Democrats Assail Funding Shift in Trump's Public-Works Plan

(Bloomberg) -- President Donald Trump’s plan to upgrade U.S. public works is drawing sharp opposition from Democrats who are key to getting it enacted, putting the administration on the defensive as it seeks to revamp the way projects are approved and financed.

Hours after the White House on Monday released its 53-page infrastructure plan, the administration was countering complaints from Senate Minority Leader Chuck Schumer and other Democrats that the president was proposing more cuts in his 2019 budget than the $200 billion allocated for the initiative.

“This is not a real infrastructure plan,” Oregon Representative Peter DeFazio, the top Democrat on the House Transportation and Infrastructure Committee, said in a statement. “It is simply another scam.”

Republicans mostly focused less on Trump’s proposal to stimulate $1.5 trillion in new investment for public works and more on the elements of the legislative outline that would reduce the permitting time for projects to two years or less. The plan, which was a year in the making, is intended to give Congress a road map for legislation. Democratic votes will be needed because a measure likely can’t pass the Senate with only Republican votes.

‘Great Reviews’

“Our infrastructure plan has been put forward and has received great reviews by everyone except, of course, the Democrats,” Trump tweeted Tuesday morning. “After many years we have taken care of our Military, now we have to fix our roads, bridges, tunnels, airports and more. Bipartisan, make deal Dems?”

Speaking at a meeting Monday with lawmakers about trade, Trump said he wants to see a counter-proposal from Democrats.

Senate Democrats have already called for $1 trillion in federal dollars for public works, and House Democrats last week proposed their own plan, a “Better Deal to Rebuild America,” that would spend $1 trillion on transportation projects, high-speed internet, schools and other needs.

Representative Kevin McCarthy of California, the second-ranking House Republican, said there’s a history of transportation issues being handled in a bipartisan way. He thinks that’s possible with Trump’s plan even in the toxic political climate in Washington, he said.

“I think what Trump is doing, it’s probably less than what he originally wanted to, knowing the climate of where we are,” McCarthy said in an interview. “I think it’s very doable what he proposed.”

There are at least six committees in the House and five in the Senate that will consider elements of the plan, White House officials have said, but McCarthy said he thinks one piece of legislation is possible. The Senate Environment and Public Works Committee plans a March 1 hearing with Transportation Secretary Elaine Chao.

The rollouts of the infrastructure and budget plans on the same day quickly sparked a dispute between leading Democrats and the administration. Democrats, who have called for a $1 trillion federal commitment for infrastructure, criticized Trump for proposing to spend $200 billion while cutting funding for transit and other transportation programs even more deeply in his budget proposal. Schumer said he counted more than $240 billion in cuts.

The White House took issue with Schumer’s analysis, including his tally of the shortfall to be faced by Highway Trust Fund, which relies on fuel taxes and becomes insolvent after 2021 if no new funding is approved. While Schumer counts that as a $122 billion spending cut, the administration said the budget simply reflects that outlays will exceed revenues.

“Given the urgent need to rebuild our nation’s infrastructure, it’s odd that the senior senator from New York would misunderstand elementary funding features of our transportation system,” John Czwartacki, a spokesman for the Office of Management and Budget, said in a statement. “One might assume that the minority leader, and a former member of the Senate Finance Committee would understand the aspects of, well . . . finance.”

‘Misses the Point’

Jeffrey Rosen, deputy secretary at the Transportation Department, also took issue with the figures cited by Democrats.

Their complaint “misses the point” of the Trump infrastructure plan, which is to put limited resources “into places where they can produce better results,” Rosen said during a Monday evening call with reporters.

While the budget proposal does cut existing spending, the public works plan will do a better job of using federal funds to draw private investment, he said. Taken as a whole, the proposal “is a major increase in overall infrastructure outlays, which if used wisely and properly, improve the quality of life for Americans everywhere,” he said.

Trump’s plan relies on using much of the $200 billion in his proposal in incentives to spur states, localities and the private sector to raise and spend the balance of the promised $1.5 trillion. The driving principal is that the federal government doesn’t own most infrastructure and should focus on encouraging local funding and streamlining the permit process.

The plan would create a grant competition with preference given to applicants that commit their own revenue such as taxes, fees or tolls, and it also seeks to encourage more investment with proposals that include relaxing restrictions on states putting tolls on interstates to raise money for projects.

Trust Fund Insolvency

Schumer dubbed it the “Trump toll plan,” saying it would increase burdens on local governments and not improve ailing infrastructure.

Trump’s plan didn’t address the looming insolvency of the Highway Trust Fund, but Pennsylvania Representative Bill Shuster, the Republican chairman of the House Transportation and Infrastructure Committee, said the long-term sustainability of the fund must be addressed.

Shuster has urged fellow Republicans to consider raising the federal gas tax for the first time since 1993. While groups including the U.S. Chamber of Commerce support the idea and the White House is neutral, key Republicans and entities including the network led by the billionaire industrialists Charles and David Koch are opposed.

McCarthy, the majority leader, said passing a gas-tax increase would be “a little tough” because it hurts lower-income drivers who have to pay a higher percentage of their income for taxes than wealthier people.

Chao repeatedly said during the Monday call with reporters that “nothing is off the table” in terms of how the program will be funded and urged lawmakers from both parties to work together.

“We all want the best infrastructure in the world and we don’t want to pay for it,” Chao said. “Unfortunately, that can’t happen.”

©2018 Bloomberg L.P.

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