President Trump today extended an olive branch to Democrats who last night took control of the House of Representatives, saying he is willing to collaborate on issues of common interest such as infrastructure investment.
However, Trump warned that if Democrats insist on spending the next two years investigating him and his Administration, little policy progress will be made because both tracks can’t be pursued at the same time. “You can do one or the other, but not both,” he said.
At a press conference in Washington, Trump highlighted infrastructure, a huge component of which is surface transportation, as an area of common interest in the 116th Congress. He added that the GOP’s gains in the Senate last night could make it easier to enact bipartisan legislation because Senate passage will not hinge on the votes of one or two Senators. As of this afternoon, Republicans held a 53-45 majority in the Senate, with the remaining two being independents.
Infrastructure issues have already been addressed to some extent this year by the re-authorization of funding for the Federal Aviation Administration and passage of the Water Resources Development Act. In the U.S., infrastructure covers transportation, broadband, water, and electricity.
In February, the White House unveiled a $1.5 trillion infrastructure plan calling for direct federal spending over 10 years of $200 billion. Of that, half would be used to create an “Incentives Program” to spur $1.3 trillion in funding from states, localities, and the private sector. Funding would also have come from eliminating federal programs deemed obsolete or not pulling their weight.
However, the plan has been stuck in limbo as the White House grappled with more pressing near-term concerns and faced questions over how any entity other than the federal government could commit such massive resources.
The next two years will not only see the chance of stepped up infrastructure activity but the expiration on Sept. 30, 2020 of the five-year federal transport funding law known as the FAST Act. Because of the expected year-long demands of the 2020 presidential election cycle, it is unlikely Congress and the White House would have beyond the end of 2019 to complete work on one or both issues, according to Elaine Nessle, executive director of the Coalition of America’s Gateways and Corridors, a public-private sector coalition that advocates for intermodal funding.
Because of the timing, Nessle said expectations for a massive infrastructure bill may have to be scaled back. In return, Congress could push for expedited action on the FAST act reauthorization, she added. The other option is for lawmakers to pass short-term funding bills to keep money flowing into projects, a step they have taken many times in the past.
One change wrought by the flip of the House is the balance of power on the House Transportation & Infrastructure Committee. As the current ranking member, Rep. Peter A. DeFazio (D-Ore.) is a near shoo-in to become chairman given House Democrats’ penchant for selecting by seniority. A new chairman would have been selected regardless of last night’s outcome because the current chair, Rep. Bill Shuster, (R-Pa.), is retiring.
One issue that will remain on the table is the federal motor fuels tax, which has not been raised for 25 years and has lost about 40 percent of its purchasing power over that time due to inflation. In February, Trump stunned many in Congress by saying he could support a 25 cent a gallon fuel tax increase—either imposed all at once or phased in over five years-and would give lawmakers political cover to push it through. Nothing has happened since that time, however.
In 2017, DeFazio proposed to index federal fuels taxes to construction-cost inflation, and to direct the Treasury Department to issue 30-year bonds to finance transport infrastructure projects by bond repayments made using the indexing formula. The proposal, dubbed “A Penny for Progress” because it would increase gasoline and diesel taxes by 1 cent per year, would raise $500 billion by fiscal year 2030, DeFazio said at the time. That, too, has gone nowhere.
It’s unclear as to whether Trump still has the appetite to raise taxes, or whether a Democratic-controlled House will go along with a move supported by virtually every business group, including the U.S. Chamber of Commerce, but one which is still politically unappetizing. James H. Burnley IV, Transport Secretary during the latter part of the Reagan administration and the long-time head of the transport practice at the Washington law firm Venable LLP, said the fact that Trump implicitly supports such a move stands in stark contrast to his predecessor, Barack Obama, who for eight years rejected such a tax hike as being too regressive.
