President Trump Touts Infrastructure Plan to Nation

A highlight in President Trump’s State of the Union this week was his promotion of a $1.5 trillion infrastructure plan that would couple investments by state and local governments and private investors, with $200 billion in federal grants.

“I am calling on the Congress to produce a bill that generates at least $1.5 trillion for the new infrastructure investment we need, ” Trump said. “Every federal dollar should be leveraged by partnering with state and local governments and, where appropriate, tapping into private sector investment — to permanently fix the infrastructure deficit.”

The infrastructure package would include $200 billion in direct federal investment and President Trump expects the other $1.3 trillion to come from a combination of local, state, and private investment, incentivized by the federal seed money.

While concrete details are yet to be presented, initial estimates show that Alabama could expect a total appropriation of $4.33 billion, which could require $2.16 billion in matching funds.

According to a leaked draft of the plan from Axios, the $200 billion includes:

$100 billion in grants through an “Infrastructure Incentives Initiative” designed to encourage investment from state governments, local governments, and private companies on “core infrastructure,” which includes surface transportation, airports, passenger rail, maritime and inland waterway ports, flood control, water supply, hydropower, water resources, drinking water facilities, and storm water facilities.

Each state could only receive up to 10 percent of the total, and federal grants couldn’t make up more than 20 percent of the total spent on a project. Applications would be received every six months with the heaviest weighted criteria being “evidence supporting how applicant will secure and commit new, non-federal revenue to create sustainable, long-term funding”;

$50 billion on rural infrastructure. This is to ensure that projects in rural areas, which usually have lower returns on investment, do not get left behind. Eighty percent of the funds under this initiative would be provided to the governor of each state based on a formula using the total of a state’s rural lane miles in relation to total rural lane miles in all states and a ratio based on the total adjusted rural population of a state in relation to the total adjusted rural population of all states. Estimates show that Alabama has about 2.5 percent of the nation’s rural lane miles of road and 3.3 percent of the nation’s rural population;

$20 billion on the “Transformative Projects Program.” It would give federal money to swing-for-the-fences type projects that couldn’t get money from private markets due to the “uniqueness of the program.” Included in the possible programs that could receive money are “commercial space” ventures;

$14 billion to grow existing federal credit programs for infrastructure;

$10 billion towards a “Federal Capital Financing Fund” that would assist federal agencies in purchasing land for new projects or indicatives.


A former White House domestic policy aide who advocated for a more competitive tax code has written an opinion piece for The Hill.

James Pinkerton, co-chair of the RATE Coalition and who served in the administrations of Presidents Ronald Reagan and George H.W. Bush, believes that “lower tax rates mean stronger incentives for business expansion, and that means a brighter economic future for all.”

He gives examples: ExxonMobil announced that it would invest an additional $50 billion in the U.S. over the next five years. Its CEO said the decision was “partly as a result of tax reform” that reduced the corporate rate from 35 percent to 21 percent; Verizon in addition to new capital expenditures recently announced will allocate $400 million to award shares of the company stock to rank-and-file employees.

During the recent World Economic Forum, the Washington Post wrote: “‘Big positive surprise’ coming from Trump tax plan, CEOs say.” Bank of America CEO Brian Moynihan said, “Think about large global companies: They can go anywhere. They think the U.S. is the place to talk about investing in the next 12 to 18 months.”

Pinkerton said when a foreign company starts noticing a positive change in the U.S. business climate, that can’t be discounted as just domestic political spin. When the tax “price” for U.S. business was high, there was less demand for the goods and services that our businesses produced and less demand for U.S. workers.

Observers are making the point that tax rates, which are a price of doing business, affect behavior: As Nobel Laureate Milton Friedman liked to say, “if you cause something to cost more, then you’ll get less of it.”

(The New York Times on Sunday editorialized that “These statements are also cleverly designed public relations spin that tells us little about the actual long-term economic impact of the tax law.”)

Pinkerton wrote that many would say that billions upon billions of new dollars going into additional worker pay, benefits, and contributions to charity are the essence of ‘long-term economic impact.’

Apple CEO Tim Cook acknowledged this fact, saying of the former 35-percent corporate rate, “We thought this was never good for the United States because it motivates people to invest elsewhere instead of in the country.”


The “government shutdown” that lasted just one work day probably won’t take place next week, Republicans say. Congress two weeks ago approved a short-term spending bill through Feb. 8 and GOP leaders said they are confident they can avert a government shutdown for that date, Roll Call reported.

Congress has yet to pass a budget for fiscal year 2018-19, but House and Senate leaders from both parties are negotiating a possible two-year deal. However, negotiations have been stymied amidst inaction on unrelated legislation to address the pending expiration of a program that covers illegal immigrants who came to the country as children, Roll Call reported.

Democrats were blasted for their initial opposition to a short-term funding bill and the weekend government “shutdown.” Democrats now insist on a dollar-for-dollar match in non-defense spending with defense spending.

Another short-term CR is expected to keep the government open past next Thursday. Key Republicans believe that, despite the need for Democratic support in the Senate and the lack of progress on an immigration bill, that there will not be another shutdown. But leaders have not addressed the issues within their own party.