Six months into the first year of Republican control of the White House and Congress since 2006, we are far enough along to know what’s fake and what’s not about the looming infrastructure package and other federal transportation priorities.
President Trump came to Washington promising a $1 trillion infrastructure package. Despite initial resistance, Republican congressional leaders now acknowledge the need to advance such a measure and the President deserves credit for forcing it onto their agenda.
The timing is complicated by two factors: a crowded legislative calendar and the fact that—as of right now—an infrastructure package is somewhere in the Capitol Hill ether.
Republicans are grappling with repeal of Obamacare, which is a stark reminder of how difficult it is to pass major legislation even with single party control. Also waiting in the wings is a massive effort to rewrite the tax code. The annual government spending bills and a battle over another U.S. debt ceiling increase will also chew up additional time.
The Trump FY 2018 budget provides the first tangible outline of its infrastructure package. It confirms the initiative will total $1 trillion over 10 years and consist of: $200 billion of direct federal funding for transportation and other types of infrastructure; incentivized non-federal funding; reduced costs; and leveraged federal funds through public-private partnerships.
Beyond these components, the administration has only provided broad principles of how its goals can be achieved.
Unfortunately, the budget was not as vague about the administration’s vision for the existing surface transportation program. It proposes to pair the infrastructure initiative’s $200 billion in direct spending with $100 billion in highway and public transportation investment cuts over the same 10-year period. This outcome would be the result of the administration’s proposal to scale back Highway Trust Fund (HTF) supported spending to what current revenues would enable and call on states and localities to finance more of their transportation needs.
Cutting highway and transit spending by 40 percent is not ARTBA’s definition of an infrastructure package. This is the same HTF deconstruction scheme House Republicans have marched out routinely since 2011, and which has not seen the light of day in either chamber.
Further evidence that gutting the HTF is fake news came shortly after the budget was released when 253 House members called for including a long-term HTF revenue solution as part of a tax reform package. This level of support is well above the 218 votes needed to pass legislation and includes a majority of House Republicans and Democrats.
Even though the House and Senate haven’t acted on tax reform, both are working aggressively on it. A tax code rewrite moving in close proximity to an infrastructure initiative is a true opening for addressing the HTF’s structural deficit. In the past 30 years, all HTF revenue enhancements have come as part of a broad tax or budget bill.
An infrastructure package and tax reform may very well move separately. However, enactment of a tax package with a permanent HTF revenue solution could and would set up subsequent action on infrastructure. An HTF fix could also be part of a stand-alone infrastructure plan, and lawmakers have been clear that it must be supported with real revenue.
The key points to understand are that we are working with a blank slate and there is growing interest in Congress for addressing the HTF once and for all. We will continue to sift through the fake news and keep pursuing real opportunities.
Stay tuned.