President Trump renewed his commitment to spending $1 trillion on improving America’s physical infrastructure in his Feb. 28 speech to the nation and acted quickly to put the program on course.
On March 8 Trump met with business leaders at the White House to obtain their input to gain support for the program. On the same day the Senate Appropriations Committee held a hearing to gather more facts about the issue.
According to the Department of Transportation’s most recent report on the subject, repairs that are needed for highways and bridges are estimated to reach $830 billion, including the Interstate System, National Highway System and Federal-aid highways.
The American Society of Civil Engineers puts the number slightly higher at $836 billion and grades the United States infrastructure at D+.
“America’s roads are often crowded, frequently in poor condition, chronically underfunded, and are becoming more dangerous,” ASCE asserts.
As usual, Trump’s plan faces the same stumbling block as earlier initiatives: lack of agreement on how to fund the needed improvements.
At the March 7 Senate hearing, the U.S Chamber of Commerce said a variety of funding mechanisms should be tailored to the various infrastructure project lines and, where possible, make use of existing federal programs.
“We believe that business, labor, public transit advocates and other key stakeholders must partner with the Congress to find a long-term, sustainable funding source for the Highway Trust Fund,” the Chamber explained.
Trump is vague about how to pay for his plan. “To take advantage of estimated trillions in capital that equity firms, pension funds and endowments can invest, these partnerships must be incentivized with a bold new vision,” said Secretary of Transportation Elaine Chao at a March 1 gathering of state highway and transportation officials in Washington.
“Barriers that hamper our ability to tap the full potential of public-private partnerships need to be removed,” she argued, but didn’t cite examples.
Among the ideas the Administration is tossing around are tolling, tax credits for developers, and government payments to the companies issuing debt to finance their work on these projects.
Although hiking fuel taxes seems to be off the table for consideration – like it was during the Obama Administration – Trump’s advocacy of public and private partnership mechanisms leads some to fear substantial reliance on tolling, which could add significant costs to the nation’s supply chain.
Opposing this idea is the new Alliance for Toll-Free Interstates, which includes FedEx, UPS, AmericanTrucking Associations, many other trucking associations and individual companies, and the National Council of Chain Restaurants.
In practical terms, tolls could only help fund about 10% of the projects that need financing, especially those in rural areas, says Greg Cohen, president of the American Highway Users Alliance.
“Private investment can handle some big new projects, but much more of course needs to be done to get the current system up to a state of good repair and to protect our commerce corridors across the country,” he points out.
Which Infrastructure?
Another problem stems from differences in how advocates define exactly what they mean by “infrastructure,” sometimes going far beyond roads, bridges, freight railroads rails and port access to encompass everything from wind farms to mobile communications facilities.
When Trump’s staff asked the states to propose projects to be candidates for immediate funding, many of those projects turned out to be mass transit improvements and refurbishing of rail passenger terminals, such as Union Station in Washington, D.C. (AA, 1-31-17, P. 2).
For some time now Congress has been drawing down the Highway Trust Fund by diverting money to support mass transit and bicycle paths. Highway advocates, particularly those involved in freight, want to see this stop.
Trump also seeks to remove the death grip that environmental laws and groups have on new projects. As soon as a project is announced, the plethora of automatically generated environmental lawsuits and legally-required impact studies result in delays that can extend for a decade and longer.
Acting early, the President issued an executive order in January that is intended to speed up environmental reviews for infrastructure projects.
At his March 8 meeting with business leaders Trump revealed he is looking at possibly requiring states to begin infrastructure projects within 90 days of obtaining federal funding to help accelerate the approval process. “We don’t want to give them money if they’re all tied up for seven years with state bureaucracy,” he declared.
