Five things to know about Trump’s leaked infrastructure draft
A draft of the Trump administration’s principles for an infrastructure plan leaked earlier this week, providing industry leaders and lawmakers with a glimpse of what might be coming from the White House this year.
The undated document, obtained by The Hill, describes an infrastructure plan as a push for improvements to water infrastructure, transportation and Veterans Affairs facilities.
The White House refused to comment on the draft, but said that it “looks forward to presenting our plan in the near future.”
The leak came as industry leaders and lawmakers clamor for President Trump to release his long-awaited infrastructure package. The administration had promised the proposal would be released in January, though it now appears to be slipping to next month.
Here are five important takeaways from the leaked draft.
1. The sources of revenue are unclear
The draft did not identify clear sources of revenue to pay for infrastructure improvements, raising questions about how the package would ultimately be funded.
“There’s nothing that really cuts to the very real question of how we’re going to pay for it,” said Kate Wood, the director of infrastructure policy for the Association of Equipment Manufacturers, a trade group.
One potential revenue source is tolling, as the draft argues states should be given the “flexibility” to collects tolls on the interstates and use the revenue to invest in infrastructure projects. States were banned from tolling on interstates in 1956, with some exceptions for states already collecting tolls.
But collecting tolls could prove difficult for some states, Wood said, especially if they do not already have laws in place to capitalize on the proposed lift on the tolling ban.
Including the expansion of tolls in the plan could also spark a political fight, as lawmakers have long been wary of broaching the issue and many industry groups are opposed.
“As we’ve said before, we have serious concerns about the unintended consequences of tolls, including their inefficiency, disruption to traffic flows, diversion to secondary roads and negative impact on local economies, to name a few,” Chris Spear, the president and CEO of the American Trucking Association, said in a response to the leaked draft.
2. The struggling Highway Trust Fund is not mentioned
Some industry leaders who have long advocated for a comprehensive infrastructure package argue any plan must address the struggling Highway Trust Fund, which is used to finance road building.
The draft document, however, does not mention the fund, something business leaders say they are worried about.
“Our primary concern with what’ve seen so far with the administration’s infrastructure proposal is that it does not [address] the underlying solvency issues with the Highway Trust Fund,” Jim Tymon, the policy division director of the American Association of State Highway and Transportation Officials, told the Hill.
Tymon said he is “hopeful” that a future administration proposal will address the trust fund, which he said is a No. 1 priority for the state transportation departments.
The fund receives revenue from an 18.4 cent federal gas tax, but that levy has not been raised since 1993, eroding the fund’s ability to finance road projects.
Some groups, including the U.S. Chamber of Commerce, are advocating for an increase to the gas tax to save the fund and finance infrastructure projects. But raising the gas tax is a politically charged issue bound to face roadblocks in Congress from both Republicans and Democrats.
The gas tax, like the fund itself, is also not mentioned in the document. But the White House last year was considering an increase to the federal gasoline tax as part of its infrastructure proposal.
3. It pushes for the expansion of public-private partnerships
Half of the appropriations under the memo would go toward bolstering private, state and local investment in infrastructure projects through grants. The draft also specifically recommends removing “constraints” currently in place on public-private partnerships for transit systems.
The administration is already receiving pushback for those components from progressive groups, like the Millions of Jobs coalition, which is made up of labor unions and grass-roots advocates.
“It’s a huge decrease in the federal government’s traditional role of funding infrastructure. It would shift the burden of investment to local taxpayers and force cities and states to sell off our bridges and roads,” Tate Hausman, the coalition’s executive director, said of the draft.
“Under Trump’s plan, control of our critical infrastructure would be handed over to corporations and rich investors, leading to higher costs for everyone,” he said.
Trump himself has questioned whether the use of public-private partnerships for infrastructure would work.
4. Trump may have a way to deliver to rural regions
The proposal suggests that a quarter of the appropriations go toward a program dedicated to investing in projects in rural areas, which could help Trump deliver to the communities that helped elect him.
The plan says states would be encouraged to work with private and local investors on infrastructure efforts and lists broadband, or high-speed internet access, under “eligible entities” for the rural program.
Expanding broadband access is another priority for industry groups and also for Democratic lawmakers, who last year called for a $40 billion investment in increasing internet access for rural communities.
Trump during the 2016 election won 62 percent of American voters in rural communities and smaller towns, according to the PEW Research Center.
5. The source of the draft and when it was created are murky
While the document has been circulated as a draft of the Trump administration’s plan, its origins are unclear. The White House has not formally acknowledged the draft’s existence and has not provided additional information on a forthcoming package since the document first leaked.
One clue to the timing of the draft is a section on expanding private activity bonds, a tool commonly used to finance infrastructure projects.
The draft recommends allowing entities to issue advance refunding bonds to refinance private activity bonds. But the GOP tax bill passed late last year repealed the tax exemption for new advance refunding bonds. The House tax bill at one point proposed eliminating private activity bonds, but the final bill signed by Trump kept the financing tool in tact.
The language about advance refunding bonds, if included in a future proposal, would place the infrastructure package at odds with the GOP tax law. But it is possible that the draft pre-dates the December passage of the tax legislation.
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