Trump team considers $1 trillion for infrastructure to spur economy

The Trump administration is preparing a nearly $1 trillion infrastructure proposal as part of its push to spur the world’s largest economy back to life, according to people familiar with the plan.

A preliminary version being prepared by the Department of Transportation would reserve most of the money for traditional infrastructure work, such as roads and bridges, but would also set aside funds for 5G wireless infrastructure and rural broadband, the people said.

President Donald Trump is scheduled to discuss rural broadband access at a White House event on Thursday.

An existing U.S. infrastructure funding law is up for renewal by Sept. 30, and the administration sees that as a possible vehicle to push through a broader package, the people said. They asked not to be identified because the Trump proposal isn’t final and hasn’t been announced.

The news buoyed U.S. stock futures early Tuesday, including for companies that may benefit from a burst of new public spending. Fluor surged 11% before regular U.S. trading, while Vulcan Materials climbed 8.3%.

The draft plan is emerging as lawmakers from both major political parties and Trump debate the timing and scope of more stimulus for a U.S. economy plunged into recession by nationwide shutdowns needed to halt the spread of coronavirus. It’s the latest sign of momentum in Washington for some kind of infrastructure spending blitz ahead of the election.

House Democrats have offered their own $500 billion proposal to renew infrastructure funding over five years. It’s unclear how long the administration’s draft would authorize spending or how it would pay for the programs.

Trump is pushing to rev up the U.S. economy—which four months ago was the centerpiece of his argument for a second term—as he trails Democrat Joe Biden in most national polls. The White House has explored ways to shift the next round of federal virus aid from personal financial support to growth-fostering initiatives, such as infrastructure spending.

The White House declined to comment specifically on the administration’s plans.

“Since he took office, President Trump has been serious about a bipartisan infrastructure package that rebuilds our crumbling roads and bridges, invests in future industries, and promotes permitting efficiency,” White House spokesman Judd Deere said in a statement.

Trump has periodically called for more spending on infrastructure, including during his 2016 presidential campaign. In March, as the pandemic tightened its grip on the U.S., he urged as much as $2 trillion in new investment in U.S. roads, bridges and tunnels.

That echoed his push two years ago for Congress to dedicate $1.5 trillion toward new infrastructure investment. But hopes for federal legislation ended in May 2019 after Democrats said Trump walked out of a meeting on a $2 trillion plan and vowed not to work with them unless they stopped investigating him and his administration.

Lawmakers who attended a closed-door meeting with the president in February 2018 said he told them he’d support a 25-cent per-gallon increase in gas taxes, but Trump never publicly endorsed it. The idea drew opposition from Republicans who don’t want to raise taxes and Democrats worried about the impact on low-income populations.

It’s possible that the infrastructure measures currently being drafted could be rolled into the next round of pandemic relief. The House passed $3 trillion in additional stimulus in May, but the Republican-led Senate spurned that bill and will instead weigh its options next month.

The Democratic bill to reauthorize the current infrastructure program was unveiled this month. It includes investments in roads and bridges, funding to make certain projects more resilient to climate change, and funding for public transit and Amtrak, among other priorities. The House Transportation committee is set to take up the measure on Wednesday.

The existing surface transportation authorization law, known as the FAST Act, authorizes $305 billion over five years and expires on Sept. 30. Lawmakers will either extend it or come up with a long-term replacement. It’s not yet clear how closely the administration’s plan will align with the Democrats’ proposal—or with what Senate Majority Leader Mitch McConnell, R-Ky., might do.

Infrastructure spending has long held appeal for lawmakers as a way to spur growth, and the pandemic is renewing calls to fast-track roads and other projects. Mary Daly, president of the Federal Reserve Bank of San Francisco, called for public-works spending on infrastructure, including projects that could help low-income people.

“We need to focus on investments that leverage the talent of everyone and contribute to the economy’s long-term growth prospects,” Daly said in a speech Monday. She cited health, education and digital infrastructure, such as internet access.

One major question facing lawmakers will be how to pay for the measures, a hurdle that has stopped previous moves on infrastructure. Increasing the federal gas tax to support a massive round of new spending is unlikely, though, as Trump cheers low gas prices and calls for other measures, including a payroll tax cut, to put cash in Americans’ pockets as the country copes with fallout from the virus.

Congress has shown little concern about the more than $2 trillion allocated to curb the pandemic’s economic damage, though some conservatives have begun to urge Trump to turn off the taps. But interest rates are near zero, making additional government spending more palatable, Daly said.

