Contractors of America chief executive, commented on what he thought was missing: “Congress must identify ways to address chronic funding shortfalls affecting the federal Highway Trust Fund that have put needed highway, bridge and transit improvements at risk too many times during the past decade. 

“Congress must also identify effective and long-term ways to fund other infrastructure improvements that are just as vital to our continued economic success as is the surface transportation program.”

Sandherr’s views were echoed by a press release from the American Road & Transportation Builders Association, which said: “We oppose the simultaneous call for eliminating transit capital and other transportation construction grant programmes put forward.

“The same budget points out the need for a permanent resolution to the Highway Trust Fund’s fiscal instability, but falls short of proposing any meaningful solutions.”

The Highway Trust Fund finances road works from the federal government. GCR reported in July 2014 that they would “begin writing bouncing cheques next month”.

Trump vs Trump

In September last year, GCR reported that Trump planned to pay for infrastructure through federal spending, saying that private funding “doesn’t work”.

During her presidential campaign, Hillary Clinton promised $275bn in direct spending on infrastructure over five years, plus another $225bn in loans and loan-guarantee programmes.

Trump told Fox Business in August 2016: “Her number is a fraction of what we’re talking about. We need much more money to rebuild our infrastructure.

“I would say at least double her numbers, and you’re going to really need a lot more than that.”

Read an overview of Trump’s infrastructure bill here, and the full 55-page document here.

Top image: US President Donald Trump addresses the Conservative Political Action Conference, February 2017 (Michael Vadon/Wikimedia Commons)