Dive Brief:
- President Donald Trump could be preparing to present an infrastructure bill — much sooner than expected — in tandem with an upcoming tax reform measure, according to Axios.
- Success on the infrastructure front could recharge the administration's stalled momentum after it failed last week to make good on Trump's campaign promise to repeal and replace the Affordable Care Act.
- Construction-related stocks like John Deere, Caterpillar, Fluor Corporation, AECOM and Vulcan Materials Company rose on the news Tuesday, according to Yahoo Finance.
Dive Insight:
Aside from the timing factor, there's no indication that infrastructure and tax reform will be part of the same bill. What is more likely is that Trump will aim to gain leverage with Democrats who won't want to return to their constituents after having turned down job-creating projects.
It's not only the threat of voter retaliation, however, that would appeal to Democrats. Infrastructure spending is a bipartisan issue, and even though the two sides of the aisle disagree on funding, repairing and modernizing the nation's roads, bridges, ports and utilities is something most lawmakers support.
A few weeks before the election, Trump's team introduced a $1 trillion, 10-year infrastructure proposal that featured private financing in return for significant tax credits. Democrats, however, said the program would have to include a major direct spending component to make sure that critical but non-revenue-generating projects wouldn't be left out. Republicans fired back that they would block any stimulus-like plan.
Earlier this month, Trump unveiled his proposed 2018 budget, which eliminated some major, longstanding infrastructure grants, including the Federal Transit Administration's capital investment program, which doles out billions for major transportation projects.
Industry reaction was swift but tempered, with most waiting to see what kind of additional infrastructure spending program he would introduce as part of the $1 trillion plan. However, some groups said that without seeing the details of Trump's infrastructure proposal, they were disappointed with the cuts in the budget.
Some lawmakers are taking advantage of the pro-infrastructure environment to propose ways to pay for projects. To that end, Rep. Peter A. DeFazio, R-OR, proposed a one-cent per year increase earlier this month to the current 18.4-cents gas tax, which is funneled into the Highway Trust Fund. That program allocates money to the states for their own road projects, and an annual 1-cent hike could add as much as $17 billion annually to the HTF.
