During the previous Trump Administration, the comprehensive infrastructure plan aimed to stimulate $1.5 trillion in sustainable investment over 10 years, streamline project approval and permitting, and empower state and local authorities. In six installments, I distilled the broad themes from the 2017 Plan contrasted to the current Administration’s policies.
We will start with the most misunderstood piece of the plan: the $100 billion incentives program. Recognizing that localities are best positioned to understand and address local infrastructure needs, this program aimed to enhance the efficiency and sustainability of infrastructure funding. The proposed incentive grants would have added an additional 20% on top of formula funding and advance grant disbursements. Hence, for this program, once a project had secured $100 million in non-federal revenue, the project could be eligible for up to $20 million via the incentive grant. Eligibility was weighted predominantly on the ability of the project to secure new non-federal funding streams for construction and maintenance. We also included a look-back provision to fairly account for projects that had already pursued a more sustainable funding model.
At the time––and even recently––several prominent congresspeople and news agencies incorrectly stated that the Trump plan flipped the government 80-20 funding model. Traditionally, a project can receive up to 80% of its cost in federal funding. Many misconstrued the Plan to suggest that all federally aided projects would only receive up to 20% funding.
Lesson learned: when crafting legislation, do not use ratios already present in federal law.
Over the last 4 years we have encountered a 71% rise in construction inflation and a net loss in real infrastructure funding. In large part, these staggering figures have resulted from the Biden Administration’s infrastructure bills (IIJA, IRA, and CHIPs Act). These programs take tax-payer dollars, circulate them through a slew of federal regulations, and inject the funds back into a supply-constrained market. This has oriented infrastructure investment away from maintenance, weakening rather than strengthening our infrastructure.