Infrastructure plans remains long on vision but short on specifics

While President Trump’s first address to Congress last night touched upon a wide range of topics that are front and center in terms of the country’s “to do” list, a topic that may have one of the most direct impacts on freight transportation, logistics, and the supply chain has to do with infrastructure.

On the campaign trail and again in his inaugural address, Trump stressed the need for increased infrastructure investment in the form of a “trillion-dollar rebuilding plan” that would be “one of the biggest projects this country has ever undertaken, which he said would be funded through low interest rates and infrastructure bonds.

In his address last night, Trump again rang the bell for infrastructure improvements, noting that the United States has spent trillions overseas, while infrastructure at home has crumbled, but he pointed to a bright future, saying that “Crumbling infrastructure will be replaced with new roads, bridges, tunnels, airports and railways, gleaming across our very, very beautiful land.”

That comment was made with an eye on the future, too, with Trump noting that President Dwight Eisenhower initiated the last truly great national infrastructure program, with the building of the interstate highway system, adding that the time has come for a new program of national rebuilding.

This build up led to Trump providing a top-level vision for what may be coming down the (infrastructure) road in the future.

“America has spent approximately $6 trillion in the Middle East, all the while our infrastructure at home is crumbling,” he said. “With the $6 trillion, we could have rebuilt our country twice, and maybe even three times, if we had people who had the ability to negotiate. To launch our national rebuilding, I will be asking Congress to approve legislation that produces a $1 trillion investment in infrastructure of the United States, financed through both public and private capital, creating millions of new jobs. This effort will be guided by two core principles: Buy American and hire American.”

These comments rang true to what the President has previously said.

As previously reported, administration officials are floating some $137 billion in tax credits to infrastructure investors. It’s estimated these tax credits would generate an estimated $1 trillion in private sector investment over 10 years.

But whether that $1 trillion would go to the most-needed infrastructure jobs––or merely those that produce the biggest revenue streams to investors––remains an open question.  

And Transportation Secretary Elaine Chao has said it’s time to “unleash the potential” of private capital to modernize that infrastructure. She said at her confirmation hearing before the Senate Commerce, Science and Transportation Committee that economic gains are being jeopardized by infrastructure "in need of repair, the specter of rising highway fatalities, growing congestion, and by a failure to keep pace with emerging technologies."

But before anything goes anywhere, don’t forget about the funding component, which is really the engine that drives any type of forward progress for infrastructure.

And if that $1 trillion figure sounds familiar, it should, as it is the same amount Senate Democrats recently rolled out in a plan of their own in January.

This ten-year plan vows to create 15 million jobs, with $210 billion allocated towards repairing aging roads and bridges and $200 billion for “a vital infrastructure plan” to finance transportation projects of national significance.”

The New York Times reported that the Senate Democrats plan dedicates $180 billion to rail and bus systems, $65 billion to ports, airports and waterways, $110 billion for water and sewer systems, $100 billion for energy infrastructure, and $20 billion for public and tribal lands.

And Senator Minority Leader Chuck Schumer, D-NY, said that “Senate Democrats are walking the walk on repairing and rebuilding our nation’s crumbling infrastructure. We ask President Trump to support this common sense, comprehensive approach.”

Now, given the polarizing partisanship in Washington, which has become almost “normalized,” especially in recent years, one cannot assume this will be a fluid process by any stretch.

And without a definitive and sustainable way of footing the bill, things will likely remain in wait and see mode before infrastructure projects of any kind, shovel ready or not, begin in earnest.

There is likely a long way to go before we see some real progress, given the pace at which things tend to move in Washington. Here is to hoping, we see things accelerated on the infrastructure front. Our nation’s economic competiveness is counting on it.