Trump’s Infrastructure Non-Plan Is A Non-Starter
In quick succession, the Trump administration last week released two documents: its long-promised statement on infrastructure and its proposed budget.
The infrastructure “Funding Principles” restated Trump’s goal of reducing permitting times for projects, a goal most observers agree with. But aside from that, it’s unfortunate that no other element of either the infrastructure document or the proposed budget meets the needs of the waterways or other national infrastructure.
On waterways, the administration looks to privatization, which most unequivocally oppose. The infrastructure document proposes to “authorize non-federal construction and operation of inland waterways projects” and would authorize the Inland Waterways Trust Fund to pay private contractors.
The problem for waterways users is that rebuilding locks and dams would not be a money-making proposition for any private entity except under one condition: being allowed to charge extortionate tolls that could strangle water-borne trade. Even if we assume that private entities could do a better and more cost-efficient job of rebuilding locks than the Corps of Engineers, barge operators would be faced with financial obstacles in the form of potentially huge tolls instead of the physical obstacles of crumbling locks and unscheduled outages. How would that be an improvement?
Mississippi River lock tolls would amount to an unfair and unequal export tax on cargoes originating in Upper Mississippi states. In a world of fierce competition between agricultural exporters, this would eliminate the U.S.’s long-touted “transportation advantage” and be a death-blow to farm exports.
The budget plan contains more unwelcome proposals. Disregarding his own stirring words last June about the needs of our locks and dams, the president’s budget proposes a shocking 22 percent cut to the Corps of Engineers. Sticking to a figure that Trump has repeated, it proposes a mere $200 billion in direct federal spending (over 10 years) for infrastructure needs that the American Society of Civil Engineers has estimated at $4.5 trillion by 2025.
Instead of “generating” another $800 billion in additional funding, from a supposed mix of state and private sources, the budget proposal now assumes that another $1.3 trillion will somehow materialize. This is a very problematic assumption, because states and localities have less borrowing power than the federal government, and most are already strapped.
In an especially galling move, the new budget also proposes a further increase in fees paid by barge operators. The industry recently voluntarily increased the size of its contribution and is the only waterways beneficiary that directly pays anything into the Inland Waterways Trust Fund, even though virtually all Americans enjoy the many pass-through benefits that our unparalleled waterway infrastructure provides to our economy.
Mike Toohey, president and CEO of Waterways Council Inc., noted that under this budget proposal, “Carriers, and therefore shippers like American family farmers, energy/petroleum and coal producers, cement and construction material companies, and many others who rely on cost-competitive waterways to ship their products around the U.S. and the world, would be saddled with massive increases that deter freight from the waterways and cause a modal transportation shift.”
Of course, Congress, not the president, is ultimately responsible for passing the budget. Trump has often said that as a dealmaker, he begins by stating maximum outcomes but is willing to negotiate down. We have already seen him willing to compromise on immigration.
But where the waterways are concerned, it’s too bad that we see very little from the administration in either document that should survive. It’s now up to Congress to work out its own infrastructure plan.
