Trump and Clinton Are Both Ready to Build. Will Congress Play Along?

There are big promises for an infrastructure package, but nobody’s sure how to get there.

Traffic moves slowly across the Tappan Zee Bridge while construction continues on the new bridge as seen from Nyack, N.Y., on July 20, 2016.
AP Photo/Seth Wenig
Jason Plautz
Add to Briefcase
Jason Plautz
Aug. 3, 2016, 8 p.m.

If you be­lieve cam­paign talk­ing points, then there will be one clear win­ner no mat­ter who takes the White House next year: the na­tion’s in­fra­struc­ture.

Hil­lary Clin­ton has re­peatedly talked up a $275 bil­lion, five-year in­fra­struc­ture pack­age as an early pri­or­ity. In her speech at the Demo­crat­ic Na­tion­al Con­ven­tion last week, Clin­ton said that in her first 100 days she would “work with both parties to pass the biggest in­vest­ment in new, good-pay­ing jobs since World War II,” adding that in­vest­ing in in­fra­struc­ture now would “not only cre­ate jobs today, but lay the found­a­tion for the jobs of the fu­ture.”

On Tues­day, Trump sought to outdo her, telling Fox Busi­ness Chan­nel that he would “at least double her num­bers” on in­fra­struc­ture spend­ing. “I don’t know if you’ve seen the warn­ing charts, but we have many, many bridges that are in danger of fall­ing,” he said.

“We’re really happy to hear this at the top or near the top of our can­did­ates’ pri­or­it­ies; now we hope that Con­gress takes note,” said Brad Mar­kell, ex­ec­ut­ive dir­ect­or of the AFL-CIO In­dus­tri­al Uni­on Coun­cil. “This can help fo­cus on what we need to be com­pet­it­ive, to lay out a big­ger vis­ion for what Amer­ica can be.”

Of course, if all the na­tion needed was talk­ing points to re­pair its in­fra­struc­ture, we’d be zip­ping around on bul­let trains while log­ging onto the na­tion­al broad­band-in­ter­net net­work. The prob­lem re­mains how to find the cash to pay for the much-needed up­grades.

Con­gress was forced to cobble to­geth­er a quilt of pay-fors to cov­er a five-year trans­port­a­tion bill—the FAST Act—last year, largely by li­quid­at­ing a Fed­er­al Re­serve sur­plus ac­count. But it did not se­cure a long-term fix for the dwind­ling gas-tax re­ceipts that have left the High­way Trust Fund on the brink of in­solv­ency. To get the kind of bi­par­tis­an agree­ment ne­ces­sary to pass a 12-fig­ure in­fra­struc­ture pack­age (and use it as a chance for le­gis­lat­ive comity), it would have to be fully paid for, without hefty taxes that might ali­en­ate con­ser­vat­ives.

“The goal is to keep that co­ali­tion to­geth­er and not pick a strategy that’s go­ing to ali­en­ate any­one that helped get the FAST Act passed,” said Robyn Bo­erst­ling, vice pres­id­ent of in­fra­struc­ture policy for the Na­tion­al As­so­ci­ation of Man­u­fac­tur­ers. “It’s go­ing to take build­ing a re­la­tion­ship and trust to come up with ways to make it hap­pen.”

Clin­ton has said that her plan would be paid for through ad­just­ments to the busi­ness-tax code. The idea of link­ing tax re­form to in­fra­struc­ture has been kicked about for years; one pro­pos­al would lower the tax rates for cor­por­a­tions’ off­shore earn­ings, but im­pose a one-time trans­ition tax as a cash in­flux.

The gen­er­al idea has sup­port from the White House and high-rank­ing mem­bers on both sides of the aisle, but ana­lysts have cau­tioned that it would not be a suit­able long-term fund­ing solu­tion. Clin­ton has also pro­posed us­ing $25 bil­lion to kick-start an in­fra­struc­ture bank, to cre­ate re­volving loans that would back ma­jor pro­jects.

Trump on Tues­day said he’d set up a fund and would “make a phe­nom­en­al deal with the low in­terest rates” to cov­er the half-tril­lion dol­lars that he was prom­ising for in­fra­struc­ture. The money would be sold as bonds, he ad­ded.

As to who would cov­er the fund: “People, in­vestors. People would put money in­to the fund. The cit­izens would put money in­to the fund.”

It may be light on de­tails, but a bor­row­ing plan would al­low the coun­try to take ad­vant­age of a weak eco­nomy to sup­port job-cre­at­ing pro­jects. Mar­kell said that while any paid-for plan would be ideal, “money is as cheap as it’s ever been; we don’t think you ne­ces­sar­ily need to line up pay-fors.”

The con­ser­vat­ive Her­it­age Ac­tion for Amer­ica de­cried the plans as “an­oth­er Obama-style stim­u­lus.” In a state­ment Monday, spokes­man Dan Holler said both parties “must re­ject this no­tion that the fed­er­al gov­ern­ment can con­tin­ue bor­row­ing money to spend our way to eco­nom­ic op­por­tun­ity for all.”

