Infrastructure in the Trump Administration
In this time of increasing uncertainty and division, the President’s State of the Union this evening will be the first time the 116th Congress will be able to gauge the “partnership” they can expect from the President. Lawmakers from both sides of the aisle will be keen to understand the President’s plans for infrastructure, one of several topics prime for potential bipartisan support. For a president who frequently discusses making investments in our nation’s infrastructure, he has yet to present a comprehensive plan or proposal, outside of his broad outlines shared last year. Meanwhile, Chairman Peter DeFazio (D-OR) of the House Transportation and Infrastructure Committee has already scheduled the committee’s first hearing for Thursday (2/7) aptly titled– “The Cost of Doing Nothing: Why Investing in Our Nation’s Infrastructure Cannot Wait.”
The proposals found in any infrastructure plan will ultimately be supported by both Democrats and Republicans. However, the political divide is over how we pay for the plan. “Increasing the federal gas tax is not a 10-20 year solution” according to John Cahill, Vice Chairman of O’Neill and Associates. The gas tax hasn’t been increased in over 20 years and cannot meet current funding needs. Other considerations include a vehicle miles travel fee that would need to be eased in over the next 10 years or even a form of a carbon levy.
As with anything in Washington, timing is key. John Cahill believes that for an infrastructure bill to be passed this year, Congress will need to have serious new revenue options to consider by May in order for a bill to pass the House in June. The Senate will not take any action on their own version of a bill until they see what the House is able to do. Whether a bill can be passed in the Senate by the end of the year is anyone’s guess at this time.
A long awaited FAA reauthorization passed in the last Congress so no new aviation related legislation is anticipated barring necessary infrastructure improvements at airports to accommodate current and future passenger growth. Increasing the Passenger Facility Charge (PFC) has been discussed for many years. That idea will likely be addressed separately in its own legislation as opposed being included in a greater infrastructure package. PFC revenues are a federally approved user fee that an airport can levy on enplaned passengers and can be used to fund a wide range of projects including terminal improvement, development, and to secure municipal bonds or to pay principal and interest on debt. However, PFC’s have not been increased for almost 20 years. Airline groups and D.C. anti-tax organizations are opposed to increasing PFC’s.
House Ways and Means Chairman Richard Neal (D-MA) is working closely with his democratic partners on the Transportation Committee to consider tax options to pay for the country’s infrastructure needs. Congressman Neal said last week that “my strategy is, whatever we agree to, we’re going to do it together…everybody saying this was what we agreed to, this is what we’re going to do.” His committee plans to hold a hearing in February or March on infrastructure spending with a range of stakeholders to ensure that the White House holds to the 80/20 federal/state cost share model for these proposed projects so that the states aren’t left with footing the whole bill.
Ultimately, we will have to see how much Democrats and Republicans are willing to compromise to present an infrastructure package that is fully funded, can be defended in their districts/states and has the support of the President.