Key leaders in Congress don't yet have details on a timetable
Plan likely to include projects beyond roads and bridges
President Donald Trump’s call on Tuesday to ready projects for his $1 trillion infrastructure plan could meet roadblocks on Capitol Hill.
“If you have a job that you can’t start within 90 days, we’re not going to give you the money for it because it doesn’t help,” he said. “We’re going to be very strong on that. They have to be able to start within 90 days.”
Capitol Hill and the construction world is eagerly awaiting Trump’s yet-to-be officially released plan, which the administration has said will give a facelift to the nation’s roads and bridges, while also funding other projects, like water systems and internet access.
The idea of spending $1 trillion on such projects – “perhaps even more,” as Trump said Tuesday – could stumble in Congress, where the partisan differences over how to pay for it could overtake the bipartisan interest in getting something done.
When will it be released?
Looking for a win after the failed attempt at health care reform, the Trump administration says it will release the infrastructure plan soon.
Transportation Secretary Elaine Chao hinted at a potential timetable last week, saying his plan will “be announced later this year” and “include a strategic, targeted program of investment valued at $1 trillion over 10 years.”
Reached by CNN, key congressional offices who would be involved in shaping legislation for an infrastructure plan didn’t have any further guidance on how soon a bill could start making its way through Congress.
But back in January, before the Obamacare repeal rejection, House transportation committee Chairman Bill Shuster, R-Pennsylvania, outlined an ambitious plan that had Congress tackling taxes and infrastructure right after dealing with health care.
“You’ve got to figure out the pay for it, which will come, I believe, in the first 100 days,” Shuster said. “Then in the next second 100 days is when we’ll put together a big infrastructure package.”
One delay may be simply getting enough members on board for such a large spending bill to pass. PricewaterhouseCoopers warned clients in a recent memo that while the two sides agree “to a large degree,” there are remaining questions about what plan “can be not only approved by Congress, but also most fully supported on both sides of the aisle to ensure the program’s most productive and cooperative implementation.”
What will be in the bill?
The builder-in-chief appears to be taking a wider view of infrastructure than simply “roads and bridges.”
Chao said the Trump plan will also include projects the construction industry calls “social infrastructure.”
“The proposal will cover more than transportation infrastructure – it will include energy, water and potentially broadband and veterans hospitals, as well,” Chao said while speaking at an event for her department’s 50th anniversary.
On Monday, Housing and Urban Development Secretary Ben Carson told low-income housing advocates that “the infrastructure bill that’s being worked on has a significant inclusion of housing in it,” according to The Washington Post.
There’s plenty of work to be done, but the nation’s contractors say they’re trying to speed up the process.
“We are doing everything in our power to help this administration finalize a plan this year,” said Brian Turmail, the senior executive director of public affairs for the Associated General Contractors of America. The organization, which represents over 26,000 members involved in the infrastructure world, has informed the Trump administration about its construction priorities.
Can contractors handle the surge of work?
Trump’s November victory was seen by investors as a harbinger that good times were on the way for the construction industry.
Several major engineering and construction firms – including AECOM, Fluor, and Chicago Bridge & Iron Company – saw massive stock gains in the immediate aftermath of Trump’s election. Those shares have fallen off a bit from their December highs, but these companies are clearly hoping for the extra business that an infrastructure bill would bring.
However, a dearth of skilled labor could slow the project even once a bill is approved.
Rory DeJohn, a senior vice president at Turner Construction Company, one of the nation’s largest firms, told Congress last week the industry is experiencing a “very real issue” finding enough skilled labor.
“There are approximately 100,000 fewer people working in our industry today than in 2007 when we completed approximately the same amount of work,” he said, speaking about the construction industry as a whole.
Trade groups insist contractors will find a way to tackle the infrastructure needs.
“Our firms aren’t in the business of saying no to any business. It’s not in their DNA,” said Turmail of the Associated General Contractors of America, though it isn’t clear if the shortage of quality labor would drive up costs.
How far will $1 trillion go?
One trillion dollars is a big number to be sure, but it actually may not be big enough. Spread over 10 years, it averages out to $100 billion per year. As big as that number sounds, it may not be sufficient to meet the nation’s needs, according to civil engineers. Though they would benefit from a larger bill, they say the nation’s infrastructure is dangerously behind schedule.
The American Society of Civil Engineers called for trillions of dollars to be spent on infrastructure in its quadrennial report card, which named deficiencies of all stripes and gave the US a “D plus.”
Can Republicans and Democrats agree?
Likely the stickiest issue yet to be ironed out: How to pay for the plan.
The Democratic plan calls for government footing the $1 trillion bill.
Republicans, not eager for a major government spending initiative, have pushed public-private partnerships. In this model, private investors put down some or all of the capital to fund a public project and then collect the revenue through things like tolls.
Although it would pump in private money, many experts say this model has its flaws.
Investors may get on board with a major highway or urban project where they can recoup the costs down the road, but smaller revenue efforts like building internet connectivity or water systems in rural areas have less appeal for investors.
It “might just be more of a dream” than reality to get private investment into some rural areas, said Raymond, meaning rural communities could be largely left out.
“Public-private partnerships are not viable for most transportation projects in the United States,” Jim Tymon of the American Association of State Highway Transportation Officials told a Senate panel recently. “Most transportation projects cannot generate a sufficient revenue stream through tolls, fares, or availability payments to service debt or provide a return on investment for private sector partners.”
Private industry companies also have concerns.
“While these are all valuable private sources, they are not a replacement of core federal funding,” said Edward Mortimer, head of transportation infrastructure for the US Chamber of Commerce.
One way to make public-private partnerships attractive to investors would be to offer tax incentives. Raymond, of the American Council of Engineering Companies, recommended watching another administration priority, tax reform legislation, to see what Trump and Congress have in mind for the infrastructure bill.