It was supposed to be a big, beautiful infrastructure bill. But President-elect Donald Trump’s pitch for a $1 trillion upgrade of the nation’s roads, bridges, tunnels and airports is already running into potholes as it meets reality in Washington.
The overwhelming sticking point, as always, is how to pay for it.
Trump’s advisers are so far floating the same kinds of financing schemes that Congress has batted around for years with little success, including proposals to lure private investors or reap a revenue windfall through an overhaul of the tax code. Key lawmakers say they’re in the dark on how Trump’s plan would work — with some conservatives simply hoping that his call for massive tax breaks will provide an economic jolt that makes the hard spending decisions easier.
Democrats, meanwhile, are split on whether to cooperate with Trump on his plan. Hillary Clinton adviser Ron Klain denounced it Friday as a “trap” that would provide “a massive corporate welfare plan for contractors” without necessarily spurring any new infrastructure spending.
Even congressional Republicans who have long championed spending on transportation projects say they don’t yet know the details of Trump’s 10-year proposal, which the president-elect has vowed will “put millions of our people to work” while making U.S. infrastructure “second to none.”
“Look, we don’t have the details,” House Transportation Chairman Bill Shuster (R-Pa.) told POLITICO. “We’re working very closely with his transition team and hopefully with the new department head to figure out how we’re going to pay for it. It’s got to be fiscally responsible.”
A trillion dollars is “a big number,” said Senate Commerce Chairman John Thune (R-S.D.), adding that a tax overhaul could be one promising way to pay for it. “I think it’s going to come down to figuring out just actually what’s achievable.”
“I think this is critical, something that could draw us together,” said Sen. Shelley Moore Capito (R-W.Va.), who hoped that the infrastructure plan would also include an expansion of broadband internet service. But asked whether a Republican Congress would approve it, she said: “Not if it’s not paid for.”
“To just add it to the national debt, I don’t think President-elect Trump or members of the Republican Conference would support that,” said Rep. Mark Meadows (R-N.C.), a member of the House Transportation Committee and the conservative Freedom Caucus.
Some Democratic lawmakers were more optimistic than others than any big infrastructure plan will get through Congress, even with a GOP president pushing it.
“The country needs it,” said New York Democratic Rep. José Serrano, who sits on the Appropriations Committee. But he said Trump “should be telling us how he’s going to get it through a Congress that doesn’t want to spend $1.50 on anything.”
Trump has touted his infrastructure plan as a top priority — even mentioning it in his election-night victory speech — raising expectations that it will have a prime place in the agenda for his first 100 days. His senior adviser Steve Bannon has portrayed it as a massive borrow-and-spending binge that would make conservatives “go crazy,” telling The Hollywood Reporter: “With negative interest rates throughout the world, it’s the greatest opportunity to rebuild everything. … We’re just going to throw it up against the wall and see if it sticks.”
But despite its eye-popping $1 trillion price tag, it’s unclear to infrastructure finance experts whether his plan would involve much, or even any, additional federal spending on top of the five-year, $305 billion transportation bill that Congress approved last year.
Trump advisers walking in and out of Trump Tower in the past week have floated some ideas on how to pay for the plan, which has also seemed to morph day-by-day.
The Heritage Foundation’s Stephen Moore, one of Trump’s tax advisers, pitched GOP lawmakers Tuesday on a one-time 10 percent tax on offshore business income, the kind of tax break that Republicans maintain would encourage companies to bring their overseas earnings back to the U.S.
But by Wednesday morning, Steven Mnuchin, a leading contender for Treasury secretary, told reporters the transition team was “looking at the creation of an infrastructure bank,” a pot of money that would use federal money to attract state and private dollars to fund projects. It’s hardly a new idea in transportation circles — but Trump’s presidential campaign had blasted Clinton for proposing the same idea, saying such a bank would be “controlled by politicians and bureaucrats in Washington D.C.”
President Barack Obama has also repeatedly proposed an infrastructure bank, though that idea went nowhere in Congress.
Trump’s campaign also called for setting up “public-private partnerships,” another means of encouraging private investors to put their money into infrastructure. In one version, the investors would get tax credits to build a project and could recoup their money by charging fees for its use, such as tolls. But as New York Times columnist Paul Krugman wrote Saturday, that would be problematic for types of infrastructure that don’t generate revenue streams: “Toll roads are not the main thing we need right now; what about sewage systems, making up for deferred maintenance, and so on?”
