Dive Brief:
- President Donald Trump's $1 trillion infrastructure plan could grow into $1.7 trillion of total investment, according to Reuters. Trump made the announcement to a group of U.S. mayors assembled at the White House earlier this week.
- According to an alleged White House document leaked earlier this week, the administration plans to help fund only those state and local projects that can come up with 80% of the costs, pumping up the total of what the president considers outside investment and boosting the value of his infrastructure plan. That represents an 180-degree turn from the traditional funding scheme in which the federal government contributes 80% of the cost.
- Trump is supposed to detail the plan in his upcoming State of the Union address Jan. 30.
Dive Insight:
The White House would not confirm the authenticity of the document, which Axios published this week, but the plan outlines a wide variety of public asset improvements and is similar to the strategy Reuters detailed last week. Half of a $200 billion federal investment would go toward the Infrastructure Incentives Initiative, which would see federal grants awarded to state, local and other qualified groups that want to pursue projects in the categories of surface transportation, airports, passenger rail, maritime and inland waterway ports, flood control, water supply hydropower, water resources, drinking and storm water facilities, and Brownfield and Superfund sites.
The Transformative Projects Program, which will help pay for innovative infrastructure projects, will get 10% of the $200 billion. Another 7.05% will go toward federal credit programs, 25% will fund a Rural Infrastructure Program, and 5% would go to the Federal Capital Financing Fund.
Private-sector investment also features in the plan, through wider use of private activity bonds (PAB). Late last year, the president made some disparaging remarks about public-private partnerships (P3) to a group of House Democrats, which, given the contents of the latest plan, may turn out to be just talk.
No one is really sure where the $200 billion is going to come from, although the leaked plan would direct mineral and energy development revenue into a new U.S. Treasury infrastructure fund. The proposal would also allow for the disposal of certain federal assets to allow more money to flow to other infrastructure projects.
There are proposals as to how to raise the $200 billion, though. The U.S. Chamber of Commerce has suggested raising the federal gas tax by 25 cents per gallon to create a more stable revenue stream for the Highway Trust Fund, and Rep. John Delaney (D-MD) has proposed raising the corporate tax rate to 23%, even though the tax reform bill passed at the end of 2017 lowered it to 21%.
