The White House will release the principles of President Donald Trump’s long-touted $1.5 trillion infrastructure proposal on Monday — a plan that leans on state and private investment as key, driving factors in financing the effort.
The administration’s proposal is expected to seek $200 billion in new federal funds, according to a senior administration official, who briefed reporters over the weekend on the condition of anonymity. That includes $100 billion on “incentives” to match state, local and private investment spending on infrastructure projects, and $20 billion for expanding federal loan programs that focus on various kinds of infrastructure (rail, water, transportation).
The administration has pushed for public-private partnerships to spur infrastructure action across the United States, even as NBC News has reported that Trump himself is waffling on the funding idea.
The plan would also allocate $50 billion for rural infrastructure projects to be distributed as block grants to states, and another $20 billion for
“transformative programs” that have an eye toward “next-century-type” infrastructure projects, the official said. Finally, the administration is asking that Congress spend $10 billion on a capital financing fund.
Every federal dollar should be leveraged by partnering with state and local governments and, where appropriate, tapping into private sector investment — to permanently fix the infrastructure deficit,” Trump declared in his State of the Union address.
Asked how the $200 billion infusion would be paid for, the senior administration official cited “a whole series of places where the administration is suggesting reduced funding” in their soon-to-be-released budget, declining to be more specific than an assurance it would be paid for “out of savings from other areas of the federal budget.” The White House is also planning to release its version of the federal budget Monday.
The fix, the administration says, is moving toward what they call “one agency, one decision”: directing one federal department to take the lead on permitting actions.
Trump is expected to hit the road to sell the plan once its broad contours are released. But the sale he’ll really need to make is with lawmakers on Capitol Hill — a fact that administration officials involved in crafting the proposal are keenly aware of.
Monday’s release, they say, shouldn’t be seen as a “take-it-or-leave-it proposal,” but the launching point for the deal-making process. “This is the start of a negotiation — bicameral, bipartisan negotiation — to find the best solution for infrastructure in the U.S.,” the official said. “We envision this will be a bipartisan push.”
If adopted it could mean that balancing the budget in less than 10 years would be impossible is spending to GDP ratio grows and with new investments the GDP fails to increase as is thought by the Trump Administration.
In a time of full employment throwing gas in the form of stimulus and growing the debt will lead to higher bond interest rates being paid on debt as the fed increases the rate and inflation kicks up higher.
During the 2008 recession a stimulus plan by President Obama’s Administration worked to push forward shovel ready projects but due to regulatory issues and bad management many projects spent more than 1 million dollars to create 1 short term job in retrospect.
Under President Trump, the elimination of red tape will save billions in cost increases between the time a Plan is suggested and approved for a start date.