Trump's Infrastructure Plan Is a Trainwreck

Donald Trump loves to talk about infrastructure. The idea that he would repair America's roads and airports was a signature part of Trump's brand from the start of his candidacy, separating him from Republicans wary to massive public spending. Potentially, an infrastructure plan could be an actual piece of bipartisan legislation, and a huge win for his struggling presidency, yet no detailed proposal from the administration or bill from Congress has been produced. And Trump's efforts to pivot to infrastructure have been repeatedly derailed. June's "Infrastructure Week" was sidelined in the news by testimony from former FBI Director James Comey; this week Trump called a press conference to talk about infrastructure and somehow wound up defending white supremacists.

So what happened to that big, beautiful $1 trillion proposal to fix America's roads, bridges, ports and waterways, that we were all promised?

Trump has actually been promising a full and detailed infrastructure plan in the near future since August 2016; as of April, we were supposed to see it by sometime in May. This January, he got the GOP to include infrastructure in their 200-day legislative agenda. But we didn't see any detail about what Trump had in mind until late May, when he slipped a six-page info sheet on infrastructure in his budget proposal for 2018 with no fanfare. This fact sheet remains the most concrete sense of Trump's plans we have.

Some in the White House have claimed details have not been quicker in the coming because of Congress's decision to focus on healthcare and tax reform. However, observers seem to blame Trump for not making it an earlier priority.

"I've worked in the White House in the past, and people get distracted" by other policy pushes and emerging issues, said Marcia Hale, president of bipartisan infrastructure development advocacy group Building America's Future. "This White House is more distracted than most."

What about that fact sheet? Rather than pledging $1 trillion in direct spending, as many hoped he would, Trump actually called for just $200 billion in spending over the next ten years, with only a few billion to be used in 2018, alongside deregulation and permit streamlining that would encourage private investment in infrastructure. That spending is mostly meant to be leveraged into getting private investors to pony up the remaining $800 billion rather than directly funding projects. This proposal would also shift responsibilities for infrastructure onto states and localities, who already take care of most of it, albeit using federal aid.

"What I think the Trump administration is saying is… 'We're not going to make a list of projects the federal government is going to fund,'" said Randal O'Toole of the libertarian Cato Institute. "'We're going to provide a number of tools so that the state and local governments can do what they need to make it work.'"

That's not enough for infrastructure groups. "We would suggest that the administration go back to its $1 trillion plan. Although clearly we need more" than even that, said Hale. When confronted with the idea that this might be what Trump sees as putting $1 trillion into infrastructure, she shot back, "we would respectfully disagree, because that's not the way it was talked about in the campaign."

On top of this, Trump's budget called for massive reductions in existing direct spending infrastructure programs, which would even out with the $200 billion Trump proposed for indirect spending, if not lead to a substantial net cut in infrastructure spending over a decade. Even if Trump's budget never becomes a reality, as will almost certainly be the case, this is a worrying sign of priorities and intentions.

The Trump administration clearly loves public-private partnerships, where private companies invest in projects in exchange for collecting revenue from those projects—think toll roads or bridges. Barack Obama advocated for these partnerships, and plenty of Democrats can get behind them as part of a plan. But they don't work for every type of project, since not every bit of infrastructure is easy to monetize.

"You're still looking at 15 to 20 percent of projects at the highest that can be done as" public-private partnerships, said Hale, who favors a mix of public and private funding of infrastructure. "Shifting money from a public account into a private funding mechanism isn't going to solve the problem."

Jacob Leibenluft of the Center on Budget and Policy Priorities doubts there are enough major projects out there that could be paid for by this mechanism. "[White House officials] want to claim to have a major investment," he said. "But they don't seem to be willing to put forward the federal resources to make that investment possible… in a way that would rebuild the infrastructure that needs rebuilding."

Those I've spoken to with some knowledge of the inner workings of the administration say the staff is hard at work on fleshing out the six-page proposal, which will ideally outline how Trump wants to use that $200 billion to magic up more money and how he'd pay for it all. They're expected to have an actionable plan by September, which they'll then leave to Congress to turn into legislation—although it's unclear if new distractions or roadblocks, like Trump's decision to can the infrastructure council he created via executive order last month, will complicate that timeline.

Even if the administration puts out a full plan, it's unlikely it will lead to legislation immediately. Because of Congress's decision to leave infrastructure at the bottom of its agenda this year, it has to wait until tax reform, the federal deficit, and the 2017 budget have all been resolved. By now it's not just a matter of sequencing, but of figuring out what money these pushes free up for infrastructure. Given how contentious these issues are, and how distracted and hostile Trump has been of late, consensus seems to be we won't get an infrastructure bill until early 2018 at best.

And no matter how much we hear about the bipartisan lovefest for infrastructure, any bill based on Trump's plan would face staunch opposition.

"Some Republicans don't even want to do an infrastructure bill," said Michele Nellenbach of the Center for Bipartisan Policy. Many on the right don't want to see more spending, which is bound to lead to higher taxes or more deficits. Meanwhile, Democrats and some Republicans will not support anything without some level of direct public spending. Plus, everyone's apparently a little dubious of the fact that Trump reportedly wants to try new and untested ways of incentivizing private funding for infrastructure rather than using older, mostly reliable mechanisms.

"The danger is that we get into February or March," said Hale, "where we're fully into primary world in the House and the Senate. And after that, there's very little hope [anything] gets done."

"At the end of the day," said Leibenluft of the administration, "it's very hard to see how they deliver on anything that will actually look like what they promised in the campaign."

Still, "if you're the Republican leadership," said Nellenbach, "you can't just send everybody back home with nothing. And an infrastructure bill gives everybody a win." So Congress could still craft a bill—maybe without input from Trump, by coming up with a compromise that can get enough votes from Democrats and Republicans, even if it falls far short of Trump's promised $1 trillion. "The folks in the White House understand the politics around this, and if we can get, in this atmosphere, a bill out of Congress that funds infrastructure, I think cooler heads would follow and get him to sign it," said Hale. "At least that's my hope."

None of the experts I spoke to believe it's practical to totally overhaul American infrastructure spending mechanisms or solve all of the country's public works problems with a single federal bill. Any plan that emerges from the White House or Congress will be found wanting. But developing any plan as quick as possible, and passing any new infrastructure funding would be a step in the right direction—not just because the country needs an injection of money, but because anticipation about what Trump will actually propose has actually damaged national infrastructure spending.

"Since Trump won the election, infrastructure spending has decreased as state and local governments cancel and/or slow projects as they await the big federal program," said CEO of Aquamarine Investment Partners and infrastructure wonk Joel Moser. "Beware announcements about pending infrastructure funding programs, as they will have the opposite effect."

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