Whatever the financing mechanism, some Republicans say Trump may be the one to sell it.
“His business acumen is going to give him a better handle on the fiscal reality than we’ve had heretofore,” said Rep. Trent Franks (R-Ariz.).
In fact, policy experts from both sides of the aisle have faulted Trump’s broad tax and spending agenda for not even remotely adding up. They say the tax cuts he’s proposed would add $10 trillion to the national debt in the coming decade, while his pledge to trim the debt to zero would require savage cuts to federal spending.
But Meadows said he hopes Trump’s tax cuts would bring a surge in revenue.
“That stimulus provides an economic boom that will get us back to a 4, 4.5-percent GDP growth,” he said. “That will actually make some of these questions a lot easier to answer than at an anemic 2.2-to-maybe-2.8 GDP.”
Rep. Lou Barletta (R-Pa.) echoed the kind of infrastructure-spending-equals-jobs argument that conservatives rejected when Obama was pushing his $832 billion stimulus through a Democratic Congress nearly eight years ago.
“The federal government will get money back because, as I said, these are good-paying jobs,” Barletta said. “You’re going to be putting people to work. They’re going to be paying taxes. That money is going to come back to Washington.”
But beyond wide support for the idea of infrastructure spending, Republicans’ unanimity breaks down quickly — especially when it comes to using repatriated money from corporations’ overseas earnings. House Ways and Means Committee Republicans such as Chairman Kevin Brady of Texas and Dave Reichert of Washington state have indicated they’re lukewarm at best to that idea, saying repatriation revenues should go to lowering tax rates instead.
The difference this time, some lawmakers and lobbyists say, is the push infrastructure will be getting from an emboldened President Trump. In contrast, Obama has mostly chosen to stay out of the long-term funding debate in hopes Congress would come to a decision.
“We’ve had zero leadership coming from the current administration,” said Rep. Mario Diaz-Balart (R-Fla.), who leads the Appropriations Subcommittee for Department of Transportation spending. “No suggestions, no ideas — they’ve just been kind of like pretending it’s not an issue.”
Obama has proposed some funding ideas, but lawmakers dismissed them as either unrealistic or gimmicky, as in his proposal to use savings from a hoped-for drawdown of troops overseas. Republicans ridiculed the proposal for a $10.25-a-barrel oil tax that he included in his last budget.
Democrats find a variety of flaws in Trump’s proposal, especially the reliance on public-private partnerships.
Rep. Peter DeFazio of Oregon, the top Democrat on the Transportation Committee, said those partnerships won’t do much for the 143,000 bridges that need work nationwide “unless you’re going to toll 143,000 bridges.” He said the same goes for the interstate highways “unless you’re going to start massive tolling of already constructed infrastructure to reconstruct it.”
“So it’ll help with individual sorts of big projects, but it’s not any kind of cure-all, and it certainly isn’t going to get the big bang that Trump has talked about in infrastructure,” DeFazio said.
DeFazio said he would propose indexing the gasoline tax to inflation, so that the rate would rise over time, or implementing a wholesale barrel tax on oil. “If they want to put people to work quickly and they want a big bang in infrastructure, they need real money,” he said.
At least one House Republican agrees: Former Transportation Chairman Don Young of Alaska said he would also hike the gas tax to pay for transportation projects, and he faulted both his own party and Obama for blocking it in past years.
“There’s no pie in the sky, no magic wand,” Young said. “We have to pay for it.”
If Republicans settle on a plan, Democrats might be the key to passing it, Sen. Sheldon Whitehouse (D-R.I.) said in an interview.
“There was partisan hostility to anything President Obama wanted from the Republican side,” Whitehouse said. “So with President Trump supporting it and with Democrats supporting it, I think there’s the prospect of a filibuster-proof majority emerging around that bill.”
But Sen. Patrick Leahy (D-Vt.) said he’s not yet ready to sign onto Trump’s plan — whatever it turns out to be.
“I haven’t seen it, and nobody’s seen it,” Leahy said. “A lot of his plans seem to change day by day. I’ll wait till I see it.”
Bernie Becker, Brianna Gurciullo, Jennifer Scholtes and Tanya Snyder contributed to this report.
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