Last night, in his address to Congress, President Trump revisited his campaign promise of a big new investment in infrastructure. He called upon Congress to pass a $1 trillion infrastructure package, using a combination of public and private investment.
While there is the potential of bipartisan agreement on a new infrastructure package, there are a lot of roadblocks that must be solved before consensus can be reached, including:
- Timing: Congress has a crowded calendar this spring. They must finish the hearings and voting process on Cabinet nominees, and then get through the hundreds of deputy secretaries and other senior positions that require Congressional approval. In addition, the repeal, repair, and/or replacement of the Affordable Care Act looms large, and will likely take a significant amount of time and political capital this spring. Another major priority is tax reform, which is likely to take many months, if not more than a year. Most likely, any infrastructure package waits till these other priorities move forward, pushing it until later this year, if not to 2018.
- Funding: It’s unclear how much of the $1 trillion would be federal funding, but whatever the amount, Congress would likely want to see it paid for, rather than increasing the deficit. The House Transportation and Infrastructure Committee has already indicated that any infrastructure package must be “deficit-neutral” and Senator McConnell, the lead Senate Republican, has expressed similar reservations. In a recent speech to the National Governors Association, USDOT Secretary Chao indicated that it is going to be a challenge to find a way to pay for new infrastructure spending that would be agreeable to Congress and the American people. In addition, President Trump has just instructed all federal agencies to significantly cut spending in their proposed 2018 budget to allow for a 10 percent increase in defense spending. That makes federal funding even harder to come by for a new spending priority.
- Private Investment vs. Projects Needing Funds: The private investment aspect of an infrastructure package would likely be handled through tax credits that incentivize private investment in infrastructure projects. However, many in Congress have raised concerns about only this approach as it is unlikely to help advance projects in more rural areas or repairs to existing infrastructure. In other words, it wouldn’t help infrastructure projects unless they have the potential of generating income for private investors, and these types of projects are likely already in the pipeline. Tax reform is also considered a potential source of funding for infrastructure—but that means that any infrastructure investment would need to wait until any tax reform package is completed.
At this point, it looks unlikely that any infrastructure package will be on the front burner for Congress. However, that gives us time to meet with key members of Congress to continue to make the case that Safe Routes to School, bicycling, and walking are an important part of transportation investments.