Trump proposes $200B for infrastructure to be cut from other federal programs to pave way for $1.5T in projects

Bart Jansen | USA TODAY

Show Caption Hide Caption Trump calls for $1.5 trillion in infrastructure President Donald Trump is calling on Congress to pass legislation to generate at least $1.5 trillion to upgrade the nation's roads, bridges and other infrastructure. (Jan. 30)

WASHINGTON – President Trump will unveil his long-awaited infrastructure proposal Monday to shift $200 billion over the next decade from other federal programs to pave the way for $1.5 trillion for roads, bridges, waterways and railways.

Trump’s approach is to let Congress negotiate the details. His four objectives are to stimulate new investment, streamline federal permitting, invest in rural projects and improve the workforce, according to four senior administration officials who briefed reporters Saturday.

Spurring construction is broadly popular. But critics are already calling Trump's approach "fake" and a "scam" for its lack of new revenue and because of its reliance on funding from local governments and private investors.

“This fake proposal will not address the serious infrastructure needs facing this country, so our potholed roads will get worse, our bridges and transit systems will become more dangerous, and our tolls will become higher," Rep. Peter DeFazio of Oregon, the top Democrat on the Transportation and Infrastructure Committee, said in a Saturday radio address.

Trump’s proposal is built on top of existing construction programs with an eye toward encouraging greater local investment, according to senior administration officials. Polls show people would prefer to have projects determined locally, rather than sending their money to Washington, according to the officials.

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Trump and members of his Cabinet will tour the country to point out where construction is needed — and where admirable projects have been accomplished, according to senior administration officials.

A poll administration officials cited from September found 84% of Americans think the country needs infrastructure investment. The Harvard CAPS-Harris poll surveyed 2,177 registered voters.

Groups such as the National Association of Counties, the National Conference of State Legislatures and the U.S. Conference of Mayors issued a joint statement Thursday welcoming Trump’s focus on infrastructure.

Trump's program will be debated by six committees in the House and five in the Senate. The administration has been conferring with lawmakers since March 2017 on the program, holding 40 meetings with caucuses or other groups to gauge priorities and get feedback, according to a senior administration official.

Congress could still develop its own funding. Trump is open to new sources of revenue, according to senior administration officials.

In 2015, lawmakers patched $70 billion from sources such as a Federal Reserve surplus, Customs and Border Protection fees and the sale of part of the strategic petroleum reserve in order to provide $305 billion for the last five-year highway bill.

The gas tax traditionally funded the highway trust fund. But the tax has remained 18.4 cents per gallon since 1993, and it hasn't kept pace with inflation as cars became more fuel-efficient.

The U.S. Chamber of Commerce, an influential advocacy group for businesses, proposed in January raising the gas tax 5 cents each year for five years to generate $394 billion over a decade.

“It’s the simplest, fairest and most effective way to raise the money we need for roads, bridges and transit,” Chamber CEO Tom Donohue said.

Under Trump's budget, the $200 billion in federal funding will be taken from other programs that are cut or eliminated, according to senior administration officials. The precise trade-offs aren't designated.

Trump’s priorities include $100 billion for incentive funding to match local investments; $50 billion for rural projects distributed as block grants to governors; $20 billion for expanding loan programs and private bonds for roads, waterways and railways; $20 billion for transformative projects with a vision for the future; and $10 billion for federal building projects.

The federal government traditionally provided 80% of funding for qualified highway construction. But Trump's incentive funding is projected to provide 10% or 20% of a project’s cost to generate $500 billion to $1 trillion in total investment, according to senior administration officials. The loan programs could generate 40 times the federal investment, officials said.

While the federal share would fall, senior administration officials said the change will reduce the reliance on the federal government for a broader variety of worthy projects. Only 28% of all highway construction and only 4% of water projects nationwide get federal funding, the officials said.

Local matching funds could come from sales or property taxes, or user fees. The city of Los Angeles adopted a sales-tax referendum in November 2016 to generate $120 billion over 40 years for infrastructure, which administration officials said could serve as an example for others.

Tolls would be one way to spur private investment in roads or bridges. But they wouldn't be financially justifiable everywhere.

"This is one of the tools in the toolbox," Pat Jones, CEO of the International Bridge, Tunnel and Turnpike Association, said before Trump unveiled his plan. "We believe we need an approach to infrastructure that says, 'all of the above.' "

But shifting the financial burden onto states and local governments, and to private groups, is what drew criticism.

“This is not a real infrastructure plan — it’s simply another scam, an attempt by this administration to privatize critical government functions, and create windfalls for their buddies on Wall Street,” DeFazio said.

Other aspects of Trump's proposal include:

•Putting a single federal agency in charge of permitting for each construction project, such as the Transportation Department for a highway or the Army Corps of Engineers for a water project. The single review could stop second-guessing and delays from other agencies.

•Giving governors rural grants for greater local control over how money is spent on projects such as broadband.

•Removing training obstacles for workers who don’t attend four-year colleges. The proposal would expand eligibility for Pell grants and allow the transfer of professional licenses from part of the country to another.