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Trump Ups Ante on Infrastructure

The President, Republicans in Congress and business leaders are working hard to highlight the need for a new infrastructure program to support economic growth – but did you hear all about Trump’s latest Tweet?

The administration recently mounted yet another push to get its infrastructure plan moving, but nobody noticed because of the latest round of controversies surrounding the President’s seeming inability to leave any thought unexpressed or perceived insult unaddressed.

In this situation, however, Twitter distractions may have had a less damaging impact given that the central dilemma facing all recent infrastructure plans remains unchanged –
everyone is in favor of doing it, but no one can agree on how to pay for it.

The last time Congress approved a multi-year highway program, only the first few years were funded through an ungainly collection of short-term budget gimmicks that could stretch only so far.

One of these allowed employers to delay payments to their pension funds, thus boosting the amount of profits the federal government could tax. These temporary fixes meant the program eventually would need to fall back on money drawn from the government’s general fund.

The five-year program was signed into law by President Obama in December 2015 and included about $205 billion for highways and $48 billion for mass transit. Called the Fixing America’s Surface Transportation Act, or the FAST Act, it also targeted freight priorities for the first time.

Last December Congress passed a continuing budget resolution which reduced infrastructure spending by $2.4 billion.

President Trump has made a massive $1 trillion infrastructure plan one of the centerpieces of his new Administration’s agenda. However, his plan relies on necessary funding coming from public private partnerships, and bond-like investments.

As critics in Congress have pointed out, the vast majority of federal-aid roads and highways in this country are not good candidates for tolling because they are located in sparsely traveled rural areas.

One funding method Congress and the President have no appetite for: raising fuel taxes. The user fee approach has long funded the highway system and is supported by American Trucking Associations.

The Trump Administration’s latest big push to get legislation going yet again bogged down because of disagreements with Congress over funding.

The need is not going away. Nearly half of 1,500 manufacturing and supply chain professionals recently surveyed by IndustryWeek magazine and Penton Research say that investment in U.S. infrastructure should be a top priority, and of those 90% declared that spending on roads and bridges should take precedence.

Rep. Alan Lowenthal (D-CA) has resurrected the approach he first suggested in 2015 to raise funds needed to support freight and multimodal projects.

His plan would create a Freight Transportation Infrastructure Trust Fund that would be funded through a national 1% waybill fee on the transportation cost of goods.

The Freight Trust Fund would distribute the money raised through a freight formula program to state departments of transportation, and create a freight competitive grant program available to states, regional and local government entities.

Lowenthal’s bill drew support from the freight advocate group, the Coalition for America’s Gateways and Trade Corridors (CAGTC), but at this point it is no more likely to attract support from his fellow legislators than it did back in 2015.

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