“The re­sponse to the slow­est eco­nom­ic re­cov­ery in six dec­ades should not be doub­ling down on Hil­lary Clin­ton’s pro­pos­al that simply re­peats the same failed policies of the Obama ad­min­is­tra­tion,” Holler ad­ded in re­sponse to Trump’s in­ter­view.

Demo­crats have said that low gas prices make this an ideal time to raise the gas tax as a long-term fix. At a for­um hos­ted by the law firm Dentons on Tues­day, Trump ally and former House speak­er Newt Gin­grich even sug­ges­ted us­ing the oil and gas re­serves on the na­tion’s pub­lic lands as a honey pot, sug­gest­ing “pack­aging in­fra­struc­ture for cit­ies paid for by de­vel­op­ment of fed­er­al land.” Gin­grich con­fessed that the idea would be “an ana­thema to en­vir­on­ment­al­ists,” but thought it could draw the sup­port of uni­ons and may­ors.

An aide for the Sen­ate En­vir­on­ment and Pub­lic Works Com­munity cau­tioned that “there’s a huge dif­fer­ence between what is be­ing said now and what hap­pens when you have to find a new rev­en­ue source.” A real­ist­ic in­fra­struc­ture plan, the aide said, would likely have to be coupled with an ef­fort like tax re­form, a tough lift but one that could pay off for White House-Con­gress re­la­tions.

“To ac­tu­ally have an ad­min­is­tra­tion in lock step with House and Sen­ate on in­fra­struc­ture would be a huge deal,” the aide said, say­ing that the White House hasn’t driv­en a ma­jor in­fra­struc­ture bill in more than a dec­ade.

An­oth­er open ques­tion is how the can­did­ates and Con­gress define “in­fra­struc­ture.” Some Re­pub­lic­ans still gripe that the $105 bil­lion in­fra­struc­ture title of the 2009 stim­u­lus bill in­cluded gov­ern­ment build­ings, cy­ber­se­cur­ity and the elec­tric grid, but only $48 bil­lion for trans­port­a­tion. En­vir­on­ment­al­ists are look­ing to Clin­ton to use her in­fra­struc­ture push to build out clean en­ergy, a pos­sible tough sell for Con­gres­sion­al Re­pub­lic­ans.

With Con­gress also hav­ing passed a 5-year trans­port­a­tion bill and FAA reau­thor­iz­a­tion, and hop­ing to pass a wa­ter re­sources de­vel­op­ment bill be­fore the end of the year, there may not be an ob­vi­ous le­gis­lat­ive hook for in­fra­struc­ture. Bo­erst­ling said that, with the right de­tails, polit­ic­al will should not be an is­sue to fix a long-sim­mer­ing prob­lem.

“What’s im­port­ant is to have the pres­id­ent de­clare a need and put an em­phas­is on it, then let’s fig­ure out how to make it hap­pen,” she said. “There’s no ma­gic num­ber, it’s just wheth­er we’ve de­livered a bet­ter out­come, wheth­er that’s re­du­cing con­ges­tion or build­ing out new sys­tems or build­ing up man­u­fac­tur­ing. How we get there is the in­ter­est­ing de­bate.”

What We're Following See More »
Trump Makes Good on Promise of New North Korea Sanctions
42 minutes ago

President Trump this afternoon announced another round of sanctions on North Korea, calling the regime "a continuing threat." The executive order, which Trump relayed to Congress, bans any ship or plane that has visited North Korea from visiting the United States within 180 days. The order also authorizes sanctions on any financial institution doing business with North Korea, and permits the secretaries of State and the Treasury to sanction any person involved in trading with North Korea, operating a port there, or involved in a variety of industries there.

Ivanka to Court Over $785 Sandals
1 hours ago
Trump Says He’ll Visit Puerto Rico
3 hours ago

"Seated next to Ukrainian President Poroshenko on his final day of meetings at the United Nations, Trump did not say when he might go to Puerto Rico, but spoke solemnly about the destruction to an island he said had been 'absolutely obliterated.'”

Trump Promises More Sanctions on North Korea
4 hours ago

In response to a reporter's question, President Trump said "he’ll be looking to impose further financial penalties on North Korea over its nuclear and ballistic tests. ... The U.N. has passed two resolutions recently aimed at squeezing the North Korean economy by cutting off oil, labor and exports to the nation." Meanwhile, the Guardian reports that South Korea's unification ministry is sending an $8m aid package aimed at infants and pregnant women in North Korea. The "humanitarian gesture [is] at odds with calls by Japan and the US for unwavering economic and diplomatic pressure on Pyongyang."

Irma Bad for Orange Juice Business
4 hours ago

Hurricane Irma "could even be the knockout blow for a product — orange juice — that has been slipping in popularity among Americans, although the beverage still ranks as the country's favorite 'fruit'...Ninety percent of the state’s $1 billion annual harvest is eventually processed into OJ." Per the executive director of the state citrus grower's association, "It’s somewhere between significant and catastrophic."


Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.