Trump, Congress Face Test on Infrastructure Politics, Funding

 

Declining infrastructure spending leaves much undone, including maintenance. An organization of civil engineers graded U.S. infrastructure in a report this year as a D+. Above, a crumbling bridge in downtown Atlanta. Photo: J.C. Burns, Flickr Creative Commons

Backgrounder: Trump, Congress Face Test on Infrastructure Politics, Funding

By Joseph A. Davis

Infrastructure may be the foundation on which the U.S. economy is built, the one thing that dissolves party lines, the magic cure for unemployment and low wages. But it’s also an index of U.S. political dysfunction.

Since 2018 is an election year, politicians are talking “infrastructure.” There will be loud speeches and much bustling in the Capitol. Credit will be claimed; blame will be cast.

Just don’t bet the ranch on very much happening. But that will not keep it from being news, including for environmental reporters.

Is Trump plan DOA?

Earlier this month, President Donald Trump unveiled his “infrastructure framework.” Lots of people and interests across the country hope an infrastructure plan will succeed. But this one seems doomed to go nowhere. Eight years ago, when jobs were really needed, it might have had a chance. But at this writing the U.S. unemployment rate is around 4.1 percent.

 

The glittery promise of infrastructure

was that it could be something that

Democrats and Republicans could agree upon.

 

The Trump plan is not funded — or at least is funded with play money. Congress has already locked in new deficits of over a trillion dollars, so there’s not much left to spend. The recent two-year budget deal imposes caps on most federal spending, so new spending is not really possible.

During the campaign, the glittery promise of infrastructure was that it could be something that Democrats and Republicans could agree upon (and thus pass).

But few Dems are endorsing the long-awaited (or long stalled) Trump infrastructure proposal, which seeks to cut regulations and shift the funding burden even further to states and localities.

In fact, many quickly denounced it as a sham. Environmentalists were even less kind. And so far even key Republicans have been lukewarm.

With many Democrats, including some key committee leaders, opposing the Trump plan rather vehemently, the White House won’t have the 60 Senate votes required to amend a slew of existing federal laws it seeks to change. And those myriad laws are also under the jurisdictional thumbs of a relatively large number of Congressional committees — a sure-fire recipe for wrangling, obstruction, chaos and delay.

Plus, as an election year, it’s the last year of a Congress many think will change its party balance. Generally, the odds of any legislation passing in an election year go down month-by-month as November approaches (unless maybe the bill gives clear advantage to a party with lopsided power).

That all means the odds of the Trump plan clearing the sharply divided Congress before Congress adjourns in 2018 are rated low.  But there’s much more to the infrastructure picture.

The backstory on infrastructure

First, remember that people mean different things by the term “infrastructure.” Roads, bridges, water mains, sewage plants, locks and dams, reservoirs, power plants, power lines, ports and harbors, railroad tracks, pipelines and refineries, public transit systems — those are some kinds of infrastructure that environment and energy reporters often write about.

But a lot of other things can be lumped under that fuzzy definition: Telephone cables, internet cables, banking systems, post offices and public buildings, hospitals, airports, railroads, schools, … and perhaps private businesses as well. That is where the conflict and confusion start.

President Donald Trump met with members of Congress at the White House to discuss infrastructure on Feb. 14. Photo: whitehouse.gov

Congress has been regularly doing infrastructure — its own way — for a long time.

It has come up with water project authorization bills like clockwork every two years (by which we mean every election year). It has worked on transportation legislation (often known as the highway bill) every five years or so. It has annually spent money for low-interest loans to build local sewers and drinking water systems.

Projects have been chosen by Congress, federal agencies and the states. Funding for these projects, while never as much as anyone wants, and perhaps declining over some decades, has been substantial and fairly consistent.

Democrats, being Democrats, have yearned for more and taken what they could get. Republicans, being Republicans, have disapproved of the federal spending they entail, but often made an exception in the case of their own home districts.

Spending in hundreds of billions

It is hard to say precisely how much Congress has spent on these infrastructure projects in recent years, because that depends on definitions. But the Congressional Budget Office, or CBO, recently put the number at hundreds of billions per year for all levels of government.

For 2014 alone, CBO put the combined number at $416 billion. That was for both capital (construction) and operating costs (the bigger share). In 2014, the federal government spent $61 billion on capital costs, while state and local governments spent $112 billion.

