Trump's $1 Trillion Infrastructure Plan Is Back
The administration's new $1 trillion infrastructure plan is light on both details and free market reforms.
President Donald Trump's 2020 budget request to Congress has been released, and with it is a renewed call for a $1 trillion infrastructure plan. This 13-digit proposal is a notably scaled back version of Trump's previous plans, both in the amount of new money the president is looking to spend and in reforms he's hoping to make.
"Decades after building-out the core of our infrastructure, much of it is in urgent need of repair, expansion, and modernization," reads a fact-sheet released alongside the budget. "Without continued investment and maintenance, America's infrastructure will continue to age, deteriorate in quality and performance, and gradually contribute less to American economic output."
To right the situation, the White House's 2020 budget calls for $1 trillion in infrastructure investments, at least $200 billion of which would be made up of new federal spending.
If this sounds familiar, it is because it is roughly the same plan the administration released in February 2018, which promised $1.5 trillion in infrastructure investments kickstarted by $200 billion in new federal spending.
That plan was fairly detailed, coming with some funding formulas for that $200 billion in new spending that put an emphasis on projects that could attract, state, local, or even private investment, and which would not need ongoing federal support.
The February 2018 plan also included regulatory reforms that would have made it easier to privatize airports and toll interstate highways. Private Activity Bonds—tax-exempt bonds issued by private sponsors to raise capital for infrastructure projects—would likewise have been expanded.
That proposal died on the vine as Congress became preoccupied with other issues and Trump failed to advocate for it.
This new proposal, while still including some broad language about how the federal government shouldn't be "the primary funder of the Nation's transportation systems" is otherwise pretty light on details.
Of that $200 billion in new spending, the administration has specific plans for only $10 billion of it. The White House says that it will "will work with the Congress on allocating the remaining amount."
Unlike the White House's February 2018 infrastructure plan—which envisioned a $1.5 trillion infrastructure plan as an addition to existing federal efforts—the budget documents released today suggest that the Trump administration will be counting a renewal of current surface transportation spending toward its $1 trillion plan.
This latest budget document is "less specific, and it relies slightly less on the private sector than other proposals" had, says Baruch Feigenbaum, a transportation policy expert with the Reason Foundation, which publishes this website.
That change, says Feigenbaum, could be a nod to the fact that the White House knows it will not be able to get many of its infrastructure priorities through a Democrat-controlled House. It could also reflect an internal change in the administration's priorities.
"Many of the architects of his original proposal are no longer in the administration," said Feigenbaum, meaning the White House could have "folks with a different list of priorities that are not as strictly free market as they once were."
A good example of this can be seen in the portion of Trump's budget proposal dealing with the Federal Aviation Administration (FAA). The president's request includes $3.3 billion for updating the agency's air traffic control operations to improve safety and reduce delays.
Notably missing is any reference to spinning off air traffic control operations, currently run by the FAA, into a separate nonprofit corporation. This is something the administration has supported in the past as a way of modernizing air traffic control services, and references to the idea were included in both previous presidential budget requests.
That it is now missing form this budget proposal is an indication that the Trump administration's plans for infrastructure reform are now less ambitious and less free market.
