Visions - Winter/Spring 2018 - 19
President Trump's infrastructure plan relies on state and local governments for funding
Distribution of funding under the White House's new plan
$100 billion
for incentives for state
and local governments
to provide 80%
of funding
$200 billion in federal funding over 10 years
$20 billion
for "transformative
projects" that are new
rather than rebuilding
existing infrastructure
$50 billion
for rural infrastructure
needs through block
grants to states
$20 billion
for federal loan programs to
attract private investment
and private activity bonds
DIVISIONS IN CONGRESS
With an infrastructure funding gap exceeding $2 trillion (see
chart left), pollsters have documented Americans' overwhelming
support for new infrastructure initiatives since the 2016 campaign. Although the level of public agreement supersedes partisan and geographic boundaries, Republicans and Democrats
in Congress remain far apart on such issues as program design
and financing. In terms of program design, while public-private
partnerships are unpopular among Democrats, Republicans
generally disapprove of expansive efforts taken by the federal
government.With regard to financing, Democrats view tax code
incentives as favoring GOP allies in the private sector while
Republicans view federal spending as deepening the federal
deficit and supporting Democratic-allied unions. However, the
strongest opposition to the infrastructure plan has been voiced
by fiscal conservatives who see paying for an infrastructure plan
with unspecified budget cuts rather than new revenue streams
$10 billion
for a "capital revolving
fund" to fund federal
government office
building projects
as a nonstarter. The debate over savings vs. revenue has also
begun to emerge from within the Trump administration.
CONCLUSION
Most analysts, including this one, agree that President Trump's
proposal will not become law this year; overcoming Democratic resistance to public-private partnerships, fiscal conservatives' concern over budgetary issues, the 60-vote threshold in
the Senate, as well as a host of other issues is too heavy a lift
on Capitol Hill in an election year. However, a newly elected
Congress will provide a fresh start in 2019 and possibly the
momentum to reach a deal with the White House on a comprehensive infrastructure package.
To discuss any of the topics raised in this article, or obtain
additional information concerning the White House's
infrastructure plan, please contact: James Winslow,
Senior Director, Government Affairs, (202) 973-0474,
james.winslow@sumitomocorp.com.
In addition to funding, the proposal aims to shorten review processes for projects and improve training for workers
Additional proposals under President Trump's infrastructure plan
$1.5 trillion investment over 10 years Encouraging federal
Infrastructure workforce training Streamlining regulatory review
Investment includes $1.3 trillion in
divestment of assets
The plan proposes changing
The proposal includes a 21-month
funding from the private sector and
This proposal includes
licensing requirements to allow
deadline for federal permitting and
$200 billion in government funding. selling airports and highways workers to move between states
review and designating one lead
to the private sector.
and expand apprenticeships.
agency to review each project.
Remaining infrastructure uncertainties
Gas tax increase
The federal gas tax, which was intended
to fund the Highway Trust Fund, has not
been increased since 1993, but could be
raised for infrastructure funding.
Highway Trust Fund
Congress spent $140 billion from 2008 to
2015 and will need to allocate $107 billion
in additional funding through 2026 to
maintain current infrastructure spending.
Funding sources
The White House stated that their FY2019
budget will include cuts to programs to
fund infrastructure investment, but has not
specified what the cuts will be.
Sumitomo Corporation of Americas
19
Table of Contents for the Digital Edition of Visions - Winter/Spring 2018
Contents
Visions - Winter/Spring 2018 - Contents
Visions - Winter/Spring 2018 - 2
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Visions - Winter/Spring 2018 - 20
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