Conservatives vs. Trump’s infrastructure plan
One of Donald Trump’s top campaign promises — a trillion-dollar program to rebuild highways, tunnels, bridges and airports — is already meeting resistance from conservatives.
The president-elect has vowed that his infrastructure proposal will create “millions” of jobs, likening it to Dwight Eisenhower’s creation of the interstate highway system. It’s one piece of his agenda that’s drawing support from Democrats, who love public works programs just as much as Trump loves to brag about his experience building golf courses and skyscrapers.
But Trump’s 10-year infrastructure proposal could offer an early test of how some of his more unconventional policy ideas will fly with conservative Republicans in Congress — even though he hasn’t made it clear whether much, or even any, of that $1 trillion would come from federal coffers.
Dan Holler, spokesman for the group Heritage Action for America, questioned the job-creation claims for such plans, in the same way that conservatives have scoffed at the benefits of President Barack Obama’s $832 billion stimulus.
"Conservatives do not view infrastructure spending as an economic stimulus, and congressional Republicans rightly rejected that approach in 2009,” said Holler, whose group is the political arm of The Heritage Foundation.
He said Congress should devote its energies to other items on Trump’s wish list.
“It would be a mistake to prioritize Big Government endeavors over important issues like repealing Obamacare, reforming our regulatory system and expanding domestic energy production,” Holler said. “Along with confirming a conservative justice to the Supreme Court, these are the type of legislative efforts that will help anxious families and folks struggling all across the country.”
Trump’s proposal even drew flak from the Competitive Enterprise Institute, a conservative group that his transition team has turned to for advice on his environmental policies. “There is little evidence that these public works projects promote long-run economic growth,” CEI fellow Marc Scribner wrote Thursday in a blog post on “The Great Infrastructure Myth.”
It’s unclear whether these critiques presage major problems for Trump’s plan, which he has yet to put forth in more than skeletal form.
The language Trump has put out so far suggests that his actual infrastructure spending would amount to far less than $1 trillion in federal money — relying instead on policy strategies like tax credits to spur private investment in transportation projects. He also hasn’t suggested any fix for the government’s perpetually cash-strapped Highway Trust Fund, which relies on a federal gasoline tax that Congress hasn’t hiked for 23 years.
Even so, Trump cheered infrastructure advocates from both parties when he gave the issue a prime mention during his victory speech early Wednesday.
“We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals,” Trump said. “We’re going to rebuild our infrastructure — which will become, by the way, second to none — and we will put millions of our people to work as we rebuild it.”
For transportation supporters, the vocal buy-in from the developer-turned-politician spawned hope that his plan may get a warmer welcome from Congress than Obama’s most recent infrastructure proposals received.
“I think that the X factor, the missing ingredient, has been in presidential leadership,” one GOP industry lobbyist said.“It’s been a real champion at the White House who really puts his or her shoulder into it.”
“He gets all of that instinctively,” another transportation lobbyist said. “That’s all very positive.”
Senate Commerce, Science and Transportation Chairman John Thune (R-S.D.) and House Transportation and Infrastructure Chairman Bill Shuster (R-Pa.) both gave Trump’s proposal some encouraging though noncommittal words Thursday. Thune said through a spokesman that he “supports enacting a national infrastructure improvement plan,” while a spokesman for Shuster’s committee said he’s “encouraged … that the idea of addressing transportation is gaining some traction in Washington.”
Sen. Sherrod Brown of Ohio, the top Democrat on the Banking Committee, said he expects the topic to be a top priority for the panel next year, noting that “both presidential candidates proposed badly needed infrastructure investments that will help get Americans back to work.” Hillary Clinton’s five-year, $275 billion infrastructure proposal would have relied on revenue from some vaguely defined tax overhaul — though Trump boasted that his plan was bigger.
On Wednesday, House Minority Leader Nancy Pelosi told fellow Democrats that her party wants to work with Trump "to pass a bill very fast," according to a source on a conference call.
