Trump Infrastructure Outline Trudging Slowly
President Trump released his Legislative Outline for Rebuilding Infrastructure in America (53 pages) Feb. 12. The outline offers $200 billion in federal spending over 10 years and aims to spur an additional $1.3 trillion in state and private infrastructure spending. It seeks to limit environmental oversight while shortening regulatory review to two years. It includes a directive to the White House Council on Environmental Quality (CEQ) to revise its guidance on the National Environmental Policy Act (NEPA) to streamline the process. Under the banner, “one agency, one decision,” another directive would designate a lead agency responsible for developing a single, unified review document and decision.
The administration outline is predicated on state and local governments matching federal contributions at a level of at least four-to-one. Apparently, funding from existing sources such as sales taxes levied for transportation projects meets the requirement. “There will be a lookback provision so that states and local governments who have already recently raised revenues aren’t penalized for being forward-thinking and implementing the types of policies that we’re encouraging through this program,” said a senior administration official.
Spending under the Trump proposal of $200 billion would see $100 billion targeted to local governments, and $20 billion would fund “projects of national significance” that can “lift the American spirit.” Another $50 billion is targeted for rural block grants, mostly for roads. The remaining $30 billion is to support infrastructure-related programs such as Environmental Protection Agency (EPA) loans under the Water Infrastructure Finance and Innovation Act, which White House officials suggest could leverage up to $40 in local and private money for every federal dollar. The administration infrastructure outline omits any mention of climate change or resilience.
A bipartisan group of congressional leaders met with the president Feb. 14 to discuss the outline.The group included Senate Environment and Public Works (EPW) Chairman John Barrasso (R-WY) and Ranking Member Tom Carper (D-DE), Senate Commerce Committee Chairman John Thune (R-SD) and Ranking Member Bill Nelson (D-FL), and House Natural Resources Chairman Rob Bishop (R-UT). Rep. Bishop characterized the discussion as “preliminary.” Sen. Carper called it “refreshing,” and seemed to point to a proposal to raise the fuel tax to help pay for the plan. “He said we should raise the gas, diesel tax by 25 cents a gallon,” said Carper. “He kept coming back to that and saying that these things are worth having, they’re worth paying for.” The president, however, has not yet publicly endorsed it and Barrasso calls it “a non-starter.”
The president’s infrastructure outline is receiving decidedly mixed reviews in Congress. Fiscal conservatives raise concerns about the $200 billion cost in the shadow of the recently enacted $1.5 trillion tax cut and $300 billion two-year federal budget deal.
Revenue suggestions, such as increasing the fuels tax by $0.25 per gallon, violate long-held Republican anti-tax dogma, though endorsed by the U.S. Chamber of Commerce. Meanwhile, shippers endorsed suggestions of an annual per-vessel fee for commercial users of inland waterways to pay for capital investments, operations, and maintenance. Some questioned a proposal that would allow some revenue derived from energy development on public lands to pay for capital, operating, and maintenance costs of federal lands, funds that may already be otherwise committed. Others questioned shifting primary funding burdens to state and private entities. Additionally, the outline would allow sale of federal assets that “would be better managed by state, local, or private entities,” and mentions as examples: Ronald Reagan and Dulles International Airports, the Tennessee Valley Authority and Bonneville Power Authority’s transmission assets, and the Washington Aqueduct, which supplies Washington, DC’s drinking water.
At the U.S. Conference of Mayors meeting in January, D.J. Gribbin, special assistant to the president for infrastructure, noted that the plan would not include proposals for specific funding mechanisms, leaving that to a conversation with Congress. He also committed to leaving funds such as the Highway Trust Fund intact, though other existing spending may be repurposed.
Environmental leaders decried the envisioned “regulatory streamlining” with the one agency-one decision permitting model that would be foreshortened to about two years and limit U.S. EPA authority to review other agencies’ environmental impact statements under the Clean Air Act and the Clean Water Act. The White House has directed the Council on Environmental Quality (CEQ) to recommend revisions to the National Environmental Policy Act (NEPA) to facilitate the two-year timeline and allow states greater authority for NEPA enforcement. Regulatory experts noted that two years would be less than the time required to complete some environmental impact studies. The plan would additionally limit the window for NEPA-based lawsuits to only 150 days, rather than the current six years. Ted Boling, associate director for NEPA at CEQ, called the two-year window for approvals an “ambitious goal.”
House Minority Whip Steny Hoyer (D-MD) called the outline a “fantasy” in comments following its release.
Initial hearings on the administration’s infrastructure outline were held March 1 with Transportation Secretary Elaine Chao appearing before the Senate Committee on Environment and Public Works chaired by John Barrasso (R-WY). In her Senate testimony, Sec. Chao defended the infrastructure outline, defending its leverage and funding projections, shifting infrastructure costs to state and local levels, and pointing strongly to permitting reform as incentivizing private infrastructure investments. Chao also said that the administration has not officially endorsed raising the fuel tax, contradicting comments by Sen. Carper (D-DE) following a Feb. 14 White House meeting.
