President Donald Trump and key Democrats are talking about a possible grand bargain on infrastructure, with each side suggesting they could cooperate on a trillion dollar plan if control of the House flips next month. But basic math and the tortured history of past infrastructure initiatives suggest they are likely to be disappointed once again.
It's been just eight months since Trump unfurled a $1.5 trillion infrastructure proposal that promptly sank without a trace in the Congress his party controls. Republicans and outside conservative groups fretted at the cost, while Democrats feared that the details of Trump’s plan would shortchange blue states and cities like New York while shredding environmental safeguards.
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A Democratic House might be more willing than the current Republican-led Congress to devote big money to rebuilding the nation’s roads, bridges, rails, airports, waterways and broadband networks — and in fact, the chamber's Democratic leaders included a “bold” $1 trillion effort in the midterm election promise.
But lawmakers would still face a fundamental problem: Raising anything approaching that kind of cash would require some combination of tax hikes, borrowing or budget cuts elsewhere.
Neither party has shown much willingness to address that challenge in recent decades, even during the brief period of bipartisan optimism that infrastructure inspired before Trump’s inauguration.
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“Everybody in town” wanted to spend the months after Trump’s election “trying to define themselves as infrastructure, but very few of them are willing to come up with money,” one infrastructure lobbyist told POLITICO, asking for anonymity to avoid disrupting his relationships on Capitol Hill.
The lobbyist added that even some of the more plausible funding scenarios, such as a hike in the federal gasoline tax, would probably yield an infrastructure initiative “more limited than what people are talking about.” (Then again, it’s been 25 years since either party has been willing to increase that tax, the main source of federal highway and transit money.)
“Maybe the president’s willing to go along with a deficit spending infrastructure package,” the lobbyist said. “I don’t know that Republicans in the Senate are.”
After January, the funding debate will be amplified by the political pressures of the 2020 presidential election cycle, in which any help Democrats offer Trump in achieving such a major policy goal would be handing him bragging points for his reelection campaign.
Even so, Trump helped stoke renewed hopes when he told Fox & Friends this month that he might be able to find "commonality" with Democrats if they end up in control.
“They want infrastructure, I want infrastructure,” Trump said. "There’s something that can bring us together."
For that to happen, both sides would need to agree on what an infrastructure plan would look like.
Trump and his advisers initially flirted with various funding streams for his infrastructure plan — from selling projects to private investors to reaping revenues from a massive, once-in-a-generation overhaul of the tax code. Former senior adviser Steve Bannon hinted in late 2016 that much of the money would come from debt, relying on “negative interest rates throughout the world” as “the greatest opportunity to rebuild everything.”
Eventually, the White House settled on a plan to have the federal government pay $200 billion over a decade, largely offset by spending cuts in other areas. State and local governments would be expected to raise or find the bulk of the other $1.3 trillion, with help from private investments or partnerships like toll roads, and Trump proposed to prune permitting requirements to shave years off the time it takes to build projects.
Republican leaders in the House and Senate responded by not proposing any legislation that marginally resembled the White House’s 55-page outline — instead, portraying a series of traditional water, spending and Federal Aviation Administration bills as victories for infrastructure. The closest anyone came was outgoing Rep. Bill Shuster (R-Pa.), who put forward a draft that proposed raising the gasoline tax as an interim measure to shifting to a system of charging by how many miles a person drives.
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Senate Democrats offered a counter-proposal that would raise $1 trillion for infrastructure by rolling back last year’s tax cuts for the wealthy and increasing the corporate tax rate. Those would be non-starters with Republicans, however.
The House Democrats’ most recent $1 trillion proposal follows yet another well-worn tradition — deferring until later the question of how to pay for it.
“We didn’t do pay-fors,” said a spokesman for House Minority Leader Nancy Pelosi (D-Calif.). “We’ll figure that out when we get to that stage.”
House Minority Whip Steny Hoyer (D-Md.) echoed that message, though he was bullish that Democrats would succeed where Republicans have failed. “We’re a lot better at getting pay-fors than they are.”
Democrats aren’t yet on the same page with each other, however.
Some say it’s time to get over past reluctance and raise the gasoline tax. Those include Rep. Peter DeFazio (D-Ore.), who could be in line to chair the House Transportation Committee, and who has put together a $560 billion paid for largely by indexing the gas tax to inflation. Sen. Tom Carper (D-Del.), another gas tax proponent, is the top Democrat on the Environment and Public Works Committee.
But that would be hard to get through the Senate, where Minority Leader Chuck Schumer is on record as opposing a gas tax increase. The last time Democrats were in position to make such a change, when President Barack Obama oversaw a Democrat-held Congress, then-Rep. Jim Oberstar (D-Minn.) pushed to raise the gas tax but failed due to opposition from his own administration.
Or Democrats could simply borrow the money — and Trump would eagerly go along, former White House economic adviser Gary Cohn predicted in an interview with Reuters last month.
"I think they'll do a trillion dollars, trillion and a half dollars of infrastructure, and the president will sign it," Cohn said. “Another trillion dollars of debt, here we come.”
Then again, the federal deficit just hit $779 billion, on its way to an expected $1 trillion. And Pelosi has taken criticism from the left for promising to offset any new spending with budget cuts or tax hikes. Such a package would also likely risk being labeled as stimulus 2.0, an easy target for demagoguery.
Beyond the cash question, Trump and Democrats have fundamentally disagreed on just what an infrastructure plan should look like.
“Trump’s approach was a minimal federal effort and pushing maximum responsibility to state and local governments,” said Rep. John Garamendi (D-Calif.), a senior member of the House Transportation Committee. “The Democrats are not going to go that direction.”
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“There are ways to raise funds that have bipartisan support, but the president hasn’t proposed, let alone explored, them,” said Sen. Richard Blumenthal (D-Conn.). “Like an infrastructure financing authority, public-private. The president wants to sell off public assets, which is an anathema.”
However, hope springs eternal among many business leaders and state officials.
Jim Tymon, the chief operating officer and incoming executive director of the American Association of State Highway and Transportation Officials, said he sees “momentum” around infrastructure.
“I think there have been some small victories over the last 18 months that we can certainly build off of,” he said, citing recently-enacted FAA and water resources laws, and the additional $10 billion appropriated to infrastructure over the last two years.
In some ways, the booming economy may have worked against Trump’s plan. Carper suggested "the GDP numbers, job numbers were strong enough they don’t feel they need to … do infrastructure to stimulate the economy and put people to work." That same sentiment could present problems for Democrats as they try to rally support for a big spending plan.
It's also an open question about whether Democrats will be in any mood to give Trump a win of any sort, even on one of their priorities.
Blumenthal and Garamendi downplayed that idea.
“These are things we want to do,” Garamendi said. “The fact that Trump is president just means we’re going to work with Trump.”
