is set Monday to unveil a program to transform how the nation’s infrastructure is funded and developed, but the initiative faces an uncertain road in Congress over finding the money to pay for it.
Mr. Trump will propose spending $200 billion over 10 years, most in the form of new, competitive grants designed to encourage states and cities to raise their own money for improving rails, airports, highways and water systems. The proposal also would expand federal loan programs for such projects.
The White House expects the spending to spark hundreds of billions more from local governments and private investors to pay for the upgrades, resulting in $1.5 trillion in new investment.
Where the federal dollars will come from is unclear. The White House says it will raise the $200 billion through spending cuts to be outlined in the annual budget Mr. Trump will send this week to Congress. But that budget already had been rendered largely obsolete after lawmakers last week agreed to a plan to break budget caps and spend $300 billion more than previously planned over the next two years—meaning the White House’s budget relies on outdated figures.
Analysts also said Friday that the new two-year agreement, which could boost deficits past $1 trillion by next year, reduced the chances Congress would pursue an infrastructure package this year.
The White House is also hoping that its related effort to streamline federal permitting will get states to embrace new projects.
“The current system is fundamentally broken,” a senior administration official told reporters Saturday, criticizing the permitting process as overly cumbersome.
The administration wants to shorten the permitting process to two years or less by tapping a lead agency to engage earlier in large-scale construction projects, with the goal of eliminating late-stage requests for information or further review. Mr. Trump signed an executive order to that effect in August. The new proposal would aim to push that order further through changes to environmental laws.
The official said the broader infrastructure initiative aims to empower states and cities to determine their own infrastructure needs, rather than “Washington picking and choosing what we think priorities ought to be.”
With the plan, the White House official suggested the administration might be open to working with the states of New York and New Jersey on one of the largest proposed infrastructure projects in the country, an Amtrak-backed effort to extend new tunnels under the Hudson River to ease railroad-capacity constraints into New York City. But project sponsors say the project will require a major commitment of direct federal funding, while the administration has said the states would have to come up with the bulk of the money.
The tunnel project is an important objective of Democrats, including
New York Sen. Chuck Schumer,
the Senate minority leader, who has held up some transportation appointments because of the administration’s refusal to commit to paying for half of the project, which is estimated to cost more than $25 billion.
The senior White House official suggested that the project could receive funding from competitive grants, bonds sold to investors, and federal funding for “transformative” projects, though he stopped short of a guarantee the administration would fund the project.
The $200 billion under the White House proposal would include $50 billion for direct grants to rural areas, a move designed in part to bolster the package’s appeal for red-state members of Congress.
In an interview with The Wall Street Journal last month, Mr. Trump said the overall investment from his plan could grow to $1.7 trillion or $1.8 trillion even without greater federal funding, thanks to an influx of foreign investment.
“It could be as much as $1.8 trillion spent,” Mr. Trump said. “We have many, many, wealthy countries, some of whom our country made wealthy, but we have many countries, many people that really want to put up tremendous amounts of money for the infrastructure.”
Ahead of the White House’s unveiling of its proposal, some mayors have been critical of the approach. At the U.S. Conference of Mayors last month, Austin Mayor Steve Adler, a Democrat, expressed concern that cities and states would struggle to raise their own funds. “There’s going to be many jurisdictions across the country that are desperately in need of infrastructure repair and new infrastructure that have difficulty coming up with” the money, he said.
The administration once hoped to move on its infrastructure plan in 2017, but the legislative calendar was chewed up by the failed effort to repeal the Affordable Care Act followed and the successful tax overhaul. The senior administration official said the White House expects bipartisan support, saying there was “remarkable overlap” on the urge to improve infrastructure between Republicans and Democrats—although, the official added, “there’s obviously a disagreement on the best way to get to those objectives.”
Mr. Trump is set to host a bipartisan group of lawmakers Wednesday to discuss the initiative, the official said.
Lawmakers in both parties have expressed skepticism about how the infrastructure package would be funded. “The question is how are you going to pay for it?” said
Sen. John Cornyn
(R., Texas), after Mr. Trump highlighted infrastructure spending last month in his State of the Union address. “You tell me how we can pay for it and I’ll tell you what we can do.”
Once the White House unveils the package, Mr. Trump and cabinet members are expected to travel to promote the initiative, the White House official said. Mr. Trump often has complained about what he has termed the nation’s “crumbling infrastructure,” lamenting in particular the state of roads, highways and guardrails.