Dive Brief:
- Future U.S. Senate Democratic Leader Charles Schumer (NY) said Wednesday that Congress could possibly reach an agreement with President-elect Donald Trump to pass a $1 trillion infrastructure bill within the first 100 days of the new administration, according to Syracuse.com.
- Schumer indicated that both sides of the aisle can agree on the need to repair aging highways, bridges and utilities but that any "gimmicks" like the tax breaks included in Trump's initial proposal would not be considered. Instead, Schumer said Congress must fund the bill through "substantial and direct federal spending."
- Corporate tax reform, Schumer said, could pay for the entire plan if the U.S. would allow companies to "repatriate" foreign profits at reduced tax rates. The current rate is 35%.
Dive Insight:
Schumer said he has already discussed Trump's $1 trillion proposal with the president-elect and expressed concern that if companies privately owned bridges and roads, they could set tolls much higher for those assets. He also said he told Trump that his plan would result in investors picking only the most profitable developments.
Trump's plan specified that private equity investors in toll- and fee-based projects would get an 82% tax break, but the rest of the revealed details — which have been light so far — don't specifically call for private ownership of those projects. Typically, a public-private partnership on the scale of what Trump described would see the private sector design, build, operate and maintain the asset for decades and then turn it back over to whatever government entity owned it.
The lack of details in Trump's proposal has set off an endless stream of questions from Democrats, Republicans and investors that no one has been able to answer yet. Advocates of the plan maintain that significant private investment would allow the government to pay for more projects, but opponents say that non-revenue-generating projects will be ignored. However, it is certain that members of both the House and Senate are anxious to send word back home to their constituents that big projects and high-paying jobs are on the way.
During the presidential campaign, the Trump team lambasted opponent Hillary Clinton's proposal that the U.S. establish an infrastructure bank to spur private and public investment. However, earlier this month, Trump adviser Steven Mnuchin, former Goldman Sachs executive and Trump's selection for the position of secretary of the treasury, said that Trump is now considering a similar strategy.
