President Donald Trump proposed relaxing restrictions on tolling interstate highways and lifting a $15 billion cap on tax-exempt bonds for private investors among other broad principles for his $1 trillion infrastructure plan Tuesday.
Those principles, released as part of Trump’s proposed budget, represent the fullest view yet of how his administration plans to spend $200 billion over the next 10 years to generate at least $800 billion in additional state, local and private investment in highways, bridges, airports, sea ports and other public facilities.
“The administration’s goal is to seek long-term reforms on how infrastructure projects are regulated, funded, delivered and maintained,” the White House said in a fact sheet. “Providing more federal funding, on its own, is not the solution to our infrastructure challenges.”
The president’s budget is just a recommendation -- and Republican congressional leaders have said they won’t necessarily defer to his suggestions. And while Trump’s campaign pledge to improve U.S. infrastructure marks a rare point of common interest with many lawmakers, Democrats have said encouraging private investment doesn’t work in rural areas, and even some Republicans have called for more direct federal funding.
Among the federal programs Trump recommends expanding is the Transportation Infrastructure Finance and Innovation Act, or TIFIA, loan program, which helps finance surface transportation projects through direct loans, loan guarantees and lines of credit. One dollar of TIFIA subsidy leverages about $40 in other investment, according to the fact sheet.
The administration also is calling for lifting a $15 billion cap under current law for tax-exempt Private Activity Bonds, which are used to help finance public-private partnership deals for building highways and freight transfer facilities. The budget proposal calls for the U.S. to sell certain power transmission assets, including lines, towers and substations, and to impose a fee for commercial use of inland waterways.
Trump also called for reducing restrictions on states from tolling existing interstate highways. The ability to toll can create streams of revenue needed to attract private investment for building or maintaining roads. Trump also supports allowing the private sector to construct, operate and maintain interstate rest areas, according to the plan.
The administration included its plan to spin off the U.S. air-traffic system into a nonprofit corporation as part of its infrastructure initiative.
Trump’s budget proposal includes $5 billion of the proposed $200 billion in 2018. It also calls for cutting the Department of Transportation’s budget by $2.4 billion, or almost 13 percent. The proposal would eliminate $499 million for the popular TIGER program, which awards grants to states for transportation projects, and would also cut $928 million for transit work and $630 million for Amtrak.
Besides leveraging private investment, the other key principles identified in the plan are limiting the use of federal funds to projects that are regional or national priorities, encouraging states and localities to raise their own dedicated revenues, and divesting from certain federal functions and assets.
This article was provided by Bloomberg News.