At Camp David, Trump will push Republicans to make infrastructure top 2018 priority

Heidi M. Przybyla | USA TODAY

Show Caption Hide Caption Trump meets with govs, leaders on infrastructure President Donald Trump met with governors and local government leaders Thursday to talk about nationwide infrastructure improvements. He stayed silent when asked by reporters about James Comey's testimony. (June 8)

WASHINGTON – President Trump plans to press Republican congressional leaders this weekend at Camp David to make a major infrastructure package their top legislative priority this year, as his administration readies a blueprint he'll tout in the State of the Union address on January 30, according to two White House officials.

The White House will release a proposal in mid to late January that will call for a wholesale change in the way the U.S. approaches big infrastructure projects, according to the officials, who were not authorized to speak publicly because the plan is being finalized.

Trump's pledge to renew the country's roads, bridges and airports was a major populist promise from his 2016 presidential campaign. But it was put on hold as GOP congressional leaders pursued traditional Republican agenda items in his first year in office, including tax cuts and failed attempts to repeal and replace Obamacare.

At a presidential retreat in the Maryland mountains this weekend, one official said Trump will make clear that House Speaker Paul Ryan, R-Wis., and Senate Majority Leader Mitch McConnell, R-Ky., should put infrastructure above other priorities including Ryan's push to overhaul entitlement programs.

Signing the tax bill late last year, Trump challenged Democrats to work with him on infrastructure in 2018. "I really believe infrastructure can be bipartisan," Trump said Dec. 22. "I actually wanted to save the easy one for the one down the road."

Yet Trump's confidence that Democrats – and Republican fiscal conservatives – are willing to play ball on infrastructure may be overblown. The main pothole on the road to infrastructure improvements will be securing funding, which will be even more challenging after Republicans pushed through a tax bill expected to add $1 trillion to the national debt over the next decade along party lines.

"There’s a desire among legislators in both parties to accomplish something significant in the area of infrastructure," said Dave Schnittger, a former deputy chief of staff to ex-House Speaker John Boehner, an Ohio Republican. "But the idea of doing a large scale package begs the obvious question, which is 'how do you pay for it?'"

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Trump's plan would move the country away from a "project-based" system in which the federal government identifies infrastructure needs and gives money. The White House now plans to delegate that role to states and private investors, who would also provide the bulk of the funding.

The American Society of Civil Engineers estimates that some $2 trillion is needed to upgrade the country's transit systems and address solid and hazardous waste, levees, ports, railways and schools.

The Trump plan aims to generate $1 trillion for improvements, including a $200 billion federal funding commitment, according to the White House officials. The rest would be made up by state and local governments and private investors.

The federal dollars will go toward incentives for private investors, rural projects, and "transformative" projects such as high-speed rail or major tunnels, according to the officials. It will also include money for workforce development.

The plan to boost private sector participation would be a big change from the country's previous approach.

According to the nonprofit research group Rand Corporation, 97% of the funding for U.S. highways, bridges and roads comes from public sources. What's more, Trump's own budget request for fiscal 2018 cut infrastructure spending overall by $55 billion.

Unlike with taxes, which passed with a simple majority, Trump will need to reach a 60-vote threshold in the Senate to pass infrastructure legislation – which means he'll need at least nine Democrats to sign on board. And many have said they are skeptical of placing so much responsibility for public works in the hands of private investors and localities.

They also may be wary of handing Trump another major legislative win before the 2018 midterm elections. Trump is pushing infrastructure to follow through on a major populist economic promise, especially with his tax bill being attacked as primarily benefiting the wealthiest taxpayers and his efforts to renegotiate trade deals like NAFTA still in flux.

A former Manhattan real estate developer, Trump considers infrastructure, more than taxes and health care, in his wheelhouse, and his team sees rebuilding the country as an easy political win.

"People forget President Trump is a builder," said former Trump senior communications adviser Jason Miller. "Infrastructure is an important next step in investing in our country."

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What's more, the need for major upgrades is critical. The American Society of Civil Engineers gave all U.S. infrastructure – including transit, including air, rail, roads and bridges – a grade of D+ for 2017. The nation's state of disrepair has been demonstrated by recent events including a major power outage at Atlanta's Hartsfield Airport, Amtrak rail derailments causing deaths and a New York City subway system in a state of disrepair.

More: Amtrak accidents hurt safety reputation, but railroad remains popular with Congress, riders

Funding challenges

Yet Trump's own legislative wins may now work against him.

The new GOP tax law just made it harder for states and localities to raise money because property and income tax deductions aren’t worth as much as they were in 2017. Democrats warn that Trump also extinguished a major potential funding source for infrastructure – a tax on overseas corporate earnings once floated by Trump economic advisers – that was instead used to finance lower corporate tax rates.

There is also resistance among rank-and-file Republicans to add to the deficit, especially right after the House voted for $81 billion in hurricane disaster relief. Congress also needs to focus on finding additional spending cuts for a two-year government spending deal that is McConnell's top priority versus forking over more money the infrastructure project.

Helping states fund projects

The White House insists it is working on ways to help states finance projects.

A dozen federal agencies have been coordinating on the blueprint with D.J. Gribbin, a special assistant to the president, who is the White House's point person on this issue. Gribbin previously worked in the private sector on infrastructure public-private partnerships and for Koch Industries, the company owned by the billionaire GOP mega donors and brothers Charles and David Koch.

The White House is open to hearing from states on ways to raise funds, including if they want to advocate for levying internet taxes that could help fund critical projects, according to the officials.

Trump's idea to create a dedicated fund for rural projects is aimed at building support from a GOP conference that hails primarily from rural areas and would struggle more than urban areas to finance their share of the costs or attract private investors.

“The history on infrastructure spending on the Hill has generally been split on urban and rural lines, not so much party lines," said Debra Knopman, the author of a recent Rand Corporation report on infrastructure. "If your focus is on Amtrak and fixing the Northeast corridor," Knopman said, many rural lawmakers "aren't going to be as interested."

Critical needs

At issue is how to incentivize private companies to invest in projects that may be in the interest of public safety and commerce but not necessarily profit-making ventures, such as upgrading the lead-laced water pipes in Flint, Mich.

According to Knopman's report, the federal Highway Trust Fund and many of the state funds for drinking water and wastewater treatment plants "have not been operating on a sustainable basis for some time now, and communities with declining tax bases struggle to maintain their roads, bridges, and water systems and repay their debts to bond holders.

"There’s a question of how far you can go with bringing in private investment to, quote solve the problem," Knopman continued. And when it comes to places like Flint, she said, “there’s just no market there."