May 24, 2017
Selection from Michael Laris at the Washington Post. View Full Story
The Trump administration, determined to overhaul and modernize the nation’s infrastructure, is drafting plans to privatize some public assets such as airports, bridges, highway rest stops and other facilities, according to top officials and advisers.
In his proposed budget released Tuesday, President Trump called for spending $200 billion over 10 years to “incentivize” private, state and local spending on infrastructure.
Trump advisers said that to entice state and local governments to sell some of their assets, the administration is considering paying them a bonus. The proceeds of the sales would then go to other infrastructure projects. Australia has pursued a similar policy, which it calls “asset recycling,” prompting the 99-year lease of a state-owned electrical grid to pay for improvements to the Sydney Metro, among other projects.
In the United States, Chicago Mayor Rahm Emanuel (D) explored privatizing Midway International Airport several years ago but dropped the idea in 2013, after a key bidder backed away. Transportation Secretary Elaine Chao says such projects should be encouraged.
What’s in Trump’s proposed transportation budget
“You take the proceeds from the airport, from the sale of a government asset, and put it into financing infrastructure,” Chao said. St. Louis is working with federal officials to try to privatize Lambert International Airport, she said.
Officials are crafting Trump’s initiative, and he has yet to decide which ideas will make the final cut. But two driving themes are clear: Government practices are stalling the nation’s progress; and private companies should fund, build and run more of the basic infrastructure of American life.
A far-reaching proposal from the Trump administration earlier this year to take the nation’s air-traffic control system out of government hands was fueled, in part, by frustration at sluggish efforts to modernize technology.
To speed up infrastructure projects, officials are preparing to overhaul the federal environmental review and permitting system, which they blame for costly delays. Trump asked advisers whether they could collapse that process, which he said takes at least 10 years, down to four months. “But we’ll be satisfied with a year,” Trump said. “It won’t be more than a year.”
In a bid for broader support, Trump and some of his advisers have also signaled an openness to raising the gas tax to pay for needed projects. The 18.4-cent-per-gallon levy is the federal government’s main source of highway funds and was last raised in 1993.
The infrastructure initiative is being shaped by White House officials and a task force representing 16 federal departments and agencies. In addition, there is a committee of outside advisers co-chaired by billionaire developer Richard LeFrak, a Trump friend.
LeFrak said the administration’s effort, which is being led by Gary Cohn, director of the National Economic Council, Chao and others, is a sweeping attempt to rethink how infrastructure gets built. LeFrak said the issues are intensely personal for Trump, who spent his career in real estate and sees this as an area where he can make a lasting impact.
“He does think he’s the president to rebuild America. He’s a builder. It’s just logical,” LeFrak said. “He’s highly enthusiastic about this idea and getting it done.”
Critics said Trump and his advisers are putting ideology ahead of the national interest and oversimplifying how the process works.
Public stewards should not be “trying to figure out how to extract maximum value” by selling off government assets or “making huge, multibillion-dollar wagers” that span decades, said Kevin DeGood, director of infrastructure policy at the Center for American Progress, a liberal advocacy group. “Building infrastructure faster and without adequate study or time for community input may be good for developers, but it’s lousy for everyone else.”
Still, there are bipartisan concerns that important projects have been stymied by politics and bureaucracy, and that Washington has been unwilling to allocate the money for needed improvements. A civil-engineering group in March tallied a “$2 trillion, 10-year investment gap” in the nation’s roads, transit systems, bridges, water systems, power grids, parks, ports and schools.
In February, Trump told Congress that he would seek legislation “that produces a $1 trillion investment” in infrastructure and creates “millions of new jobs.” Officials have since said that the plan will probably include $200 billion in direct federal funds, which would be used to “leverage” the larger figure over a decade. LeFrak sees the chance for a deal, noting that Senate Minority Leader Charles E. Schumer (D-N.Y.) also “wants a trillion-dollar program.”
“So you’ve already got two important people — one very, very important person and one very important person — both from different sides of the aisle, who come in favor of this,” LeFrak said.
But on Tuesday, when Trump’s budget proposal was released, Schumer condemned the president’s “180-degree turn away from his repeated promise of a trillion-dollar infrastructure plan,” saying the budget contains deep cuts in spending on roads, transit projects, public housing and more.
“The fuzzy math and sleight of hand can’t hide the fact that the President’s $200 billion plan is more than wiped out by other cuts to key infrastructure programs,” Schumer said in a statement.
Trump administration officials disputed Schumer’s calculations, saying they included budget items that should not be considered cuts. They cited a projected “drop-off” in federal highway funds that could be eliminated as part of the broader infrastructure agreement.
The budget places a heavy emphasis on market solutions, such as making it easier for states to toll interstates, saying that the federal government has become “a complicated, costly middleman.” The budget also talks about leasing vacant space in Veterans Affairs facilities and selling off major power facilities as ways of “disposing underused capital assets.”