States and localities, by the way, fund the lion’s share of operation and maintenance. From year to year, these numbers have been fairly consistent, although the local share has been increasing since the 1980s and overall federal spending on infrastructure has been declining since 2002.

The politics of infrastructure funding

So how does infrastructure get paid for in reality today — if not by Congress appropriating and distributing money from the federal Treasury?

There’s the gasoline tax for highways. For clean water infrastructure there are your local utility water and sewer bills. There have been proposals for waterway user fees (collected largely through a tax on boat fuel and managed via an Inland Waterways Trust Fund). But this scheme has never been popular with boat operators or the members of Congress who represent them.

 

The Trump proposal upsets — or destroys —

the established ways of picking projects,

and relies on vague expectations to fund them.

 

But declining spending has meant that not everything that needs doing has gotten done.

The American Society of Civil Engineers, which periodically compiles a report card on the state of U.S. infrastructure, currently gives it a grade of D+. That means that not even all needed maintenance on existing infrastructure is being done. Hence the political cliche “crumbling infrastructure.”

Yet the needs are real, and they are human needs. It’s not just that local governments still struggle to fill potholes. The small, poor, largely African-American Texas town of Sandbranch, just outside Dallas, for example, has lacked running water for decades.

Who picks the projects?

Key to remember: Whoever chooses the project and gets it funded reaps the political benefits. Historically, many projects have been chosen by Congress or the states. When projects are chosen by federal agencies, it has often been ruled by strict formulas.

But the Trump proposal upsets — or destroys — the established ways of picking projects, and relies on vague expectations to fund them.

For instance, Trump proposes replacing the many law-based ways of selecting projects with a mechanism that chooses them based mainly on how much private money they can attract. Trump, while not forking over a new dollar of hard federal cash, proposes creating a new bureaucratic mechanism (the “Incentives Program”) and concentrating most project-selection power in that bureaucracy, which is controlled by him.

During his 2016 campaign for president, Trump proclaimed “plans” to spend massively — $1 trillion — on infrastructure. The plan was somewhat unclear, especially about how it would be paid for. But it was supposed to happen in 2017, and Trump said he would do it in his first 100 days and that he would spend big.

This came as a surprise to some. Former President Barack Obama had proposed “infrastructure” legislation back in 2011 as part of a larger jobs package (may require subscription), but Senate Republicans killed (may require subscription) the $60 billion portion of the bill labeled “infrastructure.”

That demonstrated not only the the importance of party politics, but also of labelling — by 2015, Congress had sent Obama a $305 billion “highway” bill. That one passed on an almost bipartisan basis (although three of the four GOP senators running for president voted no).

Changing norm on highways, water projects

Building highways is a tradition almost as American as apple pie, and they have long been funded partly by the federal gasoline tax that goes into what is called the Highway Trust Fund. Highways are politically popular because some highway construction goes on in just about every Congressional district.

But it’s more complicated. States and localities still pay the lion’s share, even for federal highways. Some of the gas tax may go to pay for public transit. And since the trust fund often shows red ink, Congress frequently pulls highway money from the general Treasury, something GOPers usually profess to be against.

 

In today’s Congress the blame game

is often more resorted to than log-rolling. 

 

Another centuries-old tradition in Congress is water projects. Yes, water projects — locks and dams, canals and dredging — are also “infrastructure.”

Even in our era’s deadlocked and dysfunctional Congress, and even on the bitterly partisan Senate Environment Committee, a water projects bill is reliably put together and passed like clockwork every two years. The partisan enemies call each other “my friend” as they do it.

And the House Appropriations Committee reliably pays for the work every year with an Energy and Water bill that is almost invariably the first one sent to the floor. The norm is: “I’ll vote for your project if you vote for mine.”

But in today’s Congress the blame game is often more resorted to than log-rolling. During the last administration, Obama five times proposed infrastructure spending that Congress usually ignored or rejected. But in 2017, the GOP pointed its shaming finger at “The Obama Legacy: America’s Crumbling Infrastructure.”

The watchword has become more like: “If you’re going to hold my project hostage, I’ll hold yours hostage.” Democrats have made several infrastructure proposals since Trump took office, but Republicans ignored them. As did most media. Today, with the word “Trump” in front of the word “infrastructure,” it has become a story.

Paying for Trump’s plan

Both sides have been throwing trillion-dollar numbers around for infrastructure needs. But that tends to be deceptive, lacking the key context of time.

Trump’s $1.5 trillion number (it has varied), for instance, is for ten years, or $150 billion per year. Of that, just $20 billion would be federal money. That’s less than the actual current amount of federal appropriations for infrastructure.

