White House Releases Backwards Infrastructure Package and Spending Priorities

A week ago, Congress reached agreement on overall spending caps, which would allow for significant increases in defense and domestic spending in FY2018 and FY2019.  Their agreement includes an additional $10 billion per year for two years to put towards different kinds of infrastructure investments (broader than just transportation).  Congress now has about six weeks to divide those overall increases into the funding allocations for federal programs and agencies.

Meanwhile, we begin the process of setting spending levels for FY2019.  Today, the White House released their outline for the long-rumored infrastructure package at the same time as their proposed FY2019 budget.  Because they were released together, we are able to look at the proposed policy structure of the infrastructure package as well as weigh where the funding for the package would come from.

The Infrastructure Proposal

First, President Trump’s infrastructure proposal would focus on a broad swath of infrastructure—surface transportation, ports, airports, broadband, water infrastructure, and more.  It would use $200 billion over ten years in federal funds to generate $1.3 trillion in state, local, and private investment.  The package is broken up into several types of funding:

  • $100 billion for an Infrastructure Incentives Program in which projects would compete for federal funding (no more than 20 percent of a project’s cost) to support infrastructure projects. The funding would be split up among USDOT, the EPA, and the Army Corps of Engineers.
  • $50 billion for a Rural Infrastructure Program, with 80 percent of funding being block granted to Governors to choose projects in areas with less than 50,000 people and the remainder for competitive grants.
  • $20 billion to expand federal loan programs like TIFIA and private financing bonds
  • $20 billion for a Transformative Projects Program, run out of the Commerce Department, that would provide federal funding to help advance “innovative” new infrastructure ideas.
  • $10 billion would go to a fund for purchasing real estate for government buildings.
  • The package also proposes extensive changes to the environmental review process for infrastructure projects to shorten timeframes and would also limit opportunities to challenge projects through the court system.

 Our Assessment

Looking at the policy proposals in this infrastructure package, the National Partnership has significant concerns.  First, projects competing for the $100 billion Infrastructure Incentives Program will be judged almost entirely on financial aspects.  Eighty percent of a project’s score will be solely based on the amount of private and local funds brought to the project and its overall cost.  Just five percent of the project’s score will be based on the economic and social return on investment.  There are no scoring points dedicated to things like improving safety or mobility of people.  It will end up funding projects solely based on their financial viability – ignoring whether the project is even needed or whether it will improve people’s lives. This scoring formula is likely to lead to the construction of new projects, rather than repairing existing infrastructure or adding multi-modal components that increase access and mobility.

In addition, the rural program is primarily a block grant program – meaning that Governors will choose projects to fund without many strings on what types of projects should be advanced.  This type of funding structure generally has a lack of transparency and public input. 

The Funding Source

Putting aside the policy language, we are also seriously concerned about the source of funding for this proposal.  President Trump’s proposed FY19 budget, which was released the same day, proposes $3 billion in cuts just in FY2019 to the TIGER discretionary grants, new transit projects, and Amtrak.  It does propose full funding for FAST Act programs, which includes the Transportation Alternatives Program.  It also assumes the Highway Trust Fund, which supports existing surface transportation programs, will run dry starting in 2021.  Allowing that to happen would mean cuts in the range of $100 to $150 billion between 2021 and 2028.  In addition, the President’s budget proposes extensive cuts to Medicare, health insurance, and other social programs that they identify as potential offsets for the infrastructure package.

Effectively, the budget would cut approximately $130 to $180 billion out of transportation between now and 2028, and then through the infrastructure proposal, put $200 billion over the next ten years into a wide range of infrastructure projects (not just transportation!) that would be selected through questionable means. Even worse, Congress has proposed allocation an additional $10 billion a year to infrastructure through the new spending caps agreement, yet the President’s budget explicitly states they do not want to spend any of that increased funding on transportation.

Summing Up

This infrastructure package is not something we can support.  It would move us backwards, instead of forwards into a nation with safer transportation options and increased mobility for everyone—particularly in lower-income areas that most need investments. It would shift us from assessing transportation projects based on how it will improve safety and mobility to simply how much money they would generate. It does not address our values for transportation.

The National Partnership will instead work with our partners to sustain current investments into programs that prioritize mobility for people, not just cars, and will urge Congress that if they choose to invest more in transportation, it should be done in a way that prioritizes local projects that improve transportation access, choices, and safety and rights transportation inequities.