The White House finally released its long-awaited bill on Monday.
It’s been more than a year since Donald Trump’s presidential campaign started talking about a $1 trillion infrastructure plan. On Monday, the White House released an actual 55-page legislative outline.
In the intervening 16 months, the details have shifted, several unofficial Infrastructure Weeks have come and gone, and the total investment that’s being articulated has ballooned to $1.5 trillion. But the underlying philosophy hasn’t budged: This not a spending plan, but a financing idea. Trump’s bill does not include new money for funding infrastructure.
In fact, taken alongside the White House’s budget request for 2019, also released on Monday, infrastructure spending is actually in for a net reduction. The Center for American Progress said in a press call on Monday that the organization counted $281 billion in cuts to infrastructure programs in the proposed budget.
The crux of the infrastructure bill, based on a document uploaded to Scribd by a Business Insider reporter, is to dole out $100 billion in federal infrastructure grants to cities, counties, and state governments. The emphasis is not on the type of project, but on shifting the funding burden to those states and localities: To qualify for a grant, applicants would need to pay for at least 80 percent of the costs of a project, be it a toll road, transit system, telecom network, or water pipeline. A primary goal of this “Infrastructure Incentives Program” is “attracting significant new, non-Federal revenue streams dedicated to infrastructure investments,” according to the bill.
Another $50 billion would be distributed as state block grants for rural communities, plus $20 billion for risky, “transformative” infrastructure projects. (Hyperloop? Maglev high-speed rail?) The rest would fill a federal fund to encourage the use of private activity bonds, and another for improvements to federal properties. The bill also outlines steps for dramatically speeding up the environmental permitting process, a perpetual boogeyman of the GOP. “We built the Empire State Building in just one year,” Trump said during his State of the Union address last month. “Isn’t it a disgrace that it can now take 10 years just to get a minor permit approved for the building of a simple road?”
Environmental advocates have balked; in a press release, the Union for Concerned Scientists describes the infrastructure plan, overall, as a “pretext for regulatory rollbacks.”
All told, only $200 billion in federal spending is called for, with the remaining $1.3 trillion to be generated by state and local governments, as well as private investors. And when the likely source of federal funds is accounted for, it’s not really spending at all. According to a White House official who briefed reporters on the plan over the weekend, the money would come from cuts to TIGER and New Starts, USDOT grant programs popular on both sides of the political aisle. Trump calls to slash their funding in the 2019 budget request. Congress rejected his similar request last year.
This infrastructure plan may be a non-starter in Congress, too. “You won’t find someone on Capitol Hill over the last 20 years who doesn’t believe we shouldn’t directly fund the investments we make at a federal level,” Adie Tomer, a fellow at the Brookings Institution Metropolitan Policy Program, told me in January. Governors and mayors have already vocally disapproved of a plan to dump infrastructure costs even more heavily on them: Nearly half of all states faced budget shortfalls in 2017, as I reported in January. Growing infrastructure needs are a leading cause of fiscal strain for city leaders.
The American Society of Civil Engineers famously estimates that the U.S. is about $2 trillion short of the infrastructure spending required to achieve a “state of good repair.” This plan outlines a $1.5 trillion target. But it does nothing to address the long-term revenue problems that beset the Highway Trust Fund, the source of the vast majority of infrastructure spending in the U.S. In fact, Trump’s 2019 budget request calls for a $122 billion cut to the Highway Trust Fund after 2022.
And the bill does nothing to prioritize maintenance—the real multi-trillion-dollar infrastructure crisis—over new construction projects. Quite the contrary: States and local governments tend to raise sales taxes and draw private investors with the promise of new transit systems, bridges, and toll roads.
Arguably, it’s existing systems that need federal dollars the most. Look at the numbers: From 2004 to 2008, just 43 percent of state road budgets went to maintaining existing roads, which make up nearly 99 percent of the U.S. road system. More than half the money went to the other 1 percent—new construction. States did a little better after 2008, but not much; no surprise, road conditions went downhill in that timeframe.
“We’re saddling future generations with ever-burgeoning debt and infrastructure that needs maintenance and replacement,” Representative Elizabeth Esty told me in January; the Connecticut Democrat leads the bipartisan Congressional Infrastructure Caucus. “It’s not really reasonable to think that those needs can be met just by financing or leverage. That’s not addressing the baseline.”
The White House’s infrastructure bill comes a year and four months after Donald Trump’s presidential campaign released its first infrastructure white paper. In that memo, Wilbur Ross and Peter Navarro, now Trump’s Secretary of Commerce and top trade advisor respectively, outlined a plan in which $200 billion in federal funds would spur another $800 billion in private investments through tax breaks and incentives. Critics teed off on this idea from many angles —as a “trap” benefitting deep-pocketed investment firms, as a deep misunderstanding of how to lure private investments to public projects, and as shutting out a funding source for critical projects unlikely to generate ROI.
Although it sets aside block grants for sparsely populated rural areas, it is still hard to imagine how, for example, a city like Flint, Michigan would benefit from the White House bill. An impoverished city in a fiscally strained state, Flint needed millions of dollars to rebuild the lead water pipes that sickened residents. There are thousands of U.S. cities with worse lead-poisoning rates than Flint, many of them poor. It is not reasonable to expect that local tax increases, or private investors, could solve this problem.
“There are many, many projects that involve life and safety, like thousands of deteriorating bridges or toxically impacted water systems, that cannot be measured strictly on the basis of whether they can generate a match,” Henry Cisneros, the former Secretary of HUD, told me in January. “A greater number has to be identified than $200 billion.” Now it’s up to Congress to either work with the White House on this bill, or perhaps more likely, start from scratch.