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WASHINGTON — Gary Cohn, President Donald Trump's top economic adviser, ended a late January discussion with the president believing he'd finally convinced him that there’s no room in the federal budget for a massive infrastructure spending bill.
Reluctantly, Trump agreed: States and private companies would have to shoulder most of the $1.5 trillion plan Trump had promised the American public.
But then Trump waffled again, forcing Cohn's deputy, D.J. Gribbin, who had been working on the plan, to delay its release, which had been tentatively timed around Trump’s Jan. 30 State of the Union address. That’s according to two individuals and an administration official familiar with the talks.
On Monday, nearly two weeks later, the White House is planning to release its long-awaited infrastructure plan. According to one administration official, it’s still unclear whether Trump supports what was once its core concept of relying primarily on so-called public-private partnerships to repair America’s ailing airports, roads and bridges.
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Part of the holdup has been reconciling Trump’s demand for costly infrastructure projects with the nation’s growing debt, turbocharged by the new tax cut law he signed at the end of 2017.
Issues including the legislative calendar “have caused a slight delay in the public rollout of the president’s infrastructure plan, but he looks forward to sharing it with the American people” on Monday, said a White House official.
The president had wanted to declare his plan the biggest public works project since President Dwight D. Eisenhower created the Interstate Highway System in 1956, or at a minimum bigger than President Barack Obama’s 2009 stimulus package, according to the individuals familiar with the plan.
But the plan is already running headlong into the fiscal realities facing the federal government and states.
Washington is running its biggest peacetime deficit, and “states have no money either,” said Steve Bell, a Republican and former longtime Senate Budget Committee director.
“Public-private partnerships have already been criticized by both GOP and Democratic governors," Bell said.
According to people who have seen Trump’s proposal, up to 80 percent of the nation’s projected infrastructure funding needs would fall to states and private investors, flipping the traditional ratio. But the plan includes no new ideas for helping states finance the cost, the people who have seen it said.
The plan is also due to be released the same day as Trump’s fiscal 2019 budget proposal, a timing that baffles Capitol Hill aides because it invites a contrast between anticipated transportation budget cuts and Trump’s pitch for a major spending program.
Trump’s skepticism around the broad strokes of a top legislative goal is but one of the obstacles on the road to securing a massive public works project that he promised on the 2016 campaign trail and White House officials talked about throughout his first year as president.
Hours after signing the tax law in December, Trump was goading Democrats on Twitter to work with him on infrastructure, a vision he included in State of the Union address: "We will build gleaming new roads, bridges, highways, railways and waterways all across our land."
But Trump was elected as a populist, not a traditional fiscal conservative. And while even the most dubious Democratic lawmakers could have been persuaded to cut a major infrastructure spending deal with him in his first year, he instead joined with House Speaker Paul Ryan, R-Wis., and Senate Majority Leader Mitch McConnell, R-Ky., to push a more conventional GOP agenda of repealing Obamacare and big tax cuts, which helped further strain the Treasury and alienate Democrats.
On top of that, Republican lawmakers have been loath to embrace any major federal infrastructure investment. In 2009, they unanimously opposed the Obama stimulus bill, which included millions in improvements to roads and bridges. There are no indications that opposition has lessened simply because Trump is president.
Yet James Burnley, a transportation secretary under Ronald Reagan, said a public-private partnership plan could be successful if it’s structured through loan programs that prioritize the neediest projects, an already proven model for success.
“It’s easy to be cynical about something like this,” where the federal government isn’t just directly funding infrastructure, Burnley said. But “it’s a starting point for the congressional debate,” he said.
Calls for major infrastructure improvements have increased amid a rash of recent Amtrak train crashes and derailments. A new report from the American Road & Transportation Builders Association shows more than 54,000 U.S. bridges are structurally deficient.
Every four years, the American Society of Civil Engineers issues a report card on the condition of America's infrastructure. The 2017 grade was a D+. While the nation’s airports and water systems are aging, about 40 percent of the nation's 614,837 bridges are at least 50 years old, according to the report. There were an average of 188 million daily trips taken across deficient bridges in 2016, it said.
Even if the money for infrastructure improvements can be found, significant political challenges remain.
Unlike the hardcore push for tax legislation on Capitol Hill last year, Ryan and McConnell are looking to the White House to take the lead in plotting a legislative strategy around infrastructure. Also unlike the tax plan, which passed along straight partisan lines, Senate Republicans will need the support of at least nine Democrats under Senate rules, and a number have already expressed skepticism about the plan’s payouts to private companies.
Cash-strapped states like Iowa, which has the most troubled bridges in the country, according to the Road & Transportation Builders Association, are skeptical that private companies will invest in delivering broadband and resurfacing the rural roads and bridges that need it most. Administration officials say the Trump proposal includes $50 billion in direct funding for rural projects and $100 billion in incentives for private companies.
Beyond those funds, there appear to be few ideas for helping states pay for major projects. Some groups, including the U.S. Chamber of Commerce and labor unions, had advocated for a 25-cent-per-gallon gas tax as a revenue stream, while other ideas included encouraging states to tax the internet.
Trump's fiscal 2018 budget itemized $200 billion for infrastructure over 10 years, but cuts elsewhere in the budget canceled out those funds. The fiscal 2019 budget is likely to be no different, according to one official.
Further widening the funding gulf, Trump increased the plan’s price tag by half a billion, to $1.5 trillion, in his State of the Union address.
For all of these reasons, infrastructure may be the biggest test of Trump’s leadership thus far. Rep. Bill Shuster, R-Pa., chairman of the House Transportation and Infrastructure Committee, believes a deal won't happen without White House leadership, said Justin Harclerode, the committee's communications director.
“He hopes the White House continues to lead on this," Harclerode said of Shuster. "It’s going to take that to get a bill done."