SOTU: Trump Promises Streamlined Regulations, More Private Investment in Infrastructure

The president's comments adhered pretty closely to past statements but offered little added detail.


Road Construction

President Donald Trump used his State of the Union address last night to hype his still-forthcoming infrastructure plan, calling on Congress "to produce a bill that generates at least $1.5 trillion for the new infrastructure investment we need"—a 50 percent increase from his previous promise of a $1 trillion plan.

Little was said about how much of that $1.5 trillion would be coming from federal taxpayers, let alone where the administration planned on getting the money. What few specifics the president did cite highlighted his long-stated intention to streamline federal regulations and to shift more of the financial burden onto state, local, and private actors.

"Every federal dollar should be leveraged by partnering with state and local governments and, where appropriate, tapping into private sector investment," Trump said, adding that "any bill must also streamline the permitting and approval process—getting it down to no more than two years and perhaps even one."

The call for streamlining is welcome. Needless to say, some restrictions on government infrastructure projects are essential to protecting property owners and to ensuring taxpayer dollars are dispensed transparently. But others are pointless and duplicative. Current regulations require multiple agencies to issue similar approvals for infrastructure projects, adding years to the time it takes to deliver them. The time it takes to satisfy environmental study requirements has increased from 2.2 years in the 1970s to 6.6 years by 2011, according to one study prepared for the U.S. Treasury.

Trump has already taken some steps to streamline regulations, revoking Obama-era requirements that infrastructure projects account for the effects of climate change, and directing that one federal agency be responsible for issuing environmental permits.

The president's call for more state, local, and private investment offered few details, but was the subject of much criticism from Trump's detractors in the lead up to the speech.

Paul Krugman was fairly typical, declaring on Twitter that Trump's infrastructure plan was "phony, more a privatization scheme than a real plan to build."

A similar line of argument was advanced by Jacob Leibenluft, a senior advisor at the Center of Budget and Policy Priorities, who fretted that Trump's goal of limiting federal commitments to infrastructure spending "would not support many needed projects, while shifting costs to states, localities, and individuals and potentially providing opportunities for lucrative private-sector gains."

A rough draft of funding priorities for the administration's funding priorities included a funding formula heavily titled toward projects that would be able to attract capital and maintenance dollars from non-federal sources. This in itself sounds bad to many on the left, who posit that states and localities just don't have the money for needed infrastructure improvements. Leibenluft writes that "if states and cities are to provide financing, only those states and cities that have the ability and the political will to raise new revenues from taxes will be able to benefit, leaving some of the areas most in need of infrastructure investment even further behind."

This ignores the fact that the states and localities seeking the most in federal infrastructure funding also happen to be some of the country's wealthiest areas. New York and New Jersey are collectively seeking $13 billion for the New York Metro Area's Gateway Project—a rail transit scheme that would be used primarily by local riders traveling to and from the country's richest city.

Projects that rely the most on federal dollars meanwhile have often proven the most unnecessary. Take the Atlanta Streetcar, which relied on the feds to fund half its construction costs, and which has seen its ridership projections fall short while saddling the city with operating costs three times above initial estimates.

Shifting funding burdens onto state, local, and private entities would see more dollars going to projects that local people are actually willing to pay for. That would be the beginning of a far saner infrastructure policy, and it marked one of the few bright spots in Trump's speech.

NEXT: What About the Debt? Trump's SOTU Ignores a $20 Trillion Time Bomb

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  1. I hope people start using the word boondoggle again.

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  2. So Krugman thinks infrastructure is only infrastructure when built with tax dollars. Privately built infrastructure is … what?

    1. Answering myself with an aside, I guess I don’t take Krugman seriously because his opinions aren’t paid for with tax dollars, but with NYT revenue dollars. I wonder what that makes his opinions into…..

    2. Evil capitalism, of course!

    3. Property.

      The term infrastructure is exceedingly fuzzy, I would welcome the attempt to narrow the definition to something useful if that was Krugman’s actual intention.

  3. Article summary: I don’t have too many details regarding the proposed infrastructure spending. Here are some of the ways Trump has made the policy better. OTOH, I’m going to ignore all the positive steps I just mentioned and shall assuming the worst possible scenario for the future.

  4. Here in the Puget Sound deep blue paradise, a portion of the Obama stimulus went to build a “high speed” passenger rail shortcut on the Amtrak route from Seattle to Portland. Very recently the inaugural train carrying riders flew off the track and landed on I-90, closing it for two days. Several people died.

  5. “Paul Krugman was fairly typical, declaring on Twitter that Trump’s infrastructure plan was “phony, more a privatization scheme than a real plan to build.”
    Paul also is on record as follows:

    “It really does now look like President Donald J. Trump, and markets are plunging. When might we expect them to recover? If the question is when markets will recover, a first-pass answer is never.
    “We are very probably looking at a global recession, with no end in sight. I suppose we could get lucky somehow. But on economics, as on everything else, a terrible thing has just happened.”

    Like cod, Krugman is best served well-salted

  6. shifting costs to states

    I’m not clear on how this works. Does this mean the feds no longer collect money from the states that would have been used on infrastructure? Or do they expect states to raise more money on top of what the taxpayers are already sending to Washington?

    1. If I understand correctly, it means that the intent in Trump’s infrastructure plan is to offer federal funding only to projects that states are willing to pony up a larger percentage of the total cost of the project than has previously been expected. ( I do not know what the previous expectation is). Say senator Porkchop from the great state of Cornfuckistan is trying to get another lane added to a major highway in his state, and 3 billion is the estimated cost. The highway running the other way had a lane added 3 years ago under Obama, also with federal funding, for a similar cost. Obama tasked a leader of one of the committees with enforcing his basic list of expectations for any project proposed on that infrastructure package, and the committee leader told senator Porkchop (who has been in office a very long time) that the project would be added to the bill if the state committed to contributing 500 million of the total (gathered however that state gathers taxes. The federal government does not actually care how that state gets its money). Under the Trump bill, Porkchop has to contribute 1 billion this time.

      All these numbers and details are pulled completely out of my ass for illustrative purposes, of course.

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