Trump prioritizes infrastructure projects, as rebuilding America is now a hot political potato

Both parties are talking about $1 trillion in spending over the next decade. How projects will be funded, though, remains unresolved.

January 25, 2017 |

A design rendering for a single new terminal at Kansas City International Airport. That project is one of 50 that the Trump administration has prioritized for immediate attention and funding support. Republicans and Democrats are also staking their claim to rebuilding America's infrastructure, with plans that vary widely in terms of favoring either private or public financing. Image: City of Kansas City

America’s crumbling infrastructure might finally be getting the attention and funding it needs. But how best to rebuild that infrastructure, and who will pay for it, are shaping up to be contentious debates among the country’s two political parties and its newly elected president, who has identified infrastructure building as one of his administration’s priorities, and has singled out 50 projects that could receive immediate funding boosts.

President Trump’s team has provided the National Governors Association with a list of 50 “Emergency & National Security” infrastructure projects across the country that are in various stages of engineering, permitting and funding. The document, which the Kansas City Star and other news outlets have obtained and published, estimates that at least half of the $137.5 billion in total investment for those projects would be paid for by private investors. The document estimates that the projects would create 193,350 direct jobs and 241,700 indirect jobs over an indeterminate period of years.

Not surprisingly, Trump favors projects that are upgrading or rebuilding roads, bridges, rail- and waterways, and hydro plants. (At least six projects identified in the document are upgrades of existing systems of locks and dams.) A number of projects, such as the M1-Rail in Detroit and the Second Avenue Subway in New York, are already pretty far along in their engineering, permitting, and financing.

Energy projects are prioritized, too, such as $5 billion for the Chokecherry and Sierra Madre wind farm in Wyoming, and between $4.5 billion and $5 billion for the Atlantic Coast Pipeline that serves multiple utilities in Virginia and North Carolina.

A number of nonresidential construction and reconstruction projects are on the list, including the modernization of Union Station in Washington D.C., an $8.7 billion public-private project that, according to the document, would serve as a model for other multimodal terminals around the country. (The Chicago Union Station Redevelopment would get $1 billion, according to the document.)

Another $972 million would be allocated for a new centralized terminal replacing Terminal A at Kansas City Airport, for which Southwest and other airlines have already committed nearly $1 billion. One billion dollars would go toward expanding Seattle’s Airport. And $1.8 billion would support the St. Louis Airport Commission’s recent approval of a major development project at Lambert-St. Louis International Airport.

This document became public as President Trump, through executive orders, was moving to restart the construction of the Keystone XL Pipeline and the Dakota Access Pipeline, which President Obama halted over environmental concerns.

Another executive order directs federal resources toward building a massive wall along the 1,954-mile U.S.-Mexico border. The Government Accountability Office estimates that a single-layer fence would cost $6.5 million per mile, plus another $4.2 million per mile for supporting roads and fencing. CNN, quoting estimates by civil engineers and architects, reports that a wall made from precast cement panels and reinforced steel supports (not unlike the sound barriers along highways), 20 feet high and five feet below ground, could cost $10 billion and take most of Trump’s first term to complete.

Trump has insisted, both on the campaign trail and in office, that Mexico would pay for this wall. The New York Times this morning reports that Team Trump is considering plans that would divert foreign aid to Mexico toward paying for the wall construction.

Trump contends that the infrastructure spending proposed in the document released to the governors association, which would be primarily in the form of tax credits to investors, would “unlock” $1 trillion in private-sector spending.

Indeed, who pays, and which infrastructure projects get precedence, will be hot topics going forward. The Democrats have unveiled a $1 trillion proposal that relies heavily on new government spending, and is projected to create 15 million jobs over 10 years. Reuters reports that the Senate Democrats’ plan includes $210 billion to rebuild roads and bridges, $110 billion for water and sewage projects, $180 billion for rail and bus systems, and $75 billion to rebuild schools.

That plan has already been rejected by Senate Majority Leader Mitch McConnell, who led the opposition against President Obama’s 2009 economic stimulus legislation that included funding for infrastructure rebuilding. House Speaker Paul Ryan (R-Wis.) is on record saying that any infrastructure plan should have $40 of private-sector spending for every $1 of public spending.

On the other hand, Sen. Chuck Schumer (D-NY), the Senate Democratic leader, has stated that his party can’t accept the tax-credit scheme that Trump has proposed for infrastructure rebuilding, which he characterized as  “tax credits for developers.”

 

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