Despite Trump's Infrastructure Pledge, Governors Expect Little Federal Spending

by | February 28, 2017

By Stuart Leavenworth

President Donald Trump said again Monday that he was preparing to spend big on infrastructure. But even as he spoke, administration officials and congressional leaders were telling governors to expect little new federal investment in roads, bridges, transit systems, dam repairs and other water works.

Instead, the administration and congressional leaders plan to take a more incremental approach of spurring public-private partnerships _ such as toll roads _ by loosening environmental reviews, removing other red tape and possibly approving new tax credits. While some governors say private projects will provide little help in repairing their aging infrastructure, others say they will be forced to embrace the fiscal reality.

Virginia Gov. Terry McAuliffe, a Democrat, said he and Nevada Gov. Ryan Sandoval, a Republican, had recently discussed infrastructure with House Speaker Paul Ryan, R-Wis., prior to meetings Sunday and Monday with Trump and his Cabinet members.

"It seemed clear the way they were heading was public-private partnerships," McAuliffe said in a news conference at the conclusion of the National Governors Association winter meeting here.

With Trump expected to address infrastructure in his speech Tuesday night, McAuliffe said he saw little prospect of big new public investment. "Until they come up with a dedicated source of funding going forward, it is going to make it difficult," he said.

On the campaign trail, Trump promised to grow jobs with an infrastructure investment of $1 trillion or more. On Monday, speaking to a group of visiting governors, he seemed to renew that pledge, saying: "Infrastructure. We are going to start spending on infrastructure big."

Yet despite his rhetoric, Trump appears to have little GOP support for a big-money federal jobs program. Ryan is opposed, and Senate Majority Leader Mitch McConnell _ a Republican from Kentucky and the spouse of Trump's transportation secretary, Elaine Chao _ has been cool to noncommittal. Both congressional leaders want to cut taxes and reduce federal spending and are philosophically opposed to economic stimulus programs. Former South Carolina Sen. Jim DeMint, head of the Heritage Foundation, has recently become an influential adviser to Trump, and his organization has been pressing the president to scale back dreams of big federal investment.

Ryan and some other Republicans seem open to using tax credits to spur private infrastructure work. Yet it is not yet clear how Congress would pay for those tax breaks and what process they'd use to select projects deserving of special treatment. Ryan has made clear that infrastructure decisions will need to wait until the spring, after Congress has had a chance to work on health care and tax revisions.

At his news conference Monday, Trump spokesman Sean Spicer was pressed to explain how the president plans to spend "big" on infrastructure, without increasing federal budget deficits.

"All I'm trying to get at is that there are various ways to do this funding without just relying on the American taxpayer in terms of additional taxes," Spicer replied. "There are spending reductions; there are other funding mechanisms. I think in due course we will get around to that discussion."

Since occupying the White House, the administration's process for vetting possible infrastructure projects has been opaque. On Jan. 24, McClatchy was the first to report on a list of 50 "emergency and national security projects" nationwide that a consulting group had prepared for the Trump transition, which passed them on to the National Governors Association. Some of those projects had long been pushed by private developers hoping the new administration could provide them relief from environmental permits and litigation.

The administration remains interested in at least some of those infrastructure ideas. Speaking at the National Governors Association conference Sunday, Transportation Secretary Chao said she had recently met with proponents of a privately funded Texas high-speed rail project that would link Dallas to Houston. The project, included on the administration's original list of 50, claims it will create thousands of jobs but is opposed by some landowners along its potential route.

Trump, a vocal supporter of using eminent domain for development, spent Sunday night hosting dozens of governors at the White House. On Monday, he said he'd spoken to some of the governors about projects "tied up because of environmental concerns."

He suggested he'd speed up the process for environmental reviews. "They'll either be rejected quickly or they're going to get approved," he said.

Some Republican governors, such as Gary Herbert of Utah, say they applaud the administration's approach. "What we've said to the president today is 'Let's find ways to streamline regulations,'" said Herbert at Monday's news conference.

Yet other governors say private investment and regulatory relief can go only so far in helping states fix aging bridges, highways and other public works. "There has to be additional resources," said Colorado Gov. John Hickenlooper, a Democrat. "States have to come up with resources; federal government has to come up with those resources."

During a panel discussion Sunday, Chao was asked by Kentucky Gov. Matt Bevin, a Republican, how states could engage with the new administration in repairing structures such as the Brent Spence Bridge, a 1963 cantilevered truss bridge that carries Interstates 71 and 75 across the Ohio River between Kentucky and Ohio. During the Obama administration and now, the bridge has become a symbol of crucial but aging infrastructure.

Chao acknowledged that public-private partnerships are "not the answer to everything," in part because of public resistance to projects such as tollways. She didn't seem to have an immediate answer to Bevin and his bridge concerns. "We need to find new ways to innovate, to find additional resources," she said.

(Lindsay Wise contributed to this report.)

(c)2017 McClatchy Washington Bureau