Trump's Infrastructure Plan
White House Wants to Stimulate $1.5 Trillion in Projects, Overhaul Federal Permit Rules
OMAHA (DTN) -- The White House will release its long-awaited infrastructure plan on Monday, which calls for spending $200 billion in federal funding over 10 years to stimulate $1.5 trillion in new infrastructure investment, as well as overhauling the federal permit process for large infrastructure projects.
The administration sees the projects including any various transportation public works, but also technology as well, such as expanding rural broadband. A pool of $50 billion in rural funding will go to governors as block grants as well.
The $200 billion, over 10 years, wouldn't necessarily be new spending -- unless Congress chooses otherwise -- because a senior White House official told reporters President Donald Trump's budget proposal coming out Monday would take the $200 billion in infrastructure spending out of other parts of the federal government.
To hit $1.5 trillion in investment, the White House plan also requires states and local governments to commit to 80% to 90% of the funding in some cases to receive a federal match for some projects. The Highway Trust Fund would stay in place and would remain the current pot for state revolving funds. But the federal-state match of 80-20 for federal highway projects would be inverted for other various public-works projects to a 20% federal match with 80% funding from elsewhere. White House officials see state and local revenues being generated from property taxes, user fees or sales taxes to boost local investments and achieve a higher share of federal matches.
"So if they're creating new revenue streams and they want to build something, we will partner with them to help them to match and fulfill that one final gap in terms of financing infrastructure," a senior administration official said on a press call Saturday.
While the White House can lay out its infrastructure plan in a budget proposal, Congress will still be on the hook for creating legislation and funding for any new infrastructure spending. Congress has talked for years about developing a new infrastructure plan, but lawmakers have been unable to come to terms about how to pay for such plans. Congress has rejected raising federal fuel taxes to pay for the Highway Trust Fund, for instance.
The White House's formal infrastructure proposal comes after a temporary budget deal to increase spending by $300 billion over 10 years and a tax cut that could add $1.5 trillion to the national deficit over the next decade as well. All of that may make it harder for Congress to approve more infrastructure spending without ensuring it will not add to the growing annual budget deficits.
Infrastructure projects also would be the next major focus for the Trump administration in its theme to reduce regulations. The administration will work to reduce the projected time it takes for environmental permitting. The White House states the permit process for road, bridge or waterway projects now takes too long "and it's not really focused on outcomes in terms of making sure we build projects responsibly and understand the environmental impact. It's focused more on preparing for litigation and building up massive documents."
The White House plan takes regulatory oversight for infrastructure projects away from EPA, the Army Corps of Engineers, the U.S. Fish and Wildlife Service and other agencies and creates a new federal agency with the sole authority to sign off on permitting for infrastructure projects, or "One Agency, One Decision," as a White House official called it. That one agency would work with the other federal regulators to reach a single permitting decision within 21 months, and permitting would begin within three months afterward.
"So what we're going to do is, for every decision that needs to be made, find the agency that has the best expertise in terms of making that decision, give them the authority to make that decision, and then have other agencies partner with them and execute on that decision that's been made," the White House official said.
Environmental groups may assail the permit proposal, but several major governmental organizations issued a joint statement last week welcoming the focus on infrastructure by President Trump and Congress. The groups included the National Association of Counties, National Governors Association, the National League of Cities and U.S. Conference of Mayors, as well as associations for transportation officials and local engineers. They all called on efforts to move forward but called for "a strong federal-state-local partnership" as well.
"States and local governments know firsthand the needs of our communities and invest in infrastructure accordingly. This includes roads and bridges, airports, waterways and ports, transit, passenger rail, water and sewer systems, public facilities, energy, broadband and telecommunications networks," the group of government associations stated.
The groups added that they want to secure the long-term solvency of the Highway Trust Fund, and they welcomed the idea of streamlining federal permits. "Additionally, we must find the correct balance between federal, state and local investments and private sector partnerships."
The $50 billion for rural spending will come from local governments or private entities asking for matching grants. Projects would go beyond roadways to upgrading rural broadband access as well. State governments would be in charge because the funding would come from block grants to the states "to allow governors to select what the priorities for infrastructure are in their respective states."
A senior administration official said, "One thing that -- the consistent feedback that we get from those that are interested in investing more in infrastructure -- is they would like to set their own priorities as opposed to have the federal government set priorities for them. So the rural program does that."
The Trump administration also will expand some federal loan and bond programs by $20 billion that go into roads, water and rails. The administration states that every dollar that goes into Transportation Infrastructure Finance and Innovation Act loans generates $40 in economic return.
"That's how we get from a $100 billion investment in incentives and the $20 billion investment expanding our loan programs, to $1.5 trillion in new investment infrastructure nationwide.
Another $20 billion will go for "transformative programs." Those would be "projects that can lift the American spirit, that are next-century type of infrastructure as opposed to just rebuilding what we have currently."
The last $10 billion would go to a capital financing fund divvied up by Congress. The fund would largely help with government accounting rules, but it would go toward federal building projects.
Chris Clayton can be reached at Chris.Clayton@dtn.com
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