The Potholes Ahead for Trump's Roads-and-Bridges Push: QuickTake
(Bloomberg) -- There was lots of talk, but no progress, in 2017 on President Donald Trump’s pledge to fix U.S. highways, bridges and airports. A second try, in his second year, won’t be easy: Money is tight, relations are frayed between Trump’s Republicans and minority Democrats, and the two parties have a baseline disagreement over the federal government’s responsibility for such matters.
1. What does Trump want?
He promised during his 2016 campaign to propose a $1 trillion plan to upgrade national infrastructure "that is absolutely decaying and rotting and falling apart" -- roads, bridges, tunnels, airports, railroads, ports, waterways, pipelines -- within his first 100 days in office. That deadline came and went. The issue got displaced by other political initiatives, including the unsuccessful one to overhaul health care and the successful one to cut taxes.
2. Is the U.S. really ‘falling apart’?
The American Society of Civil Engineers gave America’s infrastructure a grade of D+ on its 2017 report card and estimated that roads, highways, bridges, water systems, schools and transportation systems collectively need $4.59 trillion in investment by 2025, with a funding gap of about $2 trillion. Though civil engineers might be seen as having a stake in painting a dire picture, the raw numbers are pretty bleak: 28 percent of major urban roads in substandard or poor condition, 240,000 water main breaks each year, 56,007 structurally deficient bridges in 2016. The average age of the nation’s fixed assets in 2015 was 22.8 years, the oldest in data back to 1925.
3. What is the White House proposing?
It wants to shift the lion’s share of responsibility from the federal government to states and localities, which own most of the infrastructure and which will be given incentives to generate their own sustainable funding sources. The Trump plan would allocate at least $200 billion in federal funds over 10 years, from unspecified budget cuts, to spur at least $1.5 trillion in spending by states, localities and the private sector. State and local government entities would apply for federal money, with preference given to those that raise taxes, tolls or other revenue for projects. Federal funding would be available for projects that can’t secure private financing, such as those in rural areas.
4. How much money would the U.S. put up?
That’s to be decided in negotiations with Congress. To the dismay of infrastructure advocates, the Republican-led Congress didn’t use last year’s rewrite of the U.S. tax code to earmark a funding source -- such as repatriated offshore corporate profits -- for roads, bridges and the like. Plus, the estimated cost of the Republican-approved tax cuts -- $1.5 trillion over 10 years -- puts an added burden on spending for any new federal program.
5. What’s the outlook?
If anything, a bipartisan infrastructure deal will be harder in 2018 than it would have been in 2017, with funding now tighter and concerns that political jockeying before the midterm elections in November could stall any major legislative effort. Still, fixing infrastructure is one of those issues that could generate support in both parties. Republicans are likely to need some Democratic support, unlike in their push for tax cuts. That’s because a bill with significant new spending would most likely need a supermajority of 60 votes in the 100-seat Senate, where Republicans hold only 51 seats.
6. What are the major stumbling blocks?
Democrats, governors, mayors and some infrastructure advocates say state and local governments are already doing their fair share to generate funding for projects, and that much more than $200 billion from the federal government is needed. Democrats are calling for much more in federal spending than the Trump administration is proposing and Republicans may be willing to approve. And there’s no agreement on raising the federal gas tax or other ways to generate more money. The tolls and fees that might be needed to make highway work profitable are unpopular, impractical, or both in many areas of the country.
7. Is there another way?
A group of Senate Democrats proposed its own blueprint for a $1 trillion infrastructure plan, paid for directly by the federal government. But Republicans who control Congress have said they won’t support that much in new spending.
The Reference Shelf
- The war over a new train tunnel to New York City shows the challenges ahead.
- QuickTake explainers on the needs of highways and reliance on public-private partnerships around the globe.
- A Bloomberg story on Trump’s plan to spin off the air-traffic control system.
- The U.S. has forgotten how to do infrastructure, writes Bloomberg View columnist Noah Smith.
- Trump’s promises, in his own words.
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