President Trump has made public the details of his $1.5 trillion infrastructure plan as part of a larger budget proposal released on Monday. Along with the announcement, the administration published a 55-page document that outlines how the legislation it proposes can address the country’s infrastructure deficit.
“To help build a better future for all Americans, I ask the Congress to act soon on an infrastructure bill that will: stimulate at least $1.5 trillion in new investment over the next 10 years, shorten the process for approving projects to two years or less, address unmet rural infrastructure needs, empower state and local authorities, and train the American workforce of the future,” President Trump said in a statement.
The key pieces of the proposal are a regulatory streamlining process that aims to bring the project approval process down from in some cases eight to 10 years to two years, and a $1.5 trillion spending and investment plan, of which $200 billion is government funded, that will include federal, state and local governments and private capital. The proposal includes a rural infrastructure plan to encourage freight movement and to improve transportation, as well as a “transformative projects” plan that offers federal funding and technical assistance for “innovative and transformative infrastructure projects,” the plan notes. “Applicable projects must be exploratory and ground-breaking ideas that have more risk than standard infrastructure projects, but offer a larger reward profile.”
“Passage of an infrastructure plan would likely lead to an increase in project financings and public debt issuance,” says Kurt Krummenacker, senior vice president at Moody’s Investors Service. “The impact would be modest in the next 1-2 years, however, given the challenges of enacting bipartisan legislation, defining revenue sources to service incremental debt, and the numerous planning and development requirements of launching new infrastructure projects.”
The next step toward enactment for the infrastructure proposal is for Democrats and Republicans in Congress to create a plan that can get the votes needed for passage, something that will not be easy. On that subject, Robert Poole, director of transportation policy infrastructure with the Reason Foundation writes, “Well before the plan’s February 12th release, many seemed to have made up their minds that it was a scam or a delusion. Many Democrats in Congress have called for $1 trillion of new federal spending, without a thought about where that enormous sum would come from. Others were outraged that one of the programs in the bill would provide only 20 percent funding, with the rest having to come from state, local, and/or private sources. Another criticism was the plan’s approach to funding the planned $200 billion federal expenditures over 10 years: not by either raising tax rates or further borrowing but by eliminating ineffective federal programs.”