At this point it becomes very important to ask: is that new money, or the money we have been spending all along? Trump’s proposed outline is a bit vague on this.

Another point that’s vague: The Trump “framework” says funds (even the $20 billion a year) “would be made available” for things. The wording obscures just who would make the funds available. It would not be Trump; it would be Congress, which has already spent its allowance. The Republicans — who control Congress — have long opposed raising federal infrastructure spending totals.

Trump’s framework implies in many ways that the infrastructure spending will not be real spending. Some 80 percent of the money is supposed to come from non-federal sources — private companies and state and local governments (may require subscription).

But there is little hard evidence that the provisions in Trump’s framework will induce private companies to invest. And most state and local governments are already spending as much as they can.

Shifting the financial burden

Trump’s gambit is to win politically by not raising federal taxes, shifting the political pain of raising taxes (may require subscription) to states and localities.

Moreover, the Trump plan suggests that a big part of the federal share will come from things like selling off the Dulles and Reagan National Airports (may require subscription) in the Washington, D.C. area, along with other federally owned real estate, including public lands.  

It also suggests that federal spending will be funded by oil and gas revenues (which Congress has already committed to other purposes).

 

The steamrolling of environmental protections

will guarantee broad opposition to Trump’s plan

from environmental and conservation groups.

 

All of this will be politically unpopular in states Trump needs to hold on to, and is unlikely to work.

One thing to remember, though, is that when a private company pays for building the infrastructure, they then own it and expect to make money from it. That means toll bridges and toll roads. In the case of privatized water treatment plants (which we have some experience with), it may mean higher water bills.

What (and where) is Trump infrastructure plan?

Before we talk about what is the Trump “infrastructure plan,” it’s worth asking: Where is the plan?

During his Jan. 30 State of the Union speech, Trump said, “I am calling on Congress to produce a bill that generates at least $1.5 trillion for the new infrastructure investment that our country so desperately needs.”

The White House itself had not produced a bill, and was not offering legislative language. He seemed to imply that finding funds for the infrastructure was Congress’ problem. What came out the next day was billed as a “framework” or “outline.”

The Trump plan (full text here), greatly simplified, includes the following key features:

• A certain amount of federal spending, which may actually be less than Congress currently spends.
• Increasing the amount of infrastructure spending by states, local governments and private companies. This would be accomplished by “incentives” — tax breaks and easing of finance rules. (It is unclear whether these “incentives” would actually increase spending.)
• Rolling back many federal environmental review and permitting requirements, on the assumption that environmental reviews are a major obstacle restricting infrastructure development. Evidence for this assumption is scant.
• Allocation of a major share of spending to rural infrastructure projects.
• Funding the federal share of the program through mechanisms beyond regular Congressional appropriations — such as oil and gas leasing revenue, selling off federal facilities and selling off federal lands.

Dems and progressives have not looked kindly upon Trump’s “plan.” Senate Minority Leader Chuck Schumer said it would lead to “Trump tolls” across the country. New York Times opinion columnist Paul Krugman (may require subscription) wrote: “It’s not a plan, it’s a scam.”  Katrina vanden Heuvel, editor of The Nation, put it this way: “He’s attempting to pass off a privatization scheme (may require subscription) as a public works project.”

Roll back on environmental standards

From an environmental journalist’s perspective, the 800-pound gorilla is the major rollbacks in environmental laws and regulations that Trump’s infrastructure plan proposes.

One of the biggest sets of changes called for would curtail the requirements of the National Environmental Policy Act, which requires review of the environmental impacts of federal actions before they are taken (read more about NEPA in SEJournal TipSheet). Some of these changes require regulatory action (not quick or easy), but bigger changes would require legislation (even harder).

Trump proposes environmental rollbacks way beyond NEPA. Even though there is actually little evidence to support (requires subscription) the idea that permit delays are what keeps infrastructure from being built (the biggest problem is money), he would consolidate permitting for a single project in a single agency and shorten the time agencies have to consider permits.

And all this would come on top of the administration’s many other environmental rollbacks.

Part of larger deregulatory approach

The infrastructure plan, in any case, may be just another way to advance Trump’s deregulatory agenda. He signed an executive order back in January 2017 (may require subscription) urging agencies to short-circuit environmental reviews for infrastructure. He did something similar again in August (may require subscription) 2017. He has quietly hot-wired permitting (may require subscription) for energy development on public lands.

