A Trillion Short on Infrastructure Plan

It is safe to say that the Trump presidency, thus far, has been a disappointment when it comes to infrastructure investment. Trump, the candidate, promised a $1 trillion, 10-year program to address some of the massive needs of our transportation, water/wastewater and other infrastructure systems. Trump, the president, has failed to deliver on it.

Worse, the centerpiece of Candidate Trump’s plan — which was that private investment would increasingly supplement (and possibly supplant) public money — is at odds with comments made by President Trump to a group of Democrats and Republicans at a meeting in late September.

Even worse, Trump’s first budget sought to slash transportation and environmental spending, with the US DOT’s discretionary budget dropping by 13 percent and the EPA losing more than 30 percent. The House and Senate have since passed their own versions, which aren’t nearly as damaging, but the intent is still clear, as evidenced by this passage: “The Administration’s goal is to seek long-term reforms on how infrastructure projects are regulated, funded, delivered, and maintained. Simply providing more Federal funding for infrastructure is not the solution. Rather, we will work to fix underlying incentives, procedures, and policies to spur better, and more efficient, infrastructure decisions and outcomes, across a range of sectors.”

As noted in PSMJ’s 2018 A/E/C Firm U.S. Market Forecast, industry trade groups and advocates aren’t happy. The American Road and Transportation Builders Association (ARTBA) reported that OMB Director Mulvaney said, in a conference call with them, “People might say, well, goodness gracious, that doesn’t line up with what the president said about a commitment to infrastructure. That was done intentionally. What we’ve effectively done is try to move money out of existing, more inefficient programs, and hold that money for what we expect to be more efficient infrastructure programs later on.”

In a statement, ARTBA said, “While ARTBA continues to support and advocate for a large infrastructure package along the lines of what the President promised on the campaign trail, we do not support cutting current infrastructure investment as a down payment to some future infrastructure measure. While Director Mulvaney is suggesting the funds will be used later for the infrastructure package, we should be clear his proposed infrastructure spending reductions would be used now to supplement increases in defense and security spending.”

With public-private partnerships apparently out of the picture, other issues taking precedence (tax reform, health care), and Trump’s difficulty in rallying his own party to pass legislation, it will likely be some time before any kind of infrastructure package is passed. Moreover, the Democrats — smelling blood after making gains in November and yesterday’s Alabama special senate vote — are unlikely to cooperate and hand the Republicans a win with the midterms less than a year away.

Sometimes forgotten in the talk about the Trump Trillion is that Congress passed and President Obama signed the FAST Act in December 2015, so enabling legislation is in place through 2020. Nonetheless, the high hopes the industry had after Trump’s unexpected win in 2016 are fading fast, likely signaling a return to the battle for sufficient funding to repair, maintain and improve the worsening U.S. infrastructure system.

One saving grace is that many states and metropolitan areas have passed laws providing new sources of funding for infrastructure projects. In other words, they’re not waiting around for the federal government to come through. This issue is examined extensively in the Forecast, which you can purchase at http://store.psmj.com/2018-a-e-c-firm-u-s-market-sector-forecast/.

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