Infrastructure Remains a Priority, But Funding Still a Question Mark

Five cabinet secretaries. Four hearings. Three congressional committees.

Zero new answers on how to pay for an infrastructure package.

For the past three weeks, Capitol Hill has been abuzz about President Trump's infrastructure proposal. Transportation Secretary Elaine Chao and other officials have gamely defended the plan to skeptics and touted its promise. However, there has been no new information on how the administration would fund the plan.

The common refrain on funding repeated at every hearing has been that all options are "on the table" and that the administration is "agnostic" about how Congress finds the money. One clear thing is that the Trump administration budget and the idea of slashing existing programs to offset funding for a new one appears to have no traction on either side of the aisle.

Committee Democrats have hammered that message, and Republicans, while more cautious, have expressed no enthusiasm for the proposed cuts. APA issued a statement on the Trump budget plan.

Where Is the Money Coming From?

In an outbreak of bipartisan consensus on infrastructure, a leading House Republican — Transportation and Infrastructure Committee Chairman Bill Shuster (R-Pa.) — and a key Senate Democrat — Commerce Committee member Gary Peters (D-Mich.) — both used the same phrase on the same day at separate events to describe the funding approach from the White House: "smoke and mirrors."

Looming over the debate is the future of the gas tax.

Many leaders in both parties agree that the gas tax will likely need to be increased to stabilize the transportation trust fund and support new investment. At the same time, no one sees an easy path to do that before the midterm elections. President Trump has had an on-again, off-again infatuation with the idea. Political cover from the White House would be essential but is not likely to be forthcoming given all the "agnostic" talk this week. House Speaker Paul Ryan has been more emphatic and ruled out an increase.

As the congressional hearings on infrastructure launched, APA sent a statement to Congress outlining positions on the administration's blueprint. Among other issues addressed in the letter from APA President Cynthia Bowen, AICP, the statement notes the opposition to using existing infrastructure programs as a pay-for and the need to shore up the existing system with a sustainable plan for infrastructure revenue.

Senate Democrats Plan

Meanwhile, Senate Democrats unveiled their plan.

This package would fund $1 trillion in infrastructure investment, including $200 billion for repairing roads and bridges, $10 billion for TIGER, $180 billion for rail and transit, $110 billion for water infrastructure, as well as funds for schools, energy, broadband, airports, and resiliency.

The plan would be funded by rolling back the tax code changes just passed last December. This approach is not likely to find favor with the Republican majority planning to run campaigns this fall on their signature tax cut legislation.

Appropriations Process

While doubts grow about the plausibility of action this year on a comprehensive package, the real action seems to be in the appropriations process. The budget deal approved by Congress in February provided additional funding for domestic programs in both FY 2018 and FY 2019 with an agreement that as much as $20 billion would be aimed at infrastructure.

Speaker Ryan referred to this as a "down payment" on an infrastructure program.

We still await details on how the money will be allocated. House Transportation and HUD Appropriations Subcommittee Chairman Mario Diaz-Balart (R-Fla.) has indicated that funding for THUD will indeed increase. Those details could come as early as Friday; the latest deadline for finalizing FY 2018 spending comes on March 23.

Possible Scenarios

So, what is the way forward? Congressional leaders have outlined a few scenarios. The first way could be described as the incremental approach.

Speaker Ryan has suggested that the House might pass a series of smaller bills addressing infrastructure. These would likely include several regulatory and permitting reform bills. Any new funding would be from the "down payment" provided by the budget agreement. Senate Commerce Chairman John Thune has noted that a bunch of small bills would be a challenge for the Senate. Still, he has also floated bundling some bills that have a consensus, such as FAA reauthorization and his autonomous vehicle bill.

A second possibility is the lame-duck approach. House Transportation Chairman Bill Shuster suggested that the House could pass a policy bill based on areas of bipartisan agreement before the August recess and then fund things with a gas tax boost passed during the post-midterm lame-duck session. Such a scenario is possible, but a lot of political pieces would have to line up just right for it to happen.

Of course, it is also possible that momentum could build for action on a blockbuster package. We've seen that happen before with the fast action on tax reform last year. Republicans would certainly like to have another major legislative achievement to take into the fall. However, differences within the GOP on how to approach funding would still have to be overcome.

What seems certain is that congressional activity will continue with additional hearings and, eventually, some specific legislative proposals. The most immediate and tangible actions on the Hill will be determining funding levels for existing programs in the appropriations process.

For its part, the White House is poised to continue focusing on the topic with a series of planned events, speeches, and announcements.

Top image: A bicyclist in Portland, Oregon, on a ramp from the Eastbank Esplanade connecting to the Burnside Bridge. Ryan J Lane/Getty Images.