Moreover, the impacts of, and on, climate change (may require subscription) would be largely ignored under Trump’s plan. Sea level rise and flooding already threaten roads and other infrastructure in many places. But excessive heat can also threaten infrastructure. Last year, Trump used an executive order to roll back an Obama regulation that would have required new federal roads and bridges to be built to withstand flooding and sea level rise.

The steamrolling and jackhammering of environmental protections is one thing that will guarantee broad opposition to Trump’s plan from environmental and conservation groups.

One example is the Sierra Club, which promptly declared: “Trump’s infrastructure scam is a fraud.” The Natural Resources Defense Council called it a “disaster.” Other groups focused on the fact that it could allow pipelines to be built through national parks.

Covering the many enviro angles

The good news, from an environment and energy reporter’s viewpoint, is that there are many environmental angles to infrastructure projects, issues and stories, too many to list here.

But just to take a few:

• Building more highways and less mass transit may increase both smog and greenhouse gas pollution.
• Building dams may hurt migrating fish, while removing dams can help them.
• Dredging harbors may raise issues of how to dispose of polluted dredge spoil.
• Building sewage plants and pipes may reduce pollution — but encourage more development.
• And what about replacing all those lead drinking water pipes, or working to get more people off of contaminated wells, or getting more contaminants out of municipal drinking water?

Any hoped-for bipartisanship over infrastructure may, in the end, break down over what projects are selected. Democrats and Republicans have very different visions of what they want built.

The several Democrat proposals in the past year or two have, of course, included the traditional roads, bridges and waterways. But they have also included heavier investment in environmentally beneficial sewer and drinking water projects.

Congress in 2016, for example, had appropriated some $100 million to aid the lead-plagued Flint, Mich., water system. Many other drinking water systems across the nation have problems of similar severity and scale, although their problems have not gotten quite so much publicity.

Sewer and water financing programs already exist at the U.S. Environmental Protection Agency (e.g., the revolving funds). All Congress would have to do is add money.

Energy, green infrastructure on table

Dems have also urged more federal help for various clean energy (may require subscription) infrastructure projects. For funding, they have been more open to raising the gas tax that helps pay for highways. Higher gasoline prices would reduce driving, which could help some with air pollution.

Trump recently shocked many by suggesting a hike in the gas tax (not mentioned in his infrastructure plan). This flabbergasted Republicans, who don’t like the raising of any taxes.

There can be all kinds of “infrastructure,” including gas and oil pipelines or electric transmission lines. Normally companies pay for these, but government makes them easier or harder to build via regulation. Many Republicans want to push them.

And there are completely “green” kinds of infrastructure. Charging stations for electric cars. Hybrid buses. Building fish ladders into hydroelectric dams. Separating combined storm-sanitary sewers.

The EPA for years has pushed a thing they call “green infrastructure,” which involves switching from concrete to grass to allow more stormwater to remain on land or percolate into aquifers.

And don’t forget the legendary National Parks maintenance backlog.

The question remains: how much green infrastructure will make the cut? Dems do not automatically support all these things.

What to look for in 2018

As the story develops between now and the end of 2018, there are some predictable signs that could indicate action.

First would be Congressional hearings in both the authorizing and appropriations committees — the more committees, the more telling. Next would be the appearance of actual legislation, unlikely to come from the White House — possibly introduced by key committee chairs. Also important would be any declaration of intent or priority by the House or Senate majority leadership. Another thing to look out for would be further executive branch action on infrastructure by Trump agencies (there has already been some).

Congress will finish most of the easy work it does by the time summer recess starts in August, so if infrastructure has not made big progress by then, chances of success are slim. If nothing happens on a major new infrastructure initiative, that may be a sign of dysfunctional government.

Meanwhile, regular (non-Trump) infrastructure funding is likely to grind forward as always. Even if it does not get many headlines, that may be a sign of government that fixes potholes.

Joseph A. Davis is a freelance writer/editor in Washington, D.C. who has been writing about the environment since 1976. He writes SEJournal Online's Issue Backgrounders and TipSheet columns, directs SEJ's WatchDog Project and writes WatchDog Tipsheet and also compiles SEJ's daily news headlines, EJToday.

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* From the weekly news magazine SEJournal Online, Vol. 3, No. 8. Content from each new issue of SEJournal Online is available to the public via the SEJournal Online main page. Subscribe to the e-newsletter here. And see past issues of the SEJournal archived here.