In response to Chao’s comments on permitting reform, Sen. Carper observed that the recently enacted Fixing America’s Surface Transportation (FAST) Act of 2015 and Moving Ahead for Progress in the 21st Century Act (MAP-21) in 2012 provide opportunities for regulatory streamlining that have not yet been acted on. He noted that the FAST Act includes a provision for a two-year limit for filing lawsuits.
Carper also argued that “One of the best ways to speed up projects is provide long-term funding and program certainty,” wondering why the administration’s fiscal year 2019 budget would cut funding for Transportation Department permitting.
The federal leverage of $200 billion into $1.5 trillion was questioned by a Penn Wharton Budget Model (The White House FY 2019 Infrastructure Plan) introduced by Carper that estimates that “total new infrastructure investment would increase between $20 billion to $230 billion, including the $200 billion federal investment. There will be little to no impact on the economy.”
EPW Chair Barrasso supported proposals to streamline environmental review and permitting, saying “Only in Washington is two years considered a quick turnaround. We need regulatory streamlining so we can build these projects faster, smarter, better and cheaper.”
Chao next appeared before the House Transportation and Infrastructure Committee chaired by Bill Shuster (R-PA) Wed., March 6. That hearing, however, quickly devolved into disagreement over the status of the Gateway Program, the expansion and renovation of the Northeast Corridor rail line between Newark, NJ and New York City. A report in The Washington Post over the weekend stated that President Trump personally asked House Speaker Ryan to kill a proposed appropriation for funding Gateway. Responding to pointed questioning by Rep. Sean Patrick Maloney (D-NY), Chao said, “Yes, the president is concerned about the viability of this project and the fact that New York and New Jersey have no skin in the game. They need to step up and bear their fair share.”
Chao’s House testimony, however, gave little new information on the administration’s infrastructure outline. Responding to questioning by Chairman Shuster about “pay-fors,” Chao again avoided specifics saying, “We want all funding and financing options to be on the table.”
Senate Democrats released a counterproposal, “Jobs & Infrastructure Plan for America’s Workers” Wed., March 7. Ticketed at just more than $1 trillion, the plan would roll back recently passed Republican tax cuts to help pay for it. Targeted spending includes these projects: $140 billion for road and bridge repair; another $140 billion to stabilize the Highway Trust Fund over 10 years; $115 billion for water and sewer infrastructure; $62 billion for neighborhood revitalization and housing; $50 billion for schools; $40 billion to improve airports and airspace; and $40 billion for universal high-speed internet. It also designates $25 billion for three climate resilience programs, an area completely unaddressed in the administration outline.
At a news conference announcing the Democratic plan last Wednesday, Senate Minority Leader Chuck Schumer (D-NY), contrasted it with the Trump outline: “Our plan would do three things compared to the president. First, create many more jobs than the Trump plan. Second, build many more projects than the Trump plan. And third, build the infrastructure America actually needs, not just what Republican donors and private investors can profit from.”
Senate Environment and Public Works Chairman John Barrasso (R-WY) rejected the Democratic plan broadly, “The Democrats’ plan is clearly about raising taxes on American families, not upgrading our roads, bridges, and water systems. We need a robust and fiscally responsible infrastructure plan that will help, not hurt, America’s economic growth.”
The Democratic plan is likely going nowhere, with Democrats in the minority and the growing popularity of the Republican tax cuts.
Regarding passage of a Trump infrastructure plan this year, Sen. John Cornyn (R-TX) said, “I think it will be challenging. I certainly would be happy if we could, but we’ve got a lot of things to do, that being one of them, and I don’t know if we will have time to get to that.”
Sen. James Inhofe (R-OK), chairman of the EPW Transportation and Infrastructure Subcommittee, however, said in a statement provided to Land Line Magazine, “Any time you work on a big, bipartisan bill it will be challenging, but you can’t write it off because of that. When we did the FAST Act, they predicted we had no chance of success but we were able to pass the largest highway bill in a decade. No one thought we’d get a WRDA bill [Water Resources Development Act] done in 2016 either, but it was the last bill of the 114th Congress. There is a bipartisan desire to get infrastructure done, and we’ve started the work to do it.”
Polling results indicate broad support for infrastructure investment. Seventy-two percent of Americans believe more infrastructure investment is needed according to a poll by Long Island University Hornstein Center for Policy, Polling and Analysis. This poll also found that 40 percent believe the federal government is responsible for funding infrastructure projects while 32 percent believe it is the states. And 81 percent of State of the Union viewers said it was important that an infrastructure bill pass this year, in a poll sponsored by the Association of Equipment Manufacturers.
Rep. Schuster (R-PA), chairman of the House Transportation and Infrastructure Committee, thinks a lame-duck session, after the November midterm elections, will be necessary to pass the plan.
SOURCES
Bloomberg Politics, C-SPAN, ClimateWire, CNN, Congress.gov, E&E News, Fox News, Greenwire, The Hill, House.gov, Land Line Magazine, The New York Times, Politico, Reuters, Roll Call, Senate.gov, University of Pennsylvania Penn Wharton Budget Model, The Washington Examiner, The Washington Post