The Trump Administration has declared this week “Infrastructure Week,” and today the President is expected to portray his agenda as a major new investment in revamping the nation’s roads, bridges, tunnels, and railways. Yet despite calling for a $1 trillion infrastructure plan, the President hasn’t explained how the $200 billion in new, undefined spending in his budget would achieve that goal. And a closer look at that budget reveals that it would actually weaken federal support for infrastructure by reducing Highway Trust Fund spending, cutting other infrastructure such as mass transit, prioritizing private investment, and shifting costs to states and localities.
In essence, the President’s infrastructure agenda reflects a “bait-and-switch”: rhetoric that suggests a commitment to rebuilding, but policies that would undermine our ability to do so.
In recent years, the dedicated revenues for the Highway Trust Fund (mostly from the gasoline tax) were insufficient to cover ongoing “baseline” spending from year to year, largely because the gas tax has eroded in value. On a bipartisan basis, lawmakers have repeatedly transferred money into the trust fund to keep infrastructure spending from falling.
The budget, however, proposes that beginning in 2021, the Highway Trust Fund will spend no more in a given year than the dedicated revenues it receives. In practice, that means significant cuts in Highway Trust Fund spending that would grow over time, reaching $20 billion a year by the end of ten years and extending indefinitely. Within a few years, the net impact of these two major proposals – upfront investment in infrastructure followed by this permanent policy shift – would be large and growing cuts in infrastructure spending (see graph).
That outcome reflects the fiscal priorities at the core of the budget. To present lower deficits while cutting taxes for the wealthy and corporations, the budget must cut domestic spending across the board – including in infrastructure. How roads, bridges, and railways get funded becomes a problem for states and cities to solve. Despite the rhetoric of “Infrastructure Week,” the end result would be a major step backwards in rebuilding the infrastructure we need.