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Trump's infrastructure plan under fire ahead of State of the Union

Trump's infrastructure plan under fire ahead of State of the Union
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President TrumpDonald John TrumpThe Guardian slams Trump over comments about assault on reporter Five takeaways from the first North Dakota Senate debate Watchdog org: Tillerson used million in taxpayer funds to fly throughout US MORE’s long-awaited infrastructure plan is under fire ahead of his first State of the Union address, where he is expected to provide details on the infrastructure package.

Democrats have sprung into offense, painting the president’s forthcoming package as too reliant on private interests and putting the financial responsibility for the plan on state and local governments they say cannot afford to provide funding.

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Democrats on the Joint Economic Committee have unveiled a new report that bills the administration’s proposal as a “bait and switch,” slamming the public-private partnerships the White House is slated to expand in the plan.

“We can all agree that our infrastructure needs a major investment and upgrade, but indications of the president’s plan simply won’t cut it,” Sen. Martin Heinrich (D-N.M.), the ranking member of the committee, said in a statement.

The immediate disapproval suggests the White House faces an uphill battle to sell any proposal to lawmakers, who are fresh off fights over immigration and tax reform.

The White House proposed $200 billion last year in federal funding, coupled with private investment for a total $1 trillion package. While the administration has yet to formally deliver its proposal, a leaked draft of infrastructure principles surfaced last week, providing insight into the administration’s thinking.

The draft suggests that half of the appropriations under the administration’s plan would go toward an incentive program to encourage private, state and local investment in infrastructure projects.

But the proposed expansion of public-private partnerships quickly ran into opposition from critics, who say the incentive program won't provide an adequate revenue source for a comprehensive overhaul of U.S. infrastructure.

“While there may be room to increase the usage of [public-private partnerships] in the United States, it is unrealistic to expect a large enough increase in projects to account for the level of investment that the economy needs or the administration is promising,” Democrats on the Joint Economic Committee said in their report.

Critics of the administration’s expected principles emphasize the federal government’s crucial role in funding infrastructure, while Trump himself has questioned whether the use of public-private partnerships for infrastructure would work.

Private firms would look to invest in projects that can recuperate costs through potential revenue sources like user fees or tolls, but critics are also concerned about both profitability and possible conflicting interests between the public and private sectors.

Chris Spear, the CEO of the American Trucking Association, said the use of public-private partnerships for bridges and roads is “fake funding” that won’t ultimately work. Spear said private money would be drawn to high-traffic areas in heavily populated regions, leaving roads in more rural states ignored.

“No one is going to invest in a [public-private partnership] in states like Wyoming and Nebraska, where I grew up and lived,” Spear told The Hill in an interview last week, noting that the revenue can only be recouped when there are a high volume of vehicles on the road. 

“Less than 1 percent of the roads in the United States have the level of through-put to make a [public-private partnership] and tolling scheme profitable,” Spear added.

Tolling could also inspire opposition within Congress. The leaked plan argues states should have the “flexibility” to collects tolls on the interstates and use the revenue to invest in infrastructure projects. But lawmakers have long been wary of broaching the issue, and it's bound to face resistance in Congress on both sides of the aisle.

“Adding tolls to existing roads in order to draw in private entities willing to repair and maintain them would be an unpopular approach,” the Democrats on the Economic Committee argued in their report. 

The administration is also running into allegations of corrupt conflict-of-interests in its drafting of a plan to rebuild the nation’s infrastructure. Democracy Forward, a nonprofit group, released a report Tuesday accusing the Trump administration of creating a proposal borne out of “crony capitalism.”

“President Trump’s infrastructure strategy would leave American communities behind, as private special interests like his friends and business associates get rich,” the report says.

The report includes the president’s infrastructure policy adviser, D.J. Gribbin, among a list of aides it argues could personally benefit from the White House plan.

Gribbin formally worked for Macquarie Capital, a firm currently involved in a project involving the Port Authority of New York and New Jersey, according to the report.

The report asserts that Trump’s infrastructure plan will push local governments to carry debt for private entities by taking advantage of private activity bonds, a common tool used to fund infrastructure projects.

“DJ Gribbin’s former employer Macquarie Capital regularly takes advantage of these bonds, even calling them the ‘premier source’ of financing in a presentation bearing Gribbin’s name,” the report says.