“Now is an especially good time to take on this type of debt,” Daly said. “Even before the crisis, we were in an environment of low interest rates—and that is expected to continue for the foreseeable future. This makes public spending relatively cheap and easy to finance.”

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8 thoughts on “Trump team considers $1 trillion for infrastructure to spur economy

  1. We need a $2000 direct payment. That last direct payment ($1200) is the only reason May retail sales surged 17.7%. Unless we get another direct stimulus payment, things will get worse. File, print—now.

  2. Infrastructure improvements of all sorts are needed and some immediately, but essential public health and safety services cannot be delayed – especially during a pandemic which may take a couple of years to control. Public hospitals, health departments, environmental health hazards, police-fire-and EMT services are just a few. So are our schools.

    With few exceptions, schools are the largest employers in our counties. There are school staff and students in every precinct of America. Schools are also potential virus-spreading factories. From schools the virus can spread quickly to parents who work throughout the economy, to siblings in day cares and their caregivers, to grandparents, and more. Still we have no plan to test students and school staff weekly to catch, contain, and trace the virus. Our state has plans for a mere 2-day supply of masks to public schools with no requirement for wearing them. Ideally school desks, equipment, and restrooms would be disinfected after every class change, but schools’ budgets will be cut at the time they’ll need vastly more sanitation supplies and the staff to use them. And how exactly will students be socially distanced on school buses, and how and with what will every surface in them be disinfected every day between every bus run?

    In the last decade, there has been an explosion of students with asthma and diabetes. Additionally, there are special ed. students in every school who are medically fragile. Yet so many schools do not have a full time school nurse. Will lack of school nurses qualify as an infrastructure need?

    If schools must close again, we’ve already learned that too many rural households don’t have broadband, and many more parents can’t afford computers and/or internet access. THOSE are immediate infrastructure needs, but will they have the same lobbying pull as the contractors who build bridges and highways?

    Children’s ages can’t be put on hold. They’ll keep progressing through school even if school can’t keep pace with the public health, staffing, plant operation, school bus, and computer demands imposed by the coronavirus. Students and schools are the foundation of our intelligence infrastructure, and the building blocks of that foundation must be solidly cumulative. We can’t afford to leave holes in that foundation.

  3. Just another boondoggle. How exactly is our economy stimulated by throwing hundreds of billions at road contractors and paying additional premiums imposed by federal Davis-Bacon labor requirements? We need to rescind the federal fuel tax and substitute it with increased state fuel taxes which will allow each state to avoid federal interference and unnecessary costs.

  4. Is this the 27th attempt at an “Infrastructure Week”? I’ve lost count. This administration will trip over itself again before it makes any progress, as it tends to do. It simply cannot govern amid its own self-made crises. So it goes.

  5. Infrastructure for whom? Rural broadband and 5G is good and needed. However, what does this mean for metropolitan areas where 84% of Americans live? The ~30% of Americans who live in cities? Any infrastructure proposal needs to empower communities directly and bridge gaps between cities and suburbs. Mass transit connections, enabling legislation for regional funding mechanisms and coordination, and bypassing State DOTs for local infrastructure needs.

  6. Over 100 university and US Dept of Interior studies prove non-ionizing RF radiation from communication towers mutates genes and kills wildlife and plants outright. Especially bees, birds, and bats. 5G is 50 times more powerful/dangerous than 4G LTE… AND the number of towers required will be 50 times more than current. So life or death risk factor increases by 2,500%.

    Do you realize the first 5G towers in the world were installed in Wuhan 3-weeks before Coronavirus? Indy, Seattle, Atlanta are going in now. There is no need for 5G except carriers can blast us with more ads, charge more, and stimulate the fake economy… killing us softly in the meantime.

    Humans too if the UHF & UHI towers (even you wifi router) are close enough and persistent. Eating mutated genes, or an is never a good idea

  7. Repairing the roads and bridges will be an economic boon of eminent proportion to Indiana and all Hoosiers by the reduction of auto depreciation, new commerce, and auto finance. My companies have provided the software for auto leasing in the US since 1979. That includes calculating the residual values, which in Indiana and salt-belt states, is significantly lower (-40%) than say Georgia or California.
    Let us not forget the primary cause of road deterioration is salt-melted water seeping into the surface then freezing again popping up the asphalt/concrete. Denver has 3-times the snow as Indy, but they use very little salt by comparison. Rebuilding Infrastructure should be preceded by a plan of alternate deicing.

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