Trump’s Proposed Infrastructure Plan: Is It Much More Than It Seems?

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President Trump released his long-awaited infrastructure plan last week, and like most things that come out of the White House, it was overshadowed by the partisan politics that dominate our government. The plan has been decried as a “farce,” a “scam,” and “underwhelming” by some. Most of the criticism focuses on what is perceived to be a modest amount of federal funding—$200 billion—committed by the White House as well as the significant reliance on state and local funding sources and private investment. However, an argument can be made that the plan is about much more than the level of federal funding. It offers an approach to revitalizing the nation’s infrastructure that combines a variety of funding resources. This approach is something that should not be controversial because it presents a practical solution to the fact that the federal government alone does not have the resources to finance the trillions of dollars that are necessary to rebuild America’s infrastructure.

Given that this plan is coming out of a conservative Republican administration, it should not be a significant surprise that the White House wants to put the majority of the decision making for future infrastructure in the hands of the states. The Administration points out that the states are in the best position to determine what projects should be built and how much money should be spent. The plan would reward states that are willing to share responsibility for funding infrastructure projects and are able to bring new and creative ideas to project delivery.

At this point, the majority of public-private partnership projects (P3) are being sponsored by state and local governments. Significant P3 projects have been built or are in the works in New York, Florida, California, Pennsylvania, Missouri, Virginia, and Colorado. Most of these projects utilize combined funding sources, including federal, local, and private monies. The entire purpose of the Trump plan is to provide, essentially, seed money that will spur and leverage additional investment.

Moreover, the plan does not simply identify infrastructure spending goals—which is largely what the Democrats’ plan speaks to. Rather, it identifies and proposes to eliminate various federal statutes and regulations that limit or create disincentives to infrastructure spending. This includes streamlining infrastructure permitting to two years, requiring permitting to be coordinated by a single agency, eliminating caps on and expanding the types of projects that can be financed by private activity bonds, broadening the types of projects that can be funded under federal infrastructure programs such as the Transportation Infrastructure Finance and Innovation Act (TIFIA) and Water Infrastructure Finance and Innovation Act (WIFIA), and creating expedited statute of limitations for environmental challenges to infrastructure projects.

Finally, while the plan’s funding commitment of $200 billion may be legitimately criticized as insufficient to meet this significant challenge, there have been hints from the Administration that it may be willing to consider additional funding, including a long-overdue increase in the federal gasoline tax. Given the recent tax overhaul and the concerns about how it may increase the federal deficit, it is not surprising that President Trump’s initial federal funding commitment is more limited. However, an analysis of the plan should not begin and end with that initial funding commitment. Rather, the plan should be examined for what it does to maximize investment from all interested parties and how it eliminates acknowledged roadblocks to most robust infrastructure spending. In this regard, there is more to the plan than appears on the surface.