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MEMORANDUM
 
To:       ARTBA Board of Directors
            ARTBA Council of State Executives

From:   Pete Ruane
 
Re:      The Infrastructure Conversation: Part 2
 
Date:    November 18, 2016

Last week, I updated you on the details of President-elect Trump’s infrastructure plan and the tepid response from House Speaker Paul Ryan (R-Wis.) and Senate Majority Leader Mitch McConnell (R-Ky.) to such a package.  Things have certainly changed this week.  A high profile infrastructure discussion is now underway, but I wouldn’t buy a bridge from anyone who tells you they know what is going to happen.
 
Notable components of the week’s conversation:
 

  • House Majority Leader Kevin McCarthy (R-Calif.), Nov. 14: “I think the infrastructure of America is lagging far behind.  I think this is one that can be a priority.  I also believe it can be a bipartisan issue.”
  • House Transportation & Infrastructure (T+I) Committee Chairman Bill Shuster (R-Penn.), Nov. 14: “Look, we don’t have the details…We’re working very closely with his transition team and hopefully with the new department head to figure out how we’re going to pay for it.  It’s got to be fiscally responsible.”
  • House Transportation & Infrastructure Committee Ranking Member Peter DeFazio (D-Ore.), Nov. 14 regarding the Trump proposal: “The only details I’ve seen talks about doing this either by borrowing—which I’m not opposed to—or private capital…It only works for revenue generating projects…So it’ll help with individual sorts of projects, but it’s not any kind cure-all and it certainly isn’t going to get the big bang that Trump has talked about in infrastructure.”  DeFazio added, “There has to be a big federal portion or you’re not going to have a big infrastructure investment that addresses the country’s needs.”
  • Rep. Mark Meadows (R-N.C.), a member of the House T&I Committee and one of the most conservative members of the House, Nov. 14: “I think we believe that there needs to be additional infrastructure investment for bridges and roads…The mix of that—how much goes to mass transit, how much of it goes to bridges, roads, aviation, etc.—is a question mark on where we need to be.”
  • Steven Mnuchin, Trump transition team executive committee member and potential nominee for Treasury Secretary, Nov. 16, describing his conversations with the president-elect: “I think the other thing—very big focus—is regulatory changes, looking at the creation of an infrastructure bank to fund infrastructure investments…So there’s a lot of things to do and I’d say the economic priorities are clearly taxes, regulatory, trade and infrastructure.”
  • Senate Commerce Committee Chairman John Thune (R-S.D.), Nov. 16: “My guess is if that gets done, it probably hitches a ride on tax reform…I don’t know that just an infrastructure bill on its own, a stand-alone, would probably go anywhere.  But I think it’d have to be coupled with something that we view to be really advantageous in terms of growing the economy and stimulating the economy. 
  • According to media reports, one of Mr. Trump’s tax advisors, Stephen Moore of the Heritage Foundation, briefed Republican members of Congress on a proposal to use a one-time tax on the overseas earnings of U.S.-based multinational companies to pay for a boost of infrastructure spending.  A number of lawmakers in 2015 pushed repatriation as a way to fund the FAST Act, however, key members of the House and Senate tax committees opposed such a plan.

 
Finally, it was also reported that “Vice President-elect Mike Pence told a closed door meeting of the House Republican Conference, Nov. 17, that he and President-elect Trump want to focus on tax reform and relief, securing the border, repealing and eventually replacing Obamacare, creating jobs, increasing security and building infrastructure.”  He told his former House colleagues to “buckle up” for an anticipated ambitious opening to a new Administration.
 
Here are two takeaways:
 
First, either the president-elect has tapped into a latent demand on Capitol Hill to do more than the largely status quo 2015 surface transportation bill, or he is driving the interest of lawmakers.  Either way, the fact this discussion is ongoing from Trump Tower to the U.S. Capitol shows an opportunity may be available. 
 
Second, there is a big difference between an opportunity and a guarantee.  The people projecting a boom in infrastructure investment have no idea of the complexity and capriciousness of the legislative process. 
 
Stay tuned...we’re going to help make this a lengthy conversation!

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