POLITICS
12/11/2017 04:59 pm ET Updated Dec 11, 2017

Donald Trump Prepares To Finally Release His Infrastructure Plan, But Huge Obstacles Remain

Infrastructure Week stretches all year.

WASHINGTON ― Here we go again.

Donald Trump’s administration is reportedly planning to unveil its long-promised infrastructure proposal in January, according to The Wall Street Journal.

Trump administration officials spoke about the plan’s release as early as March of this year. The president himself said it was largely completed in May, announcing it would be coming in two to three weeks. A themed Infrastructure Week at the White House in June came and went without mention of any details about the plan. Transportation Secretary Elaine Chao then said it would be released sometime in the fall.

In recent months, administration officials had said they hoped to turn to infrastructure after Congress finished overhauling the tax code. But it appears other legislative priorities, like welfare reform, may also be on the agenda.

With Congress racing to finish its tax reform bill by Christmas Day, Trump’s infrastructure proposal may finally get its due early next year. It’s not clear, however, how and whether it even gets off the ground.

Trump proposed a $1 trillion package during the campaign to overhaul the nation’s crumbling infrastructure system and boost job creation. The measure is expected to include $200 billion in direct spending, with the rest of the plan consisting of private tax incentives that are meant to spur investment in infrastructure projects in the form of public-private partnerships.

Several big questions remain about the nature of the plan, however.

Trump has repeatedly contradicted his aides by criticizing public-private partnerships, even at times speaking in favor of more direct spending. At a recent sit-down with Democratic senators at the White House, for example, Trump emphatically said he did not like the notion of public-private partnerships ― a key element of his plan ― to pay for an infrastructure overhaul, according to a senator who had attended the meeting.

If the tax bill passed in the House last month becomes law, it would deal a larger blow to the administration’s infrastructure plan. A provision in the bill eliminates the tax-free status of certain bonds that builders rely on to arrange financing for certain projects. Public-private partnerships, for example, rely on such bonds to finance projects including toll roads and airports. The reconstruction and widening of Interstate 66 in Virginia, which was recently completed, received $946 million in private activity bonds, for example.

″[Private activity bonds] are a useful tool for public-private partnerships by allowing private financing to achieve near parity with tax-exempt municipal bonds,” said Michael Sargent, a transportation policy analyst for The Heritage Foundation. “Without PABs, financing for public-private partnerships is likely to be more expensive, thus making traditional government-backed projects potentially more appealing.”

The Senate tax bill, however, does not eliminate the tax-free status of so-called private activity bonds. Republican lawmakers in the House and the Senate are hashing out the differences between the two bills behind closed doors this week, and it’s unclear whether the House provision will be included in the final product. 

Moving another large bill through Congress in an election year is likely to prove doubly challenging for Trump and congressional Republicans. While Democrats generally support overhauling the nation’s infrastructure system, they say the government should spend more money to do so ― as much as $1 trillion. Most Democrats also oppose using tax incentives to fund infrastructure improvements, calling them a way to enrich wealthy investors.

Overhauling infrastructure could get lip service in Trump’s first State of the Union address, which is scheduled to take place in late January. Former presidents have often used the occasion to call for ambitious domestic programs. In this case, it could also give Trump and Republicans an opportunity to tout a popular initiative ahead of next year’s midterm elections. 

Those issues were likely the topic of a meeting Trump had Monday at the White House with Rep. Bill Shuster (R-Pa.), who chairs the House Transportation and Infrastructure Committee. A spokesman for the committee’s GOP majority said the two men discussed “options and ideas for moving forward on an infrastructure package.” Also present from the administration were: Chao, Chief of Staff John Kelly, Director of Legislative Affairs Marc Short and Director of the National Economic Council Gary Cohn.

White House deputy press secretary Lindsay Walters said in a statement after the meeting that Trump “looks forward to working with Rep. Shuster and his colleagues in Congress to turn this vision into legislation next year.”

This post has been updated with a more recent quote from Sargent.

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