Washington — President Donald Trump administration’s proposal for a $1 trillion bill to improve the quality of the nation’s roads and highways will be paid for mostly by private funding that will be stimulated by $200 billion in federal spending, Transportation Secretary Elaine Chao announced Monday.
Speaking at an event in Washington, Chao said the transportation bill will include $200 billion in federal spending that will “be used to leverage $1 trillion in infrastructure investment over the next 10 years.” The remainder of the money would come from private companies that would enter into partnerships with local and state governments to provide financing that is necessary to complete expensive construction projects in exchange for revenue that would be generated by things such as road tolls or rail fares.
The so-called “public-private partnerships” have been controversial because they typically involve states turning over operations and maintenance of public infrastructure to private companies that are seeking to make big profits.
Chao said Monday “a key feature of the infrastructure plan will be unleashing the billions of dollars in private capital available for investment in infrastructure.”
She added that the White House Office of Management and Budget is working to ensure that the $200 billion federal portion of the infrastructure will be offset by cuts to other areas of the federal budget “in order to avoid saddling future generations with more debt.”
Congress has been struggling for years to come up with a way to boost federal transportation funding in the long term.
The traditional source is revenue collected by the federal gas tax, which is currently set at 18.4 cents per gallon. The federal government spends about $50 billion per year on roads, but the gas tax only brings in $34 billion annually. The gas tax has not been raised since 1993, and there is little appetite in Washington for taking a vote to do so now.
Congress has turned to other areas of the federal budget in recent years to close the infrastructure funding gap, most recently in a five-year, $305 billion infrastructure bill that was signed by President Barack Obama in 2015. The 2015 measure, which was known as the Fixing America’s Surface Transportation, or FAST, Act was paid for by gas tax revenue and a package of $70 billion in transfers from other areas of the federal budget that was used to close the infrastructure funding shortfall. The current transportation funding measure is expected to expire in 2020.
The comments from Chao on Monday are confirmation that the Trump administration’s new transportation funding package will not include a massive infusion of federal dollars that infastructure advocates have said is long overdue, despite the president’s frequent statements about drastically boosting the amount of money that is spent on the nation’s roads and bridges.
Democrats have complained that the amount of federal money in Trump’s infrastructure funding plan was always likely to be smaller than the headline-grabbing $1 trillion number.
U.S. Sen. Debbie Stabenow, D-Lansing, in a written statement said, “As anyone who drives in Michigan knows, our roads and bridges are in urgent need of repair. We also have critical needs with our water and sewer systems, and our harbors on the Great Lakes and the Soo Locks. Any plan needs to address these critical needs and create jobs in Michigan.”
U.S. Sen. Gary Peters, D-Bloomfield Township, also emphasized the importance of funding for the state’s infrastructure. “This is an issue where the details matter, and I will be carefully reviewing any proposal to ensure it includes direct federal investments that will drive growth, not just tax cuts for large corporations,” he said in a statement.
Trump has identified infrastructure as a top priority after Congress finishes debate about a controversial health care bill that has bogged down lawmakers in recent weeks.
“We’re going to do infrastructure very quickly,” Trump said in an interview with CBS News’ John Dickerson in an interview on “CBS This Morning” that aired on May 1. “We’ve got the plan largely completed, and we’ll be filing over the next two or three weeks, maybe sooner.”
Chao said Monday infrastructure is still a top priority for Trump.
“We are fortunate to have a president who understands the challenges of infrastructure perhaps more than any other leader in recent memory,” she said. “He has made revitalizing, repairing and rebuilding our country’s infrastructure one of his top priorities.
Chao is scheduled to take questions from lawmakers in the Senate on the Trump administration’s plans for improving the nation’s roads at a hearing on Capitol Hill that is scheduled to take place on Wednesday. She said Monday there is “rare bipartisan consensus that now is the time to act” on transportation funding.
“There has never been a more exciting time to be involved in infrastructure,” she said. “It’s a national priority, and has growing public support.”
The Infrastructure Week event at which Chao spoke is organized by groups that seek to highlights importance of transportation infrastructure in Washington, including the AFL-CIO, American Society of Civil Engineers, U.S. Chamber of Commerce, Business Roundtable, National Association of Manufacturers, Building America’s Future, Value of Water Campaign and the Brookings Institution: Metropolitan Policy Program.