A key element to President Trump’s plan for securing funding for critical infrastructure upgrades and repairs across the country has now been emphatically rejected by Trump himself, according to reports from multiple media outlets.
The long-promised infrastructure plan may not be successful, or even attainable, if the federal government refuses to implement public-private partnership funding.
The public-private partnership funding element of President Trump’s supposed $1 trillion infrastructure spending plan, one of many campaign promises made by Trump, is being abandoned, according to reports from multiple media outlets.
President Trump and White House officials have struggled to finalize key elements – namely financing – of the infrastructure plan amidst calls for tax reform and health care overhaul. As a result, in a meeting with lawmakers last Tuesday, Trump said that states and localities would cover most of the costs, the Chicago Tribune reported last week.
Previously, the White House had promised investors they would be backed by federal money, though tax reform would come first. With the rewritten tax code also to be unveiled later in the week, the president addressed private financing for infrastructure at Tuesday’s meeting with “emphatic rejection,” the Chicago Tribune reported.
“He dismissed it categorically and said it doesn’t work,” said Rep. Brian Higgins, D-N.Y., who was at the meeting and asked Trump about the infrastructure funding proposal.
According to the Chicago Tribune, a White House official said there are “legitimate questions” about a public-private financing approach and that the administration has researched such approaches and found “they are certainly not the silver bullet for all of our nation’s infrastructure problems.”
During his campaign, Trump had championed a public-private partnership to fund infrastructure plans. Just this past May, the White House stated that “private investors would underwrite projects in exchange for a share in future profits.” In June, Trump stated that his plan involved partnering with state and local governments, adding that the proposal includes an investment in new federal support for infrastructure, which will be matched by significant private, state and local dollars.
Throughout Trump’s campaign and his first months in office, analysts and federal officials alike noted that the infrastructure plan needs investment – most notable, foreign investment.
“Working with foreign investors is going to be a critical part of any [infrastructure spending] plan we put forward,” Treasury Secretary Steven Mnuchin said at the SelectUSA Investment Summit in Washington in June. “Public-private partnerships are crucial to ensuring that the American taxpayer does not bear the full cost of any proposed program.”
Foreign investors such as Australia, Canada, Europe and the Middle East already invest in U.S. infrastructure, but Trump’s proposal will need even more private-sector involvement, American Shipper noted in its report of Mnuchin’s statements.
The Trump administration’s 2018 budget revealed that the federal government would only cover $200 billion of the $1 trillion total over 10 years, leaving quite a bit left of the proposed infrastructure plan for states and private interests to cover.
“Private investors might be willing to participate, but it’s likely going to be a tough sell, as infrastructure assets don’t tend to generate a particularly high return on investment,” American Shipper stated in it’s September magazine feature.
Despite the intense need for updated roads, bridges and tunnels, if the money isn’t there, it won’t get done.