The group Building America’s Future — chaired by Democratic former Pennsylvania Gov. Ed Rendell, former Transportation Secretary Ray LaHood and former New York Mayor Michael Bloomberg — pledged to work with Trump and Congress “to tackle this unifying issue in the first 100 days.” Pete Ruane, CEO of the American Road and Transportation Builders Association, invoked Trump’s post-election comments about “healing” after a bruising campaign, saying that “the bipartisan aspect of this is compelling.”
Lamenting the “crumbling” state of the nation’s roads and bridges has been a bipartisan pastime for years. Both Trump and Vice President Joe Biden have bemoaned the “Third World” condition of New York’s LaGuardia Airport, where Trump often lands his private Boeing 757.
But Congress has been stuck for years on the question of how to pay for such projects, with suggestions such as bonds, enhanced revenues from tax reform, some hoped-for peace dividend or a hike in the gasoline tax all coming and going with no action.
Trump will most likely have great sway with the GOP-held Congress, however, especially after his surge in the polls helped Republicans retain control of the Senate. Having the same party in charge of Congress and the White House certainly opens “the opportunity to solve a critical problem in a way that has lasting benefits and impact,” said Katie Thomson, a former general counsel at the Department of Transportation who now works at the firm Morrison Foerster.
As Pelosi’s remarks show, Democrats may also be eager to sign onto a bill that promises to boost domestic spending. “There is a potential irony here, in that his more natural allies on specific items may actually be Democrats,” Rep. Gerry Connolly (D-Va.) said.
Still, it's unclear how much Trump’s proposal would actually boost federal dollars.
His pledge for the $1 trillion in investment, based on a proposal crafted by economist Peter Navarro and billionaire financier Wilbur Ross, talks about a “bold, visionary plan. ... in the proud tradition of President Dwight D. Eisenhower.” But it would rely heavily on private funding that’s driven by a tax credit — whose cost they say would be offset by tax revenues reaped from the resulting jump in business activity. That tax scheme would apply only to money-making infrastructure projects like toll roads and airports.
In Trump’s 100-day “action plan,” he says his proposal “leverages public-private partnerships, and private investments through tax incentives, to spur $1 trillion in infrastructure investment over 10 years.”
To experts in transportation policy, that language suggests relatively little — in fact, possibly no — investment on the federal level, relying instead on tax breaks to entice the private sector into opening up its wallet.
“Clearly the devil is in the details, but I think that whatever Trump comes up with, you’re probably going to see a fair amount of involvement from the private sector,” the GOP lobbyist said.
Trump initially floated a much different version last summer, telling the Fox Business Network the government would spend as much as $550 billion and “make a phenomenal deal with the low interest rates.” Pressed on the cost, he added: “We have bridges that are falling down. I don’t know if you’ve seen the warning charts, but we have many, many bridges that are in danger of falling.”
“Donald Trump Proposes $550 Billion in New Government Debt,” the resulting Wall Street Journal headline read, suggesting the difficulties such a plan could face in a Republican Congress that has spent eight years lambasting President Barack Obama over deficit spending. The conservative site Newsmax called his idea “a steaming pile of hogwash.”
His new talk about financing and “leveraging” might avoid those fiscal pitfalls, but it wouldn’t fix the Highway Trust Fund. And for many transportation boosters, a plan that doesn’t do that is a halfway solution.
“Financing is a nice piece of the puzzle,” said Bud Wright, executive director of the Association of American State Highway and Transportation Officials. But, he added, "We certainly believe that we need additional federal investment, but really finding funding to do that — using some traditional or creative sources to generate new revenues — is important."
The only way to fix the trust fund long term, experts said, is to generate reliable, recurring new revenues. But Thomson noted that that has been out of reach for some time — through both Democratic and Republican administrations.
“It’s a political problem regardless of who’s” in power, Thomson said. “There’s a fundamental unwillingness to make politically difficult choices.”
Ed Mortimer, executive director of transportation infrastructure for the U.S. Chamber of Commerce, said his group will make a case to the Trump administration that some kind of sustainable funding fix should be part of whatever plan the new president offers.
“We’re very optimistic that we’re going to find a way to come up with some long-term, sustainable funding,” Mortimer said Wednesday. “We got a great shout-out last night.”
