President Donald Trump was widely expected to discuss his long-anticipated infrastructure plan tonight, particularly since the White House leaked an outline for a plan to generate $1 trillion in spending through public-private partnerships. Tonight, Trump unveiled an even more ambitious sum, requesting Congress present an infrastructure bill for $1.5 trillion to rebuild America’s roads, airports and rails.
NEW: Trump calls on Congress to produce a bill to spur $1.5 trillion in infrastructure investment pic.twitter.com/PKjtocYyLp
— Axios (@axios) January 31, 2018
Lamenting that it can take up to 10 years for a permit to be approved to build a simple road Trump demanded that the infrastructure plan also clear away the red tape surrounding the permitting process.
As previously discussed, Trump’s framework under discussion for modernizing U.S. roads, bridges, waterways and other public works calls for allocating at least $200 billion in federal funds over 10 years to spur states, localities and the private sector to spend at least $800 billion and as much as $1.6 trillion. Ultimately, however, the government may be on the hook for the full amount, which would have to be funded with incremental debt.
As Bloomberg notes, White House infrastructure adviser DJ Gribbin has said the administration plans to send detailed principles to Congress a week or two after Trump’s State of the Union speech to begin the legislative process.
Excerpted from the speech:
I am asking both parties to come together to give us the safe, fast, reliable, and modern infrastructure our economy needs and our people deserve.
Tonight, I am calling on the Congress to produce a bill that generates at least $1.5 trillion for the new infrastructure investment we need.
Every Federal dollar should be leveraged by partnering with State and local governments and, where appropriate, tapping into private sector investment — to permanently fix the infrastructure deficit.
Any bill must also streamline the permitting and approval process — getting it down to no more than two years, and perhaps even one.
In response, Bloomberg Intelligence analyst Nathan Dean says that Trump’s call for $1.5t for the new infrastructure is going to fall flat with Congress, noting that there isn’t enough time for Congress to agree on such a broad package before they turn their attention to the 2018 elections, not to mention coming to a bipartisan agreement over budget concerns.
As Dean further says, “all of this infrastructure talk in Washington is going to have little impact on total U.S. infrastructure growth in 2018.”
Meanwhile, Democrats are already questioning the plan and key groups are at loggerheads over the question of funding.
And so, despite the massive spending commitment, which could mean as much as $1.5 trillion in new debt, there was little reaction in the ten year, which was modestly lower on the news, as it either has had plenty of time to price the news debt in, or simply does not believe that it will happen.