The trillion dollar question: will Trump fix America’s infrastructure?

The trillion dollar question: will Trump fix America’s infrastructure?

One of President Donald Trump’s signature campaign promises was getting a massive infrastructure bill through Congress. Now, it seems Trump’s prize infrastructure bill may just come to fruition. Fresh off passing a major tax reform bill, the Republican-led Congress enters the new year with positive momentum. However, serious obstacles remain in the form of competing legislative priorities and the Democrats’ willingness to cooperate. GRI Analyst Steven Spinello examines the prospects of US infrastructure reform in 2018.

The trains run! Sometimes…

Perhaps there is no sicker patient than America’s infrastructure. One pothole in New Jersey was so large it could have swallowed up a small car. A bridge in Wisconsin was closed to motorists due to dangerous “sagging”. During the recent cold snap, nearly 80 water main breaks occurred across the Maryland-DC area, leaving thousands of people without running water. Fly into New York’s JFK Airport and you may find your terminal inundated by flood waters. The decrepit state of American infrastructure serves up rich material for late night television. American civil engineers are understandably dejected, having slapped the country with a grade of “D” in its latest assessment.

The legislative process – the most obvious treatment for this patient – typically suffers one of two prescribing faults, of which both parties share equal blame. The first fault is due to short-sightedness. Rather than take a holistic, long-term approach there is a tendency for Congress to resort to patchwork legislation. This tendency is even greater under divided government. Pragmatism is ultimately traded for ‘stopgap funding’ where the government promises to pay for certain programs for up to one year and sometimes less (an exception to this trend was the “reauthorization” of a 5-year transportation funding bill in 2015).

The second prescribing fault is best described as “death by distraction”. In this oftentimes fatal case, another major legislative item (for example, health care or immigration) co-opts any serious attempt at reform. Comprehensive infrastructure legislation thus fails to achieve meaningful lift-off. In both cases, America’s civil engineers can only shake their heads at what every day must look to them like a dam ready to burst.

Let’s make a deal

US President Donald Trump believes he is the person to finally change this. The former reality television star relishes big deals: “In my opinion, they should come to me on infrastructure. We can do bipartisan infrastructure.” That was Trump in an interview with the New York Times on 28 December.

From Day 1 of his campaign, then-candidate Donald Trump promised to prioritize infrastructure if elected president, arguing that America was “becoming a third world country, because of our infrastructure, our airports, our roads, everything.” However, pouring concrete quickly took a backseat to other legislative battles, namely the Republicans’ failed attempt to repeal the ACA and then later comprehensive tax reform.

In a weekend trip to Camp David, Trump assembled Republican leadership for a huddle on 2018 objectives. He hammered home the point that infrastructure remains his top priority. In the days that followed, details emerged which suggest that Trump is willing to lean on his executive powers if Congress fails to deliver an infrastructure bill to his desk. This could include streamlining the environmental review process across 17 federal agencies. The fact that the Trump administration is even considering such alternatives indicates the difficult road ahead for Congress.

Look to Congress for the crystal ball

Just two weeks into the new year, the 114th US Congress is already looking ahead to November. The 2018 midterm elections will play a decisive role in determining whether or not the Republicans maintain their grip on both houses of Congress and in turn their lock on important committee chair positions like the House Committee on Transportation and Infrastructure. All 435 seats in the House are in play. In the Senate, 33 seats are up for grabs; however, Republicans will need to defend just 8 seats to maintain their majority in that chamber.

Democrats are anticipating a blue “wave” in the House similar to how Republicans were swept into power in 2010 on the heels of a Republican backlash against former President Obama. Already, thirty House Republicans have decided not to seek re-election. This count includes would-be incumbents like Rep. Darrell Issa (R-CA) and Rep. Ed Royce (R-CA) who both hail from the nation’s bluest state and represent districts where Hillary Clinton performed well. The Democrats are going all in, having fielded candidates in all but 20 House districts.

Sensing the political winds have shifted in their favor, Democrats may be extremely reluctant to work with their Republican counterparts on any legislation, let alone a massive infrastructure bill. In a generic congressional ballot, Democrats have a seemingly commanding lead of +11.8 points in a RealClearPolitics average of multiple polls. Despite Trump’s call for bi-partisanship, the Democrats may hesitate to hand their (unpopular) opponents a legislative victory.

2018 Outlook: Word of the year will not be “bipartisan”

With Republicans having delivered on their promise of tax cuts, the President’s party enters 2018 with the wind at their backs. This comes even despite polls which suggest voters are not jumping up and down about fatter paychecks. If the president wants to ensure infrastructure doesn’t fall to the back-burner, Trump will need to continue to apply pressure to Republican congressional leadership.

House Speaker Paul Ryan (R-Wisconsin), who has reportedly weighed stepping down from his speakership, indicated he’s more interested in pursuing social welfare reform. Trump may have better luck in the Senate where Majority Leader Mitch McConnell (R-Kentucky) understands the political realities. Democrats smell blood; Republicans are playing defense.

McConnell stated that the “Democrats aren’t going to be interested in entitlement reform.” McConnell is referring to the fact that comprehensive entitlement reform would require 60 votes in the Senate, a seemingly unattainable number given the Republicans’ current two-seat advantage (51-49). In 2017, Democrats failed to demonstrate a desire to work with their Republican colleagues on either health-care or tax reform. Much of this was motivated by a desire not to be seen as assisting a president with historically low approval ratings. In 2018, we can expect more of the same.

About Author

Steven Spinello

​Steven A. Spinello is based in New York City. He currently works as a Senior Analyst for EY. Steven holds a B.A. in economics from the University of Maryland. His primary writing interests include global finance, ​trade, ​maritime security​, ​and interstate relations especially at it relates ​to the US, ​Latin